Greene Approves Budget, Sets New Tax Rate

By. Brent Wilson, Field Officer

Historically when the Greene County Board of Supervisors meet to discuss the new budget and tax rates, it draws a large turnout and the meeting is moved to the Performing Arts Center at the high school. It starts an hour early and goes late into the night. This year the plan was the same for the meeting on April 26th, except only one speaker addressed the Board.

Greene had advertised a personal property tax rate of $.775/$100 of assessed value – an increase of $.025/$100 or 3.3%. Chairman Bill Martin asked County Administrator John Barkley to outline the process that brought them to the $.775 rate

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John Barkley

Barkley indicated that revenues for the current year are on target and there is a healthy reserve fund balance. He was complimentary of the county departments since 21 departments presented reduced budget requests. The increase of $.025/$100 will generate additional revenue of $460,000. In terms of the impact to a homeowner – a home assessed at $200,000 would require $50 in additional property taxes. All other tax rates will stay the same in the county.

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Sharon Mack

The meeting then shifted to comments from the public. The only person to sign up was Greene County School Board Chair Sharon Mack. She thanked the Board for their support and explained why the school’s requested near a 3% increase. She indicated that the main driver is that teachers have been budgeted a 3% increase and a 5% increase for has been budgeted for teacher assistants in order to remain competitive in attracting and keeping good teachers and their assistants. In closing, she appreciated that the Board of Supervisors fully funded the schools request.

With the public hearing closed, the discussion then shifted back to the Board members. Supervisor Dale Herring (At-Large) said that in addition to the 21 departments reducing costs, 16 had no increase and some had less than $1,000 increase. The budget addresses current and future needs, especially the water impoundment.

Supervisor Jim Frydl (Midway) agreed with Herring and expanded on the school situation. In the past 4-5 years there has been an increase of 14% in number of students with fewer teachers rather than adding teachers. His other main comment was that Greene doesn’t act like D.C. – in Greene we invest in key functions especially for the long term, such as water and sewer and water impoundment.

Supervisor David Cox (Monroe) has seen Greene grow over the years and he stated that the school system is the future of Greene County and it is playing catch up. We have major issues to address in the water impoundment and the fact that the schools don’t have enough capacity for the growth we’ve experienced. imageHe also highlighted the poor emergency communication capability where a firefighter was in a burning building a year ago and he couldn’t talk to people 200 feet away. It almost cost him his life.

Vice Chair Michelle Flynn (Ruckersville)  indicated that during her orientation she heard of counties raising their personal property tax rates more than $.10/$100. She was glad that Greene could hold to only a $.025 tax increase.

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Bill Martin

Chairman Bill Martin (Stanardsville) believes that the table is set for Greene County. The county has a great school system but we need more commercial expansion to increase our tax base. The water impoundment is the lynch pin to the county’s progress. However, the budget incrementally adds over $680,000 in new expenditures (the largest component being $170,000 for the regional jail) but only has new revenue of $460,000. The additional $120,000 would equate to an additional tax rate increase of $.012/$100 or a total tax rate of $.037/$100 of assessed value. This imbalance caused Martin to not support the budget.

Cox made a motion to approve the budget and the tax rate Frydl seconded the motion which passed of 4-1 (Martin opposed). At the first Board of Supervisors meeting in May, the Board will vote to appropriate funds for fiscal year 2017.

However, several questions came out of the budget process……..

1) how much Reserve Fund is left vs. the balance the auditors recommend having?

2) does the county have enough cash on hand going forward to get through the low periods right before the semiannual personal property tax payments?

3) should there be a “cash only” minimum balance in order to be able to pay the bills every month?

4) how should Greene look to finance the large, looming expenditures such as the water impoundment and school expansion?

Finance Director/Deputy County Administrator, Tracy Morris provided what the Reserve Balance has been the past four years (calculated at September 30th, the end of the fiscal year):

Fiscal Year Balance

% Decline

% Cumulative Decline

2012 $19,633,000

2013 $17,446,000

11.1%

11.1%

2014 $15,731,000

9.8%

19.9%

2015 $14,412,000

8.4%

26.6%

In the FY2017 budget included a $2,850,000 decline in the Reserve Balance to balance the budget. The FY2016 budget projected a decline in the Reserve Balance of $3,067,000 and with these amounts being used the 2016 and 2017 estimated Reserved Balance would be:

Projected Balance

% Decline

% Cumulative Decline (since 2012)

FY2016

15.6%

42.2%

FY2017

14.5%

56.7%

Two keys to remember are that the Reserve Balance is not all Cash. It is made up of all Balance Sheet accounts – both cash and non-cash. Morris also indicated that all investments of cash have been liquidated. In addition, Board Policy indicates a goal of maintaining a minimum reserve Balance of 15% of income plus 1 month of expense  which seems to be in jeopardy.

There has been discussion that an additional benchmark might be provided to operate the county on a sound financial basis and that would be to have a “cash only” minimum balance. This lead to ask how much cash does the county have which Morris directed to the County Treasurer, Stephanie Deal.

Deal provided the following detail of the cash balance by year in the two months (June and December) before personal property taxes are collected.

FY2012 FY2013 FY2014 FY2015 FY2016
April $8,855 $9,925 $6,873 $7,712 TBD
May $10,851 $13,951 $11,746 $12,050 TBD
October $8,999 $10,758 $8,389 $8,777 $7,794
November $10,869 $13,878 $11,026 $11,461 $10,829

(All numbers in thousands) *Fiscal Year ends 9/30

The trend shows a steady decline in the cash balance after peaking in 2013, similar, but not as steep as the decline in the Reserve Balance over the same period. May and November showing increases in the cash balance indicate that a large portion of the county pays their personal property taxes in the month before they are due.

As for Frydl’s comment that Greene County is not like Washington, D.C. he is currently correct – Greene got out of borrowing that plagued the county in the past. There is concern that there are major projects on the horizon – the water impoundment project for over $40,000,000 and the study currently being conducted on the physical needs of the school system – price to be determined.

The “good news” about the schools teaching more students with fewer teachers while on the surface sounds good but it is a concern whether it is sustainable. Cuts have been made to administrative staff causing teachers to take on more “non-teaching” tasks with growing classrooms. The combination of these issues raises concerns whether Greene County schools will keep their good teachers and help attract businesses to the county.

Lastly, the 2017 budget includes $2,836,000 of Debt Service. The “real” good news is that this amount declines annually the next nine years (2018 to 2026). Absent any new debt being acquired, starting in 2027 the annual decline jumps to $1,952,000 (in one year) and gets bigger the next 10 years to $2,224,000 in 2036. The total decline for the 11 year period is $19,288,000 and for the total 20 year period the total reduction will be nearly $27 million.

The chart below shows the trend line going down – significantly in the out years providing a source of revenue within the existing debt structure.

image

Will this reduction in existing debt service be enough to fund all the projects needed to be done in Greene? Probably not, but it is a good start for the future.

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

Photo Credits: Greene County, Greene County Record, Martin Campaign

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