Money matters

 

Ken Peterson, who represents District 5 on the Goochland Board of Supervisors and chairs of the county's finance committee, declared the county in good financial shape at that body's May 3 meeting.

He also thanked all involved in the issuance of general obligation bonds in early February to for their hard work. "By issuing those bonds before interest rates started to go up, we saved the taxpayers of Goochland about $10 million dollars in debt service over the life of the bonds," said Peterson.

Since being elected to office a decade ago, Peterson has been actively involved in changing the finance culture of the county from one that could be charitably labeled dysfunctional to an exemplar, earning three AAA bond ratings, the smallest county in America to do so.

Deputy County Administrator for Administrative Services Barbara Horlacher presented the projections for the third quarter of FY22, which indicate a nearly $7 million surplus over budget, with fund balance relatively flat at $41 million.

 She also asked the committee to approve funding extra services from the county's outside auditors, PBMares, to deal with an increased workload that is the result of "empty seats" on the county's finance staff.  These would be tasks that would not violate GASB conflict of interest regulations. The cost would be approximately $165 per hour. The position of Director of Financial Services has been vacant for a few months. Interim County Administrator Manuel Alvarez, Jr. said that he expects that position to be filled soon.

The second five-year contract with PBMares expires at the end of 2022. Horlacher said that an RFP will be used to find new auditors.

Things are good in Goochland's financial house, but the challenge now, contended Peterson, is to sustain this in the long term. He discussed the concept of depreciation, which, for governments, is maintenance of fixed assets, which liquidate over time. Peterson contended that setting funds aside to replace items like sheriff's vehicles, computers, and HVAC systems, which wear out and must be replaced to continue to provide the level of service that citizens expect. This, he said, is the annual component of the capital improvement plan, and wondered if it should be part of the annual budget. In recent years, Goochland has used budget surplus money for this purpose.

Peterson suggested that the county's financial polices (https://www.goochlandva.us/DocumentCenter/View/4422/Goochland-Financial-Management-Policies-Effective-May-1-2018) be amended to include methods for sustainable funding of this "depreciation" with annual budget surpluses. Don Sharpe, District 4, Board of Supervisors' Vice Chair, said he would prefer inclusion of a recommendation. "A new board can change anything it wants." He suggested spelling out the current practice in detail as a road map for future boards.

Alvarez said that the current budget process includes an estimate of the surplus for projects to be included in the CIP. The way it works now is if there is not enough money in reserves at the end of the year to fund planned projects, they are deferred, or other funding sources are sought. The 25-year CIP provides a good basis for this to work.

"The financial condition of the county is only as good as its leadership," said Peterson. "It falls on the shoulders of the citizens to elect fiscally responsible people to run the show. That's the only reason it's been working."

Sharpe said that future challenges could make that difficult. A significant fall off in real estate valuations, the main source of county revenue, for instance, could change everything.  This happened after 2009, when valuations plummeted.

During public comment, Jonathan Lyle suggested a management by objective policy in place contending that thought mist be given before a policy deviation can happen.

No decisions on fiscal policy were made, the committee could revisit the issue at its August meeting. (To listen to the complete discussion, go to the county website https://www.goochlandva.us/ click on listen to county meetings and select May 3 finance committee.)