Looking ahead for 25 years

Since taking office in 2012, Goochland County’s current board of supervisors refused to accept govern by status quo. From restructuring the massive Tuckahoe Creek Service District debt to securing a AAA bond rating, these supervisors take their responsibility as stewards of public funds very seriously.

Changes in cash proffer laws in 2016, coupled with a dramatic rise in residential rezoning applications brought the potential for new fiscal stress to the top of the supervisors’ worry list. As they considered a drop off in cash proffers—monetary mitigation for the capital expense caused by growth—the supervisors realized they need a better estimate of looming expenditures countywide over the next few decades.

The county retained the services of a consultant to gather data and interpret data on the cost of residential growth to better gauge the county’s ability to absorb it. One component of this project is a long range capital improvement plan.

Typically, the county CIP looks five years into the future to prudently plan expenditures for items with a useful life of more than three years and costing at least $50,000. This year, the Board asked for a 25 year CIP.

At a special workshop on December 11, County Administrator John Budesky presented a draft of this document to the supervisors. It was a daunting undertaking  that required a substantial amount of work for every department, especially that of Financial Services, under the direction of Barbara Horlacher. “I would not have done this with any other board,” he said at the start of his remarks.

Projected costs assumed a two percent annual increase in the consumer price index. They did not address possible savings resulting from repurposing existing buildings for other uses. Budesky explained that a sitting board of supervisors cannot obligate a future board to raise taxes to meet the cost of debts it incurs. The numbers included in this CIP, said Budesky, do not reflect a tax increase. However, he opined that, at some point down the road, the Board an citizens may need to have a “discussion” about capital funding in the form of a referendum to allow the county to issue general obligation bonds to fund capital projects.

County Attorney Tara McGee cautioned that, under the new state proffer law, jurisdictions many not use proffer dollars to fund capital projects that are not directly affected by new construction. For instance, proffer money generated by new residential communities in the east end may not be used to pay for a new  fire-rescue station in District 2.

The report is a very detailed, diverse mix of needs and issues. It includes schools, new and improvements; a courthouse; several fully equipped fire-rescue stations; parks; n east end convenience center; and recurring expenses such as replacement of  HVAC systems and roofs. The list is all inclusive. Specific sites for new facilities,  have not yet been identified

The 25 year CIP reiterates that all three of the county’s elementary schools are about 60 years old. Our  existing fire-rescue stations, most built on donated land literally by the volunteers, are not sited to deliver optimal service to citizens.

For instance, District  2 has no fire-rescue station, even though it has experienced significant residential growth since the turn of the century, especially around Sandy Hook. Fire-rescue Chief Bill MacKay contended that it can take 25 minutes for  firefighters from Courthouse Company  5 to reach a blaze at the end of Rock Castle Road, even if there are crews on duty ready to deploy when  dispatched. This increases the cost of homeowner’s insurance and potential for loss of life and property from fire.

A structure fire  last week that destroyed a home in the upscale Meadows subdivision may add urgency to this issue.

The draft 25 year CIP, on which there will be a public hearing at the Board’s January 3, meeting, also includes, in later years, upgrades for firearms and radio systems for the sheriff’s office;  a new east end library; and park improvements.  Please take a look for yourself at http://goochlandva.us/  on the right side of the page “proposed CIP budget FY 2019-FY2043.”

A timeline for expenditures is part of the document. This helps the supervisors decide whether items will be funded on a pay go basis, or will require debt financing.

Budesky said that he is confident about the costs in the near term, in the outlying yeas, not so much. Peering far into the future is tricky. Indeed, had a similar task been undertaken 25 in the past, it seems unlikely that funding for information technology would have included cloud servers, software permits, and a hardware replacement cycle.

At the conclusion of the presentation, Supervisor Ken Peterson, District 5, accessed the abacus in his mind when he observed that, to build a new school and fire-rescue station every five years, the county will need to set aside at least $6 million annually, above and beyond all other expenses, for the next 25  years.

During the “great recession” the county slashed spending and delayed recurring replacements to keep its head above water as real estate values—taxes on which are the main source of local government revenue—plummeted. Time is past due for catching up. Doing it all at once sets up the county for a repeat performance of things wearing out at the same time in the future.

For instance, fire-rescue bought six 2,200 gallon tanker trucks about 15 years ago, and six new engines a few years later, all with the same expected useful life. Staggered, planned replacement will ease the cost and lessen the stresses of an entire fleet of aging apparatus. The same is true of most items in the plan.

Planning for upgrades and replacements of HVAC systems; bathrooms; carpet; roofs; software and computers; and vehicles rather than playing  catch up and making expensive, emergency repairs to keep things going beyond their useful lives, saves money in the long run. Figuring out how to pay for everything in  a timely manner is the tricky part.

The supervisors adopted a fiscal policy earlier this year, which says in part:

“In the Commonwealth of Virginia, there is no statutory limitation on the amount of debt a County can issue. The County has set its own debt ratio guidelines as part of sound financial management practices. Debt ratios will be annually calculated and included in the review of financial trends.

 The County will comply with the following debt ratio guidelines:

 a) Net debt as a percentage of estimated market value of taxable property should not exceed 2.75%. Net debt is to include general obligation, capital leases, and enterprise fund revenue bonds, including accreted interest.

 b) The ratio of debt service expenditures as a percent of total general fund expenditures (including transfers to other funds) should not exceed 12%. Limiting debt service expenditures in this way provides flexibility for other expenses in the budget.”

Costs and timing of road improvements are included in the 25 year CIP. Unlike other capital items, road projects require the blessing of, and at least some funding from, VDOT. The list of road projects includes: realignment of Hockett Road; four laning Ashland Road to the Hanover line; the Fairground Road extension to Rt.6; a bridge over Rt. 288 to reconnect Three Chopt Road  to Broad Street Road; and the bridge over Tuckahoe Creek to connect Ridgefield Parkway to Rt. 288.

The grand total for the 25 year CIP is $592,176,006. Paying for infrastructure will be a daunting task.