Supervisors advertise $75.3 million budget

A final budget and tax rate decision drew one step closer on Wednesday night (March 15) when the Fluvanna County Board of Supervisors voted 4-1 to advertise a budget of $75.3 million for fiscal year 2018 (FY18).

They also voted 4-1 to advertise four tax rates associated with the budget:

A real property tax rate of 90.7 cents per $100 valuation (an increase from the current equalized rate of 88.2 cents);

A personal property tax rate of $4.35 per $100 valuation (no change from the current rate);

A business and public utilities personal property tax rate of $2.90 per $100 valuation (down from the current rate of $4.35); and

A machinery and tools tax rate of $1.90 per $100 valuation (down from the current rate of $2).

By law supervisors must advertise a budget and associated tax rates to allow the public time to weigh in. A public hearing will take place on April 5 and supervisors are scheduled to make a final decision on April 12.

If the 90.7-cent rate becomes permanent, it will constitute a 2.83-percent tax increase. A taxpayer with a house valued at $200,000 would pay $1,814 in property taxes for the year – an increase of $50.

At a work session earlier in the afternoon, Supervisor Mozell Booker expressed concerns about how the Board has approached budget discussions.

One approach to determining a tax rate is to build a lean budget from the bottom up, funding only what is deemed to be necessary. The tax rate required to finance that budget is then calculated and, presumably, adopted.

Another approach targets a desired tax rate – usually a lower one – and seeks ways to fit the budget into that rate. Specific expenses may be cut or a blanket percentage reduction could be applied across departments.

Detractors of the second approach sometimes call it “shopping a rate.” They say the approach ignores the realities of needs and expenses in the county – all of which take money to fund.

Conversely, detractors of the first approach sometimes assert that it results in a tax rate that is simply too high for taxpayers, and that government should be able to function within the bounds of a lower tax rate.

County Administrator Steve Nichols presented supervisors in February with his proposed budget built around a tax rate of 91.5 cents. At a March 8 work session supervisors spent a long time trying to find ways to fit that budget into a tax rate of 89.9 cents. They ultimately directed staff to return on March 15 with a budget based on a 90.7-cent rate.

“We need to talk and think about another approach to the budget,” Booker said at the work session. Staff works for “weeks and weeks” to come up with a budget, she said, “and then we just slash it to a number.”

“It’s a disservice,” Supervisor Tony O’Brien agreed. “If we’re going to pull numbers out of our fanny we might as well do that at the beginning.”

“We should have told [Nichols] the first day he gave us the 91.5 [cent budget], ‘We don’t like this. Let’s go to 90,’” Booker said.

O’Brien said the issue boiled down to two fundamental questions. “Do you trust the county administrator and his staff to work hard and develop a budget that reflects what the county’s needs are?” he said. “When he puts in weeks if not months with his staff we should respect that as a starting point. Second, do you trust the constitutional officers and other staff leaders to come up with budgets that are important?... When you say, ‘I want to shop a rate,’ really what you’re doing is insulting the entire process.”

“I don’t think this is unusual practice in sorting out a budget,” said Supervisor Trish Eager, who drove the March 8 push to fit the budget into 89.9 cents. She gestured to new chairs in the meeting room. “I look around and I see waste. People deny it. But we’re all sitting in brand new chairs. Only one was broken… If I can look around this room and see that, what else is being overspent? Things that we don’t absolutely have to have?”

Nichols said that several chairs were broken and that staff moved the still-functional chairs to other departments for use.

“We cannot continue on the line that we’ve been going on for the last how many years,” said Supervisor Don Weaver. “It is ultimately the Board’s responsibility to determine that [tax] rate. The county administrator makes that recommendation… It might very well be correct, but maybe other people don’t feel that way.”

The meeting took a different turn when supervisors learned of unexpected money coming to county coffers.

Commissioner of Revenue Mel Sheridan told supervisors that he upped his estimate of how much money the county would pull in based upon new projections from his office. Real estate values increased after the last reassessment, yielding about $150,000 extra tax dollars to the county, he said.

There has also been an increase in the number of new vehicles owned by Fluvanna residents, he said. That increase nets about $316,075 in additional tax dollars.

Taken together, the extra money constitutes about 1.6 “pennies on the tax rate,” or increments of $293,000 generated by the uptick of one penny in the real property tax rate. Supervisors suddenly found themselves with more breathing room than anticipated in the 90.7-cent budget prepared for the meeting.

The advertised budget includes $375,000 in additional money for the public schools above what was allocated last year, for a total of $17.3 million. The schools requested $437,000 above last year’s funding.

Supervisors voted 4-1 (Weaver dissenting) to advertise the budget. They also voted to advertise the 2018 capital improvements plan at $1.45 million. 

In related matters, supervisors voted to switch county health insurance from Anthem to Cigna. Gail Parrish, human resources manager, said that the plans are comparable in quality but Cigna is cheaper and likely easier to manage. After soliciting employee feedback, supervisors unanimously agreed to make the switch.

Supervisors disagreed over whether to cover the entire premium increase for employees or to share the increase by continuing to fund plans at steady percentages.

“I just think employees should share” the increase, said Weaver. O’Brien agreed.

Supervisors voted 3-2 (Weaver and O’Brien dissenting) to cover the entire increase. The decision will result in an increased cost to the county of $51,984 but a savings to employees of $27,920.