County looking at $23.9 million deficit
Published: Thursday, January 9, 2003 at 6:01 a.m.
Last Modified: Thursday, January 9, 2003 at 12:16 a.m.
FYI: BUDGET PROBLEMS
Areas responsible for the projected budget shortfall of $23.9 million during the next four years: ANNEXATION:
FIRE & RESCUE SERVICES:
The deficit - more than double original projections - was calculated during the past month by county officials in preparation for an upcoming commission planning retreat.
Big chunks of the shortfall are blamed on the opening costs of the new courthouse and major annexations, which have eroded the county's tax base, County Manager Randy Reid said.
A maximum tax increase would mean residents owning a $100,000 home could find themselves owing an extra $76 a year.
If the money isn't raised in some fashion, the county may have to strip some already bare-boned departments, causing the county to suffer from "slow strangulation," Reid said.
For example, lives could be in jeopardy if ambulances don't arrive on time, and cuts to community services could reduce the number of case workers helping the county's neediest residents.
"Even if we cut, the situation would get worse by 2005," Reid said. "I have grave concerns."
Everything - raising property tax rates, implementing impact fees, merging departments with the city of Gainesville, consolidating government, increasing fees, going to the voters for an extra penny sales tax and increasing the gas tax - will be on the table for discussion at a two-day planning retreat for the Alachua County Commission beginning Friday.
The county's immediate financial distress comes from a combined shortfall of $7.4 million next year and another $16.5 million in fiscal years 2005, 2006 and 2007, according to figures released this week. The shortfall assumes 6 percent annual growth in revenues from property taxes. A larger growth rate would reduce the shortfall.
But the deficit is likely even worse. Those numbers do not reflect losses accompanying an upcoming annexation or the repayment of $2.25 million to the county's Solid Waste Trust Fund. The county transferred the money last year to shore up its Self-Insurance Trust Fund, which had been used by the County Commission to settle a large number of lawsuits.
Annexations, a new courthouse, rising health-care costs, lower interest rates and higher criminal justice costs are draining county coffers faster than the taxes on new construction can fill them back up.
In fact, Reid acknowledges that property tax revenue from the controversial construction of Florida Rock Industries' $100 million cement plant in Newberry and Dollar General's $60 million distribution center in the city of Alachua have enabled the county to balance its budget during the past several years.
Cap on growth limits options The county's problems stem from a paradox that faces communities nationwide that have begun to manage growth by limiting where new development can occur and to preserve the natural environment.
For the past four years, the County Commission has been steering a course that would ultimately encourage cities - Gainesville and to a lesser extent those surrounding Gainesville - to take control of fast-growing sections of what is now considered unincorporated Alachua County.
The county's newly adopted comprehensive plan, which may undergo some changes following court-ordered mediation, calls for the bulk of new development to occur in the areas next to the Gainesville city limits.
"Once a county adopts any serious growth limits or extensive regulatory land-use controls or policies to limit growth, that county must realize that it is also limiting its current and future ability to finance urban service provision," Reid explained in a 15-page discussion of issues to be discussed during the planning retreat.
Switching services One proposal toward fixing the problem is for Gainesville - not Alachua County - to be the jurisdiction providing police protection, fire protection, mass transportation, garbage pick-up and recreation, among other things.
But that takes time - and cooperation. An immediate switch from county to city could bankrupt the county.
Look what happened when Gainesville last year annexed a lucrative tract just south of Archer Road, where an estimated 14,000 people, mostly college students, live in apartment complexes.
The annexation, while fitting with the county's long-term goals, caused the county to lose more than $2.4 million in property tax revenue and other fees, throwing the county's budget out of kilter.
Another annexation of nearly 700 acres west of SW 34th Street between SW 20th Avenue and SW 24th Avenue could be forthcoming in the spring.
The county has yet to calculate the new annexation's impact, although an "Urban Services Report" released this week by the city of Gainesville indicates the city would gain about $1 million in revenue next year.
The annexation could have a dramatic impact on Alachua County Fire Rescue. One of its stations is located in the area to be annexed, and it will likely be the subject of contentious debate in coming months.
The city wants it. And the county can't afford to lose it because it covers the highly developed Tower Road area.
Over the long term, however, merging the city and county fire departments could prove a solution. Talks are expected to begin again, and County Commission Chairman Rodney Long on Tuesday strongly suggested the county give the "whole shebang" to the city.
As residential development shifted farther and farther out, costs to build new stations and hire adequate personnel have been more than the county can afford.
"We never should have gone into the fire service delivery business," Long said.
It's unclear if there is board support for the move.
Conventional solutions During the two-day retreat, the County Commission may consider other conventional and inventive ways to cover its upcoming deficits.
By raising property tax rates to $10 for every $1,000 of assessed property value, the county could immediately balance its budget, Reid said.
That's the state-mandated cap on taxes the county can levy to pay for countywide services, including courthouse operations and court services, sheriff's deputies, social services, roads, environmental protection, property appraiser, tax collector and supervisor of elections.
Property owners countywide now pay about $8.99 for every $1,000 of assessed property value.
Less likely, but on the table, will be discussions about possibly incorporating all of the land not currently part of a city or even consolidating city and county governments.
In most places around the state, including Alachua County, ballot initiatives to merge city and county governments have failed. It worked, however, with Duval County and the city of Jacksonville.
The County Commission also has to look forward to coming up with ways to pay for a growing backlog of road improvements and inadequate parks and recreational facilities and programs.
Some commissioners have suggested trying to sell a several-year sales tax increase that could raise money for roads, recreation and numerous capital improvements that the Alachua County School Board has identified.
There is also talk about merging several city and county departments, possibly parks and recreation and economic development.
While most of Friday's planning session will revolve around the gloomy task of bolstering the county's budget, the county might be in for some good news.
Reid said Alachua-based Moltech Power Systems, which filed for Chapter 11 bankruptcy in May 2001, has begun negotiating a payment with the county to settle more than $2.1 million in back taxes owed from 2000 and 2001.
In October, the battery-maker completed a deal to be bought out by Shanghai Huayi Co., a conglomerate operated by the Chinese government.
"That's something on the bright side," Reid said.
Janine Young Sikes can be reached at (352) 337-0327 or firstname.lastname@example.org.
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