Cuts Dominate Budget Discussion But Some New Spending Creeps In

The Clarke County Supervisors sent a message that they are not through looking for cost savings in the evolving FY 2012 budget. On Thursday night the finance committee spent two hours combing through county spending and accounts in hopes of closing a $364K budget deficit in the coming year.

Indications from last night’s meeting imply that further cuts are likely, but at least one new spending initiative was offered; spending for a new county historic district designation.

The finance committee, comprised of Supervisors Michael Hobert (Berryville) and John Staelin (Millwood), Joint Administrative Services Director Tom Judge and County Administrator David Ash, convened for a two-hour “budget balance brainstorming” session. During the session, Judge presented budget reduction options that could provide up to $391K in immediate funding cuts and a possible $144K in savings related to the proposed combined senior center / park office project.

Other long-term, but less defined revenue generation options were also considered.

“We asked county staff to ‘think outside of the box’ to come up with ideas for reducing our $364K deficit” said Supervisor Staelin. “Just how realistic the proposals are, we don’t know. There’s no secret agenda here.”

Staelin pointed out that while the formal budget deficit is $364K, this year’s budget is being supplemented by $1.24M in “one-time” previously designated capital funding, bringing the true budget deficit to $1.6M.

“The danger here is that some of the capital funds are being used for the operating budget and it’s not clear where that money will come from next year” Staelin said.

Judge presented a methodic and well-researched set of budget alternatives aimed at improving not only the county’s budget bottom-line, but also on-going operational efficiency. “I’ve shown $391K of reductions on paper but not all of that will be achievable” Judge cautioned.

Fiscal Year 2012 Budget Options (Click to view options discussed at last night’s meeting.)

Of the immediate cost cutting ideas placed on the table last night, the largest target elimination of $274K for part-time staff used to supplement the county’s full-time workforce. Judge proposed that the county re-assign existing full-time staff on an “as needed” basis to cover the workload currently being performed by part-timers.

“Many of these positions were brought in to help during the time when the economy was strong and the county was very busy” Judge said. “Things are a lot slower now.”

While some of the part-time positions, like law enforcement assistance and swimming pool lifeguards, require specially trained staff and cannot be easily covered by other county staff members, other office and administrative functions could be covered with existing staff.

Just how much of the potential part-time saving can be achieved will fall to County Administrator David Ash who the committee directed to explore the cost-saving option with the county’s various operating teams.

Other budget saving options presented last night appeared to be straight-forward, like tapping funding accounts that have long remained dormant and using funds generated from sources outside of the county.

The committee recommended that interest balances generated from the animal shelter and parks department trust accounts be reviewed to see if the combined $31K can be used for general purposes. An additional $44K in leftover park construction funds is also under review.

A $35K balance from Trigon is also potentially available Judge said. “The money has been sitting in an account for a long time. It came to the county when Trigon formed a new mutual company because we were shareholders.”

Other budget improvement measures considered at last night’s meeting may prove more controversial or difficult to implement.

For example, Judge said that sheriff’s department deputies currently spend large amounts of time waiting in courtrooms on the day that a case is scheduled to be heard. Judge put forward the concept of using a lower-paid courtroom “spotter” who would notify a deputy by phone based on the case’s docket progress. In theory, this would allow higher-paid deputies to use their time in other areas and potentially reducing the daily manpower requirements of the sheriff’s department.

Judge also suggested that an emergency medical “fee-for-service” might be considered given that other nearby jurisdictions like Warren and Frederick Counties have implemented similar payment programs.

The committee also discussed elimination of cooking facilities at the new proposed Clarke County Senior Center, instead outsourcing meal service to a company like Sodexo, the Clarke County Public Schools meals provider.

An overall review of county service fees, based on a previous fee study that was not fully implemented, was also discussed.

Judge told the committee that one area that would not provide immediate cost savings, but that would reduce the county’s overall liabilities,is reduction of employee leave balances.

“We currently have about $1M compensated absence liability” Judge said. “If departments have the excess capacity, then directing people to take time off to reduce the liability would be a good thing to do at this time.”

Sale of county assets were also placed on the budget cutting table. County Administrator David Ash suggested that the county’s former library, a house on Main Street in Berryville that is now vacant, could be sold to generate revenue.

“This isn’t the right time to sell a property” Ash said referring to the depressed housing market. “But it is there and it is empty.”

Supervisors Hobert and Staelin agreed that the idea of selling the house, which includes five acres of property and carries commercial zoning, should be considered, however, concerns over retaining the right-of way through the property and its associated parking area were a potential stumbling block.

“We’re unlikely to use it in the future” Staelin agreed.

“It bothers me that it is not being productively used”  added Supervisor Hobert. “If we are going to keep it we should try to at least rent it out so that it can be used to bring business back into the community.”

The committee directed Ash to explore the options for selling the property.

While no formal action was taken at last night’s meeting, the sub-committee directed Judge and Ash to develop a formal set of recommendation and alternatives that will be presented to the full Board of Supervisors for review.

Although the majority of last night’s discussion was dedicated to cost cutting, one new budget increase was placed on the table.

Supervisor Staelin took up the cause of a group of citizens who have been working privately to designate a new historic district in the county. According to Staelin, the new “Chapel Historic District” would place a large section of Clarke County under the new designation.

Staelin said that ten Clarke County citizens have already donated $6K of private money to get the new historic district planning started. According to Staelin, the county already has several such districts but the addition of the new Chapel Historic District would improve tourism and provide tax credits to property owners for certain types of construction.

“The initial study to review the idea was funded by citizens who were able to get a matching grant from the government” Staelin said. “The Virginia Department of Historic Resources would create the new district but it will take $10K from the county, $15K from a grant and citizens raising another $10K.”

“When citizens are putting up two-thirds of the money for something like this I think that we should consider putting some money behind the idea.”

The Board of Supervisors will meet for its next regular meeting on March 15th when it plans to set a public hearing on the budget for April 5th with final budget adoption planned for April 5th.

 

Comments

  1. Skeptic says:

    Clarke County’s Real Estate tax assessments have gone down approximately 10 percent. While our surrounding communities have adjusted their tax rates to ensure a revenue neutral tax rate, the Clarke County Board of Supervisors (BOS) have left the tax rate flat. This means Clarke County’s RE tax revenue will be reduced by 10 percent in FY12. I think we can easily pick up the $1.3 million by implementing a neutral rate to mitigate this self inflicted crisis. I know it’s an election year, but at what point does the BOS’s quest for re-election become reckless?

    You can bet the FY13 rate will be astronomical.

    • John Staelin says:

      Clarke County reassesses real estate every four years. The effective date of Clarke County’s last reassessment was January 1, 2010. In that reassessment property values fell about 11% from the previous assessment in 2006. The revenue neutral tax rate for 2010 was $0.60. Had the Supervisors adopted that tax rate the average Clarke County taxpayer would have paid about the same amount in Real Estate taxes in 2010 as was paid in 2009. Instead, the Board of Supervisors raised the tax rate an additional two cents to $0.62. At this point in time, none of the Supervisors are proposing a tax increase for 2011.

      • John, I paid $1,000 less in RE taxes in 2010 than I did in 2009. I got a REFUND from my mortgage company who holds my RE taxes in escrow. Please explain, and thanks for chiming in.

        • John Staelin says:

          Obviously, I do not know the specifics of your situation, but there are a couple of possible reasons for your refund. #1 Some mortgage companies do not take the time to call each county every year to find out what the local tax rate will be. Instead they make an estimate of what the taxes will be and then settle up with the landowner at the end of the year. It is in the best interest of the mortgage company to collect too much rather than too little and have to bill the property owner for more at the end of the year. Thus, some people will get a refund from the mortgage company. #2 In every reassessment some property values change more than others. In 2010 the average assessment fell about 11% but a few properties went up in value and some fell 20%. I hope this is not the case with you, but it is possible that the value of your property fell more than the average. If that was the case you would have been billed less. Whenever the Supervisors calculate a revenue neutral tax rate it is revenue neutral for the average landowner, not every landowner. In total, the county ends up collecting the same amount in real estate taxes whenever it sets a revenue neutral tax rate. However, the impact on individual taxpayers will vary according to their specific reassessment. I suggest you call the office of the Commissioner of the Revenue. He and his staff have access to all the specific data that is needed to explain why your taxes seemed to go down even when the Supervisors raised the tax rate.

        • If your RE assessment value for 2010 decreased more than the average county-wide (11%, as Mr. Staelin noted above), you would see a decrease in your tax bill, even after the tax rate is adjusted upward. How large of a decrease did you see in your assessed property value between 2009 and 2010? Its likely that your change in assessed values was quite a bit more than -11%.

  2. Bubba D says:

    Sure. Cut staff, cut benefits but throw thousands of dollars into another “historic district”? Increase tourism? Come on! Tax breaks for certain construction in this designated area? Because a whopping ten citizens have donated to make this happen? All of whom, I bet own the land in this new historic district. I guess some have different priorities than others, eh?

  3. Tony Parrott says:

    I’m glad to see that everything is on the table, not just education. Looking at some of these dormant accounts that have been idle for many years is a splendid idea. I’m not saying some of these areas aren’t important they just may not be important now. When the economy starts to head north again priorities can be reassessed.
    As for putting tax dollars toward a new historic district not sure now is the time; but ok I’ll play. What kind of return on investment would the tax payers see in creating a new historic district? I’m all for tourism $$$ being spent in our county but what kind of revenue should the county expect? How long before the $10k is paid back?

  4. Usually, owners of property within a designated “historic” distric are eligible for federal and state tax credits for renovations( rehablitation)to their property.
    Also, resale value for property located within historic districs is typically higher.

    So, I don’t think this is much of a tourism expenditure, I think it’s something else.

  5. In addition, I think CDN may have had this wrong. It appears that the citizens for this project wern’t working very “privately”.

    From the CC website:

    Chapel Rural Historic District
    In 2009, the Clarke County Board of Supervisors obtained funds from the Virginia Department of Historic Resources to prepare a Preliminary Information Form (PIF) for a proposed Chapel Rural Historic District for the central portion of the County. In addition, several property owners in the area generously funded approximately 50% of cost of this project. This PIF is now complete and has been submitted to the Virginia Department of Historic Resources (DHR) for consideration at the September 30th meeting of the State Review Board. At that time, a determination will be made as to whether this proposed rural historic district is eligible for the Virginia Landmarks Register and the National Register of Historic Places.

  6. cheapshot says:

    Exactly how many historic districts do we need? and how does such a district help tourism? “Gee kids, look out the car window, that’s historic land over there!”
    Long branch, the old mill in millwood, maybe-but i cant see driving to see from the road any area because its designated historic. i dont know much about historic districts-there may be tax benefits, and/or restrictions. i cant see spending one dime for something like that while not replacing school buses that are at the end of the line-thats a safety issue. One is a “luxury item” we can do any time(that citizens seem willing to fund); one is a neccessity, and whatever schedule for bus replacement we dont do this year-next year we will have two years of buses to replace. Can residents “opt out” if their home is in proposed district and they dont want to be? It is an unacceptable budget choice to fund this in these times.

  7. Thanks cheapshot for waking up the county! Thousands of county dollars are spent on these applications that benefit a few ( regardless of their 50% contribution).

    There is no tourism benefit here; merely a contribution towards a tax incentive for a few.

    Heck, I’d put in MY 1K and CONTRIBUTE 1K towards a certain supervisor’s charity if I got my 40K tax break with my home renovations!

    Good gravy…….we need to give our public servants MORE and we don’t need these types of stupid expenditures as an excuse!

    • My 2 Cents... says:

      Expose them all on here! Thats why we are sooooo happy that Dunning is leaving! However, word on the street is that he has already groomed a new guy to say NO in his place and to keep that part of the county in the rich and wealthy hands!