PE's Financial Position 'Secure'

Published 4:02 pm Tuesday, January 18, 2011

PRINCE EDWARD – Board Chairman William “Buckie” Fore, reflecting on comments from the President and governor, tapped the supervisors' comment time in a continued board meeting Thursday evening to encourage fellow supervisors to “govern with civility and mutual respect, listen to each other more carefully, and remind ourselves of all the ways our hopes and dreams are bound together.”

He also, however, used the opportunity to clarify the County's financial condition and “rebut statements I have heard in the community and from members of this board and clarify actions taken by this board and/or the county administrator to manage the county's finances.”

Fore highlighted that the County's financial position is “secure.” He cited that they are fortunate that the major employment “industries” are Longwood, Hampden-Sydney, and Centra Southside Hospital and that, while not recession proof, the industries traditionally weather economic storms fairly well.

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“I've heard people state 'the County has no money,' he would later comment. “I guess that's a matter of opinion, but in my opinion having millions of dollars in our fund balance means that Prince Edward County has the necessary money to provide services to our residents and do what needs to be done,” Fore said. “We are not broke.”

The 2008 fiscal year audit showed they had cash and cash equivalents of $8,529,790 and the most recent audit shows $8,329,117, or a decline of $200,673 or about 2.4 percent.

Fore maintained the County is “very well-managed both financially and otherwise.” He also offered that they have a good fund balance and that their debt amount is low.

Fund balances, he cited, exist to help cover emergencies, pay for unplanned events and help overcome periods of economic downturn.

“It is not a sacred cow to remain untouched,” Fore said. “While we have used a small amount of the fund balance, in my opinion, that is exactly the reason we have a fund balance. We…can disagree on the appropriate use of the fund balance, but at least we have a fund balance to disagree about.”

The use of the fund balance, he added, is all about setting of priorities and funding items that “we feel are a priority.”

Fore said he had reviewed audit reports for the 2008, 2009, and 2010 fiscal years and found revenues received in the categories of property taxes and other local taxes collectively only decreased 1.99 percent form 2008 to 2010. What has declined, he said, is funding they receive from the state. He offered that their greatest threat is the decreasing revenues from the state and not decreasing local revenues.

In response, the county administrator and the board, Fore said, have taken action to reduce County expenditures-specifically highlighting such action as the non-renewal of various contracts and moving work in-house, leaving positions unfilled when vacancies occur, purchasing capital items that reduce operational costs, and offering no pay raise for county employees. The actions, he cited, have saved the county hundreds of thousands of dollars.

“While we may all have differing opinions on how best to provide services to our citizens, I do not believe that Prince Edward County has any fat in its budget. That is a good thing. It also means that when it comes time to make cuts, they are very hard decisions, because we do not have easy targets,” Fore commented. “Every cut we make this year will have real consequences to our citizens and the services that this county provides.”

The board chairman also attempted to dispel the concept that the Board raised taxes 10 percent this year.

“That statement is not correct. No single tax was raised 10 percent and the total tax burden of our citizens was not increased by 10 percent,” he said.

He went on to explain that the real estate tax increased by five percent and the motor vehicle tax increase varied, depending on vehicle classification. The real estate increase is expected to chip in $300,000 more and the motor vehicle tax increase about $50,000.

“Thus, the increase in the overall…tax burden is about $350,000,” Fore said. “The total amount budgeted for all local taxes is $13,973,896; this includes all property taxes and taxes categorized as 'other local taxes.' This means that the total tax burden on Prince Edward County citizens increased, on average, about 2.6 percent, well below the 10 percent amount that I have heard stated.”

(The current fiscal year's real estate tax rate was increased two cents to 42 cents per $100 of assessed value and, while the personal property rate was unchanged from the previous year, the board approved an increase in the vehicle license tax that meant $10 more for most vehicles.)

The County's tax rate, he cited, is one of the lowest in the region and one of the lowest in the state.

“This didn't happen because the current and past boards were spendthrifts. The board of supervisors of Prince Edward County has a long history of conservative financial management, and we will continue to follow such practices in the future,” Fore said.

He also cited, “…I've heard statements that we are borrowing money and that using funds from the fund balance is borrowing. In my opinion, if you withdraw money from your savings account, that is not borrowing. No interest is paid and there is no requirement to pay the funds back. Over the last few years we have borrowed and all such funds have been used to purchase capital assets that have a long and useful life for the County. That is an appropriate use of debt. The County of Prince Edward does not borrow to pay operating expenses.”

(Editor's note: Fore is an employee of The Farmville Herald.)