2000-03-22 Budget Work SessionMarch 22, 2000 (Adjourned Meeting)
(Page 1)
An adjourned meeting of the Board of Supervisors of Albemarle County, Virginia, was held on
March 22, 2000, at 1:00 p.m., Room 235, County Office Building, McIntire Road, Charlottesville, Virginia.
This meeting was adjourned from March 20, 2000.
PRESENT: Mr. David P. Bowerman, Mr. Lindsay G. Dorrier, Jr., Ms. Charlotte Y. Humphris,
Mr. Charles S. Martin, Mr. Walter F. Perkins and Ms. Sally H. Thomas.
ABSENT: None.
OFFICERS PRESENT: County Executive, Robert W. Tucker, Jr., Assistant County Executive,
Roxanne W. White, Assistant County Executive, Thomas Foley, Budget Manager, Anne Gulati, and Senior
Deputy Clerk, Laurel Bentley.
Agenda Item No. 1. The meeting was called to order at 1:08 p.m., by the Chairman, Mr. Martin.
_______________
Agenda Item No. 2. FY 2000/2001 OPERATING BUDGET WORK SESSION:
Mr. Martin said that he was not present at Monday’s meeting, but he agrees with everything the
Board accomplished. He then asked if Mr. Tucker had anything to say to the Supervisors.
Mr. Tucker responded that he had nothing new to report at this meeting.
Mr. Dorrier asked if the revenues figure is correct. Mr. Tucker answered that some of the additional
revenues just discussed Monday have to be added, and the revenue figure will increase by approximately
$400,000. The staff is waiting to see what the Board will do today, because the figure could change again.
Ms. Thomas distributed information she had prepared relating to the reasons the Supervisors are
contemplating a tax increase and why the County revenues are not meeting the needs of the County. She
remarked that one reason is because of the way the State views its responsibilities to not include such
things as school buildings, full funding of the new SOLs’ impact, CSA and jail overcrowding. There are
unfunded mandates and a decrease this year in 599 funding for police. Secondly, the State has constricted
the County’s ability to spread the burden because the General Assembly has capped or restricted so many
things. She went on to say that the real estate tax does not pay any attention to a person’s current state of
prosperity which is why she does not think it is a good tax. The third reason relates to the impacts of the
economy and job market plus citizen demands. This is a community that is taking note of the fact that it is
one of the wealthiest counties in the State, and it has an excellent school system, which directly impacts on
the School Board.
She noted that the School Board members are elected, so they have a responsibility to tell the
Board of Supervisors what is needed. She suggested that perhaps the Supervisors should take the school
Board members at their word. She has gone through their whole budget, and she is impressed that it is not
just a wish list, and it is full of very firmly selected items. The fourth reason is because the County’s growth
has caught up with it which is reflected in debt service for the schools as well as police needs. She pointed
out that there are over $25.0 million in unfunded capital needs even if the County has a bond referendum
for major items. The majority of the current revenue in the Capital Improvements Program (CIP) fund goes
to maintenance and upkeep of existing structures, and this is not even counting the things recommended by
DISC. She also mentioned the County’s own policy of putting three percent of its annual General Fund
revenues into the CIP. This budget includes only two percent, and it will take another $1.0 million to meet
the goal this year.
She next called attention to her Attachment B which compares Albemarle County to other counties.
A lot of counties smaller than Albemarle are putting more local funds into the CIP. She recalled that at the
last work session it appeared the Supervisors were getting to the point of a two cents tax increase.
However, this does not take care of any of the CIP money issues. She suggested that if the County officials
want to follow their own policies and get closer to meeting the CIP needs, then perhaps they should
consider more of an increase. She is not making a motion to this effect, but she would like some discussion
of the matter.
Mr. Bowerman commented that when the voters accepted the concept of revenue sharing and a
fixed City boundary in 1983, it meant that the City no longer managed the urban portions of the County. It
has become an urban and rural County now with two very distinct groups of population. Even though there
is no annexation, part of the urbanization relates to the $6.0 million the County is paying the City as part of
the Revenue Sharing Agreement. He explained that this is part of the community urban service for needs
of an urban population. He referred to the Board’s recent closed session with the fire company volunteers
where it was pointed out that in 20 years, no new facility for fire has been added, but the population has
increased by 20,000 to 25,000 people. He then mentioned the composite index where the State calculates
school funding. He said implicit in the State’s composite index is the fact that it recognizes the more
wealthy counties and cities and is basically saying these counties and cities have the responsibilities to meet
their needs themselves. He stated that less fortunate areas get a lower index and more funding. This is
one of the reasons education in the State of Virginia has never been challenged in terms of funding
allocations because the State supports poor counties and cities by giving them a disproportionate share of
income. From that point of view, it is equitable on the State level for citizens and students, but the State is
basically telling localities if they want to keep up with their growth, it is their responsibility to meet those
needs. It is a mandate that is not directly spoken to, but it is implied by the State.
March 22, 2000 (Adjourned Meeting)
(Page 2)
Ms. Humphris referred to a comment made by Tony Iachetta, a former member of the Albemarle
County Board of Supervisors, who stated that “Growth does not pay its costs.” Ms. Humphris said the
Supervisors have learned this lesson year after year, because the more the County grows, the more money
it takes to operate the government to meet the level of service the people in Albemarle County want to have
provided for them. The reason for this is because traditionally Albemarle County has always had such a
low unemployment rate, since so many businesses move here. She said no matter how large or small the
business is, it means that there are going to be more people coming here. She added that there is no way
to close the door because Albemarle County is a very desirable place to live. She commented that new
people come to the County, but there are things that restrict County officials mostly through the real estate
property tax, which is used for income to provide schools, police and all the other services people want and
demand. People come before this Board at budget public hearings and suggest putting an impact fee on
developers as well as other things. She believes these people finally understand that this is forbidden by
the State. She thinks they also realize that County officials have been as economical and efficient in
providing the services that local government needs to provide as they possibly can. She remarked that
there comes a time when things have to be done differently. She thinks the Supervisors owe it to the public
to provide for certain things, although she is sure there is not one person on this Board who is thrilled at the
thought of increasing taxes. There are some people on fixed incomes for whom this is going to be a
potential hardship, but in order to do what needs to be done, she thinks the Board of Supervisors should
vote for a tax increase. She is particularly disturbed by the people in this community who do business
based on what a great place this is, but who come before this Board and ask that it be kept a great place so
they can keep building their businesses bigger and bigger. However, they do not want to raise taxes. She
emphasized that it is not possible to do any more with the money the County has, because County officials
have done the best they can do.
Mr. Perkins stated that he does not disagree with anything that has been said, although there is a
different approach. People are always asking him what happened to the meals tax funds, and he
emphasized that they were spent. He is also asked about the funds that were shifted as a result of the
Rivanna Solid Waste Authority taking over the Landfill, but they were also spent. He thinks the County has
been fortunate to be able to provide the level of services it has provided over the years. He noted that the
County’s assessed values have increased during the last ten years from $3,645,000 to $6,860,000 which is
an 88.2 percent tax increase, and it has been spent on schools, police and parks, etc. He recalled that over
the past several years, he has advocated setting aside one percent of the budget for times of need, but the
money has always been spent. He called attention to the resources projected for next year with the current
tax rate, which allow for over an eight percent increase. The County should be able to function with that
increase, even with the population growth. He emphasized that eight percent is a large increase, and
people have to learn to live within their means. Every family in this County has to do so, which is why he
cannot support a tax increase. He mentioned that with reassessment and an increased tax rate, he is
concerned that the bond issue to help pay for capital projects may be jeopardized in the future.
Mr. Dorrier pointed out that actual revenues ending June 30, 1999 were $147.0 million and actual
projected revenues are in the range of $159.0 million which is a nine percent increase. He said County
officials have come closer to balancing the budget now than they could a month ago since the General
Fund was short $400,000 and the school budget was short $700,000. He mentioned that the school
budget will be receiving $1.2 million more than the Superintendent recommended and by delaying the
hiring for certain positions, the shortfall of $400,000 in the General Fund can be satisfied. He agreed that
the needs are probably there for what has been funded, but he would like to see a five year analysis of the
budget. The financial consultant can deal with some of the capital needs. A nine percent increase in
revenues for this year is substantial, and if the school budget is funded at $1.2 million more, school
teachers will be getting their salary increases. He reiterated that the budget would only be $300,000 to
$400,000 short in the General Fund which could be met by delaying hiring. Therefore, he cannot support a
tax increase at this time.
Mr. Martin remarked that this is the ninth budget with which he has been involved. He has never
before been in favor of a tax increase, but he agrees with Ms. Humphris, Ms. Thomas and Mr. Bowerman’s
comments. When he ran for the Board of Supervisors, he felt very strongly that the Government should
educate and protect its people. At that time he thought protecting the people only involved police service,
but now he realizes that rescue, fire stations, courts, jails, detention homes, and CSA money, etc., are all
things related to the protection of citizens. He also believes strongly that the fight against crime should
include such things as home ownership, ballfields, gyms and keeping kids involved in structured activities.
When educating and protecting people are discussed, he has learned that protecting people is a lot more
complicated and includes a lot more things than he used to realize. He recalled that 11 years ago the tax
rate decreased by two cents. He was not a part of this decision, but he assumes it was a good one. He
does not believe anybody at that time thought the County could go this long without having to recover the
two cents decrease. He also agrees with Mr. Perkins and Mr. Dorrier. The County has lived within its
means each year, and as a result the school system has had to make some tough decisions. The school
bus replacement schedule for eight or nine years has now been extended to 13. This is one example of
how things have been stretched to hold the budget in line. The school system did something courageous
last year when it changed the bus schedules and withstood the anger from parents. The school officials
are not just asking for money. They are indicating they need funding for certain things, but they also have
shown what they are willing to do to meet the needs of the students. He emphasized that County officials
have fought against increasing taxes for a long time, and he mentioned conversations with constituents
where he was given arguments against increasing taxes. However, there are arguments on the other side
also. He thinks it is time to raise taxes, and he will entertain a motion by a member of the Board to set the
taxes at a higher rate.
Mr. Bowerman remarked that part of Mr. Dorrier’s suggestion is already in the County’s planning
March 22, 2000 (Adjourned Meeting)
(Page 3)
process for the future. He said County officials have done everything possible to stretch the funding to meet
citizens’ needs and to get departments in the school system and County government to accept the growth
given them even though it wasn’t enough to keep the level of services at what they had been in the past.
This has been done through every means possible. He thinks County officials have been good stewards of
the resources given them, but it has not been enough. He reiterated that the County has not had a new fire
station for 20 years, and the population and number of calls have increased dramatically. This is an
indication of how the County has not kept up with its growth. He would rather advertise a tax increase at a
higher rate, which would give the flexibility to put money away for future capital needs, even though Board
members may decide to adopt a lower rate. He called attention to Ms. Thomas’ comments that the capital
set aside each year isn’t as much as the amount agreed upon by County officials. If $700,000 a year is put
away instead of $200,000 there could be a one and a half cents bond referendum instead of one for two
cents. He thinks this is good planning.
At this time, Mr. Bowerman made a motion recommending that the real estate tax rate be
advertised at 76 cents per $100 of assessed value, which is a four cents increase. He also included in his
motion a recommendation to keep the personal property tax at the same rate of $4.28 per $100 of
assessed value. He disagreed with Mr. Dorrier that the school budget was funded at more than the
Superintendent recommended. Mr. Bowerman pointed out that the Superintendent was approximately $8.0
million short of his recommendations, and the School Board members reduced this amount to $1.9 million.
They made some very tough decisions and put off additional items the Superintendent felt were important.
He emphasized that the Supervisors are only dealing with the School Board’s recommendations, and a two
cents increase in the tax rate will do this. He added that he would like the opportunity to discuss with staff
and the public whether or not there should be the flexibility to look forward to the future as far as meeting
capital needs.
Ms. Humphris seconded the motion. She said she likes the idea of getting a head start on capital
needs, because they are so huge. She agreed that it makes a lot of sense to put more money into the CIP
as early as possible so when there is a referendum it will not be so large.
Mr. Martin recalled Mr. Bowerman’s comments about the County’s urban area and the Revenue
Sharing Agreement with the City. As the County officials go about trying to protect the beauty of the
countryside and the rural area, they are going to have to deal with growth by trying to keep it in the growth
areas and urban areas. In order to do this, there are going to be some infrastructure costs. He
emphasized that if people want the beauty of Albemarle County protected, funding will have to be provided
for infrastructure, etc. for the urban and growth areas which is another reason for County officials to get
ahead on some of the capital issues. There are going to be other issues in the future that are going to be
just as important to the people in Albemarle County, and this is his rationale for advertising the four cents
tax rate increase.
Mr. Perkins pointed out that it is uncertain where the County will be ten years from now, but the
County has a past history. He said financial reports show that total expenditures have increased $74.0
million over the last ten years which is an 87 percent increase. He noted that the total revenues have
increased by 93.8 percent, and school expenditures increased 68 percent over ten years. Even when
growth and inflation are considered, there has still been a substantial amount of spending, and more is
being spent per citizen and student than ten years ago. County officials can say they have done a good job,
but perhaps they could have done a better job. He added that maybe there could have been $5.0 million or
$6.0 million set aside in a rainy day fund to use to build the infrastructure that the County will need in the
future. However, County officials decided not to set this money aside. He thinks it is unfair for the taxpayers
when taxes are increased because additional resources have not been used as well as he thinks they
should have been used.
Mr. Dorrier commented that he is unsure whether or not resources have been used wisely, and he
knows there are needs. It would be helpful for the County, as well as the taxpayers, if revenues could be
stockpiled for the future. He mentioned that he worked in Governor Wilder’s administration when the
Governor was faced with a situation where he had limited revenues and a lot of demands, but he didn’t
increase taxes. He noted that the budget was cut over the years from one percent to five percent, and he
believes that is one of the reasons there is such a robust economy in Virginia now. He thinks Albemarle
County could have a similar situation and not have to raise taxes at this time.
Ms. Thomas noted that Mr. Dorrier has not been a member of the Board of Supervisors in previous
years and did not go through the decisions as far as how County funds were spent. As someone who has
gone through previous budget cycles, she thinks administrative needs have been met. It is true the
County’s citizenry demands excellent schools, which increases the need for the number and types of
school buildings as well as the need for good teachers, and meeting those expectations is expensive. If
Albemarle County cannot afford a good school system, then she does not know what jurisdiction in the
Nation can afford such a system. She believes the demands by the citizens are legitimate expectations.
She pointed out that the money has been spent mostly for salaries, which means that the money has gone
to people working in the County. The local job market is dictating the salaries, but the County is not even
meeting the consultant’s suggested salaries, so money is certainly not being thrown around. She noted,
though, that the County is doing a better job of meeting market demands this year than in the past. The
question relates to how good a government will County officials provide their citizens. She believes citizens
have been provided with a fairly good government, and she believes County officials have gotten as much
from the available dollars as possible. She mentioned the input from long time teachers who indicated that
the County could not continue as it had in the past, and she said this could probably be multiplied several
times throughout the whole County system. She is willing to support this proposal, although she thinks it is
a shame that County officials are trapped into raising the real estate tax rate. The real estate tax is not a
March 22, 2000 (Adjourned Meeting)
(Page 4)
very good tax, because it doesn’t pay any attention to an individual family’s situation.
Mr. Bowerman asked if the County is at its maximum as far as tax relief for the elderly and disabled
is concerned. Mr. Tucker answered affirmatively. The County tries to stay at the maximum amount.
Mr. Bowerman noted that he is thinking about people who are on fixed incomes with limited
resources and who do not have a lot of liquid assets other than their homes, which are excluded in the
calculations. He asked how much in other assets are they allowed to have before they get full qualification.
Ms. Humphris answered that citizens are allowed to have $75,000 in assets.
Mr. Bowerman stated that tax relief should be kept at its maximum to lessen the impact on people
with the lowest income. He said local officials need to continue pressure on the legislators to allow the
County the ability to use the more progressive system to fund the needs of the localities. He noted that
local officials are in front of the public, and the legislators are not.
Mr. Tucker described the tax relief criteria to the Board members.
Ms. Humphris pointed out that every time there is a public hearing on tax exempt funding, the
Supervisors tell people that pressure needs to be put on State representatives in the General Assembly.
They are the ones who allowed the situation to exist where localities are dependent on the very regressive
real estate tax. She stated that all of the profits of this booming economy for the most part go to Richmond,
and the legislators decide how to spend the money. They almost ignore local government and the fact that
they are the ones with increased demands on education as well as all the other services. She emphasized
that pressure needs to be kept on the legislators. The most critical Commission that is active in the General
Assembly is the one responsible for restructuring the tax structure. She serves on the Virginia Association
of Counties (VACo) Advisory Commission which, along with the Virginia Municipal League, is working with
the Restructuring Commission. When Commission members were given a history of all the studies where
suggestions and efforts were made on restructuring taxes so more money could go to localities, they
noticed that hardly anything had ever come from any of those studies. She believes the reason for this is
that the State legislators don’t want localities to keep the money. She added that the only way this is going
to change is if citizens start letting the representatives in Richmond know that they do not want all their
money sent to Richmond, and they want some of it to be used in the localities. She stated that County
officials are obligated to keep telling the people this fact.
Mr. Bowerman noted that it would make a significant difference if there was full internet access to
all of the legislators. It would also be helpful if these decisions could be made in open forum in the
communities the legislators are representing instead of depending on lobbyists who have interests in
keeping everything status quo. He then referred to how much the public affects the Supervisors in their
decision making and how difficult it is for the Supervisors to deal with all of the varied issues relating to
service delivery.
There were no further comments, so Mr. Martin asked the Clerk to call the roll.
Roll was called, and the motion carried by the following recorded vote:
AYES: Mr. Martin, Ms. Thomas, Mr. Bowerman, and Ms. Humphris.
NAYS: Mr. Dorrier and Mr. Perkins.
Mr. Martin explained that this motion is for the purpose of advertising the tax increase for public
hearing.
Mr. Tucker said it appears all the Supervisors are in agreement that if the tax rate is raised four
cents, the additional revenue from the local government’s perspective, will go to Debt Service Reserve and
not just to the Capital Improvements Program. He stated that from the comments made it appears that the
Supervisors want to reserve this money so the amount that might be needed for a bond issue in the future
will be reduced.
Mr. Perkins asked what will happen to the school’s portion of the extra revenues. Mr. Tucker stated
that the revenues from the tax increase will fully fund the school system’s request, and they will reduce the
amount that can be used for one time expenses. Mr. Martin suggested that everything be left as it is for the
schools until the amount of the tax increase is certain.
Mr. Tucker said he just wanted to make sure the Supervisors intended to set aside additional
revenues over and above the amount needed to fund the list of items on which they agreed. Mr. Bowerman
noted that this was his intent.
Ms. Thomas mentioned that there is a difference between Debt Service Reserve and capital
improvements, and she suggested that the staff give the Board information on the implications of where the
extra revenues should be placed. She said putting them all in Debt Service reduction is more than is
needed for reducing the bond referendum.
Mr. Bowerman suggested that some things may need to be paid for in the beginning which would
lower some of the costs over the long term.
Ms. Thomas mentioned that she was asked in a budget meeting in her district whether or not
capital budget needs have been anticipated and what amount is being given to capital improvements. She
March 22, 2000 (Adjourned Meeting)
(Page 5)
informed the citizens that the County’s policy is to put in a certain percentage, but she learned later that only
two-thirds of this percentage is actually being included. She thinks the public expects County officials to
deal with capital improvements needs more than just having a bond referendum once in 15 years. She is
unsure of all the implications of Mr. Tucker’s question.
Mr. Tucker explained that he asked this question because the CIP will also be adopted soon. He
mentioned that increasing the Debt Service Reserve Fund can easily be done, and the shift can be made
later. However, the money has to be put somewhere.
Ms. White suggested putting the revenues into capital reserves, and Board members agreed.
Mr. Dorrier asked if graphs could be included in the Board members’ reports for revenues and
capital expenditures as far as how they fit into the State mandates. If this could be done, Supervisors would
be able to see trend lines for five and ten years.
Mr. Tucker indicated that sometimes it is hard to figure out State mandates. He then referred to
Ms. Thomas’ comments about other localities which have more revenues in their CIPs than Albemarle
County. He knows that some of these are based on bond referendums that have passed which is why the
amounts have increased. Albemarle County has not done this, yet, although the staff believes this is now
the Board members’ direction. It appears that they want to consider some bond referendums and allow the
public to have an opportunity to act on them.
Ms. Thomas agreed that some of these counties have landfill issues and other things involved.
Mr. Bowerman pointed out that bond ratings and interest rates are also based upon the attitude of
the local government as far as what they are willing or not willing to do.
Mr. Tucker referred to Hanover County. He stated that a bond issue was just passed there last
November and the tax rate is now being increased by ten cents. Ms. Thomas mentioned that the figure in
her report predates this fact about Hanover County. Mr. Tucker said he understands that, but Hanover
County has had several other bond issues prior to this one.
Mr. Martin stated that he thinks Mr. Perkins is right that if a four cents tax rate increase is supported,
it will be harder to have the citizens accept the bond issue. Ms. Thomas said she thinks it will have the
opposite effect. Mr. Bowerman agreed. Ms. Humphris concurred, also. She added that she thinks there
are enough people who will appreciate the Supervisors having taken a first pro-active step which will, in all
likelihood, lessen the amount that will have to be requested in the referendum. It has been made widely
known that this is much better than it might have been if County officials had not started working on this
situation earlier.
Mr. Tucker referred to Mr. Perkins’ remarks that the County spent the money when funds were
shifted as far as taking care of the Landfill. He explained that the rate increased two cents in 1990 to 74
cents, and in 1991 the Board reduced it back to 72 cents. The County had approximately $800,000 in
revenues when the Authority was created and took over the Landfill. At that time the Board decided to give
the revenues back to the public, so the rate was reduced from 74 to 72 cents.
Mr. Dorrier said Ms. Thomas had referred him to a graph, but it was too simplistic. He reiterated
that graphs showing total revenues and expenditures, as well as the tax rate for each year projected back
for ten years would be most helpful.
Mr. Perkins asked about the duties of the fiscal advisers. He is under the impression they have
been hired to examine the County’s capital program, and he inquired if their duties could be expanded to
also consider the regular budget. He is looking for someone who can identify waste in the budget. Ms.
Thomas stated that this has been Mr. Tucker’s job throughout the years. Mr. Perkins stated that Mr.
Tucker does a good job with every budget he submits, but then the Supervisors change it.
Mr. Tucker stated that if the Board wants the advisers to go in that direction, then they need to take
some action to this effect.
Mr. Bowerman noted that there are ongoing costs associated with all of the capital projects, and he
thinks this should be the purview of the financial advisers. They should also consider the ramifications of
the capital expenditures in terms of the impact on the operating budget. These things are not clear and
distinct, and they should be considered together.
Mr. Tucker answered that the advisers will consider the associated and operating needs based on
the capital projects.
_________________
Agenda Item No. 3. Other Matters Not Listed on the Agenda from the BOARD.
Mr. Martin mentioned an e-mail from Delegate Mitch Van Yahres indicating that it is possible
Governor Gilmore might veto the bill relating to the red light monitoring services. He asked the other Board
members to address this situation and to recommend that others do so.
Mr. Tucker informed the Board members that the staff has drafted a letter for Mr. Martin to sign.
He noted that he has also asked Chief Miller to send a letter to the Governor.
March 22, 2000 (Adjourned Meeting)
(Page 6)
Ms. Thomas wondered if it would help to have a resolution from the entire Board drafted in support
of this bill. Mr. Martin mentioned that the letter could indicate that the request is being sent on behalf of the
Board. Mr. Tucker replied that the letter is already worded in this manner. Ms. Thomas stated that she
would like for the communication to be as strong as possible.
__________________
Agenda Item No. 4. Adjourn.
With no further business to come before the Board, the meeting was adjourned at 2:08 p.m.
________________________________________
Chairman
Approved by Board
Date
Initials