As the newly elected Goochland Board of Supervisors moves toward approving the fiscal year 2013 budget, it continues to grapple with inherited issues.
The biggest leftover gorilla in the corner is the impact of the Tuckahoe Creek Service District, which hangs over county finances like the sword of Damocles.
A close second is the dithering of self-absorbed legislators in Richmond who would rather pay power games than serve their constituents and pass a state budget forcing localities to guess at their bottom lines.
At a budget workshop on Monday, March 26, the supervisors sought ways to keep current with service on the enormous debt and mitigate the financial burden on TCSD landowners. They also explored options for dealing with expected mandated changes in the Virginia Retirement System.
There are no good choices, only less bad.
Landowners and residents in the TCSD face drastic increases in sewer and water rates on top of a higher ad valorem tax. These folks contend that, since the whole county will benefit from growth in the TCSD, all Goochland landowners should chip in.
They argue that higher tax and user costs in the TCSD make it unable to compete for new business with Henrico. If the solution to the TCSD debt conundrum is growth, this argument may have some merit.
However, all county landowners have contributed to TCSD debt service since the 2004 benchmark reassessment. Only 45 percent of the increase in valuation of land in the TCSD over 2004 generates real estate tax, the rest goes for debt service.
The county’s general fund also kicks in about $400,000 annually to pay for public utilities. This is county wide money. So, the entire county is “sharing the pain” of the TCSD.
But is it enough? At inception, the amount borrowed was touted to be about $63.5 million, including an arbitrage account that generates about $320,000 annually. As things unraveled, we learned that a $21.3 million “promise” to the city of Richmond for wastewater treatment was never reflected in any repayment plan. Now the total cost, including interest, in closer to a quarter of a billion (yes, with a B) dollars.
There are fewer than 1,200 public utility customers in the entire county, 345 in the TCSD. Their rates are going through the roof due to the inefficiencies of a small system.
These folks are understandably unhappy. Will the rest of the county be any happier to foot more of the bill?
Alternatives to increases in rates and the ad valorem tax presented by staff included using an additional $345,000 from the general fund. Some of these dollars could be redirected from other budget items. Increasing the portion of revenue sharing is also an option, which would require a public hearing and ordinance amendment.
Bob Minnick District 4, whose constituents include all of the TCSD residents, said that it seems unfair to expect users of such a small system to foot the entire bill. He wanted to know how many customers are needed to make the utility system self-sufficient. That information was not readily available.
Manuel Alvarez, Jr. District 2 asked why utility rates in Courthouse Village were higher than those in the TCSD.
County administrator Rebecca Dickson said that she does not know the reason for the inequity. Because there was little documentation of the decisions making process that created and operated the TCSD by the former regime, the new board is groping in the dark for information that should be readily available.
Board vice chair Ken Peterson District 5 observed that the agreements creating the TCSD, which were drafted in 2002, included no flexibility to deal with the realities of the cost inefficiencies of a small system.
Rising ad valorem taxes coupled with declining real estate valuations have created a dreadful, and seemingly unanticipated, situation.
The choices before the supervisors to keep the county afloat in this very fragile economy are not pleasant ones. Indeed, the current budget has something in it for everyone to dislike. This probably means that staff and the supervisors are doing what is best for the whole county.
A public hearing on the 2013 budget will be held next Tuesday, April 3 at 7 p.m. at the high school. It will be streamed live on the internet for those with broadband. The proposed budget is available on the county website www.co.goochland.va.us.