Tag Archives: infrastructure aspending

Albemarle’s ‘Welcome Stranger’ Tax May Be Slashed by 75%

By. Neil Williamson, President

luther ingramSomehow, I hear Luther Ingram’s  “(If Loving You is Wrong) I Don’t Want To Be Right” as I read through the detailed reporting on the  current discussion of cash proffers.

While State law changes and a lack of locality infrastructure expenditures have combined to generate a new cash proffer number that is 75% lower than the current amounts, Albemarle supervisors are still entranced by cash proffers as the latest report indicates they have received promises of nearly $50 million dollars.

But I am getting ahead of myself. Please let me explain.

Albemarle County’s Fiscal Impact Advisory Committee (FAIC) has issued their advice regarding the County’s cash proffer policy.

To review, according to the Virginia Department of Housing and Community Development:

A cash proffer is (a)any money voluntarily proffered in a writing signed by the owner of property subject to rezoning, submitted as part of a rezoning application and accepted by a locality pursuant to the authority granted by Va. Code Ann. Section 15.2-2303 or Section 15.2-2298, or (b) any payment of money made pursuant to a development agreement entered into under authority granted by Va. Code Ann. Section 15.2-2303.1.

Theoretically, cash proffers are designed to offset the infrastructure cost of new development.  The reality is that these “voluntary” sums are required to gain approval of residential rezonings.

It is important to note the cash proffer amount does not include the infrastructure cost (AKA Hook-up fees) for Albemarle County Service Authority.  Those are a separate line item totaling about $20,000 per Single Family Detached unit.

Until recently, localities had the ability to include maintenance items in their Capital Improvement Program as a part of the proffer calculation absent any true connection to new development.  Albemarle had considered many inappropriate capital items as a part of their cash proffer calculation.  The most egregious of these (that we know about) was three years ago when a technology upgrade was included.  At the time we stated our belief that new residential development did not generate the need for the technology upgrade.  Recently, Richmond tightened the rules regarding proffer calculation.

The staff report outlining the new methodology references the change in state code:

Note that the proffer amounts calculated in this memorandum reflect the net costs generated by growth-related capital projects in the following categories: Public safety facilities, park facilities, libraries, schools, and transportation projects. Note also, that, under current Virginia law, costs associated with maintenance and replacement capital projects cannot be included in the calculation.

In their memo to the Board of Supervisors the FAIC outlined the changes to the proffer calculations:

Under the revised provisions of the Code of Virginia only those items which expand capacity may be considered. The CIP and CNA has also been reduced to be essentially a maintenance program with limited capacity expansion. Moreover, the Committee finds that under the current proffer model, as the County’s capital budgets grow, so too do the dollar values of the proffer amounts per unit.
The committee found that the new calculated amounts were:

Single Family Detached (SFD): $4,918
Single Family Attached/Townhouse (SFA/TH): $3,845
Multifamily (MF): $5,262

For context, the 2014 “voluntary” cash proffer amounts were:

Single Family Detached (SFD): $20,987
Single Family Attached/Townhouse (SFA/TH): $14,271
Multifamily (MF): $14,871

Interestingly, buried in the staff memo is a different set of numbers based on the concept that only the FY 15- FY 19 Capital Improvement Program (CIP) should be used rather than the CIP plus the Capital Needs Assessment.  That calculation results:

Single Family Detached (SFD): $487
Single Family Attached/Townhouse (SFA/TH): $1,477
Multifamily (MF): $2,144

To most accurately reflect Albemarle County’s Capital expenditures, the cash proffer amount would not need to be $20,987 (the current amount) nor $4,918 but a mere $487 per Single Family Detached Unit.  

The Free Enterprise Forum has consistently called for the elimination of the ‘Welcome Stranger’  tax.  We agree that at these lower rates some of the concerns we raised in our 2013 White Paper Contradictory Consequences may be avoided.

However, even as these “voluntary cash contributions” may be reduced still find them to be an ineffective, unreliable revenue source with significant negative impacts.  Yes, capital programs must be funded but they should be funded by the entire community not just the new residential home buyer.

Again, we call on the Albemarle Board of Supervisors to eliminate the ‘Welcome Stranger’ Tax.

Respectfully Submitted,

Neil Williamson

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20070731williamson 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

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Greene County School Board and Supervisors Work on Communication Issues

By. Brent Wilson, Greene County Field Officer

Back on May 8th, the Greene County Board of Supervisors faced a very vocal meeting about the funding for the school system. After that meeting, the Greene County School Board again promised to be more open and transparent with the Board of Supervisors regarding issues going forward.

The paradigm in Virginia is different than other states as both the School Board and the Board of Supervisors are elected by voters.  The Board of Supervisors has the ability to tax (the School Board does not); the Board of Supervisors allocates tax revenue for schools but can not dictate how it is spent.  This structure tends to generate friction between the Board of Supervisors and the School Board in localities across the state.

As a part of their new communication strategy, on September 11th School Board Chair Michelle Flynn provided the Board of Supervisors a comprehensive review including a budget update, energy consumption, and news from Richmond (funding and education). All schools are fully accredited. There have been changes in personnel but there is no increase in staffing in total.

Greene County Schools Superintendent Dr. David Jeck reviewed the school facilities project for the athletic facilities. 95% of the work is complete with two areas needing to be finished – landscaping and a punch list of items. The contractor has defaulted and the school system is now dealing with the insurance company. The low bid general contractor underbid the project and that caused subcontractors to go unpaid. There was a completion bond required under the contract and the bond provides for all of the contracted work to be completed to the satisfaction of the Clerk of the Works to ensure that work is done in compliance to the contract. The baseball and softball fields along with the track are all certified by the Virginia High School League (VHSL) and the facility is now qualified to host district and regional play.

School Board member Troy Harlow covered the upgrades in communication with the community in the past four years. Both Dr. Jeck and the school system have a twitter page that are kept current. The school system uses an automated calling system to ensure information to passed on to parents and teachers. The most recent upgrade is Power School  which allows parents to access their child’s academic record in real time.

Further community dialog is promised in the future.  The School Board plans to hold two community budget meetings to outline the needs of the school system. In addition, a Growth and Facilities Study hopes to be undertaken this year to keep a look to the future needs of the school system.

The Board of Supervisors responded favorably to the presentation. The only question was related to the state not providing funding for the 20 – 25 special education students. The school system receives federal funding instead of state funding for these students.

Ironically, prior to the School Board presentation, Mr. David Blount, Legislative Liaison at TJPDC  addressed the Board of Supervisors. The Board Of Supervisors actually had feedback for Mr. Blount. Jim Frydl took exception to the state claiming to fully funding education when a large portion of the increase was taken back to help with VRS funding. Chairman Buggs Peyton asked Mr. Blount to take the message to Richmond to not send any more unfunded mandates.

So while the local elected officials are working to try  to communicate better, they may have a shared enemy in the local funding shortfalls legislatively created by elected officials in the statehouse in Richmond.

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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