Budget Process Proceeds
BUCKINGHAM – After a presentation on the proposed FY12 budget and a public hearing that drew three speakers, supervisors agreed on Monday night to reconvene on April 25 to consider adoption of the $42.4 million budget.
County Administrator Rebecca Carter began her presentation by saying the proposal includes an estimated $5.3 million beginning year balance and does not include a tax increase or any increase in fees for services.
However, Carter noted that the beginning year balance is $681,000 more than advertised. She explained, “This was dis-covered after reviewing the audit's ending year balances. It does not affect any revenues or expenditures so it doesn't affect that part of the budget.”
According to Carter, the $681,000 represents the sale of properties in the industrial park and supervisors directed that the money be set aside for economic development.
She advised that general fund revenues are expected to increase by approximately $1.2 million due to taxes from the Bear Garden Power Plant and Colonial Pipeline, which serves the power plant.
“The new revenue is reserved and has been earmarked to make the debt payment of about $1.3 million for the lower and upper elementary school renovation projects,” said Carter.
Carter shared, “The board of supervisors did not vote to move forward with that construction project until we knew the power plant was going to be built…and they immediately earmarked that revenue to make that payment.”
She added that the debt service payment may peak higher than the $1.3 million but that figure represents an average of what the debt service for the project would be.
Along with anticipated decreases of approximately $46,274 in state categorical funding and $80,000 in non-categorical funding, Carter explained several other variables that could affect the county's revenue picture. One of those is the possi-ble loss of approximately $60,000 that the state has paid in lieu of taxes for services provided to the two correctional cen-ters.
Moreover, she said the revenues could be affected by the constitutional amendment supported by voters in November 2010. That amendment provides for a property tax exemption for veterans who have 100 percent service-related disabili-ties. She said the program is in effect for tax years on or after January 2011.
Describing the next issue as a “matter of great importance,” Carter said, “Every year we are losing more state and fed-eral money.” She continued, “Our next reassessment should begin in early 2012. And with the decline in the economy, we are surely to see a decline in property values, which is going to mean a decline in our revenues.”
She continued, “This may cause the board of supervisors to have to consider tax increases just to equalize the money that we are getting now.”
The county administrator explained that those factors resulted in proposing that the additional $800,000 for the school division be considered a supplemental one-time appropriation. As such, it would offer the school system an opportunity to workout some of the operational issues and losses it is experiencing, stated Carter.
She added that the supplement would also help until the upper and lower elementary schools are on-line and the an-ticipated operational cost savings are realized.
“We were told by our auditors just a few months ago that Buckingham County is one of the best managed counties in the State of Virginia,” shared Carter. “And we are proud of that because we are always conservative. We are always careful but, most importantly, we have planned not just for this year but for the future.”
However, she cautioned that if the county did not look at more than the fiscal year at hand, the status could change and change in a negative direction.
As she reported during the March 16 budget work session, Carter said the proposed budget anticipates an increase of $143,534 in the county's operating expenses with the exception of social services, schools, and water/sewer. “And most of this is from mandated increased costs of retirement and increased costs of employer health insurance,” said Carter.
She added that the figure also includes all the other agencies that the county funds. Of those, only two are receiving in-creased funding. Carter said JAUNT would be receiving an additional $1,942 to keep both bus routes running year-round. Additionally, Meals on Wheels, which has not requested funding for the last two years, found it necessary to request $6,000 for the coming year.
“The county employees including all the constitutional officers' employees, the courts, social services, and water and sewer plant employees will all be required to pay the increased employee health insurance premium and have done so for the past three years,” shared Carter.
“There are no pay increases proposed in this budget for any employees so we will all be taking home less pay.” She added, “But we feel like that is better than some of the other consequences if all was expected to be picked up by the gov-ernment.”
Reviewing the $690,000 in reserves proposed for one-time expenditures, Carter listed $50,000 in reserve for contin-gency; $40,000 fire/rescue training; $100,000 solid waste truck; and $500,000 for a communications system. She noted, “All of these items in reserves have to be voted upon by the board of supervisors before the funds can actually be spent.”
Earlier in her report, Carter said the new countywide communications system would better serve the citizens as far as emergency medical services, fire protection, and law enforcement.
Focusing on the school budget, Carter described it as the “most difficult part of our budget this year.” She said the school system is facing a deficit of $873,239.
Carter explained that along with decreases in state and federal funding, the school system needs an additional $273,250 because of the VRS increase; and, will experience an increase of $272,994 in employee health insurance if the school board pays 100 percent of the employees' health insurance increase.
“The proposed budget allows $800,000 for additional operating money for the school system,” stated Carter. “This is $73,239 less than the $873,239 demonstrated in the losses or revenue and their additional costs.” She added, “Also re-member $1.3 million is reserved for the new school debt service making a total of $2.1 million of new local money in this budget earmarked for the school system.”
Reviewing the $8,306,092 in local funding of the school budget, Carter said $5,756,561 is proposed for operations and $2,549,531 for debt service.
Contrasting that figure with the $8,333,000 in anticipated real estate collections for FY12, Carter said 99.71 percent of the real estate revenue would be used to support the school system. She emphasized, “So the education of children is im-portant to the board of supervisors and its citizens.”
Continuing with the school budget, Carter provided a review of carryover requests, FY 2011 budget revisions, and re-sultant expenditures as well as specifics on recurring and non-recurring expenses.
Sharing that many people ask why the county needs such a big balance and why that can't be used, Carter offered, “It is probable, it's almost definite, that the state and federal governments are going to continue to eliminate funding to the localities.”
She questioned, “What if tax collections do not come in as we anticipate? And, with this economy we are seeing that happen.”
Carter cautioned, “The county must be careful to not find itself in a position where it is spending more money than it's bringing in because that will diminish your safe balance.”
Noting that during its budget work session supervisors voted to add $109,947 to the school budget over the initial pro-posed increase of $690,053, Carter said those additional funds must be drawn from the surplus balance.
According to Carter, the state requirement for Buckingham's local appropriation for school operations is $3.698,456. “The local appropriation for operations proposed in this budget is $5,756,561. This is $2,058,105 over the required local appropriation,” she stated. “The local appropriation for operations per student is $3,093; and, for everything, including debt service, is $4,461 per pupil.”
Using a chart comparing per pupil expenditures for school divisions in Planning District 14, Carter said Buckingham is the highest per pupil for local and total in that district.
Noting the information was based on FY09 figures from the Superintendent's Annual Report, Carter said she heard ear-lier in the day that the FY10 figures were available. She told supervisors she would have that updated information for them at the April 25 meeting.
Carter added, “We do know that the local appropriation for Buckingham has not decreased even though the number of students has decreased.”
Concluding her presentation, Carter offered, “On behalf of the board and our staff, I do thank the departments and agencies that did present their budget requests within the county's ability to fund.”
She continued, “It is very much regretted that once again pay increases are not a part of this budget and for many the health insurance increase will mean your paycheck will be less, again.”
Carter shared, “I believe that each board member has considered the importance of the needs of the county and also planned for the financial ability to provide for the departments to efficiently and economically perform the necessary serv-ices to the citizens and children of the county.”
She thanked the audience for attending and showing their interest in the proposed budget and the financial status of their county.
After Chairman Bill Talbert opened the public hearing, Superintendent Gary Blair was first to the podium.
Dr. Blair offered that education funding has never been more challenging. “As we look back over the last three years, we've been able to manage our reductions without massive lay-offs or significant program reductions.”
He explained that in order to curtail costs, they have had to downgrade the quality of their health insurance benefits. Blair said that even though the division has continued to pay for the increase in premiums for its employees, the employee is paying significantly more in deductibles. “We, too, have less financial resources,” he stated.
Blair shared that he has surveyed the employees and spent hours listening to them. “We investigated reductions in benefits or salaries or people.”
Offering that over the last three years employees worried about the future of education, Blair said that now the employ-ees are also worried about their own futures.
“As I said during the school's public hearing, we are all together in this and it's a strong partnership,” said Blair. “I re-spect and I admire public service. And I trust you'll do what you can for education.”
He continued, “Please understand that I remain steadfast in my commitment to conserve.”
Referencing Carter's comments about the school system's use of $700,000 from its FY10 budget to pay bills in advance for FY11, Blair added, “I don't think it was 'unneeded' money, I think we conserved and we've demonstrated our commit-ment to do without to defray costs for another year.”
Blair said he welcomes the accountability related to the expenditure of public funds.
He concluded, “Gentlemen, Mrs. Carter-I want to thank you for caring, I want to thank you for listening, and above all I want to thank you for loving Buckingham County and our children.”
Acie Allen, chair of the school board, was next to speak.
Noting that he had felt ecstatic about the cooperation of the two boards, Allen shared, “At this point I'm extremely dis-appointed. I'm disappointed for a lot of reasons. I'm disappointed that next year we won't be able to afford to run the activ-ity bus to give our high school athletes a ride home in the afternoon.”
He continued, “I'm disappointed that we are going to have to eliminate middle school athletics in order to cut our budget enough to reach the goals you all have set for us.
“I'm disappointed particularly that we are going to have to lose jobs-people are going to be laid off. I'm disappointed also that some of our older teachers, some of our best teachers, may very well elect to retire early so that their position can be kept for someone else so that some of the younger folks won't be laid-off.”
He went on to express his disappointment that although the school board requested $1.7 million in additional funds they are coming away with $800,000-less than half of the request. “That's a huge difference,” he stated.
Referencing the issue of carry-over funds and 'unneeded' money, Allen stated, “It was money that we could've used last year but in order to try to comply, in order to try to work with you guys, in order to try to cut our budget as much as pos-sible, to save as much, to avoid asking for more last year, we asked for that carryover to try to spend some money and pay some bills ahead of time.”
Allen questioned why the comparison charts of per pupil costs did not include adjacent Nelson, Fluvanna, and Appo-mattox counties.
He concluded, “At any rate, what we are asking you to do is to reconsider the budget appropriation for this year for the school system.”
When Allen concluded, Talbert asked if anyone else would like to speak. As he closed the hearing, a woman from the audience stood. In turn, Talbert agreed to let her speak.
Explaining that she has resided in Buckingham for ten years, moving here from New Jersey, the woman shared that she has young children enrolled in the special education program at Buckingham Primary School.
“If it weren't for that class and if it weren't for the facilities and the things that they have in this school system in Buck-ingham County the way it is right now, my children would not be progressing the way they are,” she said.
Stating that the proposed cuts were too severe, too much, she continued, “Good grief, I could see if we were really out of hand…This is not lavish. This is bare bones and we are doing the best we can to get by with what we can.” She added, “Please reconsider…Invest in children, don't cut from children.”
After the hearing, Supervisor Brian Bates offered, “Mr. Chairman before we move along, I simply would like to com-mend Mrs. Carter. Not only has it been a tough fiscal year to be working on a budget…but she did it at a time of very se-vere personal stress and loss. And I think she is due our praise for seeing to her job at a time of great personal loss.”
Supervisor John Kitchen added that he thought Carter did “a wonderful job.” He added, “And my opinion is that if any-one leaves here tonight and thinks that the board of supervisors does not support the school system, then something is wrong.”
Kitchen continued, “The presentation that Mrs. Carter laid out was very, very plain-the figures are there.” He added, “Thank you Mrs. Carter for a job well done.”
As Carter explained at the end of her presentation, the Code of Virginia stipulates that action on the proposed budget cannot be taken for at least seven days.
Although initially scheduled to reconvene on April 18, supervisors, noting one member would be unable to attend, agreed to reconvene on Monday, April 25, at 7 p.m.