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Hernando Today

Fleet Finances Under Review

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By MICHAEL D. BATES

Hernando Today

Published: February 27, 2009

BROOKSVILLE - The county has launched a review of the fleet department's budget and billing procedures.

The news comes only two days after the fleet department announced it would have to borrow $350,000 from the general fund to stay operational.

Circuit Court Clerk Karen Nicolai said the review will be conducted by the finance department, with the assistance of the department of public works.

"We need to review their expenses to make sure they're properly billing out the amount they are spending," Nicolai said.

Between finance and DPW, there should be recommendations forthcoming, she added.

And Nicolai has already made it clear she expects no further negative cash flows.
Nicolai compared the fleet department to a company that runs on a low-profit margin. The department doesn't get credited with the money owed it for work done until a month after the services are rendered.

And there wasn't enough money set aside in reserves to keep fleet operational.
Nicolai said part of the review will be to determine why the department was not able to build up any reserves.

Why did it take this long before the seriousness of the problem was discovered and who should be held accountable?

"It is a very good question, and finance has been asking (fleet) for a few months to address that," Nicolai said.
Public Works Director Charles Mixson said ultimately he and Fleet Director Jack Stepongzi are accountable for department billing.

Mixson said he took over the department in December 2008 and noticed there were problems in January.

"It's a large department and a lot of money goes through it," he said.

Stepongzi said he inherited a bad situation when he took over in January 2008. Without elaborating, he said there were "internal" problems to be dealt with.

"We were $120,000 behind when I walked in," he said.

The fleet department's budget for 2009 was $6.9 million and is divided into three separate accounts: $1.8 million for maintenance; $3.3 million for fuel; and $1.8 million for vehicle replacement.

Finance Officer Amy Gillis said fleet is in charge of billing. Her department processes the bills and audits them to make sure they comply with audit rules.

No money exchanges hands. These are all done by electronic transfer: The fleet department is supposed to show a credit to its account and the department being charged shows a debit.

"It's all done instantly right here in the financing department," she said. "We debit the (charged department) and credit it back to fleet."

Budget Director George Zoettlein works with the fleet department to establish its budget and monitor it throughout the year to make sure it is meeting revenues and expenses, Gillis said.

Gillis said reserves were never budgeted in the fleet fund so that it would have enough cash to carry forward from year to year.

Zoettlein couldn't be reached for comment. He was out of the office late Thursday afternoon.

On a related matter:

The fleet department maintains vehicles and charges for its labor and parts for both county departments and enterprise operations. The latter include such departments as the building department, which derives its income from user fees.

These enterprise departments don't dip into the general fund, the largest pot of taxpayer money.

How can the fleet department then borrow from the general fund for work done on enterprise (or proprietary) departments?
Nicolai said the taxpayers are not out anything because the $350,000 is set up as a loan, and the fleet department is being charged 4 percent interest.

It's no different than if the county had put the $350,000 in a certificate of deposit and gained interest, she said.

Put another way, "it's like getting an advance on your credit card," Nicolai said.

Reporter Michael D. Bates can be reached at 352-544-5290 or mbates@hernandotoday.com.

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