Paying for stuff

 

           

           Governments spend money on two categories, people and stuff.

            Given the ups and downs of our world over the past two years, crafting responsible, and balanced governmental budgets is more important, and far more complicated, than ever. When shadow of the black swan of Covid hovered over the world in 2020, Goochland pared its budget with a scalpel, anticipating drastic revenue shortfalls that never materialized. In 2021 an influx of federal relief dollars, most of which had strings attached, made wise spending decisions crucial, lest one-time funds be used for recurring costs.

            Real estate assessments swelled by an unprecedented 13 percent this year, generating more operating revenue.

            The Board of Supervisors will hold a public hearing on the proposed FY23 budget next Tuesday, April 5 at  6 p.m. A vote to adopt the budget will take place on April 19 at which time tax rates and the fee schedule for calendar year 2022 will be set.

            The proposed FY2023 county budget includes increased employee compensation to help Goochland compete with the "big boys" in the region to attract and retain the most qualified staff. People are the most important component of effective and responsive government.

            Paying for the "stuff" is far more complicated. A capital improvement plan (CIP) is used to fund major expenditures including buildings, equipment that costs more than $50 k, and replacement of life-cycle systems including HVAC and technology. A few years ago, the county undertook the massive task of crafting a 25-year capital improvement plan that listed everything the county needed until 2045. The total was several hundred million dollars.

On March 15, the supervisors wrestled with CIP numbers to be included in the FY 23 budget. (Go to https://www.goochlandva.us/DocumentCenter/View/8619/FY2023-GOOCHLAND-COUNTY-LONG-TERM-CIP-WORKSHOP for details.)

            The annual budget process includes funding that year's portion of the CIP and looking ahead five years. This annual realignment of the CIP can move an item forward or back in priority as circumstances change.

For instance, a replacement for the nearly 30-year-old ladder truck at Courthouse Company 5 and a new fire tanker were in the FY 23 CIP but will probably be included in current (FY22) year's budget. Fire-Rescue Chief D. E. "Eddie" Ferguson Jr.  told the board that apparatus prices will go up as of May 1 and have a two-year delivery time. By placing orders before May 1, the county can save "just under $200 k" on the purchase of this equipment. Deputy County Administrator for Administrative Services Barbara Horlacher said that there is enough money in the current year's budget to cover this cost.

            The fire-rescue CIP consumes a large piece of the 2023 CIP pie, which includes the West Creek station to be built on the east side of Hockett Road, just north of its intersection with Tuckahoe Creek Parkway.

            In past years, some smaller projects have been cash funded with end of year budget surpluses and removed from the CIP.  

            Earlier this year, Goochland County issued bonds, made possible by the blessing of voters last November, to build a new Goochland Elementary School, the fire-rescue station, and a new courthouse complex.

            The school cost as initially designed has come in significantly over budget reflecting the rampant inflation in construction.  The school board will hold a special meeting tonight, March 29, at 6 p.m. to address Goochland Elementary School construction. (Go tohttps://www.goochlandschools.org/page/school-board-meeting-live-stream to watch a live stream of the meeting.)

            The supervisors' March 15 CIP workshop discussion veered toward the philosophical as they addressed not only methods of funding big ticket items, but ways to ensure that the county adheres to its careful fiscal policies to prepare for the unknown, achieving the delicate balance of spending enough without becoming overextended.

            Supervisor Ken Peterson, District 5 raised concerns that, as the county budget grows each year, the amount of money kept in its revenue stabilization fund remains unchanged. He contended that fund should grow in line the annual general fund budget. This, he said, could lead to troubling consequences should yet another black swan event, like the 2011 earthquake that destroyed schools in Louisa County.

            Peterson contended that the projected cost increase on the new GES is a "big number" for a small rural county like Goochland, but "decimal dust" for a large jurisdiction like Henrico. Dipping into reserves to make up the difference, he cautioned, could negatively impact our superb credit rating.

            Crafting a balanced and responsible annual county budget is a delicate task. Planning for capital projects is necessary, but subject to change in a future replete with unknowns.