Big ticket items

The county budget process is  never-ending. The supervisors adopt a county-wide budget for the next fiscal year in April and approve tax rates for the calendar year. Budgets are best estimates of expenditures and assumptions that conditions will not change during the fiscal year. Accurate prediction is an oxymoron, but the goal is to get as close to a moving target as possible.

Goochland is a relatively small county, but its budget is still complicated. (To see the FY 2020 budget on the county website go to  http://www.goochlandva.us/ and click on the budget and capital improvement program on the left.) It is comprised of an operating budget and a capital improvement plan.

On Wednesday, January 22, the supervisors and school board held a joint work session focused on the capital improvement plan. There were five new faces at the table, three new school board members: Sandra Barefoot-Reid, District 1; William Quarles, Jr. District 2, and Mike Newman, District 4; and two new supervisors, Neil Spoonhower, District 2 and Don Sharpe, District 4.

New boards discuss CIP

County Administrator John Budesky began the session with background information. The capital improvement plan, he explained, is a strategy to fund items with a useful life of generally more than five years whose cost typically exceeds $50k.

While the school division adopts its own CIP, said Budesky, the supervisors are charged with balancing the collective needs with available revenue, and debt capacity based on the real estate tax rate, which is currently 53 cents per $100 of assessed valuation.

He explained that that, two years ago, using growth projections, the county and schools developed a  25 year CIP—something unheard of most jurisdictions look out only five years—that included schools, fire-rescue stations, a courthouse, and major improvements to existing facilities like cyclical replacement of HVAC and computer systems.  This revealed, to no one’s surprise, that the county’s cliff of needs” was falling behind the five-year CIP.

“This is a plan. Things change, priorities can be different,” said Budesky. Some of the amounts are placeholders, not locked in stone, to plan long term. Some projects can be moved forward into the five-year window, some must be pushed out. This helps to address the impact of new “rooftops” on county services. “My hope is that we can have a robust decision to set in motion criticality on this for the next five years.”

Right now, there are significant challenges. For instance, our three elementary schools were built 50 years ago and need replacing. Going forward, Budesky, the county tries to “smooth “out major funding challenges by not buying everything at once.

The county said Budesky is cautious about incurring debt and pays cash whenever possible. “We do a great job of cash funding our ongoing needs.” Going forward however, greater needs make that difficult if not impossible. The CIP is the recommendation of the staffs of the county and school division. Both boards set policy. There will be lots of discussion about the CIP and operating budgets in the coming months.

Budesky contended that the county’s ability to deliver major construction projects successfully to the community, even if money is no issue, must be considered. Project management, including procurement process, and project oversight should not be underestimated as part of a capital improvement plan.

On February 18, Budesky will present his recommended budget for FY21, which will include changes from the FY20 five-year CIP. He said that there needs to be a robust discussion about important projects not included in the five-year CIP window and what steps may be necessary to address them.

A new Goochland Elementary School and a new circuit court house are at the top of the facilities list. Details will be forth coming and available online in a few weeks, including the justification for the priority.

Construction of a new courthouse, estimated to cost in the range of $25 million, has been pushed beyond the five-year plan. Budesky suggested that a phased approach to replace the courthouse could move the project forward with a “more digestible” funding schedule.

Public safety needs are the top priority on the county side, said Budesky. A new $1.4 million ladder truck for the eastern end of the county has been moved into FY21 while the West Creek public safety facility has been pushed out beyond FY25.  Manakin Company 1 can accommodate the new ladder truck, and existing stations can be “upstaffed” to provide additional service in the rapidly growing east end, contended Budesky.

A new ladder truck to complement Ladder 5 (pictured)  is part of FY21 CIP.

Fire-Rescue Chief D. E. “Eddie” Ferguson, Jr., said that his agency has been successful obtaining grant funds to replace ambulances, which have quarter million-dollar price tags, but competition for that money is robust. The average mileage for Goochland ambulances is 122,000. Currently, three ambulances are “in the shop” for maintenance. Ferguson reported that a grant application for devices to remove diesel exhaust, a known carcinogen, from fire-rescue stations was not successful.

Budesky said that conservative budgeting practices have served the county well, but things could change if the economy dips. A slide of debt illustrated pay down of current debt before incurring new debt, which keeps indebtedness relatively stable. The “red line” on the chart is the goal.

Chart of county debt. The goal is not to exceed to red line.

The new Goochland Elementary School is the highest priority, said Budesky. Changes in the construction market will increase costs. Last year the new GES, with an increased capacity of 650, was estimated to cost north of $36 million and its accompanying road projects more than $4 million. Since last year, that projection increased to approximately $6 million.

The new GES will be built on this site on  Bulldog Way.

School Superintendent Jeremy Raley said he is thankful for the county’s transparent collaborative approach to the budget process. The new GES is the focus of the school division and a legacy project for the community.  Other projects related to the ongoing needs of the school division, “including those yellow school buses that transport precious cargo,” also need funding. These are high dollar “ordinary” costs for roof, HVAC systems and other items to create a safe and comfortable learning environment.

Raley said that the secondary complex has become the entertainment and cultural hub of the county. GHS was built in 2001 and needs interior renovation, roof, and system upgrades.

John Lumpkins, Jr. , District 3 cautioned against over building schools and asked about school enrollment, Raley said that there has been a modest drop in enrollment but contended that the new GES would extend the life of BES and RES to the point where the county can afford to build new schools.

“We want to have a quality project that gives citizens value for their tax dollars being mindful that we are stewards of county money,” said Raley.

Budesky said that there will be “a lot more rolling up of the sleeves” before the budget is finished. “There is room for modification up to its approval.” He thanked Barbara Horlacher and Debbie White, finance directors for the county and schools respectively, for their efforts in preparing the information.

School Board Chairperson John Wright, District 5 said he would like the supervisors to review the schools’ CIP, which was approved last November, to see what items were eliminated. “This process is meant to be inclusive of everybody here,” said Wright.

The five year CIP of the school division includes  $20 million for an addition to GHS, renovations to GMS and routine costs including replacement of school buses (go to school board CIP November 2.)

Chatter about the need to raise the tax rate to fund services and facilities as Goochland grows has been around for a while. It is doubtful that the FY21 budget will include an increase in the tax rate, but next year is another matter. “There need to be conversations about needs beyond the five-year plan that cannot be funded with the current 53 cents per $100 of valuation tax rate” said Budesky.

The county is expected to use its excellent bond ratings to borrow a substantial amount of money in the next few years. Just how much the county will borrow and what sort of tax rate will service that debt remains to be seen.

Let’s hope that the constructive collaboration between the supervisors and school board continues as they seek to meet Goochland’s financial challenges.