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Hernando commission hears proposal for tax hike, vows to remain solvent

BROOKSVILLE — A couple of hours into Tuesday's special budget meeting, county Commissioner John Druzbick said he was ready to "make the leap.''

Still short nearly $5.8 million in the general fund with no apparent solution, despite a dozen cost-cutting ideas swirling in the room, Druzbick spoke in favor of increasing the property tax rate to balance the county's 2012-13 budget.

His colleague, Dave Russell, said the move "shows a lot of courage'' from a commissioner in a re-election bid.

"You know you're going to get hammered for it,'' Russell said.

But Druzbick said the cost-cutting measures under consideration weren't going to fix the deficit. And he said he would not agree to spend reserves to balance the spending plan — not when the county is facing so many unknowns financially.

There was no other support among commissioners for Druzbick's proposal — at least for the time being.

In a related matter, however, commission Chairman Wayne Dukes stated publicly that the county has no plans to file for bankruptcy or declare a fiscal emergency. The commission will do whatever it takes, he said, to make sure the county remains solvent.

The statement, for which other commissioners gave their nod of consent, as did the county administrator, came in response to a six-page memo from assistant county attorney Jon Jouben last week that warned that insolvency was a strong possibility if the commission didn't increase revenue.

The strong public words by the commission were urged by Julie Santamaria, director of RBC Capital Markets.

"Unless this statement is made,'' Santamaria wrote in an email Sunday to county finance director Amy Gillis, "we cannot move forward with the request for proposal for a line of credit.''

Santamaria also suggested that the county notify rating agencies of Jouben's memo and be prepared to see the county's general fund debt ratings be downgraded. "But it is less likely to occur if the County Commission makes a commitment to raise taxes if necessary to remain solvent and honor its financial obligations,'' she said.

The exchange was not publicly discussed by commissioners Tuesday.

Druzbick said that, for the past several years, the county has done its due diligence as property values have plummeted in Hernando.

"Our budget has dropped like a stone,'' he said, noting that taxes today are 40 percent less than in 2007 and, as a result, county services have been trimmed.

"The cracks have started to show,'' he said. "We've seen it in animal control. We've seen it in code enforcement. … It's starting to be detrimental to the organization.''

County budget manager George Zoettlein calculated that the commission would need to increase the tax rate by 0.8450 of a mill to make up for the entire projected shortfall or 0.4572 of a mill to match the rollback rate. The rollback rate is the property tax rate the county would have to levy to raise the same amount of money the county collected during the current budget year.

A mill is $1 in tax for every $1,000 in appraised taxable property value. To wipe out the shortfall, the tax increase for the owner of a $150,000 home with a full $50,000 homestead exemption would be $84.50. For the rollback rate, the tax increase would be $45.72.

Druzbick said he would like to see commissioners consider the rollback rate, at a minimum, though he wasn't sure where they would find the cuts to make up the remaining $2.65 million shortfall under that scenario.

While Russell said he didn't disagree with Druzbick's point, he said he wanted more information on the myriad of cost-cutting ideas discussed earlier during Tuesday's meeting. And he wanted the vote to come when all commissioners are present.

Commissioner Jeff Stabins was absent from Tuesday's meeting, and Dukes took the blame, saying he knew Stabins would be out of town when he called the meeting last week.

He agreed that the full commission should vote on the tentative tax rate. The vote is now slated for next Tuesday's commission meeting.

Also at that meeting, some of the cost-cutting ideas will come back for formal action.

Among those is a proposal to begin in-house collections for Hernando County Fire Rescue ambulance bills. Spring Hill Fire Rescue has a much higher rate of payment with its in-house billing service.

Commissioners will also consider a proposal to move its utilities administration building on the State Road 50 bypass in Brooksville to the utilities operations site on Wiscon Road. In addition, the commission is considering the sale of 63 surplus properties that the county staff said could fetch nearly $2.8 million.

There was one piece of good news. The county is looking at a small windfall with the price of gasoline falling, according to chief procurement officer Russell Wetherington. He told commissioners that the sheriff could save $78,000 and county departments another $34,000 in unleaded gasoline and $93,000 in diesel because of the falling prices.

Wetherington also mentioned a cost-cutting idea that surfaced when the county recently asked its employees for ideas. It was suggested that the county could consider selling the Hernando Beach water tower for scrap for about $60,000.

The decommissioned tower costs the county $8,500 a year in maintenance, and then every eight years $55,000 for maintenance. But land services director Ron Pianta warned that the structure is used by boaters as a point of navigation.

Dukes noted that the owner of a new cellphone tower next to the Coast Guard Auxiliary building has agreed to put a light on it for mariners, if that is necessary.

County Administrator Len Sossamon described some of his own ideas on how to use the value of the county's utilities department to generate money for the county general fund.

The ideas grew out of a recent suggestion by Russell to assess the value of the utilities for possible sale. Sossamon said he has broadened the idea to include other options — among them collecting fees for use of county rights of way or franchise fees.

He said he would bring more information to the commission next week.

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

Hernando commission hears proposal for tax hike, vows to remain solvent 07/03/12 [Last modified: Tuesday, July 3, 2012 9:20pm]
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