County shortfall: $12.5M
Three new offices come online in recession

By Wayne Markham

wmarkham@keynoter.com
Posted-Saturday, June 14, 2008

Service cuts, tax increases on the table

Monroe County's past spending habits are coming back to haunt county policy makers, who learned Friday they face a $12.5 million budget crunch.

Based on this year's $79.1 million in property tax revenue, reducing county spending by that much for budget year 2008-09 represents a 15 percent cut.

“It's scary,” said County Commissioner George Neugent, who found out about the magnitude of the financial problems at the same time he learned a budget workshop scheduled for next was being canceled.

“We're in serious financial trouble,” he added. “It does not look good.”

County Administrator Roman Gastesi said the June 19 workshop was canceled to give him and his staff more time to dig into the numbers.

He pointed to county spending practices “for the past five years,” noting that each year to balance the books, the county dipped into reserves.

“What happened is we depleted our savings,” Gastesi told the Keynoter Friday, adding the drawdown was close to $8 million in the current budget year.

Last year, County Clerk Danny Kolhage, butting heads with then-Administrator Tom Willi, warned of a $10 million shortfall if county spending continued to eat into reserves.

Gastesi, who started his job as Willi's replacement May 12, said the $12.5 million estimate for next year includes $1.5 million that should be put back into the reserve accounts.

“Right now, more or less, we have [reserves] equivalent to three, four months,” Gastesi said. “That's tight. No local government should be in that financial position.”

Willi was fired Dec. 5 at a County Commission meeting n Key West. Because he was terminated without cause, the county wound up paying him $282,000 in severance.

Commissioner Sylvia Murphy just learned of the budget shortfall this week.

“We should have handled some of this last year, but by the time we did, we got demoralized and now we'll have to do it again,” Murphy said.

The longtime Key Largo resident said the county has never faced a budget cut as large as the potential $12.5 million figure she's heard.

“It might be time to take some divisions and put them together,” she said.

Mayor Mario Di Gennaro said “we have to cut expenses; we have to slim down and be more efficient. But we also have to increase revenue. That's what this county has been lacking.”

Without giving away specifics, Gastesi said the budget crunch is so severe that closing the gap will require “various measures, including millage rate and service adjustments.”

Increasing county tax rates above the rollback rate would require a super-majority vote of the commission, which means at least four of the five voting to increase taxes. Rollback is the tax rate that would generate the same amount of tax revenue next year as this year.

This year's millage rate of 2.73 ($273 per $1,000 of assessed property value) generated $79 million of unincorporated Monroe County's overall budget of $329.4 million.

The county administrator's talk about “service adjustments” hints at cuts in county services.

Murphy said she's heard one idea being vetted that would transfer portions of the county's in-home services care to an outside vendor. That program operates under the Department of Social Services and provides support services to frail, impaired elderly (age 60-plus) and/or disabled adults (ages 18 to 59).

Neugent said he's heard talk about further reducing library services, park hours and other county programs, which he said will “trigger some serious grief.”

Eyeing the budget he inherited, depleted reserves and the state mandate to further reduce local taxes, Gastesi described the county's financial forecast as “the perfect storm."