BROOKSVILLE — The effort to plug the $10 million hole in Hernando County's general fund budget for next year will move to center stage this week.
Deputy Administrator Larry Jennings will hand out target budget numbers to county division heads, telling them the stark reality of the financial picture they face.
On Tuesday, the County Commission's Budget and Finance Committee will begin discussing key budget-building policies, ranging from how much money the county should set aside in reserves to whether user fees should be implemented for some county services.
Those discussions, and others that have already taken place during meetings of the county's leadership team, all will lead up to the County Commission budget workshops later this summer and culminate in approval of the final spending plan in late September for the fiscal year that begins Oct. 1.
Developing the 2009-10 plan has been a challenge because the multiple funds that make up the budget have all taken hits from the bad economy. Fees and tax revenues are down, forcing major cuts in spending.
The general fund alone faces an expected $10 million shortfall.
Some of that could be absorbed if the county chooses to spend down some of the millions of dollars that it has in reserves. But county officials want to be sure to balance their need to make the budget work and their need to keep sufficient money in reserve for emergencies and to preserve their favorable bond rating.
Using some reserve money, as the county did last year to deal with the revenue reductions then, could help the county to again prevent what County Administrator David Hamilton terms "draconian measures'' such as severe cuts in county services or significant fee hikes.
Just how much should be set aside in untouched reserve is a decision for county commissioners but they will get some help to make that choice.
The Budget and Finance Committee will discuss a new budget reserve policy during its Tuesday session to prepare a recommendation to the commission. While the county's existing policy allows for reserves well over 20 percent in the general fund, the policy proposal would trim back that level.
The proposal is to budget the reserve at a minimum of 18 percent of the general fund. That would include 3.5 percent as an emergency reserve in case the county is hit by a disaster. That is down from 7 percent in the existing policy. Another 3.5 percent would be a general fund stabilization reserve in case of a loss of a major revenue source or a severe downturn in the economy.
The remaining 11 percent of the reserve would be the dollars that roll forward from one year to the next to operate the county during the first couple of months of the new fiscal year before property tax money begins to flow in.
The policy also suggests that an additional half percent of the general fund budget be set aside for unforeseen expenses.
Scaling back on the reserves is ultimately a board decision, Hamilton said.
"But you don't want to keep too much money just sitting there," he said. "It's not doing anything for you."
Hamilton said that looking at the reserves is one of several measures the county is considering to trim costs.
The list suggested by county staffers for discussion by the budget committee includes whether some county services should be reduced, additional fees should be charged for services and whether pennies should be added to the local gas tax. Also under consideration could be reduced hours for employees or a wage freeze.
In addition, the county is looking at ways to consolidate services. Members of the county leadership team have been assigned to see how services such as information technology and human resources could be combined across all county-level functions, including those run by the elected constitutional officers.
Consolidating office space is another way the county hopes to save money, and the budget committee will be asked to talk about that as well on Tuesday.
Hamilton acknowledged that a lot of different ideas to reconfigure space in the county government center have been discussed, including moving him to a different office and not having county commissioners' offices in the building.
The annual cost of leasing space at Brooksville City Hall to house the Property Appraiser's Office is $60,000. The clerk of the circuit court also leases space outside the government center, costing $36,000 a year.
The proposal on the table would be to spend $194,271 to move various departments into renovated space at the government center to make room for both the appraiser and the clerk. The project would be similar to the construction of a courtroom approved by the commission last month to ease judicial crowding in the building.
County staffers also looked at opening up some of the space in the various county departments, many of which are divided into small offices. But their conclusion was that such renovation and the cost of cubicles "would be prohibitive in this budget climate," according to a memo to the budget committee.
Hamilton acknowledged that he found the design of the government center curious. In addition to the small-office arrangement in the various departments, he also spoke about the atrium — the open, multistory lobby of the government center.
It features an information booth, various displays and a large planter.
Said Hamilton: "The palm trees have the nicest office in the building."
Barbara Behrendt can be reached at [email protected] or (352) 848-1434.