Swiftmud coping with deep budget cuts
After years and years of being flush with cash, the agency that oversees water resources in West Central Florida is in a real funding crisis. The Southwest Florida Water Management District is feeling the pinch of the staggered economy and plummeted property values. The pinch means district executives will have to change the way they do business. The good news for administrators is that the district will plod on this year, and maybe the next because of cash reserves it has amassed, but two years down there road is a roaring financial waterfall. In its heyday, the district was bursting with success. It spent hundreds of millions of dollars buying up wetlands for preservation and literally set the standard for agricultural and commercial water consumption. It delved into groundwater and surface-water quality and had the ability to put restrictions on development that didn't adequately plan for water usage.In times of drought, it established residential lawn watering guidelines. In times of rain, it examined ways to ease flooding. That was before a few years ago, when the economy tanked and property values precipitously fell. The district budget is dependent largely on property taxes in the 16-county area which it covers. Now, the district is forced to run its far-reaching programs this year under a $155.5 million budget. It may seem like a lot for a water management district, but it's almost half of what it was last year. Already, the district is directing some of its crew to jump ship with offers of separation packages backed up by the looming threat of layoffs next year. "If you look at the history of the district," said newly hired district Executive Director Blake Guillory in a recent interview, "we've been different sizes at different times. "We're going to be OK. "We can do better, efficiency-wise," he said. "We can. We are looking at every department, every bureau, every section. We are evaluating everything." The total operating budget for the district this year is down 44.4 percent from the $279.8 million budget last year. The biggest part of the $124.3 million decrease is due to a $57.4 million reduction in property tax revenue. Besides the cut in tax revenue, the state cut its portion of the district's funding by $28.9 million, which had gone into the Florida Forever and Water Management Lands Trust Fund. Other reductions include a $1.7 million cut in local funding and a $2 million reduction in interest on investments. To further cut operational expenses, the district's governing board in May merged the budgets of the eight basin boards, which resulted in a projected savings of as much as $400,000 a year. With all that, it will take cash reserves to carry the district for a year. If the district continues to operate under its current budget, it could go into the red in 2013 to the tune of about $30 million. Until then, said Guillory, who has been on the job less than two months, the ship will continue on. "We have reserves," he said. "And we also have a lot of projects that were funded that … have been canceled. We call that balance forward, that money is carried forward." He said the $50 million deficit this year can be funded through reserves and money saved through those canceled projects. "We are going to be OK this year," he said. "Looking forward, this is sustainable for two years. We're looking two years out. We saying in two years, we might not be able to continue funding projects at the same level." Such programs that may be cut or eliminated include one that aims to improve the quality of surface water, such as rivers and lakes; another is an incentive project for the agricultural industry to cut its dependence on groundwater. Storm-water retention projects along with programs that encourage alternative water supply uses also may be on the chopping block, he said. "We are not cutting those programs this year," Guillory said. Another way to cut costs is underway now, he said, and that's a hard look at the district's surplus lands program. "We're re-evaluating district properties right now," he said. Being examined is all the land owned by the district and how much of that is not environmentally sensitive. Can revenue be made by selling that land or trading it for other acreage that is environmentally sensitive? Can it be leased to agricultural concerns? And, if so, what are the appropriate rates? Guillory said he will have to get answers to all those questions over the next two years to squeeze out every dime possible. The goal is to streamline the district's operations as much as possible, to preserve critical programs and the staff. In October, the district implemented its organizational restructuring plan – expected to reduce expenditures by $15 million a year. The plan includes staff reductions and a realignment of the staff based on types of work they do. Currently, more than 700 people work for the district and managers want to cut that by as many as 150 positions. Forty of those currently are vacant positions or filled by contractors whose work is nearly finished. Eligible employees are being offered "separation packages" that will be available for 45 days. If the voluntary efforts don't produce the necessary reductions, the district will begin involuntary layoffs in January or February. "I knew what I was getting into," he said, when he took the job, "and whatever we do, we are trying to keep and do what's best for our staff." He said some employees have already volunteered to quit and before the end of the year, "a good number" will join them in taking the packages. "We are looking for that level of sustainability," Guillory said. "How efficient can we be before we really have to start cutting into our core mission. We're not there yet, but that's what we looking for."
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