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Hernando Today

County Has $37M In Cash Reserves

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By MICHAEL D. BATES

Hernando Today

Published: March 26, 2009

BROOKSVILLE - The finance department released its annual citizen's report this week, showing the financial activity for fiscal year ending Sept. 30, 2008.

The report shows Hernando County has budgeted $92.6 million in total revenues in the general fund, which is the main operating source for the government and supported by taxpayer money.

But probably the biggest news is the county's carry forward balance-reserves in the general fund at the end of fiscal year 2008 was $37.4 million, a decrease of only $884,122 from the beginning of that year.

That's $37 million brought forward from the prior year that the county has not spent.

And Budget Director George Zoettlein said county commissioners have the authority to tap reserve accounts for any purpose, subject to guidelines.

For example, it would require a supermajority vote to appropriate money from the general fund emergency reserve: Commissioners are considering taking $500,000 from the budget stabilization fund to give to the Office of Business Development to help retain and attract industry to Hernando County.

County Commissioner David Russell said the county is top-heavy with reserves.

"I feel that we can afford to pare down those reserves," he said. "I don't believe we need to carry that much."

Russell said he will not use reserve dollars to fund recurring programs, "but we'll certainly use those to some degree to get through these tough economic times."

So does the county plan to spend it?

That won't be known until deeper into the budget season.

Equally important, where is all that money?

Mostly in interest-bearing investments, including money market funds, trust funds and other sources.

The $37 million left over is equal to 44.12 percent of the total money the county spent for the year in its general fund, which was $84.8 million.
Finance Director Amy Gillis said the county does not track the $37 million to see if it goes into individual projects nor is it earmarked for any one expenditure.

It is used, she said, to offset revenue needs and to pay for the first few months of expenses while the county waits for tax money to come in.

The county needs money to run the government the month of October because the budget year ends Sept. 30. They fund that "thirteenth month" with the cash balance forward.

But according to the county tax collector's office, about 80 percent of taxes comes into the county in November.

So most of that $37 million, which has barely been touched, starts to be replenished and the cash balance forward starts rising.

Put another way, every year, the county is starting with about the same amount of money.

Take the $84.8 million in expenditures and divide it by 12 months, it means the county needs about $7 million a month to cover expenses.

That is more than amply covered by the $37 million cushion.

While that scenario sounds reasonable, accounting is not always that simple and may not account for all expenses, Russell said.

While dollars do start flowing in during November, "we don't know how much at this time in revenues we're not going to get from foreclosures," he said.

Deputy County Administrator Larry Jennings said typically the county receives about 98 percent or better of its tax collections but historically it's been budgeted at 95 percent of the revenue.

Last year, the county budgeted right at 98 percent, based on the collection rate.

"That seemed to be a more realistic number," Jennings said.

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

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