POWHATAN – Two weeks ahead of the Powhatan County Board of Supervisors’ plan to adopt its fiscal year (FY) 2021 Operating Budget, the field of possibilities as to what will happen next still remains wide open.
The board held a public hearing on the FY 2021 proposed tax rate as well as a brief budget discussion during its meeting on Monday, June 15. But despite holding numerous budget workshops over the last several months, no clear plan has emerged yet regarding the budget. That is supposed to begin to happen next week.
During this week’s workshop, the board members agreed to come to their regular meeting at 6:30 p.m. on Monday, June 22 with each of the supervisors laying out a plan for how they think the budget should be handled.
Bret Schardein, interim county administrator, said the board asked staff to look at reductions of 2 and 4 percent from the FY 2020 budget. He and Charla Schubert, director of finance, have been working on that and have preliminary ideas of what can be cut to achieve those funding levels. He said their goal was to provide those scenarios to the supervisors by close of day on June 16.
With those scenarios in hand, he invited the supervisors to meet with Schubert and himself one or two at a time this week to “really dig into it, answer your questions, and help you all come up with proposals that would meet your priorities for funding this budget year.”
The supervisors have been in agreement for the last several months that they would wait as long as possible before adopting their budget because new information is constantly coming out that could help them formulate better plans. They plan to adopt the budget at their meeting at 6:30 p.m. on Monday, June 29.
In recent meetings, board members have been saying that they aren’t as worried about the current state of the county’s revenue as they are about what will happen when taxes are collected in November.
The big unknowns
Currently, there are several big outstanding topics the board has been discussing where no clear, unified direction has been stated: tax rates, expected tax collection rates, possible reductions in county departments, and a possible reduction in school funding.
The board is trying to gather as much information as it can to predict what its tax collection rate will be for FY 2021. Usually, the county sees about a 97 percent collection rate, but that dropped down to 94 percent with the Great Recession of 2008. Right now, they are trying to gauge whether the current economic crisis caused by the COVID-19 pandemic and its aftermath will result in a similar collection rate or something worse.
Schardein said 94 percent is the highest collection rate they are looking at as they try to come up with conservative projections given business closures and rising unemployment.
The current real estate tax rate is at 88 cents, but with an overall 16 percent average increase in real estate assessments this year, keeping that rate would mean most households would see an increase in their taxes. The board can choose to stay at 88 cents or choose a lower rate, with the effective tax rate (the average resident wouldn’t see a rate-related increase on their tax bill) of 80 cents.
The board advertised the budget and tax rates at current levels but has been suggesting for weeks the possibility of making reductions before the budget is adopted.
The supervisors approved 90 percent of the county portion of the school board budget on May 14 with the understanding they would work with the school board to determine how to handle the other 10 percent, or about $2.33 million.
The two boards met on June 11 to discuss the school division’s budget. No votes were taken or official decisions made during the meeting, but there were requests by the supervisors to the school board for the latter to find more areas for savings to help reduce the budget.
A presentation by Dr. Eric Jones, superintendent, laid out areas staff had identified for potential cuts if the schools did not receive full funding – field trips, stipends for athletic coaches and extracurricular sponsors, a 10 percent cut to all material and supply budgets, and personnel reduction. At the meeting, the topics of furlough days and salary reductions were also mentioned by others.
Adding to the list of considerations, Bill Cox, who represents District 4, pointed out at the June 15 board of supervisors meeting that helping to bring better broadband access to Powhatan has been a stated priority since the supervisors were sworn into office in January. The board had a workshop on June 10 discussing the issue and the challenges they have faced in this effort.
Yet in looking at the current budget, there is no funding being put aside to address the broadband issue, which is not in line with the board’s statements that it is a priority, Cox said.
“If we are serious about that, then it has got to be part of our budget,” he said, reiterating several times that the board needs to be clear on its strategic goals and then implement a budget that supports them. While it might not be feasible to look too far into the future, there are pressing problems and anticipated costs the board knows could happen in the next few years (he mentioned maintenance contracts and possible fire and rescue needs), and those need to be part of the discussion as well, he added.
Larry Nordvig, District 2, suggested all of the board members come prepared with a plan for a budget that includes their budget priorities and the rates they think will fund them as well as what margins for flexibility they are willing to accept around their plans.
“If you come with a baseline and then accept the fact that is not going to be so clean this year, I think we will get further down the road on Monday and maybe not have to be here until 1 in the morning,” he said.
Laura McFarland may be reached at Lmcfarland@powhatantoday.com.