Supervisors provide direction on balancing five-year financial plan
Monday, October 19, 2009
At last year’s retreat, the Board started the budget process with plans for no salary increases, 55 frozen positions, and expectations there would be $100 million less in the Capital Improvement Budget.
As part of this year’s retreat, County staff presented the Board with a revised five-year financial plan based on the existing real estate property tax rate of 74.2 cents. Property assessments are expected to be 3.75% lower in FY 2011, with a rebound not projected until FY 2013. Sales tax revenues are expected to be 2% lower next year, with a increases projected to begin in FY2012.
“We are facing a significant imbalance between revenues and expenditures,” said Deputy County Executive Tom Foley. The County has a $5.8 million shortfall over the course of the five-year plan.
That plan assumes the number of frozen positions will be expanded from 55 to 65. No salary increases are projected for next year’s budget either, but they are projected for the following four years. No money will be spent on professional development, and no money has been restored to previous program cuts.
A group of department heads and County Executive Bob Tucker formed something called the Leadership Council to make recommendations on how to bring the plan into balance. Some of their recommendations included:
- Establish an equalized tax rate for both commercial and residential property tax rate for the first two years of the plan. This tax rate is assumed for the purposes of the five-year plan at 77.2 cents.
- Maintain that tax rate for the remaining years of the plan.
- Eliminate general fund spending for ACE program, cutting program to the $350,000 allocated externally by the Virginia Department of Tourism. The proceeds would go 100% to local government and are not subject to the 60/40% split with the school system.
- Discontinue participation in VDOT’s revenue-sharing program and re-route 100% of these funds to local government, saving $1.5 million annually.
- Eliminate spending for recycling centers during the next five years while future of program is studied.
- Reduce funding to the Affordable Housing Trust by $190,000 a year.
- Establish a one-time revenue shortfall contingency fund of $1.5 million.
- Extend number of frozen positions beyond 65 called for in the existing plan.
- Reevaluate all projects in the Capital Improvement Program.
- Eliminate salary increases.
Other assumptions include:
- Any money the County obtains through the land use revalidation process will be used to contribute to the County’s general fund as “fund balance.”
- Investigate whether school system can contribute to the reduction in the CIP
- Work with the business community to promote the economy
- Delaying construction of the Ivy and Pantops fire stations
- Consider merging services and departments with the City of Charlottesville
- Review development review task force recommendations to see if any cost savings can be found
“Nobody’s tax burden actually increases because reassessments are still declining during that time period,” Catlin said. “It does mean that in the last three years of the plan, if reassessments come above zero, people will see a minimal tax increase in their bill. What the Board said in their discussion was that was a possibility for balancing the five-year plan.”Catlin acknowledged that many of the options on the table would involve painful decisions.
“There’s not any of them that either the staff or the Board felt good about embracing, but there was definitely a realization that we are at that place of tough choices,” she said.County staff will now use the direction from the Board to prepare a more detailed analysis of how these spending cuts would affect next year’s budget. They will be presented with that analysis at a work session in November.
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