Money matters

 

The Goochland County audit and finance committee held its quarterly meeting on June 2. These sessions provide the committee with current fiscal positions and the opportunity to discuss related matters.

First on the agenda was the kickoff for the county’s Annual Certified Financial Report (ACFR) for FY26, which ends on June 30. State law requires that the ACFR be completed and approved by the supervisors in December. In previous years, this process began in the summer. This is one of many procedural changes made by Dr. Jeremy Raley, Ed.D., since becoming county administrator about a year ago.

The FY2025 ACFR is available at https://www.goochlandva.us/Archive.aspx?AMID=43 This document has a wealth of general information about the county and its fiscal condition. Last year, there were some issues with procedures in the finance department resulting from “compression,” catching up at the last minute rather than performing necessary tasks throughout the year. Raley hired an interim director of finance to reconcile the errors before Denise Sandlin was named Director of Finance earlier this year.

Sandlin assured the supervisors that new and more robust financial procedures and controls have been put in place and will be continually improved. She and her team will be ready to greet the PBMares team when it arrives to begin work on the FY26 ACFR on June 8. Her report included a preliminary check list of tasks, many of which have been completed, to start the audit process.

Mike Garber, https://www.pbmares.com/people/michael-garber/  a principal of PBMares, https://www.pbmares.com/ which has been retained by the county for many years to conduct its annual audit, talked about his firm, the audit team assigned to Goochland, and items that are “tested” during the process. (Go to https://www.youtube.com/watch?v=nkh34L-vWnc for the video of the meeting.)

Representatives of PFM (https://pfm.com/), which advises the county on capital funding matters including bond issuance, discussed the county’s financial position regarding assumption of additional debt.

Capital projects that have been on the county radar screen for a while include a new courthouse—our current circuit courthouse will celebrate two centuries of continuous operation in September—fire-rescue station 7 on the east side of Hockett Road; upgrades to the secondary complex, including an addition to house the career and technical education department; and renovation of the old Goochland elementary school. Estimated cost for these projects, most planned for completion in the near term, is $114.5 million.

A chart included in the PFM presentation estimated the cost of  Station 7 at $13.2 million, with an expected start date of April, 2027, completion in June 2028; $56 million for the courthouse with an expected start date of April, 2027, completion  in July,2030; $30 million for the secondary complex upgrades with an expected start date of June, 2027 to be completed by August, 2028. A $15 million amount for old GES renovations, essentially a place holder with no projected timing as options for this site are under discussion. Not included in the chart is approximately $30 million for parks and rec projects “in the planning horizon over the next ten years ($18 million over the next 3 years. $12 million thereafter through year 10.)”

Issuing the $46 remainder of the approved general obligation bonds is the lowest cost option, said PFM. Discussion with bond counsel will be necessary to determine if any of these funds may be used for Station 7. These could be issued in FY27.

PFM presented an analysis of conservative “tried and true” funding mechanisms and how they relate to county. They discussed the budgetary impacts of debt funding these projects.

 If the county chooses to finance the entire $114.5 million for projects planned in FY27, the peak debt service ratio would hit the policy limit as a percentage of general fund expenditures in FY28 but would be well below its target percentage of debt to assessed valuation. This would be allowable under policies but could limit future borrowing.

PFM also illustrated the impact of revenue generated by new projects nearing completion. When the Ashland Road Amazon facility, Axial, and West Creek commerce center, hit the tax rolls, the ratio of debt service to general fund expenditures could drop from 11.4 percent to 11.2 percent.

PFM suggested funding the other $68.5 million with an appropriation bond issuance, which would be AA+ rated, a notch below Goochland’s triple triple rating, in mid FY2028. The rate is slightly higher than the triple triple but still very attractive and does not require a referendum. When all the debt is layered on, the total annual debt service was estimated at $13.3 million. New bonds will have the option to refinance at lower interest rates.

Committee chair Charlie Vaughters, District 4 said one rating notch lower, which equates to an approximately 15-20 basis points higher interest rate, is not significant. (A basis point is one hundredth of one percentage point.)

Raley pointed out that the PFM analysis is based on assumptions and that the county has many levers to pull. It can decide not to do all projects, use cash capital funds, or proffer dollars to reduce the debt amount. Next steps are to decide which projects will go forward and how they will be financed.

Proffers

In response to citizen queries about cash proffers—amounts paid by developers to mitigate the impact of residential rezoning on county infrastructure—a proffer data base has been added to the county website. Go to https://www.goochlandva.us/1463/Proffers

Raley said moving all the proffer data to one place from various sources was a heavy lift but now it has been reconciled in the name of transparency. He said it was a very worthwhile undertaking and will help with funding decisions going forward providing flexibility and nimbleness.

 

 

 

 

Raley said that a dashboard for cash proffer collected by the county resulting from residential rezoning had been updated as is on the county website as to amount and how the funds were uses. Cash proffers help to mitigate the impact on county facilities including schools, law enforcement, and fire-rescue. The website improves transparency and disclosure. The next meeting will be on September 1.