There will be no increase in Albemarle County’s property tax rate for the upcoming fiscal year, but some members of the Board of Supervisors are expressing concern about increases for future years that are based on previous decisions by voters and the general public.
“We do see that many urbanizing counties have much higher tax rates,” said Supervisor Liz Palmer. “We do have a very large rural area that still anticipates a rural tax rate and that’s something that’s very difficult to balance.”
“A lot of what we talk about when we talk about our struggles is being an urbanizing county,” said Supervisor Diantha McKeel. “More population means more services needed and a higher level of services, whether its recycling or education or sidewalks. They’re all important.”
On March 5, supervisors voted to advertise a property tax rate of 83.9 cents per $100 of assessed value, keeping the figure at the same amount adopted in 2016. Their action came at the end of the fourth work session on county executive Jeffrey Richardson’s recommended $428.5 million budget.
“That proposed tax rate for advertisement is a cap,” said Lori Allshouse, director of the county’s office of management and budget. “You cannot go above it, but you can go under it.”
Localities are also required to advertise an “equalized” tax rate, which is the amount that would be needed to bring in the exact same revenues as the current fiscal year. That amount is 81.117 cents per $100 of assessed value according to Allshouse.
The public hearing for the budget is on April 10. Supervisors will be asked to adopt the document on April 17.
Supervisors will hold at least one additional work session on March 27 after the elected officials have held their town hall meetings across the county.
“What staff will be working on between now and [March 27] is to update our projected revenues based on two months of actuals in our current fiscal year,” Richardson said.
Allshouse said an additional session on March 29 could provide an opportunity for the board to discuss a potential bond referendum to raise additional funds for Albemarle County schools.
“We haven’t had a chance to talk through that yet,” Allshouse said.
The referendum could raise revenues to improve the existing four high schools and build two new “high school centers” for project-based learning and professional mentoring.
Albemarle staff build their budget by projecting finances two years and five years into the future.
One of Albemarle’s deputy county executives told the board that the two-year financial plan anticipates an increase next year.
“Fiscal year 2020 has an anticipated tax increase,” said Bill Letteri. “There are two components to that. One is a three cent tax rate increase associated with general government and school capital improvement program projects.”
The 2016 bond referendum passed by voters was contingent on an expectation that a property tax rate increase would be needed cover additional debt service.
Letteri said the plan had previously expected that increase to take place in next year’s budget, but it was deferred for a year.
“We were able to put one-time funds in for fiscal year 2019 to help with that,” Letteri said.
The other component is related to the county’s water resources protection program. The county has been studying levying a stormwater utility fee on property owners to help cover the cost beginning in fiscal year 2020. If they do not, staff is anticipating a 1.5 cent increase on the tax rate to pay for an expanded program.
“If we were to expand the stormwater program to the extent that you all have indicated you would like to see it expanded, that would require another roughly $2.9 million in fiscal year 2020,” Letteri said. “We’re proposing here that be entirely funded through a penny and a half on the tax rate.”
Each penny on the tax rate brings in around $1.8 million in revenue.
Letteri said supervisors could also decide not to expand the program.
“In this scenario where we think we’re going to need an additional three cents in 2020, we are anticipating a certain degree of natural growth in our real estate values,” Letteri said. “If that growth exceeds those expectations, that would mitigate the need for part of the tax increase.”
Letteri said the financial plan projects operational expenses so that supervisors can anticipate the effects of staffing and infrastructure decisions. There’s also a transfer from the general fund.
“We do that intentionally by formula and we do that consistently from year to year so that we can establish an extent to which the general fund supports the capital program,” Letteri said, adding that provides an expectation that any surpluses can go to reduce tax rates.
Letteri said the five-year plan is intended to project the long-term costs and can be adjusted in the future if circumstances change.
Evaluating “the list”
During their initial work sessions, supervisors ask to have items added to or subtracted from the budget. Staff keep a list of these suggestions and then calculate the additional funds necessary to support any additions.
“If there was an item that you wanted to discuss further with your fellow board members, you asked to put it on this list,” Allshouse said.
These include additional positions as well as additional funding for nonprofit groups that may have not received their full request. Staff can suggest other sources of revenue such as use of unspent money from the current fiscal year.
“There certainly is a lot of uncertainty which I have about the individual line by line decisions that we’re still talking about and debating,” said Supervisor Ann Mallek. “But do they affect the proposed tax rate? Are we expecting to live within the advertised tax rate?”
Richardson’s budget creates 29.5 positions, but county departments had asked for more.
“When we have some 70 positions that were requested and we’ve looked at available funding, there are very hard decisions to be made,” Letteri said.
Examples of positions the board wanted to reconsider are five positions in the finance office, two in the sheriff’s office, four in the police department, 11 fire-rescue positions and four in social services.
The police department will get two new patrol officer positions.
“Those are the two priorities toward getting our patrol shifts staffed where we can continue with our geographic based policing,” said Greg Jenkins, deputy chief of the Albemarle County Police Department.
Both the city and county jointly review funding requests from nonprofit agencies through a process known as the Agency Budget Review Team.
Supervisor Norman Dill said he would support adding funding that had been requested by the Legal Aid Justice Center but not granted in the proposed budget. In all the organization requested $48,375 in county funds but was only granted $38,700, the same amount they received in the current fiscal year.
“They are up 32 percent in terms of the number of Albemarle County residents that they are serving,” Dill said.
Dill suggested the Legal Aid Justice Center deserved at least a three percent increase. He also supported a $13,000 request for the Local Food Hub as well as a $12,000 request for Sin Barreras and a $30,000 request from the Piedmont Family YMCA for childcare
Palmer also wants staff direction on what the county might do in response to the pending closure of the Van der Linde Recycling Center in Fluvanna County.
“The all-in-one bin facility in Fluvanna closed which was a lot of where our trash from Albemarle County was coming,” Palmer said. “I have absolutely no idea if the Rivanna Solid Waste Authority could even up their schedule for opening the Ivy Recycling Center.”
The proposed budget includes $821,912 in funding for the RWSA, a 28 percent increase over the current year. That funding goes to keep the new Ivy Materials Utilization Center open for nine months out of the year and to keep the Ivy Recycling Convenience Center open for four months out of the year.
Trevor Henry, the county’s director of facilities and environmental services, said he would come back to the board with more information.