A botched privatization initiative has cost millions of dollars that Hillsborough County commissioners could have devoted to a museum project they have turned their backs on. Most of the commissioners say the county can no longer afford the $17-million that was promised in 1998 for a new Tampa Bay History Center in a planned cultural district on the downtown waterfront. They say they now need the cash for $15-million worth of new fire stations and the $11-million needed every year to run the stations.
The anti-museum stance would be easier to accept if the county did a better job of collecting user fees that supplement the budget of Hillsborough Fire Rescue.
But the commission's insistence on outsourcing collection of the fees has been a disaster. Fees owed by citizens who use county ambulances, call in false fire alarms or place other demands on Hillsborough Fire Rescue have gone uncollected.
The Clearwater company hired for the job, Sky Asset Management Inc., performed so poorly that accounts receivable for Hillsborough Fire Rescue swelled by $2.2-million, according to a recent audit.
As a result, the county has had to make up shortfalls with property taxes that could have gone for fire stations or even assisted with construction of the history museum.
Fire Chief Bill Nesmith said it might take two years for his agency to recover from Sky Asset. "It just happens that we got a real bummer of a company," said Nesmith. In 1999, Hillsborough commissioners hired Sky Asset, at the time the subsidiary of an Ohio financial services company, after a consultant promised that privatizing collection of ambulance, alarm and fire inspection fees would save money.
The move did save money — just not for taxpayers. Ambulance passengers and false-alarm sounders have been getting away with not paying their county bills.
In June 1999, when Nesmith's employees turned over collections to Sky Asset, the balance for uncollected accounts was $7.6-million. One year later, the balance had ballooned to $9.8-million.
For the entire fiscal year, Sky Asset collected only $5.5-million for the county, the audit shows.
"I haven't seen an audit that bad in years," said Commissioner Jan Platt.
Nesmith said his employees have resumed collection duties. But they are a year behind on some accounts because of Sky Asset, the fire chief said.
"We've got people who are six to 12 months late and they never got the first invoice," said Nesmith.
The large amount of receivables suggests that the county wasn't doing a bang-up job of chasing down the scofflaws before Sky Asset took over. But the private collectors managed to do worse than the public collectors.
Sky Asset's parent divested itself of the Clearwater subsidiary in December. Bowling Green, Ohio-based Sky Financial Group Inc. took a $500,000 pre-tax loss on the sale of Sky Asset, according to a federal securities filing.
The buyer of Sky Asset's assets, Superior Credit Services Inc., wanted out of the Hillsborough contract. Sky Asset had earned only $357,000 in collection commissions during the first full year of the contract.
Executives of Sky Financial and Superior Credit denied their companies are responsible for the mess.
A new collection agency could be hired soon. But don't bet the firehouses on it.
Hillsborough Fire Rescue has been without a collection agency for its tougher delinquent accounts since February 1999. Fire officials had promised by December 1999 to hire a different company to dun accounts that were unpaid for six months or longer.
The bids came in, but none of the finalists was licensed to do collections in Florida. The contract has yet to be re-bid. Fire officials are talking to county lawyers about taking over long-term delinquent collections.
Commissioner Jim Norman said County Administrator Daniel A. Kleman should bring in temporary workers to help Nesmith to catch up with the delinquencies.
"I hope it's not lost revenue," said Norman. "Kleman should cut our losses. There's an investment we need to recover here."
Contact Staff Writer Francis X. Gilpin at frangilpin@weeklyplanet.com or 813-248-8888, ext. 130.
This article appears in Aug 30 – Sep 5, 2001.
