The document summarizes the budget scenario for Fluvanna County, Virginia. It outlines successes and challenges with the previous and current budgets. It then proposes a $0.65 tax rate and budget plan that would balance the budget, fund economic development initiatives, establish a capital reserve, replenish cash reserves, and mitigate future tax increases for 8 years by planning for debt service. Remaining challenges mentioned include providing tax relief, addressing zoning issues, water infrastructure needs, and ensuring ongoing commitment to fiscal discipline.

1. Fluvanna County Board of Supervisors Budget Scenario 17 March 2010

2. 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

3. 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.

4. 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.

5. Established Goals and Challenges

6. 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”

7. 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.

8. 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 atleast) and the year following ($0.07?) with no plans to make Fluvanna’s economy competitive.

9. 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 thiscycle 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.

10. Established Goals and Challenges

11. Failures of the Current Budget The majority of the BOS is determined to raise taxes to meet the economic crisis. PERSONAL GOALS: Prevent a future tax increase (one-and-done) Budget that meets our long term goals Provide School Board tools for budget reform Mitigate the “cliff effect” for FY 2012

12. 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

13. 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

14. 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.

15. 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.

16. 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).

17. 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.

18. 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.

19. 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.

20. Total Cost for Solutions Economic Development $0.0057 Economic Opportunity Grant $0.010 Post-Secondary Education Scholarship $0.0038 Capital Reserve $0.020 Built-In Debt Reserve $0.030 Debt Service and Cash Reserve $0.0705 TOTAL COST $0.15

21. Established Goals and Challenges

22. $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.

23. $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.

24. $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 noneedtoraisetaxesuntil FY 2018, provided the BOS remains fiscally responsible and responsive.

25. 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?

26. 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.

27. 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).

28. Established Goals and Challenges