Board of Supervisors Budget Work Session   3/3/2016

I want to call to order this work session, Board of Supervisors, March 3rd.

And I just want to thank our officer, Thomas, who is joining us today once again.

Appreciate it, yep.

and I think that we'll just move right into our discussion.

We're going to be speaking about the operating and capital budget and we have Trevor Henry and Lori Allhouse here to walk us through that.

I didn't even see you over there.

Madam Chair, I'll go ahead and get us started.

I'm Lori Alshouse, I'm the Director of the Office of Management and Budget.

We have a pretty busy schedule today, as you see in front of you on the agenda.

We put some timelines on it.

We were going to go through the capital program, talk about debt.

Talk about financing options.

And then we're going to move into completing the work that we started on general government and work through those final slides today.

So without further ado, this slide in front of you today shows where you are in the process.

Today is March 3rd and we're doing the CIP and debt and continuing general government.

You can see that March 8th.

You'll be finalizing your tax rate cap for advertising and you'll be approving the proposed budget and then March 30th will be your public hearing.

Good morning, Madam Chair, members of the board, Trevor Henry, Director of Facilities and Environmental Services Department.

Part of my role in the department is to help shepherd the CIP through the planning and budgeting cycle alongside with Lori.

So today's meeting, at least on the CIP side, we're hoping to do a review of the plan and the recommended plan from a county executive.

I'll look at the revenues and expenditures, touch on our financial goals and policies, and then hit where we stand on our county debt and debt service.

We're going to kind of tag team this between myself,

Laurie and Bill.

Bill will talk a little bit about the referendum process and try to elicit some feedback on that.

So hopefully at the end of the day, we've been able to both present and answer questions as it relates to the current recommendation.

And you guys have been provided handouts as well, so you have a copy of the PowerPoint.

Again, I will walk us through on the CIP side the expenditure recommendations of the list of projects and cover at a high level.

We've actually, this is the third time that we've talked CIP in the cycle, started in November.

If you're looking for the PowerPoint to go along with us so you can take notes and things, there's a couple in front of you.

We have the one on the Capitol.

It looks like this.

I recognize it was in our place.

I'm just trying to find the one that's blue.

Maybe you're missing yours.

I am.

Good awareness, Lori.

Everyone else has their information.

All right, good.

Okay, ready to proceed then?

So today, in our process, this is the you are here.

We've gone through the review, the ranking, oversight committee weighing in, recommendation to the county executive, and now in concert with the overall FY 17 budget, we're reviewing really both the plan, the five year plan, and then specifically the 17 budget component of that plan.

And again, just as a reminder, our CIP, really it's the intersection of our planning process, our comp plan, our long range planning for schools, agencies, departments.

It's the intersection of that five to 10 year planning process with our budget management process.

Highlights, Mr. Foley had touched on this last week in the budget presentation, but our CIP that is being recommended continues to meet our funding obligations, our mandates, and our maintenance replacement program.

We are prioritized funding those elements as requested.

The recommendation adopts what was the oversight committee's baseline scenario, which was generally the adopted plan maintenance replacement request as modified, and then the projects that were in design for construction, such as Pantops Station 16.

There were some changes that have come out of County Executive's recommendation including the Redhill Elementary School Modernization Construction Project.

We added a much needed parks restroom renovation and modernization but tied that to proffer funding.

We included a pilot funded

Fundraising Park Project, it's really a to be determined park project that will need to certainly work with Parks and Rec and the community as to identify the priority.

But the concept here is the county will fund some design money, some seed money to get this location and this vision of the park moving forward and then would rely on that area to really do fundraising to help construct that park.

I think there's some work to do to determine the criteria for it but the idea is that you know it's really as part of the Citizens Resource Advisory Committee and some of the thoughts that the board members have said about

really doing more fundraising and we felt like let's at least get a pilot project out there and we felt a park project would be well served.

And then finally, and Lori will talk more about this on the revenue side, there are gonna be some additional revenues coming in from our motor vehicle fees, an increase of approximately $250,000 a year.

We have programmed in using that funding to be our debt funding source for transportation revenue sharing

which will allow us to put an application in this fall over a two year process upwards of about six and a half million dollars.

So I think there's some work to do on identifying what the priorities would be for that project but this is a recurring source of funding that will allow us to maximize our dollars on that.

And then finally, I just wanted to note that there was a change from the request in that the board last month approved the early construction money for the Western Armel High School kitchen upgrade.

This was work that had been planned, it's in the adopted plan, but in working with the school specifically, they felt that it would be much less of an impact on the school operations if we could

to get that work started really at spring break on just because of the end of the year work.

So the board reviewed that, approved it, and I believe bids are actually being opened today on it.

I just wanted to note that is a change.

Fingers crossed on the bids.

So that's the highlights.

This is a slide that represents the overall funding for the five year plan, fiscal year 17 to 21.

just under $144 million.

The FY 17 budget request is $34.9 million.

And it's probably a good time to note, too, we've provided some additional handouts that are also in our CIP chapter of the operating budget, but I'm gonna step out of the presentation just for a second.

because this is I think a good time to just look at that.

So this is the prioritized list of projects and funding.

This is a document that we've used pretty frequently over the past two cycles and it seems to be a pretty good way to communicate where the recommendations are.

And I'll just orient the board to it.

This is something that again is in our binder.

It's been provided to you as a handout as well.

This is the listing of all of the requests that came in this year, the 90 requests.

They are organized by mandates, obligations, maintenance replacement projects, and then finally non-maintenance replacement projects.

So those projects that are adding expansion to facilities, to services, et cetera.

The columns represent

The middle column represents the ranking that came in via the technical review committee.

The column to the right of that, the all FY17 requests, indicate what the departments or agencies requested.

That's what came into the cycle.

And then as you move through the columns to the right, you see oversight committee recommendations.

There was the baseline.

There were several recommendations that came out of the oversight, including a recommendation that had accelerated funding of three pennies and four pennies.

And then finally, the second column to the right is the county executive recommended.

So it's just, I wanted to, I guess, just navigate to this.

This really is a, Ann often refers to it as the list.

This is the list.

This is what has worked through the process.

You can see the changes.

and you can see the amounts.

Again, this is looking at the five year request.

I'll jump back into the PowerPoint but I wanted to just spend a moment there.

We certainly can answer any questions that you have.

I should have started with that.

You can ask questions along the way.

I think this is a quick one.

I don't know.

It might not be.

On the Hollymead Dam spillway improvement, my understanding is that there is going to be some more guidance from our state government coming in the spring, and it may

It may result in this not having to go forward, but it probably will.

I mean, there's not much chance.

That's a great question.

We've been holding it up for two years.

I'm scanning to see if Greg Harper's in the room.

It's my understanding that the guidance that we have received is requiring us to move forward with the project.

but I know Greg will be in here in a bit.

It's my understanding we still need to execute the project.

I ask because there's a Rivanna project that's waiting on that also.

I'll take that as an action.

We'll either answer it today or I'll get that back to you.

All right, thank you.

Again, we're back at the summary level now.

This is the overall recommended plan, $143.7 million.

We've provided a pie chart just to see how that break out by percentages across the different functions.

The next slide now takes that 143 and change million and breaks it in between the non-maintenance projects and the maintenance replacement.

So 60% of what is in our budget is really maintenance replacement.

Those are the projects that

are keeping the buildings dry, keeping our parking lots drivable, our access drivable, our heating air conditions functioning to try to maximize the life and longevity of our existing equipment.

40% of the requests are the projects that will add some expansion, and I'll touch on those here in a minute.

but I do think it's worth noting, and I'm not gonna go into specifics on the courts, but of the 40%, that translates to approximately $56 million of non-maintenance projects.

$32 million.

$32 million.

Yeah, that's over 50% of that pie.

Okay, so talking about some of the projects that are in this recommended budget, and I've added the page number in case you want to reference it later, but the Red Hill modernization project and school security is in the recommendation.

I will note that the school security request, which was over two years, has been

Red Hill has been certainly a topic of the board and conversation over the past several years.

The design is underway now with the idea of moving into construction this summer.

It is going to be a modernization enhancement of nearly 13 classrooms and probably the biggest piece of it is going to be the media center upgrade which will add both some capacity and function to try to get it on equal playing field to other schools in the district.

Trevor, may I ask you, at the conclusion of the summer work for Redhill, Kale, and Jouett, how many other schools are there going to require security upgrades?

Four left, and I'm getting a nod of affirmative from the audience, yes.

Okay, great, thank you.

Four left.

Two in 18, two in 19.

No, that's okay.

So it sounds like we will have that completed in fiscal year 18. fiscal year 19.

It sounded like, I thought you had a question.

I know that, no, I was just gasping at the cost, just because I know they did all the easy ones first, where there just happened to be a hallway, and they could drop in a second wall.

Yeah, really, I mean, it went from the, quote, low-hanging fruit was on, you know, was tens and 20s of thousands of dollars.

I think it's improving the entrance, and certainly we have schools folks if we need to get into any more detail on it.

The second project I wanted to highlight is the Pantops Station 16 construction.

This is a project that has been in the works since 2010, 2011, when the Worrell Land and Development Company generously

donated 1.3 acres to the county.

This provides kind of an overview, a thousand foot view of where that property is.

The 250 bypass, it's just off of the first entrance off of Peter Jefferson Parkway.

It's centrally located to the Pantops area and all the function and activity that's now in that region.

The design concept is just under a 10,000 square foot building.

2 bays with really a third entrance on the side to add some additional capacity.

That project is underway.

The funding request for construction is approximately $3.2 million.

The schedule would have us

out to bid by the end of summer and about a year to build it if we are proceeding with it.

Stakeholder committee appointed by the board has formed.

We had an initial meeting a month ago and we're actively meeting and looking at not just the project piece but partnerships, potential of a blended volunteer permanent staffed station.

So there's lots of activity related to this.

Yes ma'am, and it's an ambulance staff only, which is out of Martha Jefferson.

This is one of the projects that I was looking at because of the real capacity issues in the school division, especially in the urban ring, the school division desperately needs to get started on that design phase for the Woodbrook addition so that we don't have our schools in the urban ring overflowing.

Looking at this I'm wondering if there was some way that we could this could be adjusted and I think the school division needs about a million dollars this year for the design if they were going to even be able to start moving forward at all with that some sort of an addition to handle the overcrowding.

This was one of the projects I was looking at to wonder if there was some way we could be adjusting this one to provide a million for the school division this year.

I mean, for the design phase of that part.

And I'm trying to figure out, I'm asking for some help here on whether or not this would be one of the projects where we could,

just somewhat to pull a million dollars of it out for that design phase for the school addition.

We're just kicking the can down the road and they're going to be fine.

More and more trailers were talking about busing.

four-year-old.

So the question, one question might be what are the phasing abilities for this?

I think the board affirmed fairly strongly this was a rescue only, daytime only.

So any of the part of the cost that is for fire could be postponed because we don't need that right now.

That's what I'm trying to get to Ann.

But I don't have the skill to be able to figure out how to parse it.

That is something that we can maybe push off a little bit to try and help the schools with this capacity.

Mr. Foley wants to comment on this.

I'm not used to seeing you over there.

We can make adjustments to the CIP the way you all wish to do it.

Yeah, and I think that that's great to give staff the opportunity to come with some options and let you know the impact of doing something like that.

And we could suggest the projects.

I think Ann's question about whether we can pull the fire out of the rescue, I think that's a technical question that Trevor would have to answer based on the design.

It's a small two-base station, so it's not easy to do that.

But most of the cost must be the upfitting inside as opposed to the shelf, because it's a tiny little building.

But so anyway, I would suggest that we make a list of things that need research.

Yeah, and that's fine.

I just wanted to put it on the table while we had it here that I would really love to see if this board could.

to change the timing on the Pantops station.

I would wanna see, make sure that the whole board wanted to do that.

There may be some different thoughts on that.

And I think it's that broad.

Let's see if we have board support.

We'll start over here.

Would you have board support?

It's really just to look at some options for moving the school up then because frankly we're talking about we among staff and we're gonna connect with the school staff about any possibilities we might have to otherwise do that

I specifically am trying to figure out how to help them find a million dollars to move that project forward.

They need a million dollars is my understanding.

That's the request.

A million dollars and a little more.

And we can also take a look at phasing.

I would say it would be hard to phase out a million dollars

without significant changes to the design or construction of this project.

Yeah, sorry.

So the $3.2 million, that's at this point all or nothing, it sounds like, and it's possible that something could happen.

I just want to be clear that that's what we're talking about, it's the $3.2.

Moving on, the last project that I wanted to highlight is the Ivy Materials Utilization Center, the new facility.

The scope of this project came in really late in the process as the recommendation was made to the board and the decision was made in December.

CIP reflects across

our current funding and then some additional funding in 2017, $2.6 million total to construct both the site and a building of just under 12,000 square feet at the existing Ivy MOC.

I just wanted to highlight that this is an additional project that will

Hopefully get into design this spring.

It's gonna be managed by RSWA that will be fully funded by the county through our agreement with the agreement that is in progress.

I did wanna clarify one thing, because Chairman Palmer, Chair Palmer had asked some questions about this project as well.

Every year we have an obligation to the Rivanna Solid Waste Authority for environmental remediation expenses, and that is an amount in our CIP that you'll see every year at about $523,000.

But at the end of every year, we figure out how much was really needed for remediation,

and there has been a balance for a number of years.

So this first $1.2 million or about $800,000 of the $1.2 million is actually cash to go towards this project.

So it's savings that we didn't need for the remediation and we've sort of repurposed it in

to having a cash portion of this project.

So just so you know that, a good bit of this is money that's already set aside.

The engineers and architects we worked with built some contingency in because when you're in an early stage and it's conceptual, I think they built some in there.

Okay, so those were all the non-maintenance projects that I wanted to highlight.

The final graphic that I want to talk about is just our maintenance program in general.

There have been some questions about this in the past.

This is something that we've talked about in a little more detail at the oversight committee, but I thought this might be a useful graph.

Local government schools annually, we go through a facilities condition assessment process where we have

either internal staff or engineers or in many cases a combination of both.

We do a formal vetting of all our facilities, local government, parks, schools.

We're looking at systems, we're looking at structures, and we have a methodology where we go through to identify either by age or use where we need to look at having a repair or replacement of those systems.

So that's a facility condition assessment.

That's what feeds into the CIP.

We take that number, that information, and then we kinda double check or back check against industry standards.

And so there's an industry standard called current replacement value.

So it's taking all of your facilities, you estimate the current replacement value of that structure, of those costs, and then you say, well, if you wanna kinda keep up with your industry standards,

for these kinds of facilities, you wanna be spending approximately 2 to 4% of that current replacement value of that CRV between capital and operating.

And the past couple years, both schools and local government have provided a report that comes out in the fall for oversight committee.

that basically assesses kind of where do we stand in that.

And as you can see from the graph, we're in the 2 to 3% across our facilities, which I feel is a good place to be.

You know, I don't think it's gold-plated maintenance program, but it's certainly keeping up within our industry standards.

And I do know from attending a forum this fall on the CIP process with other jurisdictions, Almar County has been held up pretty high as our

basically a compliment to the board for priority funding our maintenance.

There's a lot of counties now that have deferred maintenance and have focused on addition and capacity building and now they're in deep trouble because the maintenance has failed.

We are maybe behind where we need to be on some of the infrastructure addition, but I do think we've been in a very solid place on our maintenance replacement program.

Trevor, this might not be a question for you.

It might be more for Larry.

This particular slide doesn't relate to it at all.

The proffer, well, I'm answering for Larry, but part of our CIP, we have the capital needs assessment, which is, you know, years through six and 10.

For anything that is an enhancement, an expansion, addition,

Only the projects that increase capacity are in the proffer analysis because under the state legislation that was adopted two years ago you cannot use proffer funds to fund maintenance projects.

Only projects that increase capacity.

In our funding scheme, we've been very careful to segregate out the funding for projects that meet the state criteria for proffer funds.

That's exactly right.

So what I'm trying to show is the volume of facilities that we maintain.

So if we're looking at schools, there's 2.3 million gross square feet, approximately.

The replacement value, if we had to replace today all of those facilities, it would be just under $500 million.

So the...

that we then look at what our maintenance program is for these facilities and it comes in to be about 2.3% of what industry standards says it could be.

I think it's the denominator.

The square footage you would probably include playing fields where AstroTurf is on because that's a maintenance item, replaceable item.

So we're not factoring in the grass lying around the county office building, but Monticello High School's football field

That would count as maintenance.

Yes, actually I would.

Okay, will do.

Sorry, yes.

Thank you.

I was distracted.

The final slide I have for you on the expenditure side, it's just basically reiterating where we're at.

We've adopted in the recommendation the baseline scenario coming from oversight to fund our obligations, mandates, and maintenance replacement program with the noted additions that we reviewed here this afternoon, or this morning, excuse me.

On the first page of the big detailed chart, the water resources money, is that the income that comes from the 0.7 cents that was adopted a number of years ago?

So that's a five-year estimate of investment that's waiting to be allocated depending on what our decision is.

It's in process.

There's a use of that currently for both projects and on the safety side it would be recommended projects.

Right, right, because we have to meet all those obligations for reports and all that.

And on the second page, the park's athletic field improvements, Rick mentioned that and it jogged my memory.

Are those the playing fields or are those, I mean the astroturf fields or are those

because there was supposed to be, and this may be showing up on your revenue side this year, it wasn't last year, there was supposed to be money set aside every year to cover that when we put those turf things in.

This request, though, would be an expansion.

The parks request that you're referring to, I believe, is taking grass fields and converting them to new turf fields.

Okay, now non-maintenance, I got it.

Okay, that raises that issue differently.

Any other questions before we move on?

The question really is have we received follow-up feedback from DEQ on the analysis and the standards?

I know there was some question at a certain point that maybe the analysis and requirements would change to either defer or reduce the scope of the project.

I see.

Okay, so there was a legislative request to DCR to assess the design storms essentially that dams are designed to.

and that analysis has been completed and our consultant Schnabel Engineering has incorporated the new design storm standards into their analysis.

So we've sort of shifted and downgraded the design for the Hollymead spillway a bit to reflect a smaller design storm.

Yeah, so instead of during a design storm, there's five feet of water spilling over the Hollymead Dam across Timber Lake Drive.

There's four and a half feet of water spilling across the dam.

So it just shifted downward a little bit, the design storm.

The number in the CIP, does it reflect the change yet?

So the five year number from now forward is accurate.

I'm so sorry, and I'll look for it.

Where do I look for the window business for this building?

It is under the maintenance replacement projects.

It is number 13 on the maintenance replacement zone.

Ah, got it, okay.

And we're safe.

Yes, ma'am.

So I don't have to unpack the spring I've been carrying around for the last three months.

It is in the recommendation.

It was shot out of the window frame and almost whacked one of our staff people, so.

Okay, I'm going to move on with the revenue side.

The total revenues, of course, equal expenditures at 143.7.

You can see that 70% of the CIP, and again, we're looking at a five-year picture here, is borrowed proceeds almost 70%.

You'll see the use of fund balance at 4%, transfers coming in at 5.

Your general fund transfer that goes to the CIP is about 13% of your total budget.

You also have some state revenues and local revenues.

So it's a mixture of revenues that we use.

Again, the primary source is borrowed proceeds.

I'm going to just speak a little bit to the policies, goals, and fiscal practices.

We are very careful with the revenues.

We're very careful with our debt in the county, and I just wanted to touch on a few of these and just highlight a couple of them.

On page 35, you have a list of all your financial policies, but there's a section that has to do with CIP, and there's a section that has to do with debt.

and there's several of them.

I just put an example of one in here.

The county coordinates a development of our capital budget with the operating budget.

So we have very sound fiscal practices and policies that are approved by the Board of Supervisors.

The policies also include some things that are goals.

So we might not necessarily meet the goal, but it's a goal that you've incorporated into your policies.

One I'd like to talk a little bit about today is the county believes in funding a significant portion of your capital improvements on a cash basis.

The county's goal is that the budgeted net transfer to capital after your debt service would be 3% of your general fund revenues.

I'll talk a little bit more about that in the next couple slides.

And then also, in addition to your

policies and your goals set by the board.

We also have some fiscal practices that we do as we model and put together the CIP and the Office of Management and Budget.

One of our fiscal practices is a modeling practice that

that we look at the whole program, the revenues and the expenditures and those of you that have been on oversight committee have seen us work this a lot and sometimes we rework that model as we're trying to work a project in or trying to make a change in the CIP.

And this model, and it's actually in your book, the goal is that it includes a remainder of a two million CIP fund balance at the end of the five year time period.

And I'm gonna speak to that one as well today.

I'm going to start with this goal.

Some people call this shorthand on this goal the CIP equity or the PAYGO funding goal.

Again, this is a goal that's included in the county's policies on CIP.

And this is one in that we want our net transfer to capital to be 3% of the general fund revenues.

and those of you on the oversight committee might remember, Trevor teases me about it, I call it the net gift capital, it's a GFT, General Fund Transfer.

So basically what we do, we have a formula in your overall revenues that you get in the county and the formula will send a certain amount of money over to the capital program and the first thing that we always do is pay our debt service.

number one and then the balance that's left we transfer it into the capital program and it can be used for PAYGO projects.

So this chart shows you some history.

It starts in fiscal year 10 and goes through 17 and you can see this net gift or this net general fund transfer to the CIP is the top line.

This is the amount of money that after debt service goes to our CIP program and you'll see for example in fiscal year 10 it's 1.8 million

and in fiscal year 17, which is your first year of this capital program, this first year, by the way, is what you're going to adopt when you adopt your budget next, soon, not next week, but when you start putting your proposed budget together, your actual fiscal year 17 budget includes the first year of this five-year plan.

so in fiscal year 17 the net general fund transfer to the CIP is 1.7 and then you can see the size of the general fund on the next line and then the bottom line again against your goal we would like to have 3% of general fund revenues going over to the capital program and you can see that we're below that goal you can see in fiscal year 10 and beyond we don't quite make it to 1% we did in fiscal year 13 we got 1.4% so we were halfway there

and then you can see in fiscal year 17 we're still not quite meeting that goal at point seven.

So just wanted to give you a little history on that.

Lori, put that into some perspective as to how the tax increases over the last couple of years have enabled that transfer.

Can you repeat your question?

Could you put into a little bit of perspective for us how the tax increases over the last couple of years have influenced that amount of money that was transferred?

I seem to remember something about last year would have been a very very very tiny amount except for the tax increase.

Off the top of my head, I don't have that.

It was something tiny.

It was like $5,000.

I think that's correct.

We can get the exact number for you.

We'll do a little work on that.

Well, that's what I'm saying.

So the public looks at this and says, well, then wonder why we had to have a tax increase.

That's right, in part.

I mean, in part, yeah.

The way the formula works is it takes the prior year transfer

and then adjust that by the percentage increase in revenues, generally the county.

Some of that revenue is growth, natural growth, some of it's increases in tax rate and some of it's dedicated.

And I don't know how you would show it, but it would be interesting to show somehow a line that indicates so that the public is aware that this is a great deal of where their tax increase went.

That's a great suggestion.

Thank you.

Again, we're talking about cash here.

Yes, I understand.

So there's still about $21 million going every year to pay debt.

Exactly.

And I think to your point, you could say for the last two years,

We've dedicated the equivalent of a penny or so to it and otherwise we wouldn't have had any money for cash.

I think it may be also important to clarify that the 0.7 or these percentages that we're talking about don't necessarily represent our cash position or our cash equity position in the overall plan.

I just think that's important to understand.

It's just dedicated.

That's good.

We can move to the next slide that helps show what Bill's mentioning.

The general fund transfer to debt and cap at CIP, this is a goal that the equity funding goal actually shows your debt service, which is our priority, of course, for funding, and then the net general fund transfer to CIP just over the years.

This slide also shows you what we're planning in the next five years in the CIP.

So from the 17 to 21, you actually see the plan.

This has a little stronger net general fund transfer in the future than it has in the past.

and then I just wanted to mention this fiscal practice.

Remember I mentioned you have policy goals, you have policies that we meet and we have policies that have goals that we work very hard to meet and then we also have fiscal practices that we do to ensure that the capital program is sound.

And this practice is that the CIP fund five-year program model includes a remainder of two million in CIP fund balance at the end of its five-year time period.

and so you can see this is just the bottom line you have the full chart in your budget book on page 232 if you'd like to look at it at another time but the bottom line is what we look at often in this chart and you can see the bottom line we want to have a two million dollar fund balance at the end of the end of 21

and you can see that we watch every year and across the years you can see that there's a fund balance of 2.1 million.

If you see fiscal year 17, the bottom line there, CIP fund balance, 2.1 million.

You can see it's at 2.5 and 18.

It drops below one million in the current model in 19 and that's even with the tax rate increase that we're talking about in the out years and then it's at 2.4 and then only at 1.4 again in fiscal year 21.

This continues to show that the CIP is doing, we're making it work as hard as we can.

And the fund balance is we're keeping a real good eye on that.

We're dropping a little bit below where we'd like to be.

We don't consider it something that is not something we would move forward on.

And Laurie, as we talked about an oversight committee, the dip in the road in fiscal year 19 is because of the courts project.

So that is the pig that the

Snake swallows here that we find showing up in fiscal year 19.

It's a pig.

It's a big project.

And Lori, for the public or anyone that's listening on the podcast, would you review the tax increases that are built into

Yes, we have fiscal year 17, the one penny dedicated to capital and in fiscal year 19, I believe it's 2.1, 2.1 pennies dedicated to capital.

It's a factor, Mr. Sheffield, but it's not the only factor.

I think what the bonding or the rating companies look very carefully at is, at the end of the day, what is your equity position in your overall capital plan.

And it's important to point out that this is not a policy, which is really what the rating agency is looking at.

How are you adhering to your policies?

This is a goal of ours to be at 2 million.

I'm going to move now to debt.

Again, we have policies.

You have policies as a board on debt.

I'm going to talk a little bit about just some highlights of our debt service management, a little summary on your debt service, and some key policies and goals.

These are some bullets, but I thought they were important to kind of talk through very quickly.

Long-term debt is one of the funding sources, as you know, for the county's capital improvement program.

And financing projects with debt support the principle that projects are paid for over the useful life of the asset, over a time that those taxpayers will enjoy the use of the asset.

So we've historically been really a strong pay-go county, you know, years ago, but we also recognize that if you pay cash for a project that's gonna be used for a long time by your taxpayers,

that financing with debt spreads that out over time.

The county can employ various types of debt vehicles.

I won't go into them in detail.

Bill will bring this up later.

And the county strictly adheres to its debt service financial policies.

Now, on page 282, you have a whole chapter on debt, and I'm not going to go through everything in the chapter, but just wanted to point out a couple things.

On page 282 in your debt management chapter in your budget, you'll see charts like this.

The county plans to fund the majority of its recommended 17 to 21 CIP with borrowed proceeds, basically saying with debt.

We're gonna be adding $88.1 million in debt over the next five years, but at the same time we're gonna be retiring paying off $76.1 million in existing debt.

So you have to always be mindful that you're going in debt, but you're also paying off your past debt at the same time.

So you can see the summaries.

Again, this is all near five years.

Thinking ahead, fiscal year 17 to fiscal year 21, you can see the beginning principal balance on your debt on 17 there at 169 million.

And then you can see the total debt and then what we call the retired debt, the debt you're paying off, and then you can see your balance.

And you can see how we move that through to fiscal year 21 for you.

So you can see how much new principal you're adding.

How do we determine what projects we're going to take on debt for?

I'm thinking mainly the courts.

I'm looking at the 88 million.

Yeah, we always, a couple things we think about, and Bill may jump in here, that you only borrow for the useful life of the project, so you have to be very careful and make sure that the project is one that you, for example, has a 20-year useful life, you do a 20-year debt.

If it's something that we think's a seven-year useful life, we only borrow seven years.

You be very careful that what you're borrowing for fits the length of your debt.

No, I would just say as a general rule, obviously you would try to stay away from maintenance type projects, even though they're classified as capital.

We do a fair amount of borrowing for our capital maintenance, particularly for schools.

That's another item when we get into strategic planning.

I think we have to talk about the outlay on an annual basis for maintenance of older schools versus investing in new school buildings which will have

Yeah.

So that other part of my question, of that 88 million, is it accurate to say that that's the 30 million of the courts is in that?

And there is an equity component of that as well.

We would be receiving in the model contribution from the city.

I want to keep moving along because I know we've got to be mindful of our time here.

$13 million of the $47 million, by the way, rather than $45 million that we've been talking about, the total core project is $47.3 million.

That's over 10 years, though.

That's the entire court project that we've been talking about.

$13 million of that total is outside of this five-year period.

Paul A.C. Money.

No?

The 31 million?

That reflects the expenditure side.

For their component, yeah.

So this prices the entire building at the moment?

Or only the Amarillo County square feet?

The net is the question.

So maybe I'm interpreting this wrong, but so we're going to take on capital debt that includes revenues that come from the city.

We would be borrowing the net amount that is necessary for the project.

We're only going to be taking on debt that's our share, not.

Madam Chair, Trevor, would you kindly just give us a one-page summary?

With the time.

That's not in the CIP report for the courts.

It's in at the detailed level but not something that would have, it's been summarized at oversight and beyond.

And it really is important when we're talking about the courts and to piggyback on what Rick said just a few minutes ago, we really have to remember that this plan, this five-year plan that we have, has no new school projects in it the entire five years.

except for Red Hill, it doesn't have any additions, it doesn't have any modernizations, and you all have heard about the capacity issues that we have already right now, and we're talking about a plan that has no projects.

And it gets back a little bit to what Rick was talking about, about having a discussion about the strategic process going forward and the plan and where we're going to be.

I'm going to move on to some other summaries that you'll find in the budget document.

You think about what we have as total debt, and then you'll see charts on debt service summaries.

So this is our debt, this is our payments for the debt.

So you'll see summaries.

One's on page 284.

This particular version I have in front of you today shows all your debt service funds.

Remember that the CIP has different funds within the CIP.

You have a school division CIP fund, general government, water resources.

So this shows you the debt service projections.

for all those categories and then totals them for you.

So for example, in fiscal year 17, you'll see that your total expenditures for those three categories is $22 million.

The revenues you can see at the bottom, where the revenues will come from, I think this

reflects some of the information that we were talking about earlier that it's not all necessarily coming from local government to pay our debt.

You'll see some other sources will come in to actually help pay the debt payment on those.

General fund transfer is the major one, and that's the one that comes from our formula.

The first thing we do is pay our debt.

Lori, looking at the revenues, the federal contribution at $78,880 is a constant.

What do they base that on?

Lindsay will have that information.

She can come up to the mic.

She is, Lindsay Harris is our senior budget analyst who works with the CIP, all of our models, and that information, she'll have that.

Okay, great, thank you.

Good morning.

I'm Lindsay Harris with the Office of Management and Budget, and I'm going to turn to my debt service page to help me answer that question.

Federal Revenue from the short name that they've named it is QSCAB interest and it's interest we were getting back.

Each year that we did the addition on and renovation and we pay our portion back to the state as part of the program and then some of the interest is reimbursed.

And how long will that continue at that level?

During the recession, there was a special program that allowed us to get some federal funds to pay for some capital projects, which we took advantage of with the advice of our financial advisors.

The interest rates were very, very low.

This was part of the infusion at the federal level to try to get the economy going back.

I forget what they called it.

The shovel-ready projects.

So we took advantage of some of that, and now we're paying it back.

And I think it was related to a school project.

Just quickly, I'm going to touch on some of the key debt policies and goals.

This is on page 37 again in your book if you'd like to look at them.

This is just a couple examples.

You have a payout ratio.

The county intends to maintain a 10-year payout ratio at or above 60% at the end of each adopted five-year CIP for tax-supported debt and lease payments, which we are in alignment with.

the useful life and I mentioned this earlier when the county finances capital improvements or other projects through bonds or capital leases it will repay its debt within a period not to exceed the expected useful life of projects.

and then also I'm gonna touch on a couple things very quickly.

We have some debt ratios that we calculate annually to ensure that our debt is in the right percentage for us in comparison with other AAA bond rated organizations.

We'll hit these just in the next slide here.

One of them is outstanding debt as a percentage of your market value of your taxable property.

So basically, we don't want that to exceed 2%.

And according to this chart, you can see the maximum rate at 2% on the red line.

And you can see Albemarle County, the line at the bottom, which is in gray on the screen, you can see that we stay below that in addition to staying below our AAAs and the AAs.

You can see we just touched the triple A line in fiscal year 20 on this.

The next one we always monitor is the ratio of debt service expenditures to general fund and school fund revenues, and it doesn't exceed 10 percent.

Again, this chart shows the 10 percent maximum on the red line.

Albemarle on the gray line is showing you that we are not exceeding the 10 percent.

in these categories.

So we do have the debt capacity.

I think what these show is that we have the capacity as a jurisdiction to borrow more.

It's the revenue side.

It's the paying the debt side that is where we're not capable to do it.

And in reference to the previous question asked by Brad, these are the things that the bond rating agencies are monitoring very closely.

We would hope that our value of our property would creep up a little.

I mean, this is sort of the worst case scenario shown as the flat line in the red.

So I'm just going to move it forward now to Bill Latire that's going to talk a little bit about the future and I think this is some of the conversations you're having about strategic future of how do we move forward with our CIP and he's going to share some information of a category that we call

CNA as usually initials we use, but it's the capital needs assessment, which is we look at a 10-year period, we look at those items that aren't funded in the current five years, and we look out for a full 10 years to see what's on the horizon of requests that are coming our way.

Laura, can I ask one question just to clarify for anybody listening and for us too?

The information I'm looking over here towards Laura, the information that we put in our capital plan is the same information we use when we do our five-year financial planning.

She builds the model.

They work closely together that it connects to our five-year planning projections.

We update them too as soon as we update our other numbers.

All of these graphs I think reflect our projections for the growth and values of property and I think just as an example the graphs we've shown previously show that we're projecting our existing base of real estate to grow by about 1.4% over the next couple years beyond the one we're looking at.

So that's the general answer.

Years three, four, and five I think

And I think that's what Liz was getting at.

She was trying to figure out how far you had lowered it.

Well, actually, I was trying to make sure that anybody listening also knew.

But it was that number.

Because of Ann's question, I just wanted to make sure that we clarified that.

This board has, this fall and in previous months, expressed a good deal of interest in the subject of bond referendums.

And I have spent some time talking through what bond referendums are about and their advantages.

So I'll go through a few slides today.

I won't spend a lot of time on it.

But certainly as we think about the challenges in the capital fund going forward, as we think about your desire to be very engaged with the community, I think a bond referendum is one of those tools that is an important consideration for us in the future.

It has that aspect, of course, of going to the community and engaging them and gauging the level of support for various capital projects.

It also has that potential advantage financially, because you get the full faith and credit of the community, you're able to issue bonds at the best possible rate.

So just in going through this, Trevor has prepared an unfunded projects and capital needs assessment.

This really highlights for us the magnitude of those projects that have been identified but as yet unfunded both in the CIP and in the capital needs assessment period.

many of which I think would be good candidates for the subject of bond referendum.

We would encourage us to certainly think and consider those.

As Mr. Foley has mentioned, the existing CIP as proposed is a very much hold the line

with the exception of the courts really is all about maintenance and replacement type projects which we would not think are necessarily good candidates for a bond referendum.

As we've mentioned before, again, there are several options that the board can consider for options for financing, and those include, of course, the general obligation bonds that we would issue through a referendum, lease revenue bonds, which is a more typical form of financing, and then pure revenue bonds, which is likely not to be something we would look at unless we form a utility or something that actually generates revenue that we would then secure.

This next slide, again, just highlights the particular issues associated with bond referendums, GEO bonds.

They are issued by the county.

They come with the full faith and credit of the citizens, which is an important issue for, again, the actual rate that you're able to secure.

It's not subject to annual appropriation as would be a lease revenue bond.

Like lease revenue bonds, we would be required to secure ratings from our agencies prior to issuance.

Again, we are triple-A, triple-triple-A, which puts us in a very favorable position for issuing general obligation bonds relative to our peers.

Once you do issue or conduct a bond referendum and get the support to proceed, you have eight years to then execute or to actually go out and issue the bonds.

It can be extended for two years, I believe, in certain situations.

We have looked around the state to evaluate the kinds of bond referendums that have been issued.

There are a number of different ways to approach this.

You can do it by a specific project.

For example, you can ask the public, would you support us building a school, for example, a particular school.

and issuing bonds for that project.

You might do it by category.

You might say, would you be supportive of the county issuing bonds for all its park improvement projects, for example, or all its schools?

There is also, we've seen general approaches to bond referendum questions such that, and Larry may help me with this, but for example, for all debt issued for capital projects in the CIP, we would, the voters would approve our going out through general obligation bonds to secure that funding.

We don't see that too often.

Yeah, I think although legally you can do it with some flexibility for purposes of marketing

Question, often times I think localities like to let the public know what the project is that they would be voting to fund and the more general you are the less you can communicate that to the voters.

We also have seen where localities will do this routinely.

They might actually every year or every other year go out with a bond referendum as a matter of course.

So that too is something to consider.

In terms of the financial advantages, we have presented this slide before.

We've tried to give you some sense for what kind of savings might be anticipated if you were, for example, to issue about $100 million in bonds.

And we just used that as our own number.

um...

It's important to realize as well that that savings is dependent upon the overall interest rate environment.

In this case, we're saying that a bond referendum might save us as much as a quarter percent or four-tenths of one percent in the current interest rate environment.

Now, I think as we look forward, if interest rates begin to creep up into the 5, 6, 7 percent range, then that spread may actually be greater.

I would think that we would anticipate interest rates to rise so in the future a bond referendum may well be more advantageous for us to think about.

Last slide is again just to give you some sense for what would be the typical timeline to issue a bond referendum.

If we were to think about, for example, this fall, this coming election cycle, we would need to have, in these months, adopted a CIP plan that included those projects that would be the subject of the referendum this fall.

In April, of course, you would adopt the plan in May, assuming there are school projects that are part of that referendum.

The school board would need to act to actually pass a resolution saying that they were supportive.

In June the board would then approve the questions that would actually be posed to the public and then in July and August we would ask the circuit court to enter the order and then you would embark on this whole sort of public information campaign as it relates to the bond referendum itself until the November election.

So as we just summarize here, I think that there is the question, and I think we are in some ways assuming that we are probably not going to be looking at a referendum question for this coming November ballot.

And that again is based on the nature of the projects that are in our upcoming

If you don't, just to reiterate, and we've said this before, if you don't do, utilize or take advantage of a presidential election year, I think you're, there are certainly some years where you would not want to do it at all based on unfortunately the low voter turnout that we have.

Right, I'm just saying that you really want a presidential election year where people actually get out to vote.

It would seem like to me.

Well, again, we would certainly put that question to this board, but right now, based upon the mix of projects that we have for immediate financing, those that are included in the 17 budget, we think that are primarily maintenance mandate type projects.

We would not recommend that those be

Now, if you were to immediately add a project, for example, a large project that you would need to finance soon, then that could be added.

If we, again, move very quickly, we'd have to actually adopt a CIP for 17 that included that project.

And we, our thought was that every other year might be an opportunity rather than waiting for.

So as we've thought about this, we've thought of 16 or then 18.

And 18 would coincide with the court project as an example

If we tried to get the best interest rates we could possibly get, rather than asking for a yes or no vote on the project itself, we would be asking the voters whether we could borrow at the most attractive rate and utilize our AAA bond rating.

That would be the question.

and through all of our education of the public, we wouldn't be saying, do you think we should do a court or not?

Because we'll let them know that we have to do the courts.

But the question would be to them, should we utilize our AAA bond rating to get the most attractive interest rate?

And we would assume that the timing of that would be 18, most likely based on what's in place now.

and the other one is whether it's an up or down vote on a project.

Again, our thought was every other year would be the opportunity to consider this, but we are certainly not suggesting we should wait four years if we don't do it in 16.

And that's one of the main things about looking at a referendum is there's really two primary ways you'd probably go about this.

One is to say, hey, we need to do this.

Will you authorize us to do it at the best rate?

The other is do you support this project?

And in our marketing or discussion of the project, we might say it may require that we increase taxes two cents as an example.

Please clarify the wording issue of the referendum has to be expressed a very specific way and that's why that extra information isn't there.

And Larry can clarify that.

There is not authority to have a referendum on a tax increase.

How you discuss that with the public would be different depending on what approach you take.

Both are done by the localities and again a $47 million dollar court project.

with a lower interest than we'd otherwise get might be worth considering putting on a referendum as long as the public understands that we're gonna have to do it anyways.

If we get a half percent better interest rate over time, that's a savings that goes then to other projects.

It's just one of those things to consider.

We don't think that this is primed for 16 unless you all wanna add some projects from the unfunded list

into the CIP with the assumption you're going to go to the voters to see if they'll approve doing those projects.

And then also our discussion of it would be about the rate probably needing to go up.

Again, I would just emphasize that this CIP and the budget proposal as a total

is hold the line, but it's not hold the line forever.

It's hold the line while we consider what the most important things are to do for the future.

And that idea was that we would do that through the strategic planning discussion.

But if you all feel differently about that and you think something should move forward as a part of this process, we completely understand that.

I think you raise a very good point having worked on voter turnout since 69 in three different states.

The peak turnout is of course the presidential year.

The next highest level is the state officers, the constitutional officers.

Governor and Attorney General, etc.

Third, congressional elections.

This would be a congressional cycle in 2018.

And then the fourth would be state elected representatives and then board representatives.

This is not the ideal scenario in terms of turnout, but we would just need to factor that in with all the other parts of the equation.

I mean, the fact is, you know, can we wait to address those needs for the next presidential cycle, because we're not in a mode yet to have in the CIP these educational capacity building projects that are going to be big ticket items queued up, ready to go, and so it may well take

at least three years, it may actually be the next presidential cycle that is appropriate to do that for those projects.

But if we did some other bonding, why then the congressional cycle, it's certainly better than doing Virginia elected officials and board of supervisors.

Bill, a couple maybe related questions.

I assume these are tax beneficial bonds for the bond buyers, that they're tax reduction in some way.

Tax exempt completely.

And then is there, have you seen other communities, you know, we have a pretty active investment community here of, is there some advantage to trying to market them, whether,

Most often, at least in our past, with revenue bonds, we get buyers, like banks, that will actually buy whole segments of the bonds, and then they would, in turn, do the marketing to individuals.

I suspect that would happen in a bond referendum as well.

People wise, so I'm trying to understand about the projects we have on our list this year that don't seem to qualify particularly appropriately for doing something this year, but is there, does everything have to be ready, designed ready before you go to the bond?

Or can you say we're gonna invest our million dollars hypothetically at a school improvement and be ready to use the bond

Does that work?

What's required is that you have adopted a CIP plan that includes the project.

Our borrowing is, we try to time the borrowing such that the timing is you're not borrowing money too soon.

So you wouldn't want to borrow a large amount of money and then wait a year before the majority of it is used for the construction.

So then it sounds like the hurdle is

And I'm just making this up as I go along.

If we were to take Albemarle High School and Woodbrook improvements and put it in, I just have no idea what the costs would be and how, what any of the consequences would be.

So I don't know whether I'd support it or not, but it would be nice to find out if it's possible to find out quickly.

That one is not so much to me like bricks and mortar because there's so much undetermined where it's going that I think selling that is going to be a really difficult thing but building classrooms is bricks and mortar for children who were already here to sit in and that to me is a different

So I don't know whether it's possible to...

I just want the slide of the timeline up.

Yeah.

Yeah, gotcha.

Okay.

So your question is, could we find out what the costs of those bricks-and-mortar school

projects are and find out if that timing could in any way work with a bond referendum sooner rather than later.

Is that the question I'm hearing?

That would be more than we've had.

You know, that would at least get us started on a

or at least have some information.

It's more strategic.

I mean, you don't have to issue all the bonds at the same time.

You have eight years to issue the bonds.

So you could, if you had an approval for

When you needed to meet the spending plan in the CIP.

What's really important

We find is that before you go out on a referendum, you need to have some certainty about the projects that you're proposing to the public that they're going to vote on.

And the process for that is the capital improvement process for local government.

So once you have identified projects in a CIP, you've already done due diligence on the cost.

or the estimated cost for that.

You've also done due diligence on how those projects would be funded going forward with a financial plan.

I like that nice way you put a funding plan, is that what you said?

Yes.

In other words, the second sentence in that first bullet where we have to identify a tax increase necessary to support the funds.

And so if you felt like you wanted to put some questions out to the public this November, the timeline up here would suggest that

Through this strategic session, if you identified some projects you want to go out to the public with, we could probably make the timeline work.

We might have to amend the CIP that you adopt in April.

We could then have the strategic discussion and you could determine if there were some projects you really wanted to put out to the voters this November.

I should point out that this black and white one is the unfunded CIP and CNA which

over the next five years has $205 million with the project.

So there's not a shortage of finding worthy projects to be funded.

And again, the environment that we shared with you earlier was just some of those operating needs in 18 that are gonna require some significant decisions.

If you decided to put some

projects on a referendum and they got approved and you move forward, those would just be on top of the challenge that we're faced with now.

But again, I think we're going to have to face that challenge in the strategic session one way or the other.

And I know there's something beyond just getting by every year that this board and this community wants.

So that's the important discussion and it has a lot to do with this capital program obviously.

But again, if that's a desire of this board, we'd like to do some more with this referendum in 16, then I think staff could leave with that direction from this board and work a schedule out that would allow us, even if you have to adopt this CIP, that would allow us to amend it in a time frame that could get something ready for a referendum.

I'm fine with having a strategic discussion about that.

Just a quick question.

Is it appropriate in the education materials of the referendum that would go, let's say this year, to identify that the source of revenues would be a possible tax increase?

So there's no limitations there.

We could be pretty candid about if you want this,

The one scenario I hope we avoid is to, as I was thinking about before the conversation unfolded with your good point here, Brad, and that is that we would come to our strategic meeting in June and realize we wanted to do some things, especially in terms of capacity building for the schools.

and realize that we have to wait yet another year.

So it's another year of incrementalism, another year of kick the can down the roadism and yet we are really at a point here as we're moving towards a two-year budget cycle, we're moving into much more of a strategically focused expenditure side for the county.

of trying to find a way that we would at least have some money in the budget this coming year to do some of the preliminary studies to do an assessment on the north end about capacity issues where we are under capacity and a study on the south end where we are

over capacity in aging infrastructure, elementary school buildings.

And so look at both of those and look for ways that we can use the CIP or the referendum combined with the CIP to come up with the scarcity of resources to at least get the studies done that forms and informs the basis of figuring out how much we're gonna need to expend for both of them.

And I'd like to do that

One correction for you there, Rick, and that is you said we're not doing any capacity building for another year.

The reality is if you look at the CIP, there's only three capacity building projects of real true nature, Red Hills, Pantops Fire Station, and the courts, and that's five years.

So for the next five years, based on this plan, which also includes a tax increase in 19, I forget.

Yes, 19 as well.

And my concern is that we've been talking about this now for at least a year or two years.

And that's the heart of this budget proposal.

The thought from staff is just that it needs to be more than something we do around the dais in three weeks period of time because the board really needs to get on the same page about that direction and a great example of this strategic issue is we have needs in our high schools now.

School systems decided to get trailers to help fill the gap.

A new high school is a 60 to 80 million dollar proposition.

That's a strategic issue, really critical one, and it is going to eat up your capacity.

You've got to look at the financial impact and all those kinds of things, but at the end of the day,

again everybody has said this continuing to add to a school that's got a bunch of additions that you know those are the strategic decisions that are really significant that we need to sit down and really talk about and whether we could be ready to do that in a November referendum is an example if you even put that on a referendum I think Mr. Randolph points out that some studies and things would have to be done I don't think the schools have actually really even cost it out

a new high school, it's not even in the CNA at this point but there's clearly a recognition now that it needs to be something identified.

Other projects are in the CNA or in the CIP unfunded and therefore we do have the data, we need probably to put those on a referendum.

And just expanding a school has a diminishing return.

And I'll go back to the story I tell people when I was campaigning that my daughter and I were arguing over the need for a new backpack because she was going to be starting Albemarle High School.

I was like, you don't need a new backpack.

You got one just fine.

But she made it very clear that it couldn't hold all of her books.

And the reality is most Albemarle County high school students don't have a locker.

because it takes so long to go between classes that they don't have time to go to a locker.

This will affect how staff goes about this.

Is there a desire to evaluate putting some projects on a

There is for me, I'd like to, if that means moving our strategic plan discussion up to May, I would support that.

And obviously in our discussion, what we're, nobody's really said, but I think the indication is there that the school division has to be involved with this.

Of course.

And just so you all know.

The school system is always involved in this.

Nobody else in the state does it together like we do.

We really have to get them, yeah.

Because I think they have, at the school board level, and while I hesitate to speak for them, I think there's a sense there that there's just no money.

I think it's pretty clear certainly we need to do the strategic planning and all but from my discussions to the other board members all of us really want to do something about the schools and the capacity issues and it's just unacceptable to have the five years with no capacity I think we need to look

We shouldn't think about it as one high school in the northern part of the county because politically that's not as easily passed as several programs that affect different parts of the county.

I know when our Attorney General, Mark Herring, was on the Loudon party, the Board of Supervisors, they built 16 schools in four years.

So every three months they were opening a new school on average.

And then maybe they still are, but when they did it, they put out referendums for multiple schools in different parts of the county so that, you know, everybody had a stake in it.

I'd like to just, I deemed his status in the audience, but I'll just repeat something that he said to me once about bond referendums.

He has a lot of experience in it, and he said generally in his experience,

I wouldn't limit that to a geographic area.

If the areas are Parks and Education and Courts of Justice, then those are areas as well.

I understand the wish to distribute things, but if the kids are in the northern part, and that's where the high school needs to be built, we shouldn't be trying to add on to the ones that are already crowded, have no parking, and have terrible traffic issues already.

So, let's try to be sensible about this, and brave about this, and make the right decision, rather than... Well, the school system has a much better idea than I do.

Just one quick reminder, one of the outcomes of the oversight committee process was to look at what we called scenario four, several of the members here were on that committee, where we looked at

bringing on additional projects.

We actually looked at the top 13 that were not currently funded that blended public safety, schools, and then some transportation.

I would suggest just as a refresher, you may want to go back and look at the memo that came out of oversight because I thought

that model actually added about $100 million in projects above what we're looking at today.

This happens to tie with the work that Davenport did.

The financial model would have required an increase in the dedicated tax rate of four pennies to accomplish that.

I'm just suggesting that as we would go into the strategic planning session, that may be good information to look at because there was some modeling that was done based on those requests and that volume and it was a pretty good blend

Do we get that?

Do you mind resending that to us?

Absolutely, I can absolutely do that.

That'd be great.

And the difference between the oversight committee process and I think what you all are gonna be going through is

the buck stops here with you all and so the combination of projects and which ones are really the most important and a high school was not in there and operating impacts were not assessed so we've got to go to that next level of really complete review and really engage you on what you think is the most important stuff because even the next list of highly scored projects didn't have anything in there for I don't think I think for Parks and Recreation some things that just didn't score much but

So it's got to be uniquely your list of priorities.

And just another thought too, Trevor, if you don't mind.

I see Dean's here and we have at least one school board member here.

I can't tell who's beside him, but anyway, would you mind just sending that information to the school board and the board of supervisors just so they have it as well?

Yeah, oversight committee did send that back in December, but I will make sure both bodies receive it again.

Yeah, that'd be great.

And going back to, just to recap on one thing, I believe we have a request to try to find that million dollars for design for Woodbrook.

We do.

Somewhere.

Great, I have one other question, but it can wait.

Service directors are allowed to provide services within a defined area of the county where you are proposing to provide enhanced services or facilities that aren't provided countywide.

and service districts are created by ordinance by the Board of Supervisors after holding a public hearing.

Things that have been covered by service districts typically have been road improvements.

You could do sidewalk improvements or other capital physical improvements.

It can also provide higher levels of services.

So if you wanted to provide increased

Services such as parks or enhanced

Those types of things which encourage development or increase higher quality of life standards.

One perspective on this analysis that we did was

We had talked before about the higher levels of service in our urban areas because of some of the challenges that we have.

And we did some look at the tax base in our urban areas versus our rural areas and determined that about half the tax base is in our urban areas.

So at the end of the day, one penny on the tax rate would generate about half of what we would normally get if you focus it just on the development area.

So just for perspective,

I've been keeping notes to make sure that we can be responsive on the action items and please, Laurie, Bill, others, make sure that I didn't miss anything.

First was the direction to staff to look at funding the Woodbrook design and how we might do that through reductions, delays, deferring or including, just modeling that and bringing that back to the board.

An action for me is to send out the current replacement value reports that came from schools and local government on the maintenance percentages.

A question was asked showing the model that has the general fund transfer and somehow to show what would be

what the transfer would have been without the tax rate and then the impact of adding the tax on the CIP as far as that goes.

A request for me to send out the courts project modeling both the expenditure side and the revenue side including the anticipated share revenues from the city.

And then finally the last one I had was the sending out the oversight committee recommendations again to the board and school board.

Moving it to early, probably needing to be in May.

Oh, I thought we were... Oh, I didn't know.

Okay.

To our second portion of this meeting, we're going to spend the next hour on general government and our operating budget.

Thank you Madam Chair, Members of the Board.

We're going to go ahead and complete the General Government Operating Budget.

This is a topic that we started I believe on the 25th of February.

We're going to pick up basically where we left off and spend the next hour talking about different chapters in your budget document.

And before we start, I did want to bring up one topic that we had talked about before because I have some additional information I'd like to share on this.

And if you remember in the compensation section, we have a 2% salary increase effective July 1, 2016.

Mr. Randolph asked for some additional information about salaries and we're working closely with the schools on that and we haven't gotten all the information together for you.

But I just wanted to mention that that's forthcoming.

And I also just wanted to add this one slide here.

This is a slide, this is information provided to us by the Human Resources Department and basically some of you might, were not on the board in October when Lorna comes to the joint, the two boards and talks about compensation and

provides their recommendation.

And I just wanted to share this with you because they provided it to me to do so.

First of all, the World of Work, which is a global, highly respected by HR professionals group that looks at salaries across a lot of categories and identifies where they think the market, the competitive market is going to move.

And at the time that they presented this to the two boards, they thought it was going to move at about 2.7, the competitive market.

And then the HR department has an adopted competitive market.

Again, this is approved market.

by the school board and the board of supervisors.

And that competitive, adopted competitive market, they believe is gonna move at 2%.

And just in February, the HR department contacted those in the adopted market, again, just to double check to see if anything changed between October and February based on some of the changes we might be seeing in the economy.

And 15 of those entities responded to the HR department, including James City County, Hanover,

City of Charlottesville, Spotsylvania County, a lot of the ones that are in our benchmark group as well, and they still believe that they're going to put a 2% increase in either in their budget if they haven't put it forth yet or already have.

So just wanted to share that with you.

Also the state of Virginia.

You know there's very different versions of the state budget out there right now.

The Senate version does have a 2% increase for state supported local positions in fiscal year 17.

The House versions is a little bit different and as you know the Governor's version is different.

as well, but we're watching those very closely, but I just wanted to share that with you.

And then you see the county of Albemarle's 2% on this slide as well.

And I won't belabor it, but I just want to make sure that everybody remembers that the 2% for the state of Virginia, while they're recommending that for state employees,

for the teachers, the 2% that they're talking about would factor through the composite index.

So it has to be, just wanna make sure everybody in the public understands that it doesn't mean that the state would be reimbursing us 2% for teachers.

They would not be.

And also there's a local match to do it.

Absolutely, yeah.

I'm just going to move back now into the categories.

This is where we left off.

We actually go through the budget document chapter by chapter.

We're following just the way the budget document is laid out.

And where we left off before, we were just getting ready to start the public works category, which is on page 129.

Thank you, Laurie.

The category of public works essentially involves two areas.

The first facility's environmental services, as you know, is the

is the new department that previously was both General Services and the Office of Facilities Development now combined into that one category.

And then our contributions to Rivanna Solid Waste Authority, primarily in connection with supporting those services that are not supported by revenues, particularly the McIntire Recycling Center and other recycling activity out at Landfill.

This total category is just under $5 million.

And again, I think in our theme of holding the line, proposed budget has the total category increasing by about $23,000 or about one half of one percent.

If you refer to your books, page 132 describes some of the principal changes in the operations

Facilities and Environmental Services, and I'll just note there have been a number of substantial decreases, particularly around energy and utility cost.

We do have a minor increase for increasing our custodial cleaning services for nine different facilities and increasing the frequency of mowing some of the medians.

Taking care of the medians, I remember I think the first year I was on the board Dennis got an extra $40,000 in so we could hire a contractor because VDOT had stopped mowing in the 29 entrance corridors and all that sort of stuff and when you only do it twice a year it looks pretty ratty for most of the time.

The other thing that's important that we all need to understand on page 133, talking about all the maintenance that's being done now in our streetscapes and common areas.

What a lot of people don't realize is that some of these are in the middle of our neighborhoods in the urban rain and in the summertime they can just get to

It's awful.

So the only other thing I would mention, notable issues that were not funded or items not funded, of course, was the Sustainable Materials Management Coordinator that we talked about at length yesterday and an additional custodian.

You know, we are adding facilities.

We are challenged with that.

Before we leave this area, Bill, I just wanted to comment on page 137 under the overview notable changes.

There's a great statement that I have yet, I can't figure it out.

Well, we may need other experts to talk about this, but as it works out, I think there's an inverse relationship between energy cost and the cost of recycling.

And it has to do with the market for the material.

I don't know that Mark is here.

Do you feel like you want to speak to that one?

The market for our collected recyclables has not been as strong as we thought and that's why this is down.

Mark Graham, Director of Community Development.

This, sitting on the RSWA board, this has come up.

What we see with recycling is the value of the product that they're trying to recycle is inversely related to the price of energy.

The cheaper the energy, the easier it is to use raw product rather than recycled product.

So what's happened right now is the price of the recycled products has plummeted.

I'm just mentioning the scrap metal.

It's a world market.

talking on the metals has been interesting because China has so much excess capacity.

They have three times as much excess capacity as we have total capacity in this country right now.

For steel production.

But is there steel safe?

When buildings fall down, it's not a good thing.

Exactly, I agree.

If there are no other questions on that category, we can move to health and welfare, which is on page 139.

I'll certainly leave this off.

As you all know, Doug and I have switched responsibilities.

Doug had been very involved in these departments over the past year, so he may chip in here a little bit for a comment.

This is obviously one of the larger categories of expense of the county.

If you include all funds, it approaches $31 million in total.

Obviously, the major operations include social services, bright stars, and significantly this year, CSA or Children's Services Act.

and Sue too much.

Just because Jaunt is gonna be part of this discussion, I've gotta read out my transactional disclosure statement about being employed by Jaunt and it having a personal interest in it that exceeds the $5,000 annually.

Here's how I have it set out.

The first slide, one we'd like Mr. Sheffield to stay for, especially is Social Services, Bright Stars, and CSA, because there's a couple extra slides on CSA.

So in broad terms, the overall category is proposed to increase about 9.8% in total, or 1.9 million.

Notably, the CSA category is one of the major drivers behind that increase.

By and large, again, with the theme of holding the line, there are a few general increases other than the cross-departmental salary increases and other things that we've already talked about.

but CSA is certainly among one of the major drivers behind the increase in this budget's operation increasing almost 59 or 60% over its prior year expenditures.

And I'm sorry to interrupt you but it just strikes me, has there been any discussion or is it possible that there are other communities or I guess I should say counties that would be interested

going together and seeing if we could work together better or some sort of regional partnership.

I'm thinking about PrEP, I guess is what.

Because PrEP saves us so much money with certain educational situations with children.

Just wondering if there's ever been a discussion about whether or not we could do something like that with CSA.

and I guess that's not a discussion this morning.

I mean, I don't even know.

Well, I will say, and Phyllis is here to speak to this further, perhaps, but we are looking at a number of different strategies.

We're seeing a number of particularly foster children being immediately transferred to the custodianship of social services.

We need to work with the schools.

We need to work with the judges.

The fact is we are doing some things together with the city now around this.

So there's some effort in place but more is needed and Christy on our budget staff has spent an extensive amount of time.

We've had lots of separate meetings with Phyllis, Director of Social Services to talk about different strategies.

So there's a real recognition here that we've got to come up with some of those ideas you're talking about.

Some things are in place but much more needs to be done and we're looking at other regions and what they're doing.

We even have some money, one time money set aside that we think if we needed to take some of that and invest in a solution that's in this budget now, we could do that.

So even the discussion we had earlier about the 31,000 for

West Street Center, which wasn't funded.

We actually believed that we could allocate some of the money in that one time pot to help us with a solution like that if it has a payoff.

At the time we put this budget together, the city had not committed to that either.

So we didn't put it in, but we do have some money set aside that we could invest if it's gonna bring our costs down.

and I don't know whether the prep model would work but certainly that regional model where everybody sort of has skin in the game and can reduce costs because everybody has the same problem.

The schools have that same problem.

And of course there's a couple of slides in your packet that just demonstrate or underscore the rapid growth and the expenditure as well as the volatility over the years.

Oh, it's not unusual.

and the fact that we don't have any local residential treatment center anymore and so many of our kids are sent to Massachusetts and places far away.

I'll just mention generally very much hold the line scenario proposed for social services, but their operations are extremely stressed.

There were quite a number of additional requests that came to us this year, a number of positions, language assistance coordinator, adults benefit specialist, adults eligibility worker, part-time adult family services specialist, foster care adoption specialist.

and others.

I'd also like to comment that when we look at our five comparable counties that we view that are similar in terms of population, that Hanover, place of birth of somebody on this dais here, with a population of 102,704, where Albemarle had approximately 1,000 more people

The persons that living in poverty between 2009 and 2013 were 5.10%.

The percentage in Albemarle County is 10.20%.

So the fact that we have a greater population living in poverty, the requirement for the county to provide the services, and hence the net amount of the budget that has to be dedicated as a result of that, something that the listening public just needs to be reminded of, that is a reality.

I'd like to just ask a question or make a suggestion that the Legal Aid Justice Center not be in the Health and Welfare Department.

in that part of the book, but it's really, to me, maybe we can't officially put it under judicial, but to me, far closer to the public defender say is just doing more civil cases, leases, and that kind of thing.

I just don't think the standards that we're using for the Boys and Girls Club and

and Bridge Ministry and you know the other ones in there are all very important but I don't think the Legal Aid Justice of the Senate or I've worked with them some and you know familiar with many people that founded it and are still there and I think they just do incredible work and the lawyers work for a quarter of what they could earn in the private market and you know they're providing a tremendous service so I think we should restore the funding to what it was two years ago thirty eight thousand something

And also the name is escaping right now, add to the list the people who are here for the

I do have a meeting about the legal aid tomorrow morning, Kathy Galvin to talk about

Right.

And that's tomorrow morning.

Yes, just to see if, since the public defender's office is not in that process, if legal aid really works anyway.

I think Norman's suggestion is actually to flip it to judicial right away.

And the board has moved some items out of the ABRT process to another process in the past.

If I could say a word about that Madam Chair.

Doug Walker, Deputy County Executive.

We have been in consultation with the city staff also.

This is a collaborative effort.

And you heard the comments from the impact representatives at your public hearing is that it does require the actual construction of a new facility that has not yet been, a site plan hasn't been submitted.

So there are concerns that the timing for this current fiscal year are such that there's not gonna be a facility ready.

So it's not to take issue with the merits of the request.

There is a question about timing, so we'll continue to monitor that.

We want to make sure that you have the best information going forward if you want to consider support for that program.

We obviously are also looking at its value to our overall Children's Services Act investment.

But the timing of it and how that relates to this fiscal year is just a part of that consideration.

It's in the city.

I'll get on West Street.

Yes, ma'am.

Okay.

All right.

So, oh, you want to move on to the health and welfare contributions?

I would just say that we'll just hold off if we could on any Jaunt questions so that I can just weigh in on any of the Health Department, Region 10, and all those others.

This is the only slide.

Okay.

Were we planning to do any specific discussion on Jaunt?

Okay.

Now Karen can go back to work.

Bye Karen.

No I have a long list for her she needs to go back to work.

Those that were noted.

I do have a concern actually on now that I see that the tax relief program for the elderly and disabled our tax or property tax waiver is has been reduced and I think that it's due to lack of connecting with the people who really need it that has caused the previous money not to be fully utilized so I would like to I think that the needs are increasing especially as we try to

Find ways to increase the size of the pie in order to accomplish some capacity investments.

This is gonna put even more people at risk of needing that support.

I very much support this program because it allows the people who did work their whole careers and have just, at the end of their lives, they need the ability to stay in their house and in their neighborhood and near their friends and family and churches.

Just to point out to Ms. Malek that we have not reduced the people who are eligible for

the tax relief program.

I understand I just I think that it's going to change.

You would have to fund those.

We take it out of reserves or something like that.

That's right.

What is the outreach?

All I've seen is an ad in the newspaper a couple of times a year.

I carry the applications with me in my car, and I would encourage everybody.

There's usually a stack over there at this time of year.

Take them with you.

The best success I've had reaching people is

At town hall meetings I ask people who come to take one or two and share them with people that they know in their neighborhood who they know well and might be more receptive to participate if they hear about it from a friend.

Because it's the reluctance of people to participate.

I've been to investigate, you know, sort of look in at the locked files.

There were people years ago who were concerned that they didn't want people knowing what their information was and I said that's absolutely never gonna happen because it's all sequestered

in a locked room.

And I guess I would make the assumption that JAVA also does this in some of their satellites.

We have a JAVA expert here.

It's finding people in the countryside.

It's really a street corner delivery of information.

I agree with Ann it is hard and I knocking on doors over the years I haven't this last couple of years but I used to carry the application forms with me and what I would hear from folks is that they didn't want people to know.

They're very private and very proud and have every right to be but yeah and I don't know how they will participate how we get around that.

Yeah.

Well, before we leave it, I'd just like to note that we still have critical needs that are not being met as successfully as they could be to produce improved outcomes in the county because we're understaffed.

in this critical area and this is a very hard working department of the county where their caseloads are going up and yet they're not able to add additional staff to address those caseloads.

and yet the needs are becoming more and more acute.

And some of those needs obviously are also chronic.

So I think we need to, and when we get into strategic discussions, this is an area that I think we need to talk about because the feds and the state are not stepping up to the level of the need that is out there and more and more responsibility put on local government.

And quite frankly, a lot of our

Our residents are unaware of the depth of the need that exists in the county.

They're unaware and we need to remind them of their responsibility because these are their neighbors, these are their people that work with them, for them, that they have contact with.

If there's going to be a discussion at some point about perhaps reallocating

potential new positions in one place versus another, then this would certainly be one of the departments I would want to have at the top of the list.

I understand, but we may be able to create some, that's all.

Thank you, Chair and members of the board.

Again, Doug Walker, Deputy County Executive.

There is not a lot of activity in this general budget category.

I want to point out just the significance of the investment in the Jefferson Madison Regional Library as a percentage of our overall investment in the category of parks, recreation, and culture.

This is how we budget for those expenses and how we account for it and how we report it to the Auditor of Public Accounts.

Some may see library services as a component of the overall education services that are provided, but it's accounted for and budgeted for in the category of culture along with parks and recreation.

I do want to point out that the increase in support for Jefferson Madison Regional Library in addition to just increased costs for supporting maintaining the current levels of service is tied to primarily the third year of a three-year commitment to implement a pay plan that was adopted again three years ago.

So we did the same last year and the year before that.

Other requests that they had to expand services at branches both regionally and in the county were not recommended for funding this year.

In the Parks and Recreation Department, I wanted to mention that they probably do as well as anyone.

We have a lot of folks who do well, but Parks and Recreation does hold the line pretty well as an agency that enjoys an enormous amount of volunteer support, and they leverage very heavily, as you know, that volunteer support and those resources to get as much out of

out of the investment that the community is making as anyone.

I do want to mention that they have unfunded this assistant director position.

This is a

existing position that was eliminated several years ago during the period of austerity.

They have identified as being important for a number of reasons, but particularly because of succession planning.

Just want to let you know.

They're fabulous.

They must have started working when they were 12.

It was a junior high school program apparently.

Yeah, the seniority in that department is extraordinary.

Hey, that's my department.

I wasn't planning to touch on that.

It is an active, I can say, and I know that many of you have been involved in that in one degree or another, it is an active issue being worked on by the department in conjunction with the stakeholders for the tennis and the pickleball and we'll be going forward to the Darden Towel Park Committee.

Frankly, at this point, I don't know when it comes back to this group.

Other than pickleball?

It's been quite an experience with a normal capital project, but where we are at this point, a quick little history.

We were contacted by the Pickleball Association in terms of seeing if we could or consider

Utilizing one of the four tennis courts at TAL, converting them into four pickleball courts.

We discussed it, we looked into the possibility of design, then we also met with the tennis community.

And long story short,

It has been determined overwhelmingly that it is preferred that pickleball has its own separate independent court and not pickleball courts was on the same footprint of the tennis courts.

So where we are now, we just recently received updated costs, today's costs in terms of refurbishing the full courts.

We have the contractor on hold, he has a schedule to do so, to refurbish those full courts at the latter part of May or first of June.

We really didn't want to hold that project hostage until we could get a better idea and some funding strategies to try to accommodate the pickleball community.

I apologize for all the emails.

I can well relate.

My inbox is loaded and we're keeping a file, but we have really reached out to the community, to both communities.

And I guess there's a reason why they shouldn't be together.

It was soon coming and I anticipated a question today.

In context, I have one pickleball player living on one side of me and one pickleball player living on the other side.

So when I take my trash out, I get the question, what's going on with the pickleball?

We're going to be meeting with both groups next week.

We had hoped to have this resolved much, much sooner, but there were some delays in getting the call estimates.

We're going to be sitting down with both groups and going over these options and telling them where we're moving forward and the recommendations that we'll be making to the Darden Town community.

before we leave the Parks and Recreation just under the library one thing I'd like to discuss during our strategic discussion is I don't know about the rest of the board but I do get a lot of comments about the library being closed on Sunday

and to look at expanding that or figuring out how to provide a little bit more service on the weekends.

I know we contribute as a larger group or we contribute with a larger group to the library system but it's getting to the point where we're seeing that more and more and I think it's just a

The number one reason I would want to try to explore this is because the overwhelming

request I get is from people who are looking to expand their education.

They're taking night classes and it's a distance learning kind of thing so they are using the library for studying.

We're talking about moms and things like that who need to kind of get away from the house in order to get their homework done and that's just not able to happen on the weekends and even sometimes in the evenings.

So if we're serious about improving our workforce and helping them improve their education,

So should we ask the library staff to give us some extra categories of hours?

I don't think it's a thing we can tackle during the budget discussion.

So if we give them a heads up that we're going to be talking about this during a strategic retreat, I'm sure John and the others, Gary and so forth, can pull together information for us so we can consider it.

One thing we could look at also, I don't want to belabor it, but volunteer opportunities.

We have plenty of retired librarians that live in this community, and they could form an auxiliary library core that can go in.

So instead of having two employees, you have one employee and you have a volunteer who's there, and that way you can cover staffing, you can stretch your dollars.

That's what we did in Hanover.

My mother was a librarian, and she supervised quite a few volunteers on the weekend.

I will also raise because this is sort of a soapbox for me and that is that community investment in fundraising for these kinds of things like operations of libraries is what made the difference to get the Crozet library built.

1.6 million dollars that was raised by the community.

if it's something where extra donations from the community around who primarily uses Northside can help provide some extra hours of time.

Okay, anything else on Parks and Rec agencies?

Yes, sorry about that.

No problem.

It's a good idea.

It's what it's about.

Okay.

In community development, just to acknowledge that the Office of Housing is reflected in this category, although that

tends to be more closely associated with the work of social services.

They obviously share a space over there at COP 5th Street, and this is largely attributable to the work that they do with the housing voucher program, but they also have significant connection to the work of community development.

More recently conversations and ongoing conversations about affordable housing would be more in the community development category.

I want to talk just real quickly about the Community Development Department again in the

The theme of holding the line and maintaining services, I think that you're aware, is that much of what community development does is development driven, and their capacity is heavily influenced by how much activity that there is, so that to the extent that they do give priority to development activity, that impacts other activities.

I will not be talking about the community development work plan today, but you know that very well as you've talked with Mark and his staff over the past years.

That is to say that they did make a request for additional planner positions that were not recommended, again in accordance with

The other that I would mention is the investments that we've made in our electronic records management system beginning with our pilot and community development.

and we have a challenge in trying to keep up with that with this imaging technician position that you see requested but not funded.

We continue to try to work to see how we can provide those real needed services to continue with the implementation of that electronic records management system with the resource constraints that we have.

We had funded over the last several years a part-time temporary position through the investment in the creation of the records management system, primarily in creating it, but also then to input the historical data.

We're now at the point where most of the work is in current information and going forward.

It's not appropriate to be using one-time money to be paying for what really is an ongoing expense.

So we have this challenge of how do we keep up with the system when we have those resource limitations.

Not to discount the need for the person, but are the submissions all required to be electronic now in addition to the great big pieces of paper that we get on our desks?

My simple answer is yes.

Mark Graham, Director of Community Development.

First, no, they are not required.

My simple answer was wrong.

So we could do that.

They're not required to.

We do have programs.

We're actually running a number of pilot programs right now to look at digital plan submissions.

There are some issues with that.

There are consistency.

Not everybody's using the same software systems and trying to make sure we've got something that works.