Category Archives: economics

The Banana Boat and Charlottesville’s Proposed BPOL Reform

By. Neil Williamson, President

My first car was a yellow 1976 Ford Pinto Station Wagon 1977_Ford_Pinto_rear photo credit motoburg(fondly referred to as the ‘Banana Boat’).  Over time, I upgraded the stereo and dressed up the interior but it never really changed the fundamental fact that my teenage “ride” was a yellow Pinto Station Wagon.

This car came to mind as I watch Charlottesville consider important and proper changes to their Business Professional Occupancy License (BPOL) tax.

Please let me explain.

On March 6th, Charlottesville City Council will be considering changes to their BPOL Ordinance designed to promote fairness to mid-sized businesses.  Currently, any business operating in Charlottesville is required to pay BPOL based on its gross receipts. In fiscal year 2016, the BPOL tax generated $6.9 Million dollars in revenue for the City, 4.4% of all City revenue.  All 38 cities in Virginia charge BPOL.  The Free Enterprise Forum believes this is an unfair tax as it is based on gross receipts and has called for it repeal.

Staff provided several examples of the challenges under the existing ordinance:

Charlottesville businesses grossing $50,000 or less per year pay a flat fee of $35 and businesses grossing more than $50,000 pay based on a rate (established in State Code and as determined by the particular type of business) multiplied by annual gross receipts.

As an example, a veterinarian grossing $49,000 per year pays $35 for an annual business license. A veterinarian grossing $51,000 per year pays according to the standard rate for veterinarians and other similar professions ($0.58/$100), and would pay a rate-based fee of $295.80.

A graphic designer grossing $49,000 per year pays $35 for an annual business license. A graphic designer grossing $51,000 per year pays according to the standard rate for graphic designers and other similar professions ($0.36/$100), and would pay a rate-based fee of $183.60. The effect is that similar small businesses with very similar gross receipts end up paying very different fee amounts.

Meanwhile in neighboring Albemarle County, businesses earning up to $100,000 pay a flat fee of $50.  Therefore the business starting out (>$50,000 gross revenue) pays less in Charlottesville until they cross the $50K threshold and then they pay much more.

The Commissioner of the Revenue has reported of hearing significant concerns from taxpayers about what can be a dramatic jump in their BPOL costs as they cross the $50K gross annual threshold.  It is important to recognize that $50K in gross revenue is the point where many businesses may be at the tipping point between viability and failure.

As the staff report outlines:

In an effort to attract, retain, and encourage small businesses in the City of Charlottesville, the Commissioner of the Revenue and City Treasurer are proposing a modest change to the fee structure used to assess BPOL:

  • Businesses grossing $50,000 and below continue to pay $35 license fee
  • Businesses grossing $50,001 to $100,000 pay a $50 license fee
  • Businesses grossing over $100,000 pay the license fee based on applicable BPOL rate

This proposed change would benefit small businesses within the City of Charlottesville by reducing the license fee paid by businesses earning between $50,000 and $100,000. Staff estimates that approximately 450 businesses would benefit from this structural change. There would also be a comparable change in the technology business incentive as well. We are recommending that these changes take place for the upcoming assessment year of 2018.

The Commissioner and Treasurer would note that this is a relatively modest proposal that seeks to provide meaningful relief to small businesses in our community within limited statutory, system, and budget constraints.

These changes do not come without cost.  Staff estimates adoption of this proposal would potentially reduce BPOL revenue by $93,000.

While the Free Enterprise Forum has consistently called for the REPEAL of BPOL, we are supportive of the reforms contained in the proposal.  In addition, we commend the Commissioner of the Revenue and the Treasurer for thinking beyond the bean counter box and seeking reform.  When properly implemented, we see these changes as leveling the playing field with adjoining localities, increasing fairness for small to mid sized businesses and promoting economic development.  1979 pinto cruising wagon

We would be remiss if we did not remind the City that regardless of changing the paint job, adding new tires and a kicking new stereo, you are still driving a Pinto Station Wagon.

Yes, repeal would be better but we support these commonsensical BPOL reforms.

Respectfully Submitted,

 

Neil Williamson

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.

Photo Credits: Motorbug.com, Autospost.com

Albemarle Passes The Bucks ($1.4 Million) To Unelected CACs

By Neil Williamson, President

piggy-bankIn Wednesday’s (2/1) meeting, without so much as a formal public hearing, Albemarle County’s Board of Supervisors plans to send a $1.4 million dollar piggy bank to the unelected Citizen Advisory Councils so that the elected officials don’t have to make the hard budget choices.

Nothing they are doing is illegal, it’s just not right.  Please let me explain.

Albemarle’s annual Capital Improvement Plan (CIP) Budget is laborious and involves significant number of staff hours to determine the staff priority for Capital projects such as vehicles, buildings and renovations.

Over the last 13 years the Free Enterprise Forum has been impressed with the level of detail and careful consideration the CIP committee (including citizen representation and 2 elected BOS members) have put into these discussions.  There have been times when one geographic portion of the development areas had CIP projects that garnered higher scores by the committee and these were funded rather than less urgent projects.

The new “Neighborhood Funding Initiative” would siphon off $1.4 million of the annual CIP budget and allocate it geographically and by population.  The staff has proposed a formula to accomplish this task:

17-155 - Proposed Allocation of Funding - View

Staff has simply developed this Board driven concept.  In fact, the staff report hints at a better manner to utilize citizen involvement along with the elected officials within the current CIP process.

staff has conducted best practices research which is summarized as Attachment A that revealed that the majority of these types of community focused improvement funding programs fall into three basic categories:  neighborhood matching grants; formal citizen involvement in capital planning; and citizen-driven Capital Improvement Programs. After hearing the Board’s discussion, staff thinks that the third category may most clearly align with the Board’s preferences, so the program has been designed along those lines.  If the Board would like this program to be more closely incorporated in the already existing CIP review, evaluation and ranking process that would be another viable approach.

The Free Enterprise Forum has long been a critic of the unelected CACs.

In 2009 we wrote:

The Free Enterprise Forum believes citizen groups (including us) should have the ability to be active participants in the workings of local government.  That being said, we are increasingly concerned that the leadership function of some Boards and Commissions may be inappropriately delegating to community organizations.

With the proposed policy change, beyond effective regulatory veto power over development projects that would advance the community vetted comprehensive plan, Albemarle now seems poised to give these unelected “mission creeping” Citizen Advisory Councils the county purse strings as well.

As the Supervisors continue to delegate, I wonder what will be left for them to do … besides run for reelection.

As we said in 2009:

In the end, elected leaders must lead, not delegate, if citizens don’t like the direction they should replace the leaders.

The more things change, the more they stay the same.  Stay tuned.

Respectfully Submitted,

 

Neil Williamson

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

Greene Supervisors and School Board Kick Off Budget Season

By. Brent Wilson, Field Officer

Prior to the second January Board of Supervisors meeting, the Greene County Board of Supervisors and the School Board held a workshop to begin the budget process. Leah Paladino, School Board Chair, led the discussion and reviewed the schools needs and priorities.

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Leah Paladino

Specifically the next school budget is looking several major issues – 1) a Virginia Retirement System (VRS) increase, 2) health insurance increase and 3) a one-time bonus – depending on Richmond’s decision. The impact of the increased local cost of the VRS is being estimated at $326,000 or a 10% increase.

Superintendent Andrea Whitmarsh’s understanding is that this increase statewide would fully fund the VRS system per what state auditors estimate is required. Health insurance is estimated to increase by 15% or $357,000 and the impact of the potential one-time bonus  is estimated at $291,000.

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At the same time, this reporter has been in communication with Delegate Rob Bell asking him about fully funding the VRS fund. His reply on January 18th was “I continue to supports efforts to achieve full funding with legislation……one of the challenges is that the budget can supercede other bills, which makes it harder to create long-term policy”. I replied asking would he sponsor a bill to prohibit “borrowing” VRS funds for anything other than retirement and when will the VRS fund be fully funded per the states independent auditors. I am still awaiting a response to that email.

clip_image005Supervisor Jim Frydl (Midway), the School Board liaison, commented that the increased VRS cost and the bonus are examples of state mandated costs being passed to the counties while the state maintains they are balancing the state The three items total nearly $1 million before addressing any operational needs – such as new text books, additional teachers and aides, updated computer equipment, etc.

As the school board pointed out, the school staffing in 2009 was 511 and over the next five years the staffing was reduced by 41 to 470 or an 8% reduction while over the same period the number of students rose from 2,852 to 3,099 or 9%. The combination of more students with fewer staff caused the ratio of students vs. staff to increase by 18% from 2009 to 2014.

Whitmarsh’s comment on the dramatic change was that reductions in staffing have been made by 2014 and since then the staff have been in sync with the increase in student population.

County Administrator John Barkley asked Whitmarsh if salaries in Greene were competitive?

Superintendent Whitmarsh indicated that there is an ongoing issue in regards to losing teachers with several years experience to Charlottesville and Albemarle County due to both wages and benefits lagging.clip_image007

Kristie Spenser, Director of Business and Facilities, addressed the health insurance increase and attributed it to four major claims which is causing the loss ratio in Greene to be higher than normal as opposed to last year when claims were below the norm.

Supervisor Bill Martin (Stanardsville) asked Whitmarsh how the morale of the staff in the schools is. Whitmarsh felt that in general it is improving, you always have some happy and some unhappy, but raises have been given recently and Paladino felt that teachers have been empowered, encouraged to innovate and moral is increasing.

Whitmarsh thanked the Board of Supervisors for the meeting and it will help them at their budget work session the next night – Wednesday, January 25th. She asked that if the Supervisors needed any further information to just ask and they will be glad to provide any data needed to help them understand the school’s needs. Likewise Martin offered to meet with the School Board if they felt it would help the budget process.

At the regular meeting of the Board of Supervisors, Michelle Flynn was elected to the Chair for 2017 and Dale Herring was elected to the Vice Chair position.

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

2016 – A Year of Exits (Executive and Grade Separated)

By. Neil Williamson, President

https://freeenterpriseforum.files.wordpress.com/2015/12/top-ten-list.jpg?w=179&h=161At this time each year, I take time to look in the rearview and see what issues we have covered that have garnered the most attention.  As usual, I am amazed, and thankful, for the large number of people who read and financially support our work.

Here are the Free Enterprise Forum Top Ten 2016 Shaking My Head (SMH) Moments

#10 Is Charlottesville the $17.86 Million Court Jester?

Imagine you are a mayor or a City Manager, if a major employer and economic driver in your city was poised to leave, how would you respond?Image result for Court Jester

Perhaps its just me, but I would likely fight like heck to keep them in the city.  It is much easier to retain a major employer than to attract one.

But what if the employer is actually an arm of a neighboring government, should that matter? …

If Albemarle decides to bring $17.86 million of ‘County’ economic activity back to Albemarle, Charlottesville may end up looking as wise as the Court Jester this Halloween.

 

#9 Bananas and Albemarle’s Outdated Economic Opportunity Map

Imagine being in the banana business — and you have no way to obtain fruit.Image result for Albemarle county development area

That is Albemarle County’s current economic development sales position: “Yes, we have no bananas.”

“If a manufacturer calls interested in locating near a highway, we tell them, ‘We have nothing for you,’. Prospect businesses are looking to move within three to six months if they are not looking to build. We tell them, ‘We have no product ready to go today.’” – Faith McClintic, Albemarle County’s economic development director

#8 Greene Supervisors Approve Overspending FY17 Budget

By. Brent Wilson, Field Officer

In just the second month of the new budget cycle, the Greene County Board of Supervisors discussed clip_image002two issues last night (8/23) that would allow the county to spend nearly $33,000 over the approved FY17 budget.

The first issue that County Administrator John Barkley explained was that several positions are needed to be brought up to market value. He further explained that supplemental funds are being requested to fund the $27,250 for the reclassification of positions. Surplus funds from the FY16 budget will allow the county to be able to fund this request.

#7 C’ville’s Hydraulic Houdini

What would you call it when Charlottesville works to make a primary pillar of an integrated

Trafficit knot  @ Proff Rd             Trafficlymead Town Center             @ Hol                       knotTrafficLakes ...

transportation program disappear?

The Hydraulic Houdini.

Please let me explain.

Those with even decent short term memory can remember the argument over the now defunct Western Bypass and the Route 29 “Solutions”.  Rather than building a limited access bypass around Charlottesville’s congestion (The Free Enterprise Forum supported), Bypass opponents proposed a series of integrated “solutions” would increase the existing roadway capacity.

My friend Jeff Werner of the Piedmont Environmental Council (PEC) even had a nifty PowerPoint Presentation regarding the  congestion

#6 Albemarle’s Executive Exodus x 2

Albemarle Executive Foley Finds Greener Pastures

Thomas FoleyWith rumors flying around Albemarle County (and Social Media) all day, a 4 pm Stafford County announcement made it official; County Executive Tom Foley is leaving Albemarle County to take up the same post in Stafford County.  In the announcement Stafford highlighted Foley’s service and temperament as key qualities they were looking for in their new administrator:

Albemarle is Losing Faith

leavingyourjobAs anticipated as the sun rising in the east, it is with absolutely no surprise that Albemarle County’s first Economic Development Director, Faith McClintic, will be leaving her position later this year.  In her short  18 month tenure, McClintic often found herself at odds with Planning Commissioners, some members of the public, this writer, and some elected officials.  In addition, she found herself without product as she said in August of this year:

“If a manufacturer calls interested in locating near a highway, we tell them, ‘We have nothing for you,’. Prospect businesses are looking to move within three to six months if they are not looking to build. We tell them, ‘We have no product ready to go today.’” – Faith McClintic, Albemarle County’s economic development director

#5 Albemarle and VDOT Create US29+Rio Lemonade

While the Free Enterprise Forum lost the battle against the US29/Rio Grade Separated Interchange (GSI), we have found Albemarle County (and Virginia Department of Transportation (VDOT)) to be working exceedingly well together and significantly positively impacting the challenging business environment due to the roadway construction.

rio gsiIn the most recent Route 29 Solutions Project Delivery Advisory Panel meeting, former VDOT Commissioner and PDAP facilitator Philip Shucet indicated the next phase of the Rio GSI project, where the intersection will close for up to 103 days,  “Isn’t going to be a birthday party”.  This might be the understatement of the year.

#4 SOMEONE’s Shameful Sensationalism

Over the last dozen years, I have read literally hundreds of Albemarle County staff reports.  I tend to find the reports to be professional, concise, factually correct and devoid of generalizations or editorial commentary – until last week when I determined that SOMEONE  improperly and sensationally  used a tragedy to further an advocacy position in what was presented as an impartial staff analysis.

In an attempt to sensationalize the need for closing of Earlysville Road to truck traffic, SOMEONE has stooped so low as to cite a terrible teenage 2002 drunk driving accident as justification to overrule the technical analysis of professional traffic engineers.

#3 ‘Snob Zoning’ Crozet Master Plan in the Works?

Recently, C-ville magazine cover story posed the question, “Can Crozet maintain its small town charm snob-zones-640-for-web-194x300.jpgas its population increases?”

Perhaps the question should be “After millions of dollars of planning and infrastructure spending, should Crozet residents be allowed to stifle population and economic growth by hijacking the master planning process?”

We’ve recently learned such a plan is in the works.  And it is a bad idea….

The reality is the CCAC is opposed to density in the development area that is critical to achieve the philosophical goals of the Comprehensive Plan. The community vetted plan calls for densely populated development areas filled with amenities and services surrounded by less populated rural areas that are supportive of agriculture, forestry and open space.

In her seminal book “Snob Zoning”, Liza Prevost, exposed what happens when NIMBY zealots are able to change plans and regulations

#2 Fluvanna Land Use Fireworks

By. Bryan Rothamel, Field Officer

OBrien2014-photo-credit-Fluvanna-County_thumb.jpg

“I’m a little surprised board members are so happy to push this under the rug,” said Supervisor Tony O’Brien. . .

O’Brien said there were supervisors who should recuse themselves from the vote because they should know they aren’t compliant with the program.

Eager asked O’Brien to name who he thinks is not compliant as she has done everything to be compliant. He replied he never thought she wasn’t but questioned if Supervisor Don Weaver and chairperson Mike Sheridan (Columbia District) were compliant. He also thought Supervisor Mozell Booker might not be compliant but she was in a different arm of the program.

Sheridan said he asked a cooperative agent if he was in compliance and was told his practices were.

Fred Payne, county attorney, gave a legal opinion that supervisors do not have to recuse themselves just because they participate in the program.

O’Brien also suggested Mike Sheridan should recuse himself because Mel Sheridan is his brother.

Payne’s said Mike Sheridan had no need legally reason to recuse himself. He continued supervisors can always recuse themselves if they feel it is necessary but there was no legal reason to do so.

Weaver, who was quiet for the discussion, called for a vote which ended the discussion.

O’Brien said under his breath after the vote, “Embarrassing.”

#1 $52.5 Million Dollar Indecent Proposal – Albemarle Backs Off Threat to Wedding Industry

Last Tuesday evening, a rare joint meeting of the Albemarle County Planning Commission and Board of Supervisors heard a great deal from both wedding venues and the vendors that support them.  Albemarle staff had prepared a proposed ordinance that, among other things, would limit the ability of wineries, breweries and distilleries to 24 events a year.  In the end the supervisors backed away from the most restrictive portion of the ‘indecent proposal’.

The testimony Tuesday was insightful and passionate.    Wedding Photographer Jen Fariello asked pointedly “Why are weddings being attacked?”  Wedding planner Adam Donovan-Groves [name correction 9:01 6/20 nw] told of one recent wedding whose local fiscal impact exceeded $250,000 musicians, gift packs, invitations, transportation, jewelry, photographer, etc.

Yes, 2016 has been a year of executive exits, speedy construction and threats of overregulation.  Through it all the Free Enterprise Forum continues to blog, tweet (@neilswilliamson) and Facebook about local issues of significant importance.

The year ahead is filled with promise: the promise of a national search for a new Albemarle County Executive, the promise of so called “Solutions” 29 being completed earlier than scheduled (looks like June), the promise of new form based code development in Charlottesville, as well as the promise of elections across all localities.

seats available2016 will also bring us the opportunity and privilege of attending and participating in  many more government meetings where important policy decisions are made and #SeatsAvailable.

Thank you for your support!

 

Happy New Year

Neil Williamson

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.

Service District SuperTax – A Tax By Any Other Name

By. Neil Williamson, President

A-rose-by

Increasingly a number of Central Virginia localities are finding that so called ‘Service Districts’ may provide a new revenue generation mechanism that is less politically repugnant than simple property taxes.  While both options are based on property value, 2017 may be the year of the Service District due to several interesting new taxation possibilities and complexities – please let me explain.

Albemarle County has been rather transparent in their pursuit of new service districts dating as far back to the discussion of a regional transit authority in the early 2000s.  The Free Enterprise Forum was a little surprised to find a suggestion of a service district buried deep in Greene County Administrator John Barkley’s December report:

Initiatives on the Horizon for 2017 – As the new year approaches, staff will continue working to improve the County’s financial reporting capabilities . . .  New initiatives will include addressing blight and the process and legalities associated with blight abatement, consideration of special assessment districts aimed at targeted infrastructure improvements, and conducting a full structural assessment of County facilities. Emphasis Added – nw

In their December 7th “Balanced Two Year Fiscal Plan” discussion the Albemarle Board of Supervisors were provided an illustration of the SuperTax Service Districts:

Eastern Ave – Phase 1 – Rt. 250 to Westhall, including Lickinghole Creek Bridge (Crozet)

This is a conceptual illustration of a specific project in Master Plan/CNA

Assumptions:

Project cost, $10.5 M (2022 $s for assumed year of construction–ends in 20 years)

Service District boundary = Crozet Development Area boundary

project funded with 60% state funds, 40% service district generated funding

Scenario 1 Crozet “Service District” provides 100% of Local Contribution – Annual cost to an increase of 2.8 cents on tax rate beginning in 2022

Scenario 2 County contributes $2M Crozet “Service District” provides remainder of Local Contribution – Annual cost equivalent to an increase of 1.6 cents on tax rate starting in 2022

Illustration: For a house assessed at $350,000, an increase of 2.8 cents on the tax rate would equate to an annual increase of $98.00; a 1.6 cent increase on the tax rate would equate to an annual increase of $56.00.

Logically this specific example raised a number of concerns.  Supervisor Ann Mallek mentioned her belief that this Eastern Connector had been promised to Crozet as a part of the concurrency of infrastructure that was the County’s responsibility under the Neighborhood Model.

This failure was identified as early as 2006 when the neighborhood model was still in it’s infancy.  In an October 4, 2006 staff report, when the Neighborhood Model was still in its infancy and the great recession had not yet hit) staff highlighted the hypocrisy of demanding developer infrastructure improvements while not holding up Albemarle’s end of the bargain:

The Comprehensive Plan has also established what public facilities are necessary at what locations to support development of the Development Areas and has anticipated developer provision of facilities along with VDOT and the County’s CIP.  However, the ability of developer and VDOT funding and the County’s CIP to adequately pay for the cost of public infrastructure to support the Development Areas as the priority areas for new development, public services and public infrastructure has become increasingly difficult.  Because this investment in infrastructure is critical to achieving the quality of life necessary to make Development Areas what is envisioned in the Neighborhood Model, the timing of infrastructure development associated with the rezoning of property within the Development Areas may need further consideration.

The Neighborhood Model has redefined how the Development Areas should develop to provide an active, vibrant urban place that will be perceived as a more desirable place to live than the Rural Areas.  It puts a greater reliance on public facilities and urban services in the Development Areas to achieve the urban form. It continues to anticipate developer provision of facilities along with VDOT and the County’s CIP providing a greater emphasis on concurrency with development.  It emphasizes Master Planning of areas within the Development Areas to best define how the Neighborhood Model can be achieved in these areas. . .

. . .Without the infrastructure needed to address the impact of the up-zoned property, concerns regarding the quality of life in the Development Areas will need to be considered.

Emphasis added-nw

Albemarle staff also presented the concept of using the Service District Supertax to fund sidewalks in the urban areas, small area planning, as well as city/county cooperative ventures.

Interestingly, the staff did not mention one VERY attractive part of Service District SuperTax funding – Local government gets all the money – unlike a tax increase where by Board policy Albemarle splits increased revenue 60%/40% with the schools this would be all local government money.  To get the same level of funding for capital projects the tax increase would need to be 60% higher than the Service District SuperTax.

While we appreciate and understand the demands placed on localities to fund the needed infrastructure, the Free Enterprise Forum believes the Service District SuperTax is a flawed model that may create a balkanization of any locality utilizing it.  Further we have significant issues with an existing Board of Supervisors sitting in 2016 approving a Service District SuperTax that does not go into effect until 2022.  While this may be legal, it does not seem right.

Concurrent funding of infrastructure to support locality’s comprehensive plan is the locality responsibility.  If there is a problem with the Board policy of sharing new revenue with the schools, change that policy rather than creating a new Service District SuperTax to work your way around it.

Respectfully Submitted,

Neil Williamson, President

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Neil Williamson is the President of The Free Enterprise Forum, a 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

Photo Credit: www.planetofquotes.com

Greene Property Reassessment Increases

By. Brent Wilson, Field Officer

mailboxAlong with the holiday cards and sales circulars, Greene County property owners recently received their biennial  Assessment Change for 2017 in the mail; and property values are up.  Some Greene County residents fear this increase in property value will make it easier to increase local revenue (and spending).

Fred Pearson of Pearson Appraisal Service performed the assessment for Greene County.  In County Administrator John Barkley’s December report to the Supervisors, he stated that the average assessment increase is 5%.

During the December 13th meeting, Supervisor Jim Frydl (Midway) commented that the increase in assessed values is indicating an increase in the value of property in Greene County. (The assessment form indicates that the assessed value is at 100% of fair market value). The impact of the tax is dependent on the increased value of your property.  For example, at a property tax rate of $.775 an increase of $10,000 in assessed value would generate an increase of $77.50 in tax.

While the above analysis is accurate, the driver for the assessed value assignment is the marketplace. The fact that your home may have appreciated and you have more equity does not put more cash in your pocket to pay the tax bill. Only if you are selling your home (or in some cases refinancing) do you get the increased equity converted into cash.

Greene County’s reassessment process next moves into an appeal process.  Property owners who disagree with the assessors valuation can make an appointment by calling 434-985-5201 no later than December 20, 2016. The County notice states the appeal appointment will be with the Assessor (interestingly Greene County does not have an Assesor on staff).  When the Free Enterprise Forum inquired we were told that the meeting would be with Fred Pearson.

The small, nonscientific,  sampling of reassessments from the area north and west of Stanardsville showed a property value increase of nearly 10%. So one may naturally assume that some areas in the county are below the 5% average to offset those assessments that are above the overall average.

The appeal process allows the property owner to discuss with Pearson the basis of the new value. Since the assessed values are to represent market values, aggrieved property owners are encouraged to identify sales in the past two years in their neighborhood of houses with comparable features and size of property to see if their assessed value could be argued to be reduced. If after the meeting with Pearson, the property owner still is not satisfied with the value assigned to their property there is a Board of Equalization review that starts February 1, 2017 and goes until February 15, 2017.

If the overall property value in the county increases then the impact would be to increase tax revenue assuming that the tax levy stays the same as the prior year. Virginia State code mandates that before the tax rate is set next year there will be a calculation to determine what the new tax rate would generate the same tax revenue as the prior year. In this case, since the assessed values are increasing the tax rate would likely need to be be lowered to generate an equalization rate.

The supervisors will make the decision of what the tax rate will be which may or may not be all the way down to the equalization rate. What is interesting is that Barkley’s December report also indicated that the county will have a surplus in tax revenue for the recently completed  current fiscal year (FY16).

So what will the county do with the excess tax revenue?

  • Will the Supervisors keep the money and build the Reserve Fund?
  • Will they direct the funds be used toward the water impoundment system and school capital projects?
  • Will the Supervisors take the additional revenue into account when setting the tax rate for the new fiscal year and lower the rate even below the equalization rate?
  • Or a novel approach – will the Supervisors refund the extra tax revenue to the taxpayers and start fresh in the next fiscal year?

Only time will tell but given the size of the projects mentioned above, Greene County (like most Virginia  localities) is looking for sources of revenue wherever they can.

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

Ballot Box Capital Spending Exceeds $1.3 Billion

By. Neil Williamson, President

In case you did not notice, earlier this week there was an election.

In addition to the Presidential race, several localities had so called “Bond Issues” on their ballots.  Albemarle County was one of 17 bond issues presented by 6 localities this year – This represents over $1.3 Billion in capital spending – not surprisingly all passed by fairly significant margins.    bond-chart-2016

The Free Enterprise Forum does not question the need for any of these projects but we do wonder if the ballot box is the proper place for determining their priority in the community.

Voters are provided a binary choice of support or not support a distinct number of capital projects in a particular government function but they are not told (on the ballot) the impact on their local budget or the other capital improvement items that might have to be postponed in order to pay for the proposed bond referendum.

Interestingly, this year when voters in four localities were provided the option to institute a meal tax – it failed in three of the four localities (Passed Matthews County 54%).  The lesson, regardless of the actual impact, if you do not call something a tax the citizens will be likely endorse it.

The Free Enterprise Forum is very concerned that referendums [and fees (i.e. storm water)] are providing local government a new way to generate revenue and duck responsibility for making the hard choices that result in tax increases.

In addition, it seems that the manner the ballot question is phrased also has an impact on the success of the effort.

Tuesday, Augusta County residents were asked not about a bond issue but a straight spending question.

Shall the Courthouse of Augusta County be removed to the Augusta County Government Center Complex in Verona, Virginia, and shall the Board of Supervisors be permitted to spend $45,000,000.00 therefore?

Voters (66%) said no.

But Henrico Schools Bond referendum asked a 6 times larger spending question in a completely different way:

Shall Henrico County, Virginia, be authorized to contract a debt and issue its general obligation bonds in the maximum aggregate principal amount of $272,600,000 pursuant to the Public Finance Act of 1991 to finance school projects and the Henrico County School Board’s Capital Improvement Program, including capital improvements to schools, furnishing and equipping of schools, acquisition of future school sites, and such other school construction, renovations, and improvements as may be required by the actual education needs in Henrico County?

It seems to this observer that voters strongly favor financing options for municipal spending even absent tax ramification information but push back on the concept of making specific spending decisions.  The language of the ballot question matters.

More importantly perhaps is not how voters are asked but should they be?

The self governance part of our philosophy appreciates the apparent citizen involvement in the process but the cynical portion questions if by limiting the choice to a binary yes/no decision they are truly engaged.

Shouldn’t those we elect make the tough choices between adding classroom space or adding a firehouse?  Aren’t they in the best position to evaluate competing priorities?

The reality is each and every one of the bond referendums that passed will be repaid using local tax revenue but not one of them said in the ballot question how the amount borrowed equates to the property tax rate increases during the term of the bond.  .

Considering the significant disclosures required when we as private citizens take on debt (car, auto, etc.) is it too much to ask for a truth in lending statement for over $1.3 BILLION in capital spending?

The Free Enterprise Forum believes such fiscal clarity should be an integral part of such ballot questions.  Unfortunately, we doubt such change will be made any time soon as that might negatively impact the passage rate and require elected officials to make the tough capital budget decisions.

Respectfully Submitted,

Neil Williamson, President


Neil Williamson is president of the Free Enterprise Forum, a privately funded non-profit public policy organization focused on local governments in Central Virginia. For more information visit www.freeenterpriseforum.org.

 

Is The Jury Still Out on Albemarle Courts Relocation?

By. Neil Williamson, President

Tonight (10/24) the Albemarle County Board of Supervisors will take “public input” regarding the albemarle-courthousepossible relocation of their courts system.  Of the five options on the table, all but one keeps the courts in the City of Charlottesville. While the Free Enterprise Forum would like to have a favored option, we do not believe the case has been made for any option — considering how far along the process is, we are astonished at the basic questions that remain unanswered.

To review here are the five options:

OPTION 1: DOWNTOWN/LEVY EXPANSION
OPTION 2: RELOCATE COUNTY & CITY GENERAL DISTRICT COURTS TO COUNTY OFFICE BUILDING MCINTIRE

OPTION 3: RELOCATE COUNTY GENERAL DISTRICT COURTS TO COUNTY OFFICE BUILDING MCINTIRE

OPTION 4: RELOCATE COUNTY GENERAL DISTRICT COURTS & CIRCUIT COURTS TO COUNTY OFFICE BUILDING MCINTIRE

OPTION 5: RELOCATE COUNTY GENERAL DISTRICT & CIRCUIT COURTS TO COUNTY SITE

As we examine the decision matrix provided by the county, we have many more questions than answers.

Here are our top ten inquiries:

  1. Has the city offered any economic incentives to support any of the City based options? (see last week’s blog post)
  2. Why does option 1 (stay downtown) cost $12,500,000 more than building in option 5?
  3. Why does it cost $18,000,000 to put the General District Court at the County office building when it appears that most of the infrastructure is already there?
  4. If you build a new county admin facility, where will it be located and, how much does it cost?  Where is that cost shown?
  5. Do options 2-5 factor in the lost property tax revenue for whatever parcel is acquired?
  6. The matrix seems to indicate that options 2-5 strongly support the County’s strategic redevelopment/urban place making priorities.   Doesn’t that really depend on where the County offices are built and how?  It could eat up a bunch of property in the urban area and create little long term value.
  7. Will option 5 allow a mix of uses on their site?  What of creating affordable housing over top of the new county offices?
  8. It seems that you are assuming any new construction by the County in the County has high economic development value.  Why?  What assumptions have been made to draw that conclusion?
  9. Is taking urban county property off the tax rolls good for economic development? Will the development area be expanded to replace this lost land?
  10. Why is the construction risk higher for option 1 than any of the other options?

The public input offered can only be as good as the information provided to them to base that input.  We forwarded these questions to Albemarle County early last week and they indicated they hoped to have answers in their presentation tonight. If that is the case, the public will have limited time to process the information before the public input session closes.

Regardless, these questions need answers before anyone should make a decision on the future location of the court.

The jury is not “still out” — the full argument has yet to be presented.

Respectfully Submitted,

Neil Williamson, President

_____________

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

Photo Credits: Albemarle County

Fluvanna Examines Energy Savings to Fund Infrastructure Improvements

By. Bryan Rothamel, Field Officer

The Fluvanna County Board of Supervisors are looking at energy savings through infrastructure improvements.

Fluvanna Supervisor Don Weaver

Supervisor Don Weaver

Don Weaver (Cunningham District) is on a committee along with deputy county administrator Eric Dahl to explore potential energy savings. It is a program the state has implemented to encourage localities to make infrastructure improvements to lower energy costs.

Recommendations include items such as changing light bulbs to LED and improving HVAC systems. Dahl told the Board the contractor guarantees energy savings are greater than cost to do the improvements, otherwise the contractor pays the difference.

Dahl received an update from the contractor just before the meeting that estimates infrastructure improvement costs at $7.7 million. The estimated yearly savings is $500,000.

Also at the October 5 meeting, the board accepted a ‘gifted deed’ from Fluvanna Rescue Squad for the Palmyra Rescue Squad station. The station will need improvements.

Supervisors paid $1 for J. Andrew Graff of Old Albemarle Surveying to survey the property. Graff essentially did the survey as a gift, unbeknownst to the county until the invoice came.

Supervisors unanimously voted a parcel in the Zion Crossroads area to be in violation of the garbage, refuse and waste ordinance. Staff showed pictures of garbage mounds at the property, located at 21708 James Madison Highway.
package2016-10-05
If the owner does not comply to remove the garbage, staff has the authority to clean the property. A tax lien will be placed on the property to recover the cost of trash removal.

Also at the meeting the supervisors upgraded the Clerk of the Board position to a pay band that moves the clerk to an exempt position. The Children Services Act position had a description change and pay band downgrade as the current employee is retiring.

Supervisors approved the FY17 pay band schematic. The biggest change is with exempt employees being moved to the new federal salary minimum of just over $47,000.

The consent agenda had eight open space contracts up for approval. Tony O’Brien (Rivanna District) thanked the residents for filing the contracts. He noted ones that he viewed were in the wrong designation previously. No other supervisor commented other than Weaver wanting full names of the contracted residents in the motions.

The next supervisors meeting is Oct. 19 at 7 p.m. There is a 4 p.m. work session prior.


https://freeenterpriseforum.files.wordpress.com/2015/10/bryan-rothamel.jpg?w=151&h=151The 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

Photo Credits: Fluvanna County 

Fluvanna Projects $1.6 Million Budget Surplus

By Bryan Rothamel, Field Officer

The Fluvanna County Board of Supervisors approved keeping the pay plan as it passed earlier in the budget season.

Because of state shortfalls the county will cover the $13,421 from the board’s contingency fund. The item was discussed on three separate times, had three motions and recorded two votes. The final approval vote was 3-2 with Don Weaver (Cunningham District) and Patricia Eager (Palmyra District) voting against it.

Also at the September 21 meeting, the supervisors received two items of good news about last year’s budget.

County staff is projecting a $1.6 million surplus as they finish closing out the books. All departments expended 90 percent to 100 percent of their allotted budget.

“I think it is a great reflection of the job you all are doing,” said Tony O’Brien (Rivanna District).

Weaver suggested next year the county could lower the tax rate because of the surplus. Departments have already requested over $100,000 of carryover items that the supervisors will have to approve.

Also, for the first time in a long time the Fork Union Sanitary District ended the year with a slight surplus, totaling almost $13,000. FUSD even accomplished the task while paying back $18,000 worth of the no interest loan the county gave the water system over the years.

“This is really a time to celebrate,” said Mozell Booker (Fork Union District).

The water rates were increased over a year ago. Last fiscal year was the first full year of the increased rates. Staff also discouraged customers of continually accumulating late fees by shutting off water service sooner. The issue with continual late fees is the bill becomes insurmountable.

The supervisors did approve a timber management plan for 94 acres behind the Fork Union Community Center and 96 acres at the old landfill.

The county will sell the timber. Both tracts were previously harvested and replanted. After being clear cut, there will be another replant of the loblolly pines. In about 15 years the county could thin the forest to help it grow. In 30 years the land will be ready for another full harvest.

During unfinished business, the supervisors waived their attorney-client privilege in regards to the lawyers used for the Davenport case. In 2015 lawyers, including county attorney Fred Payne, were sued by Davenport. The county waived the privilege for 35 specific questions.

The next Board of Supervisors is October 5 at 4 p.m.


https://freeenterpriseforum.files.wordpress.com/2015/10/bryan-rothamel.jpg?w=151&h=151The 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