US29 Bypass – Building a Roadblock is Easier Than Building a Road

By. Neil Williamson, President

On Thursday, May 23rd, from 5 pm – 7 pm at the University Area Holiday Inn,  The Virginia Department of Transportation (VDOT) will be holding an open house style meeting to discuss alternative designs to the southern terminus of the US 29 Western Bypass.  But the question is will “the public” focus on the meeting topic or use this meeting as a platform for opposition to this much needed safety improvement to US29?

Based on the e-mail and Facebook traffic I have seen this week, I fully anticipate the “roadblock builders” to be out in great numbers at this meeting.  Does this mean the public is opposed to the road? 

No, in fact our 2004 transportation survey, Charlottesville Tomorrow 2012 survey [graphic] (and others) as well as the 2011 Rivanna District Supervisor election all seem to indicate the pubic is in favor of the road.

However, when a cohort of any population, regardless of size, is in opposition to a project that cohort is generally more energized than the cohort that is in support of an already approved project.  Therefore, I anticipate the “road blockers” to dominate the attendance at Thursday’s citizen informational meeting.

While the Free Enterprise Forum applauds this vocal minority for remaining engaged, we question the structural integrity of their current six part “GO29” argument.

Please let me explain. 

On their website, The Southern Environmental Law Center (SELC) advocates for several steps to relieve the congestion on US29 other than the bypass. 

The first step in building an effective roadblock is to redefine the argument.  If you can include portions of the opposition’s solution in your solution, you will have them chasing their rhetorical tail.

By branding this as “GO29”, the SELC seems to think the public will not recognize that many parts of “their” solution are already in process at the direction of those supporting the bypass {and were included in Places29].

From the SELC website:

We can’t bypass our problems. Our community has developed an approach that addresses traffic backups directly, and also gives drivers more ways to reach destinations. Our Go29 video highlights six key pieces of the solution:       

1. Improve the interchange with the 250 Bypass near Best Buy;  
2. Build a compact overpass at Hydraulic Road to eliminate a major source of congestion and allow through-traffic on 29 to flow without stopping;
3. Extend Hillsdale Drive parallel to 29 to give local drivers ways to reach destinations without having to use 29;
4. Build a second compact overpass at Rio to solve this traffic snarl (same concept as Hydraulic);
5. Extend Berkmar Drive up to Hollymead Town Center and beyond, so that drivers could go from Kmart to Lowe’s to Target without getting on 29; and
6. Eliminate the bottleneck between the Rivanna River and Hollymead by widening 29 in both directions.

Wait a minute, four of these items are not issues.  There is community consensus (and in some cases studies completed and even funding) for:

1. The Best Buy Ramp
2. Hillsdale Drive Extended
3. Berkmar Drive Extended
4. The widening of US29 North of the Rivanna River

By suggesting these other items won’t be built, SELC is knowingly constructing a multi faceted false choice argument designed to obfuscate the simple question Expressway or Bypass?  

Should vehicles without business in the North US29 corridor be forced to go through the corridor or should they be given the option to bypass it?

But none of this is the topic of Thursday’s meeting.

According to VDOT:

The purpose of this Citizen Information Meeting is to provide an opportunity for interested citizens and organizations to review preliminary alternatives for the proposed interchange at the southern terminus of the project. . . The project will include construction of a new interchange at the southern terminus of the project that will replace the existing U.S. 250 Bypass interchange at Leonard Sandridge Road. VDOT is considering three alternative configurations for this proposed interchange. Displays showing each alternative under consideration are being presented at this meeting for public review and comment.

So the question remains, will Thursday’s meeting be about the alternatives to the southern terminus of US29 Bypass or a trip down the roadblock builder’s rhetorical rabbit hole?

Will the vocal minority succeed in redefining the meeting agenda to include settled issues or will VDOT be able to maintain the focus on the three proposed southern terminus options?

Clearly in Albemarle County, and many communities, building a roadblock is much easier than building a road.

Stay tuned.

Respectfully submitted,

Neil Williamson,President

 

Neil Williamson is the President of the Free Enterprise Forum, a local government public policy organization located in Charlottesville.  www.freeenterpriseforum.org

Photo Credits: Free Enterprise Forum, Disney

Graphic Credit: Charlottesville Tomorrow

Greene BOS Budget Balancing Act: Capital Needs, Reserve Fund,Tax Rates, Services

By. Brent Wilson

At the March 12th meeting of the Greene County Board of Supervisors   the discussion centered around the Capital Improvement Plan vs. the growth in the Reserve Fund. The BOS had previously approved the county’s CIP in total but had struggled to identify which projects would receive funding in the next 3 to 5 years.

Several projects were immediately identified as needing to be accomplished in the near future – a Rescue Squad building and an expansion to the high school cafeteria (there are four lunch periods starting at 10:42 am due to the lack of space)  – all agreed these need to happen soon. One possible source of funding for the school cafeteria expansion is by retiring of existing school debt.

The BOS discussed whether the new task force on CIPs should handle the prioritization or should a request go back to each department to sort out their critical needs in the next 5 year. Chairman Jim Frydl (Midway) proposed that the BOS request all departments to provide back a list of 5 year must have projects with written justification for each project. This was agreed by all 5 supervisors.

The discussion moved on to how to pay for the projects and whether the Reserve Fund could be a source of funds for some of the projects. Last year the BOS set a policy on how much should be maintained in the Reserve Fund, funded the schools budget request and then earmarked the remaining additional money in the Reserve Fund to various projects.

The Reserve Fund has continued to grow and exceeds the target level by over $4 million. Supervisor Buggs Peyton (Stanardsville) suggested reviewing what balance should be left in the Reserve Fund and then use any amount beyond that to help fund the capital projects that come back from all departments. Chairman Frydl questioned if the BOS wanted to modify the Reserve Fund policy that has already been set at 15% of the annual budget plus one month operating expenses. He suggested that the departmental requests for the next 5 years be compared to the excess Reserve Fund and if additional funds are required then the Board would have to consider a tax increase would be required to fund all projects.

Mr. Peyton said that the CIP is a wish list – “a Sears Catalogue” and he objected to additional taxes for capital projects but he would agree to pull down the Reserve Fund for the water and sewer project. Supervisor Davis Lamb  (Ruckersville) expressed concern about drawing down the Reserve Fund to zero and wanted to avoid going back to borrowing funds to be able to pay ongoing obligations.

Chairman Frydl commented that the preliminary audit has indicated the Reserve Fund is now approximately 32% of the annual budget of $53.5 million or $17.1 million. This compares to a minimum balance of 15% of $53.5 million or $8.0 million plus one month’s budget of $4.5 million for a total of $12.5 million Reserve Fund target. Therefore the Reserve Fund has grown, based on preliminary audit, by approximately $4.6 million since the Reserve Fund was set last spring.

Supervisor Eddie Deane (At-Large) expressed concern that he did not want the county to have to borrow to fund their needs. Discussion followed as to whether all excess Reserve Funds should be allocated to projects or not. This lead to a discussion of the property tax rate, given that the property assessments are expected to decline.

Supervisor Peyton stated that he would not increase taxes but would cut spending to balance the budget, the decision is “easy for me”.  When Mr. Peyton was asked for a clarification whether he meant he wouldn’t support raising the tax rate (generating less tax revenue) or raising total property taxes (equal to that of the prior year) that an equalization rate would provide, he indicated that he opposed an increase in the tax rate. He further explained that raising the tax rate to equalize tax revenue would cause some property taxes to increase and some to decrease and he didn’t believe that was fair.

Chairman Frydl summarized that the BOS needs the list of projects required to be done in the next 5 years. At that time, the BOS will be able to determine if there are enough funds for all projects by using the excess Reserve Fund. If more funds are required then the BOS will need to decide if additional tax revenue is required to fund all projects. He also noted that Albemarle County has acted to advertise an increase in their tax rate to equalize tax revenue since their property values have declined, similar to what Greene County is facing.

The key issue facing Greene County as it listens to each department’s budget request  is that the current tax rate is generating revenue to provide funding for operating budgets and growth in the Reserve Fund which is being used as a source of capital fund.

If the property tax rate is not equalized then there will be less tax revenue coming into the county which will result in less funds flowing to the Reserve Fund.  A decision will have to be made whether to maintain current levels of operating expenses by tapping into the reserve funds or use those funds for capital projects. There will not be enough revenue to do both.

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Brent Wilson is the Greene County Field Officer for the Free Enterprise Forum a privately funded public policy organization.

The Free Enterprise Forum Field Officer program is funded by a generous grant from the Charlottesville Area Association of REALTORS® (CAAR) and by readers like you.  To support this important work please donate online at www.freeenterpriseforum.org

‘Rezoning Ransom’: Repeal cash proffers

This editorial first appeared in The Daily Progress on Sunday March 3, 2013.  The full “Contradictory Consequences” white paper can be found at www.freeenterpriseforum.org under the reports tab.  The Free Enterprise Forum is a privately funded public policy organization focused on local government in the Central Virginia region.

 

By. Neil Williamson, President, Free Enterprise Forum

There are times you have to say no to one thing because you said yes to something else. Such is the case with cash proffers.

If a community believes in citizen vetted comprehensive planning, preserving rural areas by densification of development areas and economic vitality, then such a community must say no to the fatally flawed cash proffer system.

In the recently released “Contradictory Consequences” white paper, the Free Enterprise Forum research and case studies explain the impacts of cash proffers. Sold to the public as a way to make growth pay for itself, the unintended negative economic and planning impacts have caused localities across the Commonwealth to repeal this “rezoning ransom” and replace these funds with more dependable and equitable infrastructure funding options. Today, rather than simply recalibrating their cash proffer calculation, as Albemarle County is doing, full repeal is a much more economically and ecologically sensible and sustainable alternative.

Cash proffers are per unit fees “voluntarily” extracted from applicants seeking to rezone their property. In theory, such “voluntary” proffers would be directly tied to the costs associated with the increased density of a rezoning. In reality, cash proffers lower land values, encourage development contrary to comprehensive plans, and create false hope for outside infrastructure funding.

Lower land values, lower property tax revenue – In concept, cash proffers are voluntary payments made by landowners to mitigate the impacts of changing the prescriptive zoning on their property. The concept works best when the rezoned value exceeds the increased cost of the proffer. Such a symbiotic relationship is difficult to achieve with automatic inflation increasing cash proffers and fickle housing markets not keeping pace.

Albemarle	Single Family Detached $19,753Townhouse $13,432Multi Family $13,996
Charlottesville	No cash proffers
Greene	$5,778 per unit
Fluvanna	$6,577 per unit
Louisa	$4,362 per unit
Nelson	No cash proffers

Basic economic theory indicates any increased cost must be paid by an entity that is a part of the transaction. Many believe the increased cost of a cash proffer will be borne by the end user, the new homebuyer. This can only occur in a housing market that has constant upward motion.

If, due to market conditions, the end user is not available to accept the cost of the cash proffer it is the land owner, whose land will be discounted by the increased entitlement costs that cash proffers create. In turn, such reduced land values reduce the locality’s real estate tax assessed value and revenue (absent an increase in the tax rate).

‘By Right’ Development Encouraged Charlottesville and Albemarle are currently updating their State mandated comprehensive plans. These community vetted plans suggest the manner in which the locality wishes to grow in the next twenty years.

In many, if not most, cases the zoning in a locality’s development area does not match the comprehensive plan designation. While the property owner does not have to agree to the comprehensive plan changes, they cannot act on those new designations until they have rezoned the property. Alternatively, if the land owner chooses to move forward with the existing, some might call “stale”, zoning, which likely does not agree with the locality’s comprehensive plan, they can do so immediately without paying any cash proffers.

In 2011, a developer acquired the rights to a project that included property in The City of Charlottesville and Albemarle County. Charlottesville does not have a cash proffer, while Albemarle’s exceeds $19,000 per single family home. After calculating the increased value of the land with the rezoning in each locality, the developer chose to rezone the property that was in the City (without cash proffers) and chose NOT to rezone the property in the county. This calculated decision was based on calculation of the cost (in money and time) of rezoning the County land exceeded the increase value.

Therefore, the land owner is incentivized to not to follow the community vetted comprehensive plan vision but instead to construct lower density, less thoughtfully designed developments. These projects are built to meet local building and zoning code but absent the enhancements and flexibility a rezoning might allow.

False Financial Hope – Forecasting cash proffer revenue is much like predicting snow in Central Virginia, localities do not know when it is coming, how much they are actually going to get or when it will stop. Cash proffers rarely, if ever, total the amounts localities are banking on.

In November 2012, the Albemarle County Board of Supervisors was presented a staff report outlining cash proffers that were in excess of $49.3 million dollars quite literally off the chart.

As one looks at this chart (right) and sees almost $50 Million dollars proffered, one might anticipate the cash proffer program is answering the very need it was designed but the Free Enterprise Forum estimates at least 28% of those proffers will never be collected as they are associated with the now defunct Biscuit Run Development.

It is interesting that while the State of Virginia acquired the property for a state park on December 31, 2009, Albemarle County continued to calculate those proffers as receivable in November 2012.

Rural Areas Jeopardized – According to the Piedmont Environmental Council, Albemarle County has in excess of 10,000 units already rezoned for residential development. Why have these not moved forward?

Have the embedded costs of development in Albemarle County, including cash proffers, created a cost burden the market is unable to bear?

If growth trends continue, won’t these embedded costs push residential development out of Albemarle County’s designated growth areas and into the rural areas?

The reality is that cash proffers contribute to the paradigm that rural residential development remains the least expensive, most profitable development option in Albemarle County.

If the cash proffers are pushing development into the rural areas and surrounding localities, what are the community costs of increased traffic, more costly government services delivery, as well as loss of ecologically contributing farmland, and productivity?

Cash proffers have produced a plethora of Contradictory Consequences without achieving significant benefit. Now is the time to repeal this rezoning ransom and replace it with a more sensible and equitable alternative.

Neil Williamson is the President of the Free Enterprise Forum, a local government public policy organization located in Charlottesville. The full Contradictory Consequences report can be found at www.freeenterpriseforum.org

Greene Planning Commission Moves Capital Improvement Plan On to Supervisors

By. Brent Wilson, Greene County Field Officer

The  Greene County Planning Commission reviewed the submission of the $178 Million dollar five year Capital Improvement Plan (CIP) last Wednesday, January 16^th, approved the plan as submitted and moved to pass the CIP on to the Board of Supervisors (Attached is the CIP from 2012 ). The majority of the time on this topic was spent on how to improve the process in future years. Stephanie Golon, Greene’s Planner, updated the Commission with the process this year vs. prior years. This is the first year that all departments in the county had input into the CIP with Golon’s assistance. The CIP is outlined in Greene County’s Comprehensive Plan on pages 45 and 46 .

With the detail that Golon was able to gather, this year will be the first year to have the CIP by line item in the budget.

Chairman Norman Slezak, discussed what the expectations of the Board of Supervisors is from the Planning Commission related to the CIP. Bart Svoboda, Community Development Director, described the Planning Commission’s role as that of the police to ensure that all departments turn in their input for the CIP but not to assign priority to any item.

The Planning Commission discussed forming a committee in the future to work with all departments in securing the information earlier in the budget process. They asked Board of Supervisors liaison Vice-Chairman Davis Lamb, who was present at the meeting, to take the request of having a five member committee comprised of one staff member, one member of the Planning Commission, one Supervisor, Tracy Morris and one member from the public to the Board of Supervisors. Supervisor Lamb agreed with the request and will present it to the Board of Supervisors and asked that a member of the Planning Commission attend that meeting.

The importance of the CIP is two fold . It provides the county a prioritization of needs within the county and is critical to running the county effectively in the future. In addition, the CIP provides the basis for determining the county’s Proffer policy .

[In the interest of full disclosure, this writer served on Greene County’s Planning Commission in 2005 and chaired a taskforce to propose a Greene County’s Proffer policy]. 

While the Free Enterprise Forum is encouraged that all Greene County Departments participated in this year’s CIP process, we question why these departments, for many years refused to do so.    

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Brent Wilson is the Greene County Field Officer for the Free Enterprise Forum a privately funded public policy organization.

The Free Enterprise Forum Field Officer program is funded by a generous grant from the Charlottesville Area Association of REALTORS® (CAAR) and by readers like you.  To support this important work please donate online at www.freeenterpriseforum.org

Greene School Board Requests Level Funding

By. Brent Wilson, Field Officer

The Greene County Board of Supervisors and School Board held a joint public input session on Tuesday, January 15^th to begin dialogue with the public in anticipation of a difficult budget process.

Jim Frydl (Midway District), Chairman of the Board of Supervisors, started the evening stating the purpose of the meeting was to get feedback from the public on what is important in a time when real estate assessments are down, there are added state and federal requirements and the county must start paying for the water and sewer system. County staff has told the Board of Supervisors of a projected $800,000 to $1 million in lower county revenue, primarily due to reduced property assessment. Greene Treasurer Stephanie Deal reports increases in real estate, personal property and sales taxes that total over $350,000 in 2012 vs. 2011.

Michelle Flynn, Chair of the School Board, made a brief presentation  stating that revenue from the State is projected to decline by $232,000 due to flat enrollment and that Federal sequestration – if it occurs – would reduce Federal funds by $125,000. The presentation noted that “Local tax rate increase will be required just to equalize local revenues due to lower assessment values”.

The largest item presented as a cost cutting option is a reduction of 32 positions that total $913,000. Governor McDonnell has announced a 2% increase in teacher wages but 1% of that increase would have to be paid by the county and that tenure would be extended after 5 years instead of 3 years adds to the School Board’s request.

The total for all projected cuts and cost increases from state and federal sources along with other cost increases such as fuel and insurance came to $675,000. Flynn summarized the reductions to the school budget from 2008 of over $3 million. The School Board is asking that the Board of Supervisors provides the same funding as this year for the 2013/2014 school year.

Following the presentations, it was time to hear from the public. This meeting was quite a different setting than the last time the BOS met the public to talk about budgets. Only 12 citizens spoke on a variety of issues from the school system, JABA , the Senior Center , the Shelter for Help and Emergency and the Greene County Public Library . Two of the speakers asked for more information related to the school system – how much needs to be cut, how much would cutting athletics contribute, how is the school budget spent, etc. One speaker asked not to have taxes raised as it makes it hard for seniors on fixed income.

The other speakers gave comments to support their organizations. Kiki Flood didn’t want to see any budget cut and wants the schools to get increased funding. Karen Fisk from the Greene County Library asked that their hours of operation be expanded by eight hours a week to better match the need from Piedmont Virginia Community College  classes starting in the upstairs of their building. The final speaker was David Morris who grew up in Greene and went on to earn a masters degree and had a career in social work. He has moved back to Greene and supports putting education on a high priority as it is preparing our kids for tomorrow.

Each member of the Board of Supervisors and School Board then summarized the meeting. Flynn thanked the Board of Supervisors for attending and invited the public to their workshop on January 23^rd.

Supervisor Davis Lamb (Ruckersville) commented on the poor ranking of US students in the world  and that we must improve.

Supervisor “Buggs” Peyton

Supervisor Clarence “Buggs” Peyton (Stanardsville)  expressed concern about the reduction in assessed value of property and subsequent reduction in property tax revenue. He felt this year will come down to cutting spending or raising taxes. Last year the reserve fund was depleted and Greene County now needs to be conservative in its spending. His final comment was that he wouldn’t support an increase in the tax rate and he wouldn’t compromise his beliefs unless the schools were seriously in jeopardy.

Finally, BOS Chairman Frydl commented that the Board of Supervisors is scheduled to receive an update on the reserve fund in February.  His final comment was that we all will have to do more with less and believes that most citizens in Greene County will be disappointed in the budget as there is less revenue available and more demands from the state.

The Free Enterprise Forum applauds the two boards to begin the dialogue in this difficult process early. While the number of speakers was significantly reduced from the hearing held this Spring, including the public as a vested third party is critical.

Hopefully, the two elected board retain this level of communication and transparency.  The next few months of the budget will include several ups and downs regarding proposed state and federal funding. 

In addition, citizens and elected officials  must understand the fiscal impacts of reduced property assessment.  While many, perhaps most, citizens, would prefer to pay lower taxes; the locality must balance its budget.  If revenue is reduced, spending on local government services, including schools, will be impacted. 

The annual budget question is how the Board of Supervisors chooses to balance spending and revenue.  The fact that the School Board and Citizens are both engaged at this stage of the process is a good thing.  Will they maintain this level of communication and transparency?  Will citizens remain engaged in the byzantine budget process?  Stay tuned.

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Brent Wilson is the Greene County Field Officer for the Free Enterprise Forum a privately funded public policy organization.

The Free Enterprise Forum Field Officer program is funded by a generous grant from the Charlottesville Area Association of REALTORS® (CAAR) and by readers like you.  To support this important work please donate online at www.freeenterpriseforum.org

Faulty Fluvanna Revenue Projection

By.  Bryan Rothamel

PALMYRA — The Fluvanna Board of Supervisors were briefed on a reported accounting error in anticipated tax revenue streams for the fiscal year 2013 budget.

To compound the accounting error, the state also lowered assessments of public utility real property. Some of that money will be recouped in fiscal year 2014 because of the revenue-neutral tax rate of county reassessment.

It was stressed the error did not result in county residents being taxed incorrectly, just anticipated revenues being calculated incorrectly.

The county receives tax revenues from various property in the county. A basic breakdown includes real property and personal property. From that, there are machinery, mobile homes, public utilities real property and public utilities personal property along with real property (homes/land) and personal property (cars/RVs).

The FY13 budget included some figures in the wrong categories that lead to the supervisors building a budget from incorrect numbers. These numbers were reportedly given by the Commissioner of Revenue, Mel Sheridan.

“The Commissioner of Revenue sets the foundation. We go ahead and build a budget off that foundation. The Treasurer collects based off that budget. When there is a hiccup in the very beginning of that process, you can see how could very quickly trickle down,” said chairman Shaun Kenney (Columbia District).

The real property category for property privately owned in the county (not including public utilities) did not include tax relief for the elderly and veterans. This created an over-budgeted figured of $224,740.
The mobile homes and machinery were placed in the personal property category. This resulted in an over-budgeted figure of $117,641.

The category for mobile homes did not include the correct property values. The correction created $610 of additional non-budgeted revenues. The machinery category was also too low for property values. The correct figure was an additional $261 more than budgeted.
Also, the personal property tax of public utilities will have an increase in projected revenue. The additional amount is $41,091 to the budgeted revenues.

The state has reassessed public utility property. This is a figure the state does completely separate from the county’s reassessment schedule. The reassessment from the state subtracted $231,181 from projected revenues. This is taxed at the county’s tax rate, regardless of the county assessment schedule.  Currently, it will be taxed at $.5981 per $100 assessed. Once the county’s reassessment is complete, the revenue-neutral rate for the entire county will be $.8140 per $100 assessed. While county residents will not see much change in their personal tax contribution, public utilities assessment will not change.

Plainly, the state keeps assessments independent of the tax rate of the county. Even if the county reassess, the state assessment stays the same. Any increase in tax rate, even if neutral to private property, will cause the public utilities to pay more.

Including the public utility reassessment to the accounting errors, the FY13 budget incorrectly projected revenues by $531,600. That difference will have to be made up either by cutting spending or using the fund balance account.

The county has just refinanced the new high school bonds. It will result in a savings of $1.6 million for this current fiscal year, FY13.

“If you say anything could at a better time, I don’t know if that’s a good thing to say or not, but it is better to come now when we know we do have the money, extra funds,” said Mozell Booker (Fork Union District).

If the fund balance account is used for routine budget items, board policy is to replenish it the next year. Using the projected revenue neutral rate of $0.814 per $100 assessed and using the total budget deficit of $531,600, the FY14 budget will have to include two cents (on the $.814 rate) to make up the difference.

“Being two cents behind before getting into FY14′s budget. If those numbers are real, we are looking at the real number being 83 maybe 84 [cent real property tax rate]. That’s before we start looking at new programs and increasing the school budget. We are behind the 8-ball to start with,” said Bob Ullenbruch (Palmyra District).

The two-cent figure is one Ullenbruch brought up during the presentation as well. Projected revenue per penny is anticipated to be between $260,000 to $270,000 in the revenue-neutral tax rate.
“We need to be putting two cents for something else, not for that,” said Booker who last year wanted a higher tax rate than was adopted.

Supervisors have requested Sheridan present how the issue occurred and what is happening to correct it in the future. County administrator Steve Nichols said after the meeting he doesn’t think it will affect previous years budgets, noting they were all audited and balanced each year. Officials are looking at previous budgets.
He also said this is only a projected revenue issue, not a taxing issue. When asked by Kenney if county residents were incorrectly taxed, Nichols said no, that everyone was taxed correctly. Revenues were just budgeted incorrectly.

The next Board of Supervisors meeting is Feb. 9 at 2 p.m. Nichols will present his County Administrator proposed budget.

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The Free Enterprise Forum’s coverage of Fluvanna County is provided by a grant from the Charlottesville Area Association of REALTORS® and by the support of readers like you.

Bryan Rothamel covers Fluvanna County for the Free Enterprise Forum.  He is the founder of the Fluco Blog.  Additional writings can be found at www.Flucoblog.com

Population Growth Report or Manifesto?

By. Neil Williamson, President

This morning’s Daily Progress included an article outlining a report written by Craig Evans considering the fiscal costs and benefits of growth.  This report is underwritten by a local population control advocacy group, Advocates for a Sustainable Albemarle Population (ASAP).  The Free Enterprise Forum was contacted by the paper and asked to provide comment.  Brian Wheeler quotes us accurately in the well written article.  Below is the entirety of our statement on the issue of this troubled “report”.

The Free Enterprise Forum believes the Evans report while seemingly accurate in its limited financial analysis fails to recognize the indirect, but calculable, economic benefits of population expansion. The Free Enterprise Forum is concerned the “Counting the Costs and Benefits of Growth Analysis” report by Craig Evans is flawed in design and unfairly prejudiced in its analysis and conclusions.

Much of the Evans report reads significantly more like a political manifesto rather than an academic thesis. Using such terms as “Race to the Bottom” and describing developers as “Speculative Enterprises” do not add to the academic credibility of the report and fails to recognize developers as the very businesses who take the financial risk to bring the community’s comprehensive plan to life.

Taken at face value, the Evans report indicates that the County and City lose roughly $.25 for every dollar collected in residential tax revenue. In FY2011, the City posted a $3.8 Million dollar surplus. How is that possible?

According to NBC29, “The [FY2011] surplus came from a couple of different places. First, the city saved money during the last fiscal year when expenses came in $2.9 million under budget. On top of that, the city collected $900,000 more revenue than expected in 2012 – largely from a spike in sales, meals and lodging taxes”. Only by recognizing the indirect benefit of and important symbiotic relationship between population and revenue producing commercial activities can you reconcile this anomaly.

The Evans report fails to calculate the considerable value of population to economic vitality. It is established that “Retail follows Rooftops” and revenue follows retail. One need only look to Greene County’s recent increase in retail square footage that followed the residential expansion. In addition the retail sales tax local option has increased exponentially in Greene County since the establishment of the retail centers.

In its most telling omission, the Evans Report fails to recognize that every locality in the state must produce a balanced budget. Property Taxes are set by elected officials after consideration of ALL revenue sources. While the property taxes generated by individual homeowners may not cover Evans cost calculations, these same citizens generate the economic activity [sales tax, commercial tax, machine/tool taxes] that allows the locality to keep property taxes lower because of commercial activity.

One thrust of the Evans report is that growth comes with costs. Taken in isolation this is a true statement but when one considers the economic opportunities and advancements such growth also provides.

The Evans report cites Loudoun County as an example of rampant growth and it is true their government spending has accelerated significantly to meet the needs of their community. At one point Loudoun was building a high school a year to keep up with growth in student population. Late last year, Loudoun County was named by the U.S. Census Bureau’s American Community Survey as the county with the highest median income per household in the nation. With a median income of more than $119,000, Loudoun households generate almost twice the income than Albemarle households. Yes, there is a cost to growth but the benefits far outweigh the costs.

Paraphrasing Aaron Levenstein, “Statistics are like bikinis. While what they reveal is suggestive, what they conceal is vital”.

Respectfully Submitted

Neil Williamson, President

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Neil Williamson is the President of The Free Enterprise Forum, a privately funded public policy organization covering the City of Charlottesville as well as Albemarle, Greene, Fluvanna, Louisa and Nelson County.  For more information visit the website www.freeenterpriseforum.org

Should Charlottesville Survey Seek Citizen Input?

By. Neil Williamson, President

Once again the Charlottesville City Council has issued their annual tax survey asking residents how they should prioritize their spending decisions for the upcoming budget cycle. 

Annually, this survey gives the Free Enterprise Forum post Thanksgiving heartburn.  As we suggested regarding the Thomas Jefferson Planning District Commission (TJPDC) survey, any such instrument is only as valuable as the respective cohort who responds.  Unlike the TJPDC survey, it does go out to all city residents (via utility billing).  It is understood that all who receive the instrument will not fill it out and those who do fill it out could also fill it out online and fax in an additional response.

To be clear, the Free Enterprise Forum firmly endorses the city’s vision for citizen involvement:

our decisions are informed at every stage by effective communication and active citizen involvement. Citizens feel listened to and are easily able to find an appropriate forum to respectfully express their concerns.

But, we also believe such surveys provide an “easy way out” for councilors who are simply looking to determine which way the wind is blowing.  Just as elections should be about choices of different perspectives (which Charlottesville has lacked for some time), budgets should also be about informed choices and decisions.

Understanding that these decisions have consequences, we are appreciative of the concept behind the last three survey questions:

13. You support City services through a portion of real estate, personal property, sales and other taxes and user fees. Considering all of our City services on the one hand, and taxes on the other, which of the following statements is closest to your view?

• I believe we should decrease taxes and services (if chosen, go to Q14)
• I want to keep taxes and services where they are
• I believe we should increase taxes and services (if chosen, go to Q15)

14. If you feel services should be decreased, which services should be decreased?

15. If you feel services should be increased, which services should be increased?

The Free Enterprise Forum is appreciative of being asked to voice our opinion but this is not a true democracy.  As a republic, we elect folks to make these decisions, if we do not like the decisions they make, we have the opportunity to remove them. 

So should Charlottesville citizens fill out the survey?  The short answer is Yes. 

The longer answer is the same as we gave for the TJPDC survey:

So now the Free Enterprise Forum finds itself between a philosophical rock and a hard place; do we encourage participation in a survey that has flawed methodology or sit on the sidelines Monday morning quarterbacking?

After significant thought time, we are encouraging everyone to fill out the survey.

After City staff tabulates the responses, we challenge the City Council to accept the inherently flawed survey data as one of the many pieces of information to be used to evaluate the FY2014 budget.

That’s the reason City  Council was elected, to make decisions, not conduct surveys.

Respectfully Submitted

Neil Williamson, President

Neil Williamson is the President of The Free Enterprise Forum, a privately funded public policy organization covering the City of Charlottesville as well as Albemarle, Greene, Fluvanna, Louisa and  Nelson County.

Greene BOS and School Board Talking Tax Increase vs. Cutting Services

By. Brent Wilson, Greene County Field Officer

Virginia law dictates that localities’ Board of Supervisors (or City/Town Council) have taxing authority and provide a financial allocation to the school division, but they do not have line item control of the school budget, that power is delineated to the School Board. In every locality, this creates dynamic tension between those who have the responsibility for generating revenue through taxation and those whose responsibility is educating the children.

Last week, what started with a request from Greene County School Board Chair Michelle Flynn  to the Supervisors requesting the same funding in FY2014 as FY2013 quickly turned into a request for a presentation at a mid-January public meeting a list of potential cuts for public feedback to prioritize approximately $1.2 million of spending reductions.

Flynn started the meeting with two key questions. First, can the Board of Supervisors  provide the same funding level as this year and the schools will cover any reductions in state and federal funding with cost reductions? Chairman Buggs Peyton (Standardsville) comment was that the county is facing a 6% decline in personal property tax due to reassessment of property values. Flynn’s second request was, would the BOS cover the 1% increase in VRS cost

This lead into a discussion of the Early Retirement Incentive Program (ERIP) which currently has 19 participants.   Peyton agreed with using teachers but not unskilled positions such as secretaries and custodians. He also indicated that bus drivers that require special training should be included. Flynn contended that custodians are hard to find and should be included in ERIP.

Peyton shifted the conversation to the $16 million reserve fund that has since been committed to various projects and that the county is looking at a tax increase since the assessment is down. Supervisor Jim Frydl (Midway) estimated that due to the reduced assessments, a shortfall of approximately $1 million would occur if the personal property tax rate stayed the same.

Peyton stated that he is serving his 11^th year on the BOS and his priorities for the county, that some may find hard to believe, are education, fire and police.

School Board Member Roddie Kibler (Monroe) asked how do both boards act proactively to address the $1.4 million funding needed?

Greene County Schools Superintendent David Jeck said that one issue he does not want to impact is increasing the student vs. teacher ratio. With so many mandated programs, there is very little that can be cut – athletics, transportation (which is not a school requirement) and the vocational education program are all possible reductions. Jeck suggested surveying parents to ask what they would recommend cutting to come up with the reduced spending.  Flynn agreed that historically until there is discussion of cutting programs, there is very little public input.

After the first School Board Public Input Session, Jeck told NBC29:

“If there are certain things that they want to see kept in the budget and if there are certain things that they want to see protected going into next year, then it’s really important that they come out and share that with the school board.  The school board needs to hear that, and our school board is very responsive to folks who come out and speak.”

Frydl suggested a joint meeting between the Board of Supervisors and the School Board in January, 2013 to discuss options to cut education funding. School Board Member Troy Harlow (At-Large) assured that if the schools don’t receive the same funding then cuts will have to be made.

Frydl suggested that there is a small window between when the state budget is set in December to when the county budget has to be set in the spring. One of Frydl’s final comments was that either funds will be cut or taxes will have to be raised.

Despite Frydl’s suggestion that the State budget being “set” in December, nothing is done until at least early and often late Spring.  As an example, in May of this year the Greene BOS was adjusting their budget based on the State’s final numbers.  The Free Enterprise Forum Blog reported:

In last night’s (5/2) hastily arranged budget work session, the Greene County Board of Supervisors tentatively agreed to increase funding for the schools by $1.1 million dollars in Fiscal Year 2013.  This was approximately 1 million dollars less than was requested by the School Board.

This let to a most contentious public meeting six days later where we asked if the meeting was a Public Meeting or Pep Rally?

School funding makes up the lion’s share of every locality’s budget.  As we are seeing in all of the localities we cover (especially Fluvanna), greater communication between the school boards and the Board of Supervisors is a positive but will not eliminate the dynamic tension that is designed by state code.

The Free Enterprise Forum does not have specific opinions about any tax rate or spending plan; instead the  Free Enterprise Forum encourages the citizens of Greene County to become educated about the options and express their preference at the public hearing in January, 2013.

There are no easy answers, but it is far better for citizens to become educated and involved during the process rather than enraged at the outcome.

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Brent Wilson is the Greene County Field Officer for the Free Enterprise Forum a privately funded public policy organization.

The Free Enterprise Forum Field Officer program is funded by a generous grant from the Charlottesville Area Association of REALTORS® (CAAR) and by readers like you.  To support this important work please donate online at www.freeenterpriseforum.org

Greene BOS Gets Reassessment Update

By. Brent Wilson, Greene County Field Officer

The biannual reassessment of property values in Greene County  is now well underway.  At the November 13^th Board of Supervisors meeting, Fred Pearson from the Reassessment Office  and Larry Snow, Commissioner of Revenue,  updated the BOS with the process to date. The field work to assess the values for market conditions and changes/additions to property has been completed and the notices have been mailed to property owners. A Comprehensive Sales Data Report that contains sales from each district within the county has been prepared .

Property owners can make an appointment to appeal the reassessment of their property on November 26, 27, 29 or 30. The gross data shows a reduction in value of 6% but that includes land in easement that has declined 15% and is not taxed. The new reassessment value calculates to 99% of market value – well above the 95% minimum required by law.

Supervisor Jim Frydl got confirmation that the 99% was calculated comparing the sales price for those that have transacted recently vs. the reassessed value. Also, the 6% decline will then have excluded the property in land use, resulting a smaller reduction than the 6%.

Snow indicated that the final impact won’t be known until the meetings with the property owners and the hearings with the Board of Equalization running from January to March, 2013. Specific reassessments can vary dramatically, two specific reassessments showed a reduction of less than 1% and another a reduction of more than 10%, but in different locations of the county. There are over 10,000 parcels in Greene County that are reassessed  .

BOS Chairmain Buggs Peyton commented that a decline of $.01/$100 equaled $188,000 in tax revenue. Snow indicated that a decline of 10% would have the equivalent impact of a reduction of about $.07/$100 ($.69/$100 x 10%)  but he didn’t believe that the reassessment would be that drastic.

So, what does this process mean and what is the impact on the county and the homeowner?

Is a lower value good or bad for the homeowner?

A lower assessed value means, all else being equal, that the homeowner will owe less property tax. But, of course, the new assessment is one indicator that the homeowners investment in their home is worth less than the prior assessment. The impact to the county for a lower value, all else being equal, means less tax revenue.

Assuming that the property values decline 5%, that would have the impact of reducing the property tax from $12,972,000 down to about $12,323,000 a reduction of $647,000 in property tax revenue.

So, where will Greene County recoup the nearly 2/3 million dollars in property tax revenue?

The FY 2013 budget for Greene County  isn’t being reduced nor has the cost of operating the county declined by 5%. The process is to have the tax rate increase to offset the decline in the assessed value of the property, the new rate being called an equalization rate.

But isn’t this an increase?

Yes and no.

It is an increase in the rate of tax. But it doesn’t increase the amount of tax being paid. The value of property has been selected to allocate a major cost of operating the county to the residents of the county. If the value of the property declines, then the rate of tax must increase if the locality is to receive the same amount of tax revenue to operate the county.

The Free Enterprise Forum supports the objective and regular regular reassessment of property.  Based on our experience, the appeal process has seemed far and equitable.  A failure of a locality to regularly reassess property can result in larger swings in valuation. While we do not have a position on any tax rate, it is important all involved understand an increased “equalized” rate in a downward assessment retains the actual dollar figure of the previous tax year.

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Brent Wilson is the Greene County Field Officer for the Free Enterprise Forum a privately funded public policy organization.

The Free Enterprise Forum Field Officer program is funded by a generous grant from the Charlottesville Area Association of REALTORS® (CAAR) and by readers like you.  To support this important work please donate online at www.freeenterpriseforum.org