Stewardship

 

Goochland County finances have come a long way since the dark pre-2012 days when the county struggled to cover the cost of providing core services with declining tax revenues caused by the negative impact on real estate valuations by the Great Recession.

On August 5, the county’s budget and audit committee made up of three supervisors, Chair Tom Winfree, District 3; Vice Chair Jonathan Christy, District 1; Charlie Vaughters, District 4; County Administrator Dr. Jeremy Raley; and Director of Financial Services Carla Cave, met. (Go to the county website https://www.goochlandva.us/ click on the watch county meetings tab and select BoS Audit and Finance Committee August 5 for details.)

ACFR

First on the agenda was the kick off for the Annual Certified Financial Report (ACFR) with comments by Andrea Nichols of the Harrisonburg office of PBMares (https://www.pbmares.com/) the outside auditing firm retained by Goochland County to prepare the ACFR. She is the senior audit manager, the point person from PBMAres, working with partners Mike Garber and Betsy Hendrick, who focuses on the school part of the audit.  The ACFR must be approved locally for transmission to the Virginia Auditor of Public Account by December 15 of each year. Nichols expects that the Goochland ACFR will be finished on time so that can be accepted by the supervisors at their December meeting.

PBMares has been the county auditor through several contract cycles and has established a strong working relationship with all county departments, said Nichols. She explained that PBMares rotates those involved to ensure that a “fresh set of eyes” are used to perform Goochland audits each year.

Nichols said that her role is to oversee day-to-day logistics, coordinate with all departments, and handle the flow of information through the auditing process, to communicate clearly with those charged with governance, and ensure effective two-way communication.

The ACFR process includes reviews of internal controls, compliance with federal grants, and performs risk assessments to ensure that fiscal policies and procedures are appropriate and in compliance to mitigate risk. Standards used to assess that financial statements are not fraudulently misstated are also applied. (To review details of ACFRs for past years, https://www.goochlandva.us/Archive.aspx?AMID=43)

In the next few weeks, the audit team will be onsite in Goochland as work on the ACFR kicks into high gear. Goochland has earned high marks for financial reporting and operations for the past several years thanks to the hard work and attention to detail by all employees of the county and school division throughout the year. Kudos to all involved for being good stewards of public funds.

Fiscal ’25 fourth quarter projections

Cave presented preliminary financial results for the fourth quarter of the county’s 2025 fiscal year, which ended on June 30. As the county works under a 45-day accrual period, Cave explained, the numbers aren’t final.

Preliminary figures indicate that projected revenues will exceed those budgeted by approximately $4.8 million, much of which is due to a spike in fees generated by the Amazon facility under construction on Ashland Road. Departments are turning back budgeted but unspent funds, most of which Cave attributed to vacancies and $1.5 million not spent on the new GES returned by the schools. This translates into about $7.6 million put back into fund balance at the end of the year.

That’s the operating side. A notice at the bottom of Cave’s report  states that “The supervisors have indicated an interest in assigned these funds to future CIP (capital improvement plan) projects such as fire-rescue station 7, renovation of the old Goochland elementary school, hiring of a second deputy county administrator (Sara Worley was recently appointed to this post), future economic development incentives, or a possible additional contribution to Schools for unfunded  priorities. These assignments will be determined by the Board in October 2025.”

A CIP work session will take place on Thursday, September 4 at noon. This was postponed from an earlier date to include the new county administrator. Goochland’s capital—high dollar, long life items that cannot be funded in a single budget cycle—needs are at least $100 million. These include a new courthouse, (Goochland’'s will mark its bicentennial next year), school improvements, public safety equipment, routine maintenance to existing buildings, and other important items.

Financial Management Policies

The “Revolution” board of supervisors elected in 2011 took office in 2012 and immediately rolled up its sleeves to get the county’s fiscal house in order. Thirteen years later, the result of these Herculean efforts to wrest Goochland from the brink of bankruptcy, is a county with three AAA bond ratings, making Goochland the smallest jurisdiction in the country to accomplish this feat.

Among the measures put in place to get a handle on county finances were creation of financial management policies in 2013, which have been amended several times to ensure Goochland’s fiscal stability. These took a very conservative approach and included a revenue stabilization fund—essentially a rainy-day fund—to ease the county over fiscal bumps in the road caused by economic conditions beyond its control and enable the county to continue to provide core services.

This philosophy served the county well as it climbed out of revenue declines caused by the Great Recession and uncertainties during the early days of the Covid pandemic.

Current supervisors have discussed if perhaps the ratio of debt relative to the assessed value of real estate not to exceed 2.5 percent as expressed in existing policy, is too conservative. Debt payments, exclusive of that for the Tuckahoe Creek Service District Bonds, have a target of 10 percent of general fund expenditures and a ceiling of 12 percent to accommodate temporary overlap of debt service payments.

Last December, the audit committee met with the county’s financial advisor to discuss reducing or eliminating the policy of keeping an amount equal to 55 percent of unassigned fund balance on hand for emergencies. After discussion, a decision on the topic was postponed allowing more time to investigate the implications of the change.

If there was a March meeting of the audit committee, a recording and minutes of it do not seem to be on the county website. At the May meeting, there was mention of approval of reducing the required percentage of unassigned fund balance on hand from 55 to what seems to be 20 percent of the coming year’s General fund budget and the non-local portion of the school operating budget.

The quandary is between ensuring adequate reserves as a cushion for county operations and perhaps sitting on money that could be better used to fund capital projects.

Supervisor Jonathan Lyle, District 5, presented simplified financial language for the policies, whose current terminology, he contended, was written for and by lawyers and accountants. Lyle’s revisions, which include footers on each page with illustrative calculations of the policies using real county numbers for the most recent five years, were approved. However, the updated version has not yet been posted on the county website.