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With reserves gone, new county budget may be painful

BROOKSVILLE — Hernando residents could see more programs cut and some county employees may get pink slips in the coming weeks as the full impact of local government belt-tightening kicks in, officials are warning.

While the county was able to balance its budget the last few years by tapping reserve funds, those funds have been depleted and the county must make $5.2 million in cuts from the general fund in the coming months.

That's because the plan to build the budget also includes no new fees or increases in the property tax rate. Meanwhile, property values and the tax revenue they generate continue to fall.

"People have said that we spent like a drunken sailor, but we didn't spend the money. We socked it away. We set it aside to make up for revenue lost when values went down to keep up the services without raising taxes,'' said county budget manager George Zoettlein.

"We put it away for a rainy day, and it's rained for three years,'' he said. "Now that rainy day money is gone.''

The county leadership team met this week to identify which programs, expenses and employees could be cut. The County Commission will discuss those issues during a workshop May 3.

County Administrator David Hamilton's budget calendar notes that the first round of layoff notices could go out as early as May with a possible second round in the July. Reducing staff, like any other budget issue, is the decision of the County Commission.

Hamilton shared some details with the board last week. In a memo, he explained that, with the cushion gone, the county is looking to cut $2,774,539 from board departments. As of last week, nearly $1 million in cuts had been identified in areas that would not be detrimental to core county services.

The remaining $2,442,461 of the $5.2 million total shortfall will have to be cut by the constitutional officers, including the sheriff and the clerk of the Circuit Court, he said.

In the past, the county did not dictate a set amount for the constitutional officers to cut. This year, without a reserve cushion, those officers will have to cut deeper, Zoettlein said. The exact amounts will be distributed in the coming days.

Hamilton told commissioners last week that county staffers are several months ahead of schedule on the budget, which is ultimately approved each September with the fiscal year starting Oct. 1. Zoettlein noted that the county won't get the budgets of constitutional officers or early property value information until June 1, so the true picture won't be clear until then.

In his memo, Hamilton noted his goal was to use reserves over a period of years and hope that economic conditions would improve before the reserves ran out, but that has not happened and doesn't look likely in the next few years.

Thus, he wrote, "We have approached this year's budget on a more aggressive and certain footing of applying significant reductions to our initial budget presentations.''

Among the moves to be considered are potential staff reductions and the reality that "the sooner we take action to reduce expenditures, the greater the savings.''

With plans to bring the commission a balanced budget earlier than in previous years, Hamilton said he was setting aside time for larger issue discussions as the budget deadline draws close.

One of those issues is how to handle the cash that's carried forward from one budget to the next, an issue that grew into a controversy several weeks ago when an additional $37 million was added to the budget midway through the fiscal year, a nearly 11 percent increase in the total budget amount.

Another issue set for discussion later in the process is the cost of county employee benefits and possibly cutting those benefits. For unionized employees, those cuts would be negotiable. The county's contribution to the cost of health insurance, the pay-out amount for unused paid time off for some employees, and employee holidays are some of the areas that could be targeted for trimming.

The first contract negotiation session for this year is set for next week.

Separate from the general fund, another county fund has also struggled. Over the last several years, the utilities department has been more than cut in half. In the solid waste division, the staff has been slashed from 55 to 26, environmental services Director Joe Stapf said.

While there was talk several years ago of increasing the annual solid waste assessment from the $63.05 billed each residential property owner annually, that idea was rejected and cuts put in place instead.

In recent weeks, Stapf said there was concern that the rate would have to increase by $3 to $4 per property in the coming year because state environmental regulators had decided Hernando County needed to put more money aside to close and maintain the landfill into the future as the county was renewing its permission for the construction and debris portion of the landfill.

Stapf said he couldn't see asking residents to pay more money just so that the county can set it aside as a reserve when there are already millions of dollars set aside in the utility accounts for that very purpose.

On a recent visit to Tallahassee, commission Chairman Jim Adkins spoke with Gov. Rick Scott about the issue. This week he got word that the rule would be changed allowing Hernando to avoid setting extra dollars aside for the closure fund.

Stapf said the requirement is waived if a county regularly monitors the groundwater and has no history of existing contamination. Hernando fits those conditions, he said.

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

With reserves gone, new county budget may be painful 04/21/11 [Last modified: Thursday, April 21, 2011 8:21pm]
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