Nearly one year ago, the BOCC approved a 3% per year Fire Rescue MSBU budget increase for 5 years. They also allowed the HCFR to dip into their reserves.
At the time we wrote, "Ultimately this a shifting of funds. They are emptying the bucket that will have to be refilled later. Under certain circumstances, the Fire Department may need support from the county general fund since they are intending to use their reserves to some level that has yet to be identified. If they have no reserves, which are there for emergencies, then the support could come out of the county’s general fund."
Fast forward to May 24, 2016 and that is exactly what has happened.
At the 05/24/16 BOCC meeting, Assistant County Administrator and Fire Chief Scott Hechler announced that before the end of the 2015/2016 Fiscal Year (FY), the Hernando County Fire Rescue (HCFR) will be out of cash and operating in the red going into the 2016/2017 FY. (The FY runs from October 1 to September 30 each year.) Since their budget is tied to both the MSBU (Municipal Services Benefit Unit) and since property tax revenue is received in November, HCFR will begin to see funds again.
In 2015, The Spring Hill Fire Department merged with the HCFR. The BOCC agreed to a salary increase for HCFR firefighters to bring their salaries "in-line" with their Spring Hill counterparts, prompted by the Firefighters' Union. It was stated that $3 million of the budget increase was due to the salary increases the BOCC negotiated with the Unions.
At the 5/24/16 meeting, Hechler provided a new budget and asked the County for a loan of up to $7.5 million which HCFR expects to repay over the next five years at 3.5% interest. Commissioner Wayne Dukes asked, “How do we keep from having this same conversation this time next year?” Hechler is working with the finance departments to “right-size” the budget with a five year plan using both the MSBU and the MSTU (Municipal Services Taxing Unit). It appears that the proposed solution to closing the budget hole is to raise taxes.
Commissioner Nick Nicholson stated the issue is due to the fact that a rate needs to be set by the BOCC, and then HCFR can have stable figures to work from. Hechler wants to look long term and operate with transparency by separating the operating budget and personnel salaries from the cost of maintaining or replacing vehicles and building upkeep.
The plan is to slowly increase rates in order to make up the shortfall in the budget over the next five years, using the funds to pay back the County and then move forward once they have paid back the loan. The BOCC unanimously approved the loan.
*The MSTU is an ad valorum tax, and it is based on millage, a tax rate that uses tenths ($.10) per dollar per property. MSBU is a non-ad valorem tax, meaning it is a set rate and not assessed based on property value. The money is used to maintain streetlights, fire hydrants, fire rescue services, and multipurpose needs, including road paving.