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County In 'Safe' Spot Financially, Officials Say

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By MIKE SALINERO

msalinero@tampatrib.com

Published: December 18, 2008

TAMPA - Despite the daily grind of dreary economic news, Hillsborough County government finances are in the pink, at least for now.

Three of the county's top economic directors told county commissioners Wednesday that the government continues to enjoy top credit ratings and has enough tax money coming in to forgo tapping reserves, as the state is doing.

Budget director Eric Johnson said the county can absorb losses from declining sales taxes and lower interest income on investments because it budgeted 95 percent of anticipated revenue.

"We built into the budget capacity for shortfalls," Johnson said.

Johnson said sales taxes are running about 5 percent lower than expected, creating a potential shortfall this year of $16 million. And the $18 million in interest revenue the county was expecting on investments in its general fund could decrease significantly, he said.

If revenue continues to erode next year, Johnson said the county has reserves that can be used to close the deficit.

"We have plenty of reserves; we just don't want to tap them unless we have to," he said. "But some of those reserves are there specifically for revenue shortfalls."

The county continues to maintain a AAA bond rating with Standard & Poors Rating Services, a sign of financial stability, said Kris Landkammer, finance director for the clerk of court. She said the county's $2.11 billion is diversified in safe investments and is highly "liquid," meaning it can be quickly converted to cash.

"We're very safe, we know what's ahead of us, and I think we're just well-positioned," Landkammer said.

The county is also lucky that it doesn't have to borrow money this year. The credit markets are frozen because investors have no faith they will be paid back, said Mike Merrill, utilities and commerce administrator.

"Banks can't trust each other because they don't know if a bank that they're lending to is going to be around tomorrow," Merrill said. "Investors aren't willing to put money out long because they don't know if they invest in corporate bonds, for example, whether that corporation's going to be around tomorrow."

The county could be in trouble, however, when it goes to the bond market next year to borrow money for the water and solid waste departments, Merrill said.

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