1. Hernando

Hernando County residents could see higher taxes and fees, cut to services and employees

Hernando County Government Center
Hernando County Government Center
Published Jun. 26, 2019

BROOKSVILLE -- After a two-hour-long exercise with a new budgeting software program on Tuesday, Hernando County commissioners still faced the same reality. Fixing their $10 million budget deficit likely will mean raising taxes, utility fees or both. They'll also face cutting staff and programs and taking a hard line with county employee unions on future pay raises and benefits.

The program also allowed them to plug in and then take out again the annual cost over time of the $45 million county government center they might need to build in coming years as county judges insist on their need for more courtroom and office space.

Commissioners left the task of preparing specific choices to County Administrator Jeff Rogers, who already trimmed $1.4 million from the general fund in recent weeks. At the next budget workshop, slated for July 9, Rogers will have built multiple scenarios for the commission to consider. A couple of weeks later, they must settle on tentative budget and tax rate numbers.

Commissioners talked about potential budget cuts of $4 million and possible utility rate increases. They could add hundreds of dollars a year more for homeowners in communities with water and sewer service and the possibility of a $70 increase in property taxes for a home with a taxable value of $70,000 if property tax rates go up a mill.

Commissioners want constitutional officers to help share their budget pain, including the Sheriff's Office.

Sheriff's Office Chief Deputy Mike Maurer told commissioners Tuesday that the budget Sheriff Al Nienhuis presented earlier this month already had been cut internally. Nienhuis didn't ask to add new school resource officers or increase the cost of worker compensation and retirement, but he still has to pay for those mandates, Maurer said.

Erick van Malssen of Stantec Consulting Services told commissioners that their only choices for pulling out of their deep financial hole were to raise revenue or cut expenses or a combination of both. Cutting spending could equate to cutting employees. He also said they need to start building back their reserves, which should be at the amount required by policy of 18.5 percent of their general fund.

To do that, they can't make one-year changes and must demonstrate over time that they can hold their costs in line with their revenues. That is difficult when some of those costs are hard to control, including increases for personnel who are under contract, he said.

Commissioners had a variety of reactions to the various choices.

Commissioner Steve Champion continued to maintain that the county could cut $4 million or even $8 million if it had to as the commission did during the recession several years ago. The county got by with much less expense then, he reasoned, and the county's property owners don't have any appetite for a tax increase.

Champion was more comfortable with a potential new revenue source that would charge water and sewer customers for the use of the utility rights of way, an expense that would increase water bills and hit county sewer customers especially hard, county utilities director Gordon Onderdonk explained.

Commissioner John Allocco said that whether that was called a tax or not, it was a tax to residents. Commissioner John Mitten said he had a philosophical problem with charging utility customers to use the right of way that the county owns.

Commission Chairman Jeff Holcomb said that the tenth of a mill tax decrease the commission approved last year was based on bad information, and that, at the very least, the county needs to reverse it.

The budget discussion came hours after commissioners approved a new county staff organizational structure that included hiring a new deputy administrator, the position Rogers had before he was named county administrator. They also approved a new department director to oversee several departments previously under the deputy administrator, including libraries and parks.

Rogers also recommended naming Valerie Pianta the new economic development director. Pianta's economic development manager job will not be filled, and she will also oversee airport operations and tourism.

Rogers' restructuring protected the general fund by arranging for some of the new position costs to come from departments with revenue sources outside the general fund, including fire rescue, public works, tourism, utilities, the building department and the airport.

Several commissioners said they want to advertise for a separate economic development director in the future when the county's financial position is better.

Commissioners also learned another of the consequences when a county gets into a financial hole.

Clerk of the Circuit Court Doug Chorvat told commissioners that the county's bond rating was recently downgraded. That means the county could face higher interest rates if it seeks bond financing of a project, such as the new government center.

S & P Global Ratings conducted the review and explained why the rating was dropped.

"The rating action reflects our view of the county's weakened reserve position following consecutive years of general fund drawdowns,'' according to the company's report. "The drawdowns were prompted by expenditure growth (particularly labor costs) outpacing revenue, combined with multiple years of negative revenue performance relative to the budget.''

The county's budget reserve, now about 6 percent of its expenses, is not enough for local governments in Florida, "which carry an outsized exposure to natural disasters,'' according to the report.

The bond rating company gave Hernando officials credit for changing some budgeting processes, such as not counting carryover money from one fiscal year to the next as revenue and hiring the financial consultant to help get them out of the hole.

Still, the rating company predicted a rocky road ahead with ongoing financial challenges and warned the county that a bond rating improvement will only happen "upon the demonstrated ability to generate consecutive balanced budgets and meaningful progress toward building reserves.''

County commissioners, who have repeatedly said they didn't see the financial deficit coming, urged Chorvat and his staff to be more direct when they come to tell them they are in trouble.

"You have my commitment,'' Chorvat said.

Contact Barbara Behrendt at or (352) 848-1434. Follow .


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