Hernando business leaders give input on county budget woes

BROOKSVILLE — Whether a business builds homes or serves up chicken sandwiches, the bottom line can't be a negative number.

The same is true for county government.

But this year, as Hernando officials continue to spend more than they take in — and bolster their books by burning through reserve funds — it is time to make hard choices and drastically cut spending.

That is the message County Administrator David Hamilton delivered to the community's business leaders Wednesday evening as he met with a liaison committee, composed of the Greater Hernando County Chamber of Commerce, builders, Realtors and Hernando Progress, a private, nonprofit business group.

The session was the last in a series of community meetings on this year's budget process.

In response to questions from the group, Hamilton defended the way county departments pay for services that are provided by other county departments.

He also stood firm on leaving untouched the $18 million that the county has set aside for a new judicial center, despite the fact that the county has a $10.4 million shortfall in its 2010-11 budget and is considering slicing millions from parks, libraries, social services and public transportation.

Hamilton and George Zoettlein, the county management and budget office director, showed charts and graphs illustrating how the county has survived the last three difficult budget years and how drawing down reserves has been the norm.

Falling property values and tax reforms have driven property tax revenues downward and forced the county to dip into reserves that were built up during the boom years.

But the reserves will run out in 2013.

He said it was important to make that point with county commissioners, who must make the tough political decisions about where cuts will be made. Without drastic cutbacks, the county will be out of money and "we're writing funny checks,'' Hamilton said.

He said he had that happen to him early in his government service career, when he took over a government that had spent down its reserves and had to borrow $3 million to make payroll.

"Being solvent is really popular in the end,'' Hamilton told the group of about two dozen.

He explained how county officials this year categorized services based on whether they were mandated or whether they were considered "quality of life'' services, but he stressed that the cuts will come throughout the county's general fund spending categories.

Questioned about the way the county requires payments between county departments for services, Hamilton said the system has changed to make it more fair.

For example, if the county's Building Department, which operates strictly on the fees it collects, needs help from the Finance Department, finance gets paid.

Now, instead of basing that fee on the cost from two years ago, the county is going to use current information, which is a "dramatic change,'' said Michael McHugh, director of business development. Costs today are well below what they were two years ago because government has shrunk so much.

Hamilton said that if a department were paying a cost allocation for help from his office based on costs two years ago, they'd be paying a fee that would include the salary of Larry Jennings, even though he retired last year and has not been replaced.

One specific area where business leaders questioned the county's costs was its fleet of vehicles and the cost of oil changes, which tops $50 even though the private sector can do them for half the price or less.

Hamilton told the leaders that he is working on that, but getting to the many quirks inside county government has taken a while.

"That's going to go,'' he said.

One area where Hamilton said he isn't looking at hiring a private company is mosquito control. Chamber member and longtime government observer Janey Baldwin said other communities are privatizing the service, and she said she was concerned that the county is spending $622,000 a year.

"There are budget reductions coming'' in that department, Hamilton responded. He said he believes the department is well run.

Even with the dire talk of the need to cut millions from general-fund spending, Hamilton said that "we're a fiscally solvent county, and we want to stay that way. Having money sitting in the judicial center fund "is comfortable for me,'' he said.

But Baldwin questioned why he wouldn't tap into the fund to save county employees' jobs. Fifty or more workers will likely be lost in this year's cuts, officials have said.

Hamilton responded that the county has an obligation to provide courtroom space for the judiciary. The judges have asked for more room for years. He also noted that he didn't know what the future might hold as far as an economic turnaround.

"I think it would be wise for that money to sit on the balance sheet until we see which way this storm goes,'' Hamilton said.

Liaison committee member John Mitten thanked the county administrator for the budget presentation and summed up the group's reaction.

"Sobering,'' he said.

Barbara Behrendt can be reached at behrendt@sptimes.com or (352) 848-1434.

Hernando business leaders give input on county budget woes 06/03/10 [Last modified: Thursday, June 3, 2010 8:04pm]

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