July 7, 2020 Hernando BOCC Budget Workshop

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July 7, 2020 Hernando BOCC Budget Workshop

Fri, 07/24/2020 - 18:23
Posted in:

By LISA MACNEIL

[email protected]

 

The comprehensive Budget Workshop began on July 7, 2020 after Board of County Commissioners (BOCC) Chairman John Mitten read the Declaration of Independence in its entirety in honor of Independence Day.

During the first hour, much of the conversation revolved around the budget shortfall of Fiscal Year 2019 (FY-19), and the subsequent firing of County Administrator Len Sossamon.  For FY-19, the budgeted shortage exceeded $10 million.  When analyzing the actual budget at the end of the fiscal year, the shortfall was realized to be approximately $352,000.

County Administrator Jeff Rogers mentioned in his introduction during the meeting, “The current state of the economy is to be of concern too.”

The current COVID-19 restrictions has caused a loss of revenue for both the government as well as businesses,  and is predicted to continue to cause additional loss of revenues for FY 20/21.   The County has seen a loss of Sales Tax, State Revenue Sharing, Tourism Bed Tax, and Gas Tax. Rogers and his staff estimate that the loss of revenue for 2020 will be over $2 million in the General Fund, $1.4 million in fuel taxes and $289,000 in Tourist Development, estimating an overall loss of $ 3,689,000. 

The current and future expenses for COVID-19 are anticipated to be reimbursed to the County utilizing the recent CARES Act funding the County can receive from the State of Florida.

The current approved budget, with conservative spending, has allowed for an estimated cash carried forward balance in the General Fund of $22,699,276.

Previous projects that have been highlighted are a new ERP (Enterprise Resource Planning) software system, an upgraded two-way radio system for use by first responders, and renovating and upgrading the courthouse buildings. Rogers reported that the ERP system can move forward without incurring further debt. 

Property Taxes

Budget Director Stephanie Russ began the presentation on property taxes with a brief history.  Ad Valorem (Latin for “according to value”) taxes in Florida were first instituted in 1839.  Back then, one-half-cent was imposed per acre of first-rate land, and decreased according to the land rating.  

On July 28, 2020, maximum millage will be set for FY 2020‐2021, and TRIM notices will be mailed in August. 

Russ explained that the schedule of ad valorem taxes and millage rates comparing the FY 2019-20 with FY 2020-21 are “not apples to apples” and based on a good-faith estimate using current property values.  The FY 2020-21 revenues are projected to be $95,955,557.  This is an increase of $6,619,894 from FY-20.  In recent years, Taxable Values in Hernando have been increasing since 2014.

Comparison of Total Budget

The recommended total budget for FY-21 is $517,976,011, which is a 1.92% decrease from the previous.  The General Fund and Special Revenue are to increase, while Debt Service, Capital, Enterprise and Internal Service funds will decrease if the budget is adopted.

Russ added that there will be “a lot of carry forwards” that are going to cause the budget to grow, becoming evident in August or September. 

In the ongoing Revenue vs. Expenses spreadsheet, which tracks actual figures since 2010, Russ explained that carry-forward and reserves are not included.  The budgeted $10 million shortfall in the first half of 2019 turned out to be under $352,000.   The massive difference in actual vs. budgeted was explained to be due to budget cuts and an unexpected $3 million increase in revenues in 2019. 

The 2021 recommendation shows a $3 million deficit, which Russ explained is caused from $2.6 million in capital improvements that have been included.  However, she explained further that “More revenue is going to be budgeted for the next iteration. And then it also includes a 1.4 million dollar reduction due to estimated COVID losses.” 

These capital improvements are shown in the photo on this page. 

With regard to controlling expenses, Allocco suggested that Hernando consider “essential versus nonessential” with regard to government services while the COVID pandemic is ongoing.
 

Effects of COVID-19

The county is expected to lose around $3,729,903 in revenues due to the COVID-19 pandemic in FY-20.  An additional $1.9 million revenue loss is expected in FY-21 in the form of loss of Sales Taxes, State Revenue Sharing and Tourist Development Taxes.  

County Administrator Jeff Rogers explained that the 2021 figure is a “best estimate at this time.”  Considering the uncertainty of the path of the pandemic, Rogers cautioned that Hernando may see a rise in revenues as it recovers tourism and other lost dollars, or revenues could be reduced further in the coming year.

Commissioner Steve Champion expressed his optimism based on his observations in retail markets, he said, “These large retailers are running 50% increases. And they're collecting a lot of tax revenue … Car sales are through the roof.”  He went on to say that car sales going forward are uncertain, as production has slowed.

Commissioner John Allocco concurred that many retail establishments are doing well, however, the healthcare industry is not doing well.  “Whatever you're hearing about the hospitals being overrun, they're still below their normal census.  Their emergency rooms are still below their normal census, and have been for months.  Employees have been let go because a lot of the outpatient and non-essential (services were cut).  That's where the money is made.”

Allocco added that landlords have been unable to collect rent payments, affecting their ability to pay taxes.  

Travel to Florida is restricted at this time due to the pandemic, resulting in a loss of tourism dollars.  

Capital Improvement Projects  (CIP)

The Kass Circle Improvement project was discussed, as it is not funded by the General Fund.   The $75,000 in safety improvements is a one-time infrastructure expenditure that ultimately comes from the Planning Department’s budget after a transfer of the General Fund. 

According to Rogers, safety improvements are usually funded by the Gas Tax.  Reasons why the Kass Circle improvements were allocated from the General Fund were not available during the meeting. 

 Additional CIPs were not discussed.

County Full-Time Employees (FTEs)

The following full time employees were included in the recommended budget.

Code Enforcement‐Customer Services Technician II  - $55,056

Community Services – Community Services Director - $153,006

Animal Services – Administrative Assistant III - $55,056

Facilities – Administrative Assistant II - $47,963

Courts‐ System Administrator - $90,546

Traffic‐LOGT1‐6‐ Patch Crew (3) -  $144,796

Recycling Operations‐Facility Attendant II - $46,607

Building Dept‐Inspector/Plans Examiner - $99,824

HCFR – 12 (3‐Captain,3‐Driver Engineer, 6‐FF/EMT) - $820,475

The county library’s Branch Services Coordinator position has been eliminated, resulting in a $78,754 savings.

Non-Operating  (Debt, Interfund Transfer & Tax Collector based on % of ad valorem)

Debt has decreased by $69,891.  Expenditures have also been reduced in Court Related Tech and Wellness Center by $205,191 and $232,505 respectively.  

Increases are as follows: 

Tax Collector $217,000

Hernando/Citrus MPO $12,988

Local Mosquito Control $81,350

Kass Circle CRA $75,200

More information forthcoming as to why Kass Circle is listed in both non-operating and capital improvements. 

Budgets by Department

Department Amount Change from FY-20

Judicial Services 7,685,374 -1%

Public Works

Transportation Trust Fund 8,524,209 +4%

Engineering 1,622,387 +23%

Road Maintenance 4,130,203 +1%

Traffic Division 848,481 +6%

Waterways Maintenance 386,856 -16%

Facilities Maintenance 4,559,162 +16%

Facilities Maintenance for FY-21 to include Government Center Fire Alarm Replacement

& Air conditioners (A/Cs), Sheriff’s Office A/Cs, Brooksville Health Dept Parking Lot, Animal Control Kennel A/Cl Westside Gov Parking Lot Overlay & A/Cs, Lykes Library Parking Lot

Additional 1 FTE – Administrative Assistant II.

Planning

Health & Human Services 1,794,584.00 +8%

Planning Department 5,187,226 -19%

Utilities & Fleet

Fleet Management 10,947,147 -3%

Solid Waste & Recycling 14,331,121 -24%

Hernando County Utilities

Administration 2,940,379 +5%

Finance‐Admin 695,484        -10%

Engineering 2,112,633     -37%

Billing 1,372,509 +0%

Debt Svcs/Transfer/Reserve 35,001,230  ‐9%

Meter Reading 720,141  +2%

Customer Service/Finance 1,024,083 +0%

Water Operations 5,577,053     -9%

Wastewater Operation 6,798,385     -9%

Water Conservation 254,126 +8%

Public Safety – HCFR

Expenditures

EMS Services 14,894,820 -3.4%

Fire Services 28,170,066 -2.8%

Total Budget

EMS Services 20,224,362 +10.7%

Fire Services 36,715,651 +8.2%

According to HCFR’s Budget Director Kelly Trout, budget increases are due to increased reserves and planned CIPs (Capital Improvement Projects).  Expenditures are down due to cessation of FLSA (Fair Labor Standards Act) Overtime, saving around $650,000.  Debt servicing has also decreased. 

Planned Capital Improvement Projects include renovations and updates of various stations in the county.

John Emerson - Property Appraiser

Category   Amount Requested ,% Increase/Decrease

Personnel Services  $33,116, 1.4%

Operating Expenses  $59,043,17.6%

Operating Capital Outlay - $10,658, - 29.5%

Non-Operating Expenses $10,000, 0%

This budget is expected to be adjusted when the Florida Department of Revenue determines the Property Appraiser salary.  It is estimated that approximately $50,000 of excess funds will be turned back to the county, and that $10,000 will be returned to the Board of County Commissioners, representing fees for services.

Emerson also reported that during 2019, his office investigated 971 potential Homestead fraud cases. From these investigations 26 liens were processed which added $5,029,316.00 of property value back on the tax roll.  Based on prior years' liens that were satisfied, Emerson returned $415,049.83 tax dollars back to the county this year. 

There were 899 Single Family Residence permits pulled, which was down from 988 permits in 2018.  The average permit value also dropped from $197,601 in 2018 to $185,975 in 2019.

Sally Daniel - Tax Collector

Category Amount Requested, % Increase/Decrease

General Fund: $ 2,900,000, Not Reported

Total BCC (including GF): $4,000,000, Not Reported

Postage: $ 13,000, Not Reported

FY 2020 unused fees for the General Fund are estimated at $1,100,000.

Doug Chorvat - Clerk of Court

Personal Services, $3,217,700  

Operating Expenses  $1,680,567  

Capital Outlay $51,219  

Other Uses  $6,500  
(Article V-Court Communications) 

Total $4,955,986      
This represents an increase of 0.93%.

Additionally, the Clerk is requesting $396,961 for the following items: $150,000 funding for Care ATC Clinic as requested by Board Administration  (CARE ATC is the county’s healthcare program); $100,000 in customer service area redesign to protect the public and employees from the spread of viruses; $146,961 for security strengthening and improvement of the IT Network Infrastructure utilized by all elected officials.

The final budget request will be: $5,352,947.

Shirley Anderson - Supervisor of Elections

The total amount of the request is $1,590,115 which represents a $121,598 decrease from the prior fiscal year.

Election(s) costs differ from year to year based on the type of election(s). This budget request reflects the impact of COVID-19 on all aspects of the election process, compliance with a recent court order mandating Spanish language voting materials, and a higher voter turnout anticipated due to this being a Presidential Election year. 

This request also includes $1,300 per employee totaling $13,000 for Care ATC (the county’s healthcare program) costs that we have not budgeted for in prior years.

Of This budgeted amount approximately $62,127.50 are grant dollars which will be returned to
the BOCC at the end of fiscal year 2020-2021.

Sheriff's Office Budget: 

https://www.hernandosun.com/article/sheriff-submits-proposed-budget-fy-2020-2021

 

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