BROOKSVILLE — After months of painful discussions about cuts in programs and services, as well as layoffs, county staffers on Tuesday presented the Hernando County Commission with a balanced budget for 2011-12.
The budget proposal includes the assumption that Sheriff Al Nienhuis will cut another $1.3 million from his budget and Supervisor of Elections Annie Williams will trim another $250,000 from hers. In addition, six open positions that were set to be filled will remain empty, four of those in the libraries.
It also includes previously discussed cuts, such as the closure of parks and a reduction in employee benefits, though changes are still possible.
Reaching the balanced budget also requires the county to borrow just under $2 million from a special budget stabilization reserve, a fund that the county must pay back over the next two years.
During Tuesday's workshop discussion, commissioners raised questions about the plan, ranging from why they were once again balancing a budget with reserves after they had agreed to give up that practice and why no options were presented to allow for a tax rate rollback.
But because it was a workshop, no final decisions could be made. The discussion will continue at the commission's July 19 meeting. Public hearings on the budget, which takes effect Oct. 1, will be in September.
With property values continuing to fall — a drop of about 10 percent in the last year — property tax revenues have plummeted for the past several years. A rollback would allow the county to increase the tax rate to the level that would raise the same amount of tax revenue next year as was collected this year.
Budget manager George Zoettlein displayed a list of the tax rates the board could consider and how much additional money they would raise. He also pointed out that when he calculated all tax levies for the average taxable value this year vs. next year, even with a rollback rate, the total tax bill would drop.
Commissioner Wayne Dukes questioned why the county was proposing to transfer the remaining $7 million in its capital fund — intended to build a judicial center — to its general reserve. Since the board is taking money out of the special stabilization reserve to balance the budget, Zoettlein explained, the total reserve would drop below the amount the county's policy requires.
By putting the judicial money into the reserve, the necessary margin can be maintained, the county's balance sheet is fortified and its bond rating remains safe, County Administrator David Hamilton said.
Dukes said he wanted the process to be transparent to the public, but also noted that Hamilton said at the beginning of the process that reserves would not be used again to balance the budget, as they have been for several years.
Hamilton said the special reserve was for a onetime revenue hit on the county. In recent months, the county learned it would have to refund money to Cemex over a property value dispute and that the tax collector would lose revenue and have to take over the issuing of driver's licenses.
Using this special fund "buys us a little time to come up with more of the efficiencies as we move forward,'' Commissioner Dave Russell said.
Commission Chairman Jim Adkins said that, while he knew that the budget had to be balanced by law this week and he was willing to accept the use of reserves, he wanted the county staff to continue to look for ways to cut.
Commissioner John Druzbick said that he could not support the use of the reserves and that using the special fund requires a super-majority vote of the board — a 4-1 vote.
"It's still borrowing from reserves,'' he said.
Druzbick said paying back $900,000 to the fund over the next two years would be tough, given that property values are projected to fall again at least 5 percent for 2012-13. Adding the payback cost to the falling revenue would mean the county would start planning that year's budget with a $4.6 million shortfall.
Druzbick has voiced interest in discussing the rollback rate.
Dukes again reminded Hamilton that actions taken this budget year set the tone for the coming years, when government will need to continue to shrink, and he again voiced concern about using reserves.
Hamilton said that the staff was providing the commission with options.
"The question,'' he told commissioners, "is how quickly and how harshly you want to take down this organization.''
Dukes predicted there will be no super-majority for using reserves to balance the budget and no majority to go with the rollback rate. He told Hamilton to bring a "plan B'' to next week's meeting.
The balanced budget proposed would total $91.5 million in the general fund, compared with this year's $96 million.
The overall proposed budget would total $329.5 million, compared with this year's $345 million.