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Kenney $0.65 Proposal } 17 March 2010

Date post: 17-Jan-2015
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This is a budget solution drafted for presentation to the Fluvanna Board of Supervisors during our budget work session on 17 March 2010. It outlines a budget solution that takes care of all our long-term goals while mitigating the effects of tax increases created by future boards. The impact of this scenario is a tax rate of $0.65 -- a 30% increase in personal property taxes.
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Fluvanna County Board of Supervisors Budget Scenario 17 March 2010
Transcript
Page 1: Kenney $0.65 Proposal } 17 March 2010

Fluvanna County Board of Supervisors

Budget Scenario17 March 2010

Page 2: Kenney $0.65 Proposal } 17 March 2010

Successes in the First 100 Days

• E-911 System for Public Safety• Telecommunications Committee First Steps for

Phone/Wireless Broadband Coverage• Fiscal Transparency Upgrade for Accounting

System• Town of Columbia Restoration Project (CBDG)• Financial Accountability in Comp Plan• A-1 Zoning Public Hearings

Page 3: Kenney $0.65 Proposal } 17 March 2010

Challenges with FY 2010 Budget

With all the improvements and expenses, personal property tax rates last year should have increased $0.21, raising rates to $0.71.

The amount of borrowing and capital expenses should have led the previous BOS to raise taxes.

This responsibility was passed to the current Board of Supervisors.

Page 4: Kenney $0.65 Proposal } 17 March 2010

Challenges with FY 2010 Budget

Compounding the problem of spending without the revenues (taxes) to cover the expenditure, the housing bubble popped, and along with it credit markets and the Great Recession.

The old $0.21 tax budget possessed three major shortfalls: no E-911 system, no contingency for the FY 2012 “cliff effect” and no durable plan not to raise future taxes.

Page 5: Kenney $0.65 Proposal } 17 March 2010

Established Goals and ChallengesGoals and Challenges Old $0.21

Budget($0.71)

Balances the Budget Economic Development Long Term Solution for Schools Capital Reserve

E-911 and Public Safety Vehicles

Debt Service Replenishes Fund Balance Prepares for FY 2012 “Cliff Effect”

Prevents Need for Future Tax Hike No

Page 6: Kenney $0.65 Proposal } 17 March 2010

Failures of the Current Budget

• No allotment for new patrol cars• No allotment for E-911 system (seeks grants)• No plan for debt service• No structure for economic development• No plan for water infrastructure• No plan to reform the school budget• No plan to replenish cash reserve• No plan to deal with the “cliff effect”

Page 7: Kenney $0.65 Proposal } 17 March 2010

Failures of the Current Budget

The $0.50 scenario balances the budget, but waits for the real impact of the FY 2012 state government to hit.

Such a solution delays the true impact of the “cliff effect” to hit us before we make major decisions about the budget.

…but it also forces local government to make deep cuts in anticipation of next year’s budget.

Page 8: Kenney $0.65 Proposal } 17 March 2010

Failures of the Current Budget

The $0.55 scenario balances the budget, but draws from the cash reserve with no real long term plans for economic development, water infrastructure, schools, replenishing the reserve, etc.

More importantly, there is no plan to deal with the “cliff effect” next year – a true punt.

As such, this budget will raise taxes next year ($0.07 at least) and the year following ($0.07?) with no plans to make Fluvanna’s economy competitive.

Page 9: Kenney $0.65 Proposal } 17 March 2010

Failures of the Current Budget

To pursue the course of simply covering costs without any true road map towards building the infrastructure for economic growth means we will repeat this cycle of budget cuts and tax increases for the foreseeable future (3 years?)

Either way, we will have to brace ourselves for the impact of next year’s state budget in Richmond – whether we stay committed to economic development or not.

Page 10: Kenney $0.65 Proposal } 17 March 2010

Established Goals and ChallengesGoals and Challenges Old $0.21

Budget($0.71)

Current Tax Rate

($0.50)

Proposed $0.05 Increase ($0.55)

Balances the Budget Economic Development Long Term Solution for Schools Capital Reserve

E-911 and Public Safety Vehicles

Debt Service Replenishes Fund Balance Prepares for FY 2012 “Cliff Effect” Prevents Need for Future Tax Hike No No No

Page 11: Kenney $0.65 Proposal } 17 March 2010

Failures of the Current Budget

The majority of the BOS is determined to raise taxes to meet the economic crisis.

PERSONAL GOALS:1. Prevent a future tax increase (one-and-done)2. Budget that meets our long term goals3. Provide School Board tools for budget reform4. Mitigate the “cliff effect” for FY 2012

Page 12: Kenney $0.65 Proposal } 17 March 2010

Established Goals and Challenges

• Balancing the Budget• Economic Development• Long Term Solution for Public School Funding• Establishing a Capital Reserve• Debt Service• Replenishing Fund Balance• Dealing With Next Year’s “Cliff Effect”• Preventing a Future Tax Increase on Working

Families

Page 13: Kenney $0.65 Proposal } 17 March 2010

Economic Development

SOLUTION: Dedicate $0.0057 towards Economic Development Office ($200,000)

• Should look seriously into revamping the “visitors center” into a Tourism Center.

• Funding for full time Economic Development Officer

Page 14: Kenney $0.65 Proposal } 17 March 2010

Economic Opportunity Grant

SOLUTION: Dedicate $0.01 towards economic development grants, to be administered by the Economic Development Commission ($350,000)

• Business proposals from existing or new businesses in Fluvanna would be filtered through the EDC.

• Approved plans would be finalized by BOS.

Page 15: Kenney $0.65 Proposal } 17 March 2010

Post-Secondary Education Scholarship

SOLUTION: Dedicate $133,578 to the Fluvanna Educational Foundation for post-secondary scholarships.

• At $2,100/yr, this interprets into 63 scholarships for students moving to a 2-year institution.

• Expand scholarship to vocational training, K-Tech.

Page 16: Kenney $0.65 Proposal } 17 March 2010

School Board Reforms

SOLUTION: Reduce the Local Contribution to FCPS to $14,000,000

• Investments in Fluvanna’s economy will help improve the localities ability to pay.

• Additionally, BOS should adopt clear policy for local funding commitments per student (e.g. for FY 2010-11, (3838 students + new class) / $14,000,000 local contribution = $3600 per student).

Page 17: Kenney $0.65 Proposal } 17 March 2010

School Board Reforms

SOLUTION: Allow FCPS to keep cost overruns.• Currently, the School Board is not incentivized

to find waste within the budget.• Reduces the gamesmanship within the current

budget process so that overruns are not viewed as overinvestment, but efficiency.

• Potentially saves 8 positions.

Page 18: Kenney $0.65 Proposal } 17 March 2010

Capital Reserve

SOLUTION: Add $0.02 for funding of E-911 system, patrol cars, and other capital infrastructure

• First year will fund E-911 grant and new patrol cars; remainder will sit in reserve for water infrastructure projects, etc.

• Capital reserve for infrastructure will build over time, compliment economic development.

• Authorize the JRWA to look into the Mechunk Creek Reservoir solution.

Page 19: Kenney $0.65 Proposal } 17 March 2010

Debt Service and Cash Reserve

SOLUTION: Add $0.03 for debt service, add additional $0.07 to meet future debt service requirements for the new high school.

• Solution also allows Fluvanna to prepare for FY 2012’s “cliff effect” from Richmond by rebuilding the fund balance.

• Eventually, the debt service consumes the full $0.07.

• NO TAX INCREASE FOR THE NEXT EIGHT YEARS.

Page 20: Kenney $0.65 Proposal } 17 March 2010

Total Cost for Solutions

Economic Development $0.0057Economic Opportunity Grant $0.010Post-Secondary Education Scholarship

$0.0038Capital Reserve $0.020Built-In Debt Reserve $0.030Debt Service and Cash Reserve

$0.0705TOTAL COST $0.15

Page 21: Kenney $0.65 Proposal } 17 March 2010

Established Goals and ChallengesGoals and Challenges Old $0.21

Budget($0.71)

Current Tax Rate

($0.50)

Proposed $0.05 Increase ($0.55)

Proposed $0.15 Increase($0.65)

Balances the Budget Economic Development Long Term Solution for Schools Capital Reserve E-911 and Public Safety Vehicles Debt Service Replenishes Fund Balance Prepares for FY 2012 “Cliff Effect” Prevents Need for Future Tax Hike No No No YES

Page 22: Kenney $0.65 Proposal } 17 March 2010

$0.65 Tax Rate

Such a tax rate is competitive against area localities, even with the 2007 assessment rates.

This budget plan approaches resolution towards many of our goals, in addition to spurring economic development through grants and a commitment to water along Rt. 250.

School Board is given the tools to eliminate waste and improve graduation rates, while the BOS can adopt a clear policy with regards to our local investment in education.

Page 23: Kenney $0.65 Proposal } 17 March 2010

$0.65 Tax Rate

Fluvanna deputies and public safety personnel will be given a real communications system that works, plus have additional reinvestment in patrol cars, etc.

The debt service will be planned for all at once, while allowing time for the fund balance to recover.

Most importantly, the “cliff effect” can be mitigated by a large degree through a combination of fund balance aggregation and local economic stimulus.

Page 24: Kenney $0.65 Proposal } 17 March 2010

$0.65 Tax Rate

Though a $0.65 tax rate is a tax hike of 30% for working families, it is far better than the 42% tax hike imposed by the previous BOS, and better than 3 progessive years of 14% tax increases, one on top of the other.

…and with the $0.65 budget, there is no need to raise taxes until FY 2018, provided the BOS remains fiscally responsible and responsive.

Page 25: Kenney $0.65 Proposal } 17 March 2010

Remaining Challenges

TAX RELIEF should be the primary concern after this budget is passed

• Economic Development Office should become a hub for Fluvanna residents to find new jobs in the economic recovery.

• Moreover, as the economy does recover, some plan to deliver tax relief to Fluvanna taxpayers should be explored and implemented.

• Reassessment will hurt rural districts the most; provide relief to Lake Monticello.

• Instead of lawyers, debt consolidators?

Page 26: Kenney $0.65 Proposal } 17 March 2010

Remaining Challenges

ZONING will remain an albatross until we bring our current procedures in line with the Comprehensive Plan.

WATER INFRASTRUCTURE still remains a concern until we can find a revenue stream to implement a system.

ECONOMIC DEVELOPMENT in this economy remains a very real problem that may not pick up for another 2-3 years.

Page 27: Kenney $0.65 Proposal } 17 March 2010

Remaining Challenges

HIGH SCHOOL operational costs will be something to watch when the school comes on line.

COMMITMENT TO GOALS and fiscal discipline will be critical to allowing both the economy to recover and providing the opportunity to spur growth (and lower taxes).

Page 28: Kenney $0.65 Proposal } 17 March 2010

Established Goals and ChallengesGoals and Challenges Old $0.21

Budget($0.71)

Current Tax Rate

($0.50)

Proposed $0.05 Increase ($0.55)

Proposed $0.15 Increase($0.65)

Balances the Budget Economic Development Long Term Solution for Schools Capital Reserve E-911 and Public Safety Vehicles Debt Service Replenishes Fund Balance Prepares for FY 2012 “Cliff Effect” Prevents Need for Future Tax Hike No No No YES


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