Where the money goes

 

On September 4, the Goochland Board of Supervisors held a three-hour work session to discuss capital items—defined as costing more than $50k with a useful life greater than five years—and prioritizing and identifying possible funding mechanisms. The CIP is a tool to identify big ticket items and craft finance strategies to pay for them.

There are a lot of moving parts to Goochland government. Efficient use of tax dollars to cover all needed expenses, long and short term, is a complicated process. This work session provides a look at the process. To view the entire session, go to https://www.youtube.com/watch?v=Zowo3w_jIDc

This was the first time that all board members gathered for meaningful discussions about the county’s infrastructure needs and financial position, as opposed to nibbling around the edges during “two by two” meetings with county staff. The ‘kicking tires’ session explored what the county needs and how to pay for it.

County Administrator Jeremy Raley, Ed.D., who has been tirelessly delving into all facets of local government since starting work about nine weeks ago, outlined potential capital investments, and the status of projects “in the works”. The discussion created a mechanism to help the board make thoughtful, deliberate decisions for the benefit of all residents.

The discussion revealed contrasting yet valid views among board members about capital projects. Indeed, Raley may need to don a striped shirt and use a whistle to find consensus.

Charlie Vaughters, District 4, said, that for far too long, Goochland has deferred routine maintenance, or kicked the can down the road on infrastructure. While applauding the fiscal restraint that funded many projects with a “pay as you go” policy using annual surpluses, he contended that Goochland should have best in class facilities to attract and retain exceptional employees that set us apart from our neighbors. Vaughters reflected on the vital component that human capital, people, plays in the success of county government. Factoring the cost of additional staff for new facilities, like fire-rescue stations, should be part of the capital calculation, not just lumped into the annual budget for the first year of operation hoping there is enough money to fund all the positions needed.

Director of Finance Carla Cave reported that Goochland is currently in a strong cash position with about $65 million of fund balance as of June 30, the end of the fiscal year, and above all debt policy thresholds and targets. However, a long laundry list of needed projects could vaporize that in a heartbeat. (Go to the finance tab on the county website https://www.goochlandva.us/ to view the adopted budget for FY26, which began on July 1.)

Among the topics discussed was the end of the ad valorem tax levied on all property in the Tuckahoe Creek Service District. Some TCSD property owners have paid this tax since 2002 with little hope of being connected. (Full disclosure, GOMM world headquarters moved into the TCSD a few years ago and pays the tax.)

Cave said, based on current projections, the ad valorem tax will be paid off in 2030, well ahead of the previous 2042 date, but it could happen sooner if county revenues have a dramatic increase. Cave observed that everyone wants to get rid of the tax, whose sole purpose is to service debt incurred by Goochland County to build the basic infrastructure of the TCSD. Created in 2002 to provide water and sewer to the designated growth area in the east end, the TCSD was intended for industrial and commercial, not residential, use.

A portion of the annual general fund revenue goes to the TCSD debt as revenue sharing. This is in the TCSD ordinance and has been about $4 million in recent years. Ending the tax would put more money in taxpayers’ pockets and add the $4 million to county coffers, to be used as the supervisors see fit.

Neil Spoonhower, District 2 contended that funds generated, for example, by the Amazon project on Ashland Road should be directed to pay off the TCSD debt. Raley said that could be accomplished by a board action.

Vaughters observed that TCSD debt could be eliminated sooner by using the county’s “triple triple” AAA bond rating to issue general obligation bond debt to pay off the TCSD bonds, which, he contended would provide an equitable solution for every district to support the potential of enhanced revenue generating power of the TOD for the next 25 to 50 years.

Jonathan Lyle, District 5 said that he likes the fact that Goochland is a county rather than districts. While he too would like to see the end of the TCSD bonds, he does not want to do it at the expense of core services public safety, education, and transportation. He said he would rather see fire-rescue stations built than debt retired. He also pointed out that the assumptions used to justify borrowing for the TCSD in the first place were “somewhat ebullient” and never came to pass. He urged caution about issuing new debt to pay off old debt.

Jonathan Christy, District 1, said that while the math of paying off the TCSD debt as soon as possible makes sense, he asked if the county would also pay to dig wells for those not on public utilities and contended that spreading the TCSD debt to the entire county is insulting to those not in the district. He prefers to pay off the debt with revenues generated by the proposed technology overlay district (TOD) and other new investments in the district. The notion of spreading TCSD debt has been floated before and promptly torpedoed. (Fun fact, none of the supervisors live in areas served by public utilities.)

When created, the TCSD was seen as a moat to contain industrial and commercial development within its boundaries to generate tax revenue and keep the rest of the county rural. Once the bonds are paid off, there might be nothing to prevent high density development, which requires public utilities, from oozing into “rural preservation” areas. This unintended consequence could result in more development, which will increase the demand for public safety, education, and transportation and further degrade the rural character. Perhaps the county could restrict new utility users in the east end to commercial and industrial uses. This should be investigated.

Spoonhower said that fiscal strategies should include any incentives being considered to attract economic development to put the county on a forward-looking trajectory.

The security annex under construction in 2019, replaced the tent used for court security screening

to defer the need for a new courthouse.

A new courthouse to replace the one that has been in continuous use for almost two centuries has been on the list of badly needed infrastructure for years. A line item of $27.8 million is on the FY27 CIP.

Goochland Sheriff Steven Creasey said that, having toured several new courthouses, $27 million is way too low and estimated that $40 million is more realistic. Commonwealth’s Attorney John Lumpkins agreed that the $27 million will not meet needs of the new courthouse, depending on population growth projections for the next few generations. He also contended that an attractive and functional courthouse should enhance the village.

Raley said the scope of the courthouse is to serve the judicial system for the next 40 years or more and that the supervisors will need to roll their sleeves up to find a funding solution for the new courthouse.

Vaughters concurred with Lumpkins that, given the location of the courthouse, it should be designed to put the best foot forward for Courthouse Village. He said that the 200-year-old courthouse should be honored by the new courthouse, which comes with a price.

Raley expects more clarity on the cost and design of the courthouse by November. A good example of deferred maintenance is the annex added to the courthouse in 2019 to replace a tent that had been used to provide screening for court security to defer building the new courthouse.

The West Creek Fire-Rescue station 7, whose funding was allegedly also part of the 2021 referendum, was “paused” for a couple of years. When construction of the roundabout at the intersection of Fairground and Sandy Hook Roads in Courthouse Village caused fire-rescue to deploy an ambulance on land purchased on Whitehall Road for station 8, resources from station 7 were diverted there. Now, station 8 is in the design phase. Station 7, to be located on the site selected in 2019 will move forward. When it will be built and how it will be funded are still to be determined.

The more than $11 million estimated current price tag for station 8 was questioned by Spoonhower who felt blindsided by the increase from the $8 million number that had been used.

Fire-Rescue Chief D. E. “Eddie” Ferguson, Jr. explained that the cost estimate, about $520 per square foot, is typical for the region. The stations are designed in accordance with the 2035 comprehensive land use plan. He said that neighboring jurisdictions are finding that capital bids coming in higher than anticipated.

Ferguson explained that the fire service is changing. Stations are staffed 24/7. The pandemic mandated that sleeping quarters change from dormitory to individual bunkrooms, which increases square footage and cost. He said that the new stations are being built to last for 75 years, not unlike the four existing stations owned by the volunteers, most of which were built in the 1960s. Station 8 is expected to go out to bid later this year. Both Raley and Ferguson were hopeful that the final cost will be closer to the $8 million figure.

Spoonhower and Lyle contended that the fire-rescue stations should be built with the money earmarked for them, Vaughters said failure to build best in class for the next 75 years is penny wise and pound foolish

While it would seem sensible to use, as far as possible, the same set of plans for stations 7 and 8 and perhaps hope for cost savings in a  “two fer” Raley explained that state procurement regulations mandate that each project be considered separately to encourage competition. Ferguson said that research done on design of station 8 would apply to station 7, but there are substantial differences in building mechanics.

Vaughters mentioned the long lead times for equipment like the replacement for the chiller at the “new” high school, which opened more than 20 years ago, and fire-rescue apparatus. He said when items are identified in the CIP, they should be ordered immediately.

A myriad of items including software updates, HVAC replacement for county buildings, equipment for parks and rec, and convenience centers are also in the CIP budget.

Later in the session, School Superintendent Andrew Armstrong, Ph.D. shared identified needs of the division.

Armstrong said that our school division is the tangible return on the investment of every citizen for facilities that are safe, comfortable, inviting, and efficient. The school division’s capital needs are aligned with the county.

Projects like the new chiller, a vital component of the HVAC at the high school are big ticket, long term, and a bit boring, but vital.

Priority projects under discussion include a motor control system for the chiller, replacing boilers, and weapons detections equipment. Armstrong said that Goochland is following Louisa’s deployment of the detectors.

Armstrong mentioned the advantages of using artificial turf rather than grass that could lead to cost savings on routine maintenance by eliminating seeding, mowing, and irrigation, and make fields usable for more than one sport.

An addition to high school to expand the county’s excellent career and technical program, estimated at about $18 million in the bond referendum, will cost far more than that. The good news is that given the proposed location adjoining the high school, site work will be minimal. This facility will accommodate a wide range of CTE programs, including flexibility to add programs that equip our kids to work in emerging industries coming to Goochland.

Spoonhower wants Goochland CTE to be the beacon for the region.

Armstrong said that he does not want any Goochland student to walk across the graduation stage on Saturday night and not know what they are going to do on Monday morning. Whether they go to the workforce with a high demand credential, college, or the miliary they must have a path. “Kids have to read they have to have arithmetical literacy to achieve that,” said Armstrong.

 Other capital needs of the school division are expanding the middle school band room and an auxiliary gym.

Armstrong said that Goochland is the exception rather than the rule of lacking school weapons detection systems. Current equipment detects guns and knives and is portable for use at graduation and football games, for instance. They require additional staff. A $500k initial investment is required.

The Sheriff, said Armstrong, has been alongside the school division in the investigation and eventual deployment of weapons detectors.

In the next five years, routine equipment and roof replacement, maintenance, and renovations for Byrd and Randolph will be in the CIP. Some of these items are so old that replacement parts are no longer available.