Wednesday, November 17, 2010
On to election Day
Matters close to home
Basking in the glow of Election Day 2010, the Goochland Tea Party turned its attention to local matters at its November 11 meeting. The high school auditorium was about half filled with faces not usually seen at local gatherings, a good portent for change.
Tea Party chair Susan Lascollette urged all present to attend local government meetings, whose schedules, along with a wealth of detailed information about the county is posed at the county website www.co.goochland.va.us.
After a tribute to veterans, Dr. Jeff Spence urged everyone to donate generously to the Goochland Christmas Mother, a locally operated all volunteer charity that helps the people that need it most during the holiday season. (Contributions to this worthy 501 c (3) group may be sent to P O Box 322 Goochland, VA 23063.)
The main topic of the evening was one of vital importance, Goochland County finances.
Ben Slone, who lives in Maidens, runs a successful business in Courthouse Village, is a member of the county’s Economic Development Authority and chairman of the Goochland Republican Committee was the speaker.
Before delving into the county’s finances, Slone spoke about the importance of every vote cast in an election. In the District 1 supervisor race in 1999, said Slone, the six vote margin of victory was tainted by allegations of voter fraud.
John Wright, a CPA by trade who lives in Manakin, spoke briefly about the county’s 2009 comprehensive annual financial report. (The county’s auditors, KPMG will present the CAFR for the fiscal year ended June 30, 2010 at the December 7 supervisors’’ meeting.)
Although the 2009 CAFR was reported on in an earlier GOMM post, Wright’s reflections deserve attention. This audit created a blueprint of the monumental mismanagement in the previous regime, which will haunt the county for years to come.
Before 2009, Goochland County employed the same accounting firm to both close and audit its books. This, said Wright, is counter to accepted best practices of accounting, which require at least the appearance of objectivity.
The fact that the same firm prepared and audited county financial reports for decades “raised some red flags” in Wright’s opinion.
To maintain objectivity, businesses and other entities change auditors every so often to give fresh eyes an opportunity to catch errors.
The 2009 CAFR resulted in 40 separate restatements, or corrections. Its completion resulted in accurate numbers to serve as a foundation going forward.
Wright reiterated concerns voiced by others about the previous auditors’ failure to notice irregularities in the utilities’ department, which led to a change in county administration.
As a result of the 2009 CAFR, said Wright “we know what we own and what we owe.”
Slone then began his discourse on county finances, whose picture is now clearer, but less pleasing than before the 2009 CAFR.
The county’s general fund, whose exact size was a matter of conjecture and had been thought to be more that $25 million, now stands, stripped of all of the smoke and mirrors used by the previous administration, at $12.4 million.
In 2002, the supervisors borrowed money from the Virginia Resource Authority to cover the cost of building water and sewer lines to foster economic development in the Tuckahoe Creek Service District. At the time, that amount was touted as $63 million. Instead of building its own facilities, Goochland entered into agreements with Henrico County and the City of Richmond for these services.
The loan was back loaded, payments increasing as, supposedly, the area built out, which in theory, should have generated more tax and other revenue to service the debt.
Growth in the TCSD, in spite of the burgeoning economy in the early part of this decade, was disappointing at best. The area has never come close to using the five million gallon per day utility capacity even though infrastructure construction costs paid to build perhaps the largest capacity wastewater pumping station on the east coast. Current usage is estimated at 688,000 gallons per day. An additional TCSD water line, to further increase capacity, is currently under construction in Henrico County whose cost bled about $3 million from the amazing disappearing fund balance.
The TCSD debt is the 800 pound gorilla looming over Goochland’s future.
The 2009 CAFR also discovered that the wastewater agreement with the City of Richmond included a $21.3 million cost that was supposed to have been paid incrementally through user fees. This obligation was never included in the county’s debt projections. That’s a little like forgetting that you have a home equity loan in addition to your mortgage. Because usage has been far lower than expectations, Richmond has insisted on increases in user fees, which will probably be repeated for the next few years.
Slone presented a graph of the various TCSD financial obligations burdening Goochland. The lines rise steeply toward the future. This does not include other debt incurred by the county.
Why is this important? In the next few years, Goochland County must pay a $10 million balloon payment. Our total current annual budget is about $59 million.
The VRA is keeping a close eye on Goochland’s finances. The county cannot borrow any additional money without the VRA’s blessing. This means no new schools in the foreseeable future even though all three elementary schools are aging and filling up.
Goochland must pay its debts. Slone speculated that the ad valorem tax, paid only by TCSD landowners in addition to real estate taxes, may increase. Unfortunately, that could discourage economic development, perhaps the only hope to get out of this mess.
To further exacerbate the situation, about eight miles of force main, pressurized pipe, may be faulty and improperly installed and maintained. There has already been at least one failure when a section of this pipe shredded spewing raw sewage along River road.
Slone beleives that there way to restructure the debt and reorganize the TCSD itself to make the county’s obligations more digestible. However, the majority of the current board of supervisors, who must approve any such action, blithely whistle past the graveyard on the whole issue.
He contended that the refusal of a majority of current supervisors to even investigate the possibility of legal action against the former auditors, is very troubling.
Slone urged all present to pay close attention to the actions of the board of supervisors, especially how its members vote on important matters and educate themselves about issues facing Goochland.
Real change, he said, will come about when the voters have spoken at the ballot box on November 8, 2011. Good thoughts all.
Unless candidates come forward who can both win elections and govern wisely, little will change. So far two candidates have come forward in District 5 to fill the seat currently held by James W. Eads. While it is still early in the game, Goochland’s future is in peril and there must be ongoing substantive discussions about issues before the next local elections.
The Goochland Tea Party is a welcome addition to public discourse in the county. Hopefully, it will sponsor several candidate forums to explore a wide range of local issues and educate the voters who will have the final say.