BROOKSVILLE — Hernando County commissioners gave a tentative nod Tuesday to a spending plan for the coming fiscal year. It holds the property tax rate steady, despite a multi-million dollar shortfall revealed several months ago.
The 2018-19 spending plan totals $448.9 million, $3.9 million less than this year's approved budget. The $110.5 million general fund is about $690,000 less than the 2017-18 approved general fund.
The proposed budget is balanced, but budget director George Zoettlein said he couldn't recommend it, because it requires the county to spend $5.2 million dollars of its general fund reserves.
Dipping into reserves creates several problems.
The county would have to violate its own policy of having 18.5 percent of its general fund budget in reserve to get it through the first few lean months of the budget year, which begins October 1, before property tax revenues begin to arrive. Spending $5.2 million of reserves would leave the county with only 12.5 percent of its budget socked away.
That could bring criticism from auditors who expect the county to follow its financial rules and ensure its fiscal stability by having reserves on hand and raising taxes when necessary.
Lower reserves also could weaken the county's bond rating, hurting its ability to borrow money and driving up interest rates, as finance officials have warned for years.
Zoettlein repeated that warning, and reminded commissioners of the millions of dollars in capital projects they could face in the months ahead. The county's judiciary, for instance, is pushing for more space in the Government Center, which could force the commission to build new offices.
The county ended up with a $13.5 million shortfall earlier this year, when officials acknowledged that their previous budget manager miscalculated the cash amounts moved from last year's budget into this year's. The county then spent more than it made in tax revenues, deepening the hole.
County administrator Len Sossamon fired the former budget manager and brought Zoettlein back from retirement to work on the 2018-19 budget.
With commission approval, Zoettlein deferred a $500,000 increase in the county's business incentive package, called back some future projects, acknowledged a $3.27 million increase in revenue because of rising property values and found other ways to re-allocate funds.
But he still was down more than $5 million.
He presented a menu of options to the County Commission during budget workshops — raising tax rates, taking out a loan to keep the county afloat through the fall, cutting expenses, even closing libraries and parks.
But commissioners did not consider a tax increase, something incumbents Wayne Dukes and Jeff Holcomb touted in their reelection campaigns. The commission also scoffed at the unpopular idea of cutting back county services.
During Tuesday's budget hearing, commissioners trimmed more than $1 million by taking several unfilled positions out of the budget. They also cut capital expenses, including paving at the Westside Government Center, a playground at Rogers Park and $350,000 for a trail and overlook at Peck Sink.
They did, however, agree to spend $200,000 to re-roof the Westside Government Center.
A handful of residents spoke about their rising tax bills. Commissioners explained the individual cases away, saying that bills go up when property values rise, and the county's home values are rising. Another reason for higher bills in parts of Spring Hill is that annual garbage fees will be added to tax bills in the mandatory collection zone, rather than coming regularly with utility bills.
Brooksville resident Sue Loveday suggested raising county tax rates to improve the quality of the community.
The general fund tax rate will remain at 6.8912 mills or $6.89 in tax for every $1,000 in appraised taxable property value.
Commissioners eliminated the half-mill tax to support the county's fire service, but raised the flat fire fee from $194.70 to $253.09. The net effect varies by property, but people with more valuable homes will pay less for fire services than they did last year.
The budget also includes an increase for county emergency medical services from .67 of a mill to .91 of a mill, or an additional 24 cents in taxes per $1,000 in property value. The increase is attributed to growing costs for prescription medications used on county ambulances and other operational increases.
Commissioners asked Zoettlein to present additional budget-cutting suggestions before the commission's final budget hearing, which is set for 5 p.m. September 18.
Contact Barbara Behrendt at firstname.lastname@example.org or (352) 848-1434.