PE Talks Capital Issues
Published 4:31 pm Thursday, February 21, 2013
PRINCE EDWARD – County school officials have a long list of needs listed in their first capital projects list.
To the tune of about $10.8 million.
What's the County to do with such needs projected out over five years? At least take a look at some level of financing.
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“With money, the cost of money, being what it is today,” Board Chairman William “Buckie” Fore cited in a budget work session earlier this month, “If we could go to the expert, Davenport (the county's financial advisor), and say we want to help the school to this point, set a ceiling, go to Davenport and see how much that ceiling would cost us…”
County Administrator Wade Bartlett would add that it would be almost like a line of credit where they would draw it down as they need it and only charged the rate they begin with.
The school has a long list of needs, with a large chunk of it coming in the first two years-or about $8 million.
Specifically, the projects listed on the draft capital improvement list includes the long-discussed athletic complex renovation, $5.3 million, laser grading for the football field (should the renovation not be undertaken) $60,764; replacing the plumbing lines in three buildings at the elementary school that are underground and corroded, $114,269; and enclosing the fifth grade wing entryway to the main building, $83,774.
The second year for the five year plan as proposed would factor repaving/sealing all parking lots, $55,000; replacing wall units for heating and cooling for five buildings at the elementary school, $374,395; replacing a boiler in the sixth grade area, $58,000; roof repair/replacement at the middle school, $1,201,643; roof replacement at the career tech center, $459,316; laser grade and reseed the soccer field, $68,000; and bus replacement cycle, three per year, $300,000.
The third year of the plan factors HVAC controls on all hearing/cooling units to tie into computer controls, $143,100; replace HVAC units at the middle school, $159,000; renovation of the auditorium at the high school, obsolete wiring, ceiling tiles, carpet, and seating, a cost to be determined; roof repair/replacement at the high school, $1,076,944; and pressure washing tennis courts, leveling uneven areas, filling cracks and repaint with three coats, $78,000.
The fourth year of the plan aims at roof repairs/replacements for three buildings at the elementary school, $1,119,934 and year five factors telephone replacement across the division ($100,000) and replace/relocate the high school greenhouse, at a cost to be determined.
“My thinking is…some of the projects that they have on that list, well I'll call them realistic for lack of a better term, but ultimately, this board's gonna have to fund it,” Fore said. “Now, we'll fund it one or two ways, either in a CIP plan to assist them or through their budget to get it done.”
With money being what it is now, the chairman suggested, it may be worth taking a look at over the long-term.
Noted Bartlett, “We can talk with Davenport and see. And then, what the board would need to do is work with the school board and say, 'OK, what is it you really want to fund and not or when…'”
Bartlett noted there's no doubt the schools are getting some age on them.
Farmville District (701) Supervisor Jim Wilck added that if you can find the money, it's a good time for construction and for the interest.
“But that's if you can find the money,” Wilck also added.
Friday's work session, a continued meeting, offered supervisors a first look into the budget process, affording an opportunity to have input into the development of the 2013-14 County budget. Board members are not scheduled to meet again to talk budget figures until March, when the General Assembly's budget picture will be clearer.
It's already, however, shaping up to be a challenging season. County Administrator Wade Bartlett presented the details of what are considered fixed costs and mandates.
Of the County's total $20,194,791 budget, the total core functions/fixed costs and mandates total $17,717,735.
“…It doesn't leave a lot of room to do a lot of things,” Bartlett offered.
Discretionary expenses, he detailed in a memo to the board (factoring mandated or core function costs and assuming school funding, refuse collection/disposal, fire departments and rescue squads are core functions that are to be level funded) only $2,477,056 would be classified as discretionary expenses.
Discretionary expenses fund the Board of Supervisors, County Administrator, legal services, informational technology biosolids, general properties, Sandy River Reservoir, cannery, and all contributions to outside organizations including the library, economic development, tourism, soil and water district, cooperative extension, and capital projects.
Asked about revenue estimates, Bartlett assessed that he doesn't see where it will change a lot.
“The biggest thing that I see that can change will be the collection rate from the treasurer. She's already sent out some letters and contacted delinquent land owners and started that and I know she's already collected tens of thousand of dollars in delinquent taxes,” Bartlett reported.”
Every one percent in the collection rate on real estate, he cited, is approximately $150,000.
Still, Bartlett was hesitant to change any revenue predictions at this point.
Overall, Bartlett reported that it was a good year because they had budgeted to use money out of the County's fund balance, but didn't have to do so. There was more revenue, he cited, and as they always try to do, the staff and constitutional offices save money on their expenses.
Still, there are some issues on the funding horizon. In the coming budget year there are plans for another cell at the landfill. He speculated that they would have to spend “a considerable amount of money,” but also noted that they have a considerable amount “and hopefully, we won't have to dip into anything.”
Traditionally, they have paid on a cash basis at the landfill rather than going into debt.
The County is yet to undertake reassessment (it won't become effective until January 1, 2015), and there could be a decline in the value of properties. Time will tell, but a sales ratio may provide some clue. When a property is sold, it is reported to the state and they then look at what the property is sold for in comparison to its assessment.
Last year, Bartlett reported, it was “exactly a hundred percent.” What they are seeing, he added, is that buildings are selling a little higher than the current assessment, but that land is the opposite, selling higher than the assessment. Bartlett reported, however, that it has “balanced out, totally.”
The reassessment is almost two years from now, Bartlett highlighted, noting they'll “just have to look at what the market is at that time and the assessor will do that. So, right now, I wouldn't think that there's a big change overall.”
Piedmont Regional Jail's expenses continue to exceed revenues by a considerable amount, according to information presented in the budget work session. A worst-case scenario, it was cited, would require the county to budget between $700,000-$900,000 for the coming fiscal year.
Two things could potentially help. A bill before the General Assembly could restore an exemption for Piedmont and one other regional jail. Localities that house federal prisoners must pay the state so much per day with the reasoning that state money went into building the jail and operating (particularly manpower).
<!– 1upcrlf2 –>”Well, for three years, our jail and (a jail in) Tidewater were exempt from that because that wasn't true,” Bartlett detailed. “Those two regional jails built an addition with local money only, staffed it with employees only paid by local money, so there was an exemption for our two jails that we did not have to pay that…It expired in October and so we've had to do that since then.”
A senator that represents western Tidewater has introduced a bill that would exempt the two facilities. Bartlett offered that “hopefully,” it would pass, noting that it's “probably costing $400,000 or $500,000” to pay them back.
Another locality, potentially interested in housing prisoners at the regional jail, Bartlett cited, is waiting until the end of the General Assembly to make a decision if they're going to send 100 or more prisoners. They are trying to get state funding to build a new or bigger jail at their locality, he reported.
“Would a hundred prisoners solve our problem?” asked Wilck.
Not totally, according to Bartlett, who offered that between the two the impact would be negligible.
Bartlett said he doesn't think they're going to get the money from the General Assembly to build, noting that several other communities have been trying to do so for several years “and if they give it to one, then they're gonna be hearing a lot of people screaming.”
The board also revisited the potential of self-insuring workers. Supervisors and the school board discussed the option last year, but did not implement a plan; other localities including Cumberland's county government and school board utilize the self-insured option.
“…If it didn't cost us anything, it certainly might behoove us to look at it because…getting back to the school situation, if the school could see from this that they would save some money, maybe we could save a little money, it would certainly trim the…extra money they're asking us for,” commented Wilck.
There are risks, Bartlett cited, but you buy re-insurance to help mitigate that.
“But the risks, depending on what they are, look a little bit better if you have a need like the school has, according to what we heard the other night and you're gonna have to cover it some way,” Wilck said.
He would add that it depends on how big the risks are.
Bartlett is expected to contact the school to see if there is interest and the consultant as well.
Leigh District Supervisor Don Gantt offered that it would “be nice if we could kind of look at this thing as one big deal” with teachers and county employees treated all the same.
“I mean, get on the same type dental plan and if we can give teachers a raise, give county employees a raise-look at this all as one big pot,” Gantt said.
Asked about having the budget on the website, Bartlett reported that it was up.
In addressing the issue of tax rates, Gantt suggested that they look at lowering the tax rate for aircraft. The rate is close to $5 when the rate in neighboring Cumberland is 50 cents per $100 of assessed value.
“You may be shocked how many aircraft pop up in Prince Edward County if we reduce our tax rate to reflect what's in Cumberland County,” he commented. “Right now, you can fly your plane into Cumberland, pay your taxes in Cumberland and then fly back to Prince Edward,” he said
Gantt would also suggest that they would see more aircraft coming to Prince Edward.