January 18th
BUDGET RETREAT
The Board of Supervisors met on Wednesday, January 18, 2012 from 9:00 a.m. to 5:00 p.m at the Powhatan Library for the first day of its budget retreat.
The projections were as bad as I thought they would be when I voted against the budget last year. The total projected revenue shortfall is $5.13 million. The decrease is based on a $4.06 million decrease in real estate tax revenue and a $1.07 million decrease in other revenue.
The decrease in real estate tax can not be equalized without a $0.14 tax increase. The majority of the $1.07 million shortfall is caused by the use of $1.32 million in one-time money to cover recurring expenses in last year's budget.
In addition, there is a $289,000 projected decrease in revenues for the schools.
Expenditures are projected to increase by $1.455 million on the school side to cover the VRS repayment and $1.31 million for the county departments.
During the opening presentation the acting County Administrator Jerry Whitaker gave the Board the following updates.
1. Real Estate Assessments were down 14% for single family residences and 3% for commercial real estate.
2. The total assessment of all properties dropped $519 million and the taxable values dropped $527.5 million.
3. The decreased revenue caused by the real estate assessment decrease equals $4.06 million.
4. The real estate tax rate would need to be increased by $0.14 to $0.91 from $0.77 to generate a revenue neutral real estate tax collection of $26.3 million.
5. Other revenues are projected to decrease by $1.07 million.
6. The combined effect of items 3 and 5 means the county is facing a $5.13 million shortfall, if the real estate tax rate is not increased.
7. There is also a projected increase in expenditures of $1.31 million for county departments.
8. The starting budget gap, therefore, is between $2.38 million and $6.44 million and this does not include any decreases in state or federal funding to the county nor the $1.455 million increase in expenditures dedicated to the schools to repay the VRS or the $289,000 projected decrease in state funds to the schools.
After the initial briefing from Mr. Whitaker the board heard from several county department and 4 of the 5 Constitutional Officers.
Although we will not hear from the Treasurer until tomorrow, it can be said that all five of your elected Constitutional Officers have been good stewards of you money. With two exception, they brought their offices in under budget each of the last 4 years.
The only two exception were 1) an anomalous increase in the insurance cost for the Commonwealth Attorney which put his department over budget by less than 0.5% and a two year overage at the Sheriff's Department.
The overage, an average of 4%, at the Sheriff's Department for the last two years, however, is a problem with under budgeting and not over spending.
Almost every department head and Constitutional Officer said that the former Finance Director and County Administrator were not concerned with individual line items, but were more concerned with being under your total budgeted amount. They also said that they had little or not input in the development of the line items.
In the Sheriff's case the overage was caused by a chronic under funding of uniforms, maintenance and automotive repairs. The actual expenditures in those categories were always under funded by $80,000 for three years. This means, if the total actual expenditures for those three items was $180,000 per year for three years, the county only budgeted $100,000 a year for the years.
Such a situation arose in several departments and was traditionally linked to an under funding of repairs and maintenance.
The three departments with the biggest overages were Parks and Recreation; Facilities and Utilities.
The Parks and Recreation department was over budget 35% in FY2012 and 69% in FY2011. The reason for the overage was the fact that Fighting Creek Park was not accounted for in the budget for those two years. The park was not added to the budget until FY2012, so an average of $150,000 in expenses was not accounted in the budget.
The Facilities department was over budget 44% in FY2009, 20% in FY2010 and 39% FY2011 for a three average of 34% over budget.
The Utilities department was over budget 42% in FY2009; 15% in FY2010 and 46% in FY2011. When asked why the bi-monthly water fee was under budgeted by $135,000 ($105,187 budgeted (FY2011) and $236,981 actual (FY2011)). The reply was this is too low and should have been higher, but I have no control over the line items.
I do not blame the department heads for these errors, because they did as they were told. A budgeting process where changes in the line items are not discussed with the department heads; do not take into account the historical actuals and is done to simply make a budget look good on paper, however, is problematic.
I would also point out that the County Attorney position which we were told would save the county money, is costing the county over $43,000 more than the previous system cost the county in an average year.
As a final point, the Board authorized the Transportation Study Group to review the cost and need for a new transportation maintenance facility. The county told the committee that its annual cost for repair and maintenance of vehicles was $149,000. By reviewing the budget numbers today, this number can not be accurate. The cost for vehcile repair and maintenance in the Sheriff's Department was $216,00.
At the end of our last budget work shop at the Village Building last year. I asked if the Facilities, Utilities and Parks Department were properly funded and was told yes by the County Administrator. The projections for the current budget show that all three will be over budget again.
Tuesday, January 31, 2012 at 5:51PM