Budget Director Under Fire

BROOKSVILLE - Allegations have been leveled against the county's budget director for excessively overbilling enterprise departments and transferring the money to the general fund.
Enterprise departments are government activities that operate in a business-like format, and include the utilities, development and aviation authority. According to Florida Statutes, these funds are to be used solely for the benefit of those activities because it is not general taxpayer money but fees charged to customers.
Civic Activist Janey Baldwin said she planned to broach the subject during today's county commission meeting.
"These enterprise funds are being treated as cash cows that (Budget Director George Zoettlein) is using to fund county operations," she said.
Specifically, Baldwin said she wants to know how long the overbilling has been going on and what role Zoettlein had in what she calls a questionable shifting of money.
Baldwin is not the only one complaining.
In an April 10 memo from Development Services Director Grant Tolbert to Zoettlein, Tolbert questions the methodology used to compute the cost allocations of his department that total $1.4 million for budget year 2008-09.
Tolbert said there is no logical explanation for the cost allocation of his department increasing from $560,000 at the end of 2005 to $1.4 million for 2008-09.
He admits he cannot cover the costs, especially with the downturn in the economy, without eating up part of his $2.5 million in reserves.
"If I'm paying $1.4 million, that's half my reserves," he said.
To make up the difference, Tolbert said he would be forced to raise fees substantially.
Hernando County in 1998 contracted with Tallahassee-based Maximus, a consulting firm to help compute cost allocations for all departments.
The firm comes up with the numbers and Zoettlein applies those numbers against the budgets of the departments. That money then goes back to the general fund.
Based on calculations from Maximus, Tolbert said he would have to charge at least seven times the $250 his department now charges for variances alone.
"You know as well as I, that this cost would not be acceptable to the public nor to the board of county commissioners," Tolbert wrote Zoettlein.
Tolbert said he started questioning the cost allocations as far back as 2005. But he said he didn't make anything of it then because his department was better staffed and times were better.
Now, with last year's forced layoffs and money tight, these allocations will cripple him, he said.
It was time to get this out in the open, he said.
The full cost allocation taken from the enterprise funds this year totaled $10.1 million to the taxpayer-supported general fund, Tolbert said.
Tolbert said the problem is not so much with Maximus. It's with the numbers plugged into the methodology used by Maximus - numbers supplied by Zoettlein, he said.
For example, the basis for the original cost allocation for technical services of $262,817 for the building division and $66,817 for the zoning division was not properly determined, which resulted in recalculated numbers to $109,402 to building and $27,791 for zoning, according to the memo.
"There is still some belief here that, notwithstanding this recalculation, we have been previously charged the incorrect amounts," Tolbert said.
"I think you need to set up a full review by all department directors of the entire study and find out why the actual cost numbers are so large," Tolbert wrote to Zoettlein.
Tolbert said the more he studied it, the more doubtful he is of the cost allocation relevancy "not to mention the errors in the actual numbers."

Zoettlein Defends Cost Allocations

Zoettlein said he doesn't supply the numbers to Maximus. They are supplied by the department heads. Zoettlein said he is simply the repository of the numbers.
Zoettlein said he understands times are rough for Tolbert now. But it was his responsibility to put money away the past two years - during the healthy market - in anticipation of the cost allocation bill because the bill is always computed two years in arrears. Tolbert knew that, Zoettlein said.
"He knew the bill was coming," Zoettlein said.
Zoettlein said Maximus is charging the county $10,500 to do yearly cost allocations for departments and for federal grants.
The cost allocation process "is a legitimate way to charge the departments for the services that they actually use, and it's allocated throughout all the funds - all the departments in the county," Zoettlein said. "It's not just the enterprise funds. It's all the funds in the county, even the general fund."
"I didn't hear (Tolbert) complaining two years ago," Zoettlein said.
Zoettlein also denies that the full cost allocation taken from the enterprise funds to the general fund this year totaled $10.1 million.
The general fund will actually take in $3.3 million this year from cost allocations, he said. The $10.1 million cited by Tolbert is the cost of the entire allocation plan if it was spread out to all departments in the county, including the general fund, he said.
The hiring of Maximus has not been well-publicized.
County Commissioner David Russell said he remembers the name of the company during last year's budget talks but was not familiar with its function.
He had also not heard of the allegations of excessive charges to enterprise funds.
"I haven't seen the facts and figures, nor the allegations, but we will certainly take a look at them," Russell said.