Sarasota County revenues are sliding off a figurative cliff, and the State of Florida predicts the cliff will get steeper next year.
During a Jan. 28 budget workshop, the county commissioners learned the state had revised downward its revenue forecast for the county. In September the state predicted an 8.5-percent drop in "taxable value projections" for the upcoming fiscal year. In December, that fell to a 14.3-percent decline.
The new state estimate calls for an ad valorem tax revenue yield of $109.7 million for Fiscal Year 2011. In FY 2008, the number was $175.7 million. In the "good times" of the mid-2000s, the commissioners set aside "reserve funds" in the event of an economic downturn. After the collapse of property values, they began dipping into those reserves to maintain county services and payroll.
On Jan. 28, the commissioners could see the bottom of the barrel. If the commission continues to rely on reserves to cover the gap between income and expenses, the account will be exhausted in Fiscal Year 2013 (which begins Oct. 1, 2012) and the county will be $21 million short.
"By October 2011, we need a clear idea of how to close the gap," Deputy County Administrator Dave Bullock told the commission. "In a year and seven months, we need to be very clear about what our expenses will be."
The county began preparing for the budget storm three years ago. It pledged to keep expenses flat for five years. And the county began reducing payroll. Today there are 11 percent fewer "full-time equivalent" positions.
Constitutional officers – including the sheriff, tax collector, clerk of courts, elections supervisor and property appraiser – reduced their staffs by 9 percent overall. However, they must maintain services regardless of the budget crisis. The sheriff, for example, cannot abandon the jail; the clerk cannot stop issuing marriage licenses.
The county commissioners, too, are locked into providing certain services; they cannot, for example, stop providing fresh water or treating sewerage. Fully 70 percent of the county budget is inflexible. Thus, it is only the remaining 30 percent that must bear the brunt of any "discretionary" reductions. In the cross-hairs are libraries, public transit, parks and grants for health and human services.
The economic downturn is lasting longer than past commissioners expected, but use of the reserves to plug "the gap" allowed commissioners to avoid the drastic choices other Florida counties have faced. With the reserves dwindling, though, county staff has put its bosses on notice: If the economy does not rebound quickly, hard choices are coming.
This year the county dipped into its reserve funds for $36 million to plug "the gap." Next year, it will reach in for $50 million. For FY 12, it will scrape out the remaining $41 million. Then the budget becomes pay-as-you-go.
The commissioners pushed aggressively for federal ("shovel ready") stimulus funds and accelerated capital improvements with local bond money backed by a voter-approved local option sales tax to provide jobs now. And they focused on economic development in the hope business would create permanent jobs. In December, the unemployment rate in Florida was 11.8 percent. In Sarasota County, the rate was 12.4 percent, about 50 percent higher than it was two years ago. Four years ago, the rate was 3.1 percent, or a quarter of the current rate.
In recognition of the looming budget crisis, the county commissioners decided to hold quarterly budget workshops this year. Previously the commission waited until summertime before preparing the upcoming fiscal year spending plan. This change gives them more time to make decisions about their discretionary spending, and allows staff more time to suggest ways to save money.
The previous budget workshop focused on parks and recreation, with General Manager John McCarthy suggesting closure of some facilities. He returned Jan. 28 to say users of the Lido Beach Pool and the Payne Park clay tennis courts were very interested in trying to take on "the lion’s share" of operating costs.
Paid parking is also under consideration for "large-scale events," but for now the commissioners are ruling out parking fees for the beaches.
FIRE/EMS UNDER GUN
Emergency services have their own property tax base, but as the base dwindles, so does its income. Its reserves are dwindling even faster than those of the general fund. They are expected to hit the bottom of the barrel in Fiscal Year 2012.
Fire services officials proposed a 30-year bond to continue funding the rebuilding of old fire houses and construction of new ones. Four new or rebuilt fire stations will come online this year. As new stations are built, staffing becomes a financial issue as well.
While a bond only postpones the "bottoming out" by one year, it buffers deficits in future years. "Even with debt, there will be no [reserve] fund balance after FY 13, and you’ve still got a problem. At that point, you’ll have to raise fire fees," said Commissioner Nora Patterson.
"It’s not possible to pay as you go now. But there are benefits of having future residents pay [off the bonds]," said Commissioner Jon Thaxton. "This bonding helps level out the playing field."
The use of bonds to spread out the cost of new infrastructure such as fire stations was one of the recommendations of last year’s Budget Task Force.
The commissioners took no action last week on Fire Chief Kenneth Ellerbe’s recommendation.
LIBRARIES EXAMINED
Then it was the turn of Sarabeth Kalajian, library director. Sarasota County’s libraries are among the most used in the nation. With a variety of techniques, they independently raise about $1 million per year, which is slightly less than 10 percent of their overall budget of $11.5 million. By dividing the budget by the number of visitors, Kalajian estimated every visit to a county library costs $3.93 from the general fund.
She is wrapping up a broad-ranging strategic plan, which examined how to keep the libraries attractive to all users while implementing modern technology. For example, the downtown Selby Library and the Elsie Quirk Library use "automated materials handling," including patron check-out with scanners.
Kalajian turned the strategic plan into a "business plan," which led to a proposed budget. Using new technology would save more than $700,000 for customer service, about a 12-percent reduction.
But her budget also proposed less sophisticated means of cost-cutting. Reduction of library hours, possible closing of a library and further reductions in acquisition of new materials are all under serious consideration.
Alece Douville, libraries director, said, "People are going to see fewer books on the shelves." She noted that in 2006, county libraries spent $1.3 million for new materials to add to their collections. The proposed FY 2011 budget allots $249,000.
The commissioners also took no action on Kalajian’s proposals. The final round of budget setting will not occur until September, with several more workshops planned before then to hammer out the increasingly sticky details.
February 9th 2010 - 2:18PM