Botetourt’s two governing bodies got an early primer on a budget year that’s still 10 months away during a Friday morning meeting last week.
The Board of Supervisors and School Board watched a tag-team presentation from the county administration and the school administration as the latter tried to prepare the elected officials for what they will be facing when making spending decisions over the next year and perhaps into the more distant future.
County Administrator Jerry Burgess said he’s never started preparing for a new budget so far in advance, but he felt it was necessary because of the way the economy has treated local and state government tax collections.
Burgess and Superintendent of Schools Dr. Tony Brads weren’t looking for any kind of decisions from their respective boards, but instead were giving them a heads up on what they might expect as the just-started 2010-11 fiscal year unfolds and they start preparing for the 2011-12 fiscal year that starts July 1, 2011.
The only decision that did come out of the meeting was an agreement between the two boards for the supervisors to join School Board members during what’s become three regular “public budget input sessions” that are usually held in January and early February.
Those sessions have allowed the public to propose and discuss budget concerns with the School Board and administration as the school division is preparing its annual budget.
The only thing some supervisors wanted to see as they discussed joining the School Board members at these meetings was more public participation. The two boards also will invite the constitutional officers to those meetings.
The two administrators and the county staff spent much of the more than two-hour meeting going over the financial prospects the county will face, how state funding has already impacted the county and how they expect reduced state funding to create more challenges.
Burgess said at one point he believes “the state is on to something” in the way it has addressed its own budget problems. “You cost-shift to localities,” he said.
“The state will be into our pockets to the tune of $506,000,” Finance Director Tony Zerrilla said because the Board of Supervisors agreed to fund most of the cuts the state made to the five constitutional offices last year and this year.
Brads talked about state cuts to the school division and how the School Board has dealt with those, but he likened the process to “tighten your belt and hike up your suspenders.”
After discussing reductions in revenue from the state, Brads offered some budget considerations the School Board may have to visit next fiscal year if state funding is cut more.
Those include reducing capital expenditures, program cuts perhaps in academics and/or athletics, a reduced number of contract days (if allowed), layoffs, retirements without filling vacancies, reduced health benefits, reduced paid health insurance premiums, pay cuts and changing retirement payments for new employees.
Brads pointed out Botetourt schools have absorbed $4.4 million in cuts from the state the past two years, and reduced its own budget $4 million this fiscal year.
In an overview of what the county might expect the state to do next year, Burgess said a presentation he saw this month indicated “the train derailed” despite the recent news that the state ended the 2009-10 fiscal year with $400,000 million surplus.
Burgess went over a mix of things affecting the state budget such as the rising cost of Medicaid, the growth of debt service, deferred retirement system payments, how the 2004 tax reform increases have been neutralized by tax credits and tax relief, reduced sales tax on food, etc.
He also said the state will have a hard time borrowing money if it wants to keep its AAA bond rating because it’s at its debt capacity.
The joint meeting demonstrated how well the two boards have been communicating on budget matters the past few years. Brads said the school division would never have done what the Montgomery County School Board did last week—recommend at a School Board meeting that the county spend $125 million to build two new schools without first discussing the whole issue and options with the Board of Supervisors.
The fact that the two administrations shared similar budget concerns and that their staffs meet regularly they believe is unprecedented in Virginia, Brads and Burgess said.
Some of the matters the two boards will be considering:
• Emergency services spending:
Assistant County Administrator Spencer Suter said the county has been providing increased staff for medical and fire response to the point the paid career staff is averaging answering 300 calls a month along with what the volunteers answer. “That comes with increased costs,” he said. “We’re putting a tremendous amount of miles on ambulances.”
He noted, too, the county’s radio communications system is now 11 years old and is the backbone of emergency services. That means components are to the point they have to be replaced—noting there are 800 radio receivers in the county.
Supervisor Terry Austin said emergency services is “the board’s utmost area of concern, an area of continuing need and growth.” He said he’s a proponent of continuing to increase services and staff to maintain an acceptable level of service.
“Calling 911 and nobody comes, it’s not acceptable,” Burgess said.
Brads said the schools also feel vulnerable because of the concentration of staff and students at schools.
• School needs:
Brads said because of the way the state handled the Virginia Retirement System (VRS) funding this year, the school division and a change in the county’s Composite Index or “ability to pay” will start 2011-12 fiscal year $500,000 in arrears.
He noted the schools’ capital needs include replacing Colonial Elementary School. “It’s not a question of if, it’s when?” Brads said.
He said the science labs at Lord Botetourt High School are outdated, and more are also needed. There is available space for an addition at the school.
Long-term, he said Read Mountain Middle School will need to be added to for more classroom space. The school is already using space that was not meant for classrooms.
“The rest of our facilities are in great shape…. Everything else looks solid thanks to a proactive stance with the help of the Board of Supervisors,” Brads said.
• Employee recruitment and retention:
Burgess and Brads both noted county employees have gone three years without raises. “Everybody accepts that pretty much,” Burgess said, but noted state employees will get a bonus at the end of this year. “What’s a state employee?” he asked.
• Economic Development:
Burgess said the supervisors were scheduled this week to review a staff recommendation for taking action to recruit industry at Botetourt Center at Greenfield based on a just-completed economic development study done for the county.
He said the county has a new tourism group in place to work with that county department and to build on the success it has had.
The county staff is also analyzing the rest of the 20 pages of recommendations that came with the study, but Burgess noted “a lot of it will cost money” to implement, but “it has the potential to increase revenue.”
Burgess said the county can work with small businesses to improve that sector of the economy. “We’ve done nothing for small business,” he said.
• Capital outlay deferrals:
Burgess said the county has deferred making capital improvements to the point that rather than having capital projects that would cost several million this year, the county is spending just $176,000 in that category.
He warned, though, that this is a short-term fix. Those deferrals include not buying new county vehicles and computers. “Long term, we’ll have to pay the cost.”
Burgess pointed out voters did approve a $20 million bond issue in the early 1990s. That bond issue built Greenfield Elementary, Read Mountain Middle School, remodeled Central Academy Middle School, created Buchanan Library, developed Botetourt Center at Greenfield and created the recreation park at Greenfield.
“We like pay as you go. You don’t incur debt, but we will eventually face capital needs,” Burgess continued.
Brads said the school division’s capital reserve fund has been a good way to save for capital projects, “but it won’t build a school.”
“Despite all the bad news,” we’re still in pretty good shape,” Burgess told the two boards. He noted the county has been able to maintain its AA bond rating—the only county Virginia under 50,000 population that’s been able to do that.
At the end of the meeting, Burgess asked his board as they digest the information for the meeting for some general budget direction—just a consensus, he said.
A request that’s months earlier than normal.