Board of Supervisors Budget Work Session and Public Hearing (FY 2018 Board's Proposed Budget)   4/10/2018

on the capital improvement bond.

We will today be considering a November CIP bond referendum and the content therein.

And I think I will go directly to L'Oreal's house this afternoon.

Thank you, Madam Chair, Members of the Board.

I'm Lori Alshouse.

I'm the Director of the Office of Management and Budget.

Today, Holly Biddle is here to my right.

She works in the Office of Management and Budget and is the lead on the CIP program.

Today, as you mentioned, we're going to talk about the capital improvement plan and a potential bond referendum.

I'd like to start with sharing the desired outcomes with you as we get started.

Our desire today is to obtain board guidance on the 19 to 23 capital improvement plan and a potential November 2018 bond referendum.

What we're going to do today is quickly review the upcoming schedule.

There's a lot of items that will be right in front of you on a monthly basis.

We're going to

Just touch base on the March 29 work session, the last work session we had and the direction we received from the board at that time.

We're going to review some additional scenarios requested by the board on March 29.

And then we're going to ask for board direction today on should we pursue a November 28 referendum.

So really try to get a nod on whether we should do it or not.

and if so, a direction as to a maximum a dollar amount in general that we should put on that referendum, direction as to the quality of life categories of funding that you may want us to place that bond referendum funding in by category and then if we're able to get this far along, we'd also like some guidance on some potential projects that we may include and then we'll talk a little bit about the next steps.

I think we have about 90 minutes for this work session, so I'm just going to move us along and see how far we can get in that 90 minutes.

So the first slide I'd like to go over with you today is our budget schedule and our CIP schedule.

As I shared with you before, there's two things actually going on at the same time here.

We are working towards the adoption of the fiscal year 19 budget, which has an operating budget and a capital budget, and then we're also talking about the CIP, which is a plan, and the plan is a five-year plan.

So on the left side of this chart, you'll see that I used the color red to basically share with you the dates that are coming up that have to do with your budget approval.

So today is April 10th.

We're talking about the CIP work session, which I placed in blue because that's a planning item.

It's part of your long range plan, your five year plan.

But tonight at 6 o'clock, you are going to have a public hearing on the board's proposed budget.

So today you're going to do a little of both.

You're going to work on the long range plan and then later at 6 o'clock you'll be hearing from the public on your 19th proposed budget.

On April 17th you'll also have a public hearing on the tax rate and you'll set the tax rate and approve your 19 fiscal year 19 budget.

and then May 9th I've added this to your chart so that you're aware that we'll be bringing you the resolution of appropriations.

So that's when you actually appropriate the money into categories for your fiscal year 19 budget year.

And then additionally on that day if you decide today you'd like to go to a referendum in November, we'd also like you on May 9th to finalize your local government referendum CIP projects if you desire to do so.

If you desire to have a referendum, you'll see some other dates showing up in blue on the right side of your slide.

So what we would do on May 24th, the school board, if the school board has projects in the referendum, as you know the center, which is phase one of their school improvement project, is actually in your fiscal year 19 proposed budget, should you decide to put that center and any other items on a referendum.

The school board will request board to take action on the school board related bond referendum items.

So that's a deliverable from the school board that would be provided to the board of supervisors.

On June 6th, the board would approve the CIP including any bond referendum projects.

and then on June 13th the board would request the circuit court to order an election stating the purposes of the bond or bonds and the maximum amounts.

There's more dates that would follow if you do go on to a referendum.

I just have a clarification for myself around calendar.

May the 24th

is a Thursday.

So what you're saying is the school board at their meeting would be requesting.

It's not that we're having a joint meeting with the school board that afternoon.

Exactly.

So it would be their meeting.

Gotcha.

That's correct.

Okay.

Yeah.

Thank you.

So if there's—we'll touch on the schedule again at the end of the meeting, but if there's not any more questions right now, I'll just move forward.

So the first thing I'd like to do is bring us back to March 29th on the work session and some of the information reviewed at that time.

If you recall on March 29th, the board reviewed the following CIP scenarios.

We had put them into five categories.

You may recall we started with something called foundation, which was your basic CIP, and then moved through different scenarios.

We went to an enhanced scenario.

A lot of this came out, of course, out of your oversight committee.

Scenario three included phase one of the high school improvement project.

and then there was phase four, I mean I'm sorry scenario four, which included high school phases one to three.

Scenario five included high school phases one to three and quality of life projects.

And we're not gonna go into great detail of this, I just wanted to share with you those are some of the scenarios you looked at.

And then here on the next slide you also saw additional information on these scenarios.

And these were estimated additional resources that may be needed to support those different scenarios.

and then if you recall, you gave us guidance at that time and I can go back to the prior slide if you have any questions about it but on March 29th, the board guidance that we received was we are interested in these scenarios and again, as you know, scenarios are based on assumptions but based on all the assumptions, the best assumptions we have today, you said begin with that scenario three and then provide some additional options for the board to consider on April 10th.

and then don't exceed expenditure levels associated with scenario four.

So basically what you did if you looked at this slide back at this slide you said there's an estimated pennies on the tax rate over a five-year period here that was 3.8 cents associated with scenario three.

Scenario four, the estimated pennies on the tax rate, again that's just kind of a proxy for the additional resources that would be needed based on the assumptions and the model, went to 4.3 cents on the tax rate over the next five years.

You told us to stay within that 3.8 to 4.3 area and don't go above scenario four with your modeling.

So we took those suggestions and then we're gonna provide you a few more models in just a few minutes.

Before we begin, there's two slides here that I have shared this information with you before, but I feel like it's important to continue to remind all of us of this, that your CIP is a plan, and your CIP thinks about the next five years.

It's not a budget, it's a plan, but our plan right now has several items not in it that are important projects,

These are ranked in the top 15 by the technical review committee and we just want to mention that as you think about your CIP, your CIP has some areas and some important projects that are not included in the CIP.

They've been requested but aren't included.

And you've seen this list before so I won't go through the details but I just wanted to make sure to remind you of that.

And then the next slide I also wanted to remind you of, we know that there are some projects that have not been requested yet to be included in our long range plan and our CIP that you may be hearing more information about in the near or far term.

So for example, the Volunteer Fire Rescue Facilities Maintenance Program will be on your agenda.

soon and there's some other items on here that we do not also have included in the CIP but it's just an important reference for you to keep in mind that that they are on our watch list.

So if there aren't any questions so far I'll go ahead and share with you some additional CIP scenarios for your consideration.

Before I go to scenarios past three, I wanted to share with you what was included in scenario three.

Again, this is our base scenario, which means all the scenarios I'm going to show you in a few minutes will always include these items in it.

So scenario three includes mandates and obligations, your maintenance and replacement projects, which we consider pretty much automatic in our county, is that any maintenance and replacement project, after we've double-checked all the numbers and the TRC determined it was necessary and important to do, it ends up in the CIP.

It also has some carry-forward ongoing unfinished projects from prior years.

As you know, your CIP is a multi-year CIP.

It does include funding for the courts.

It has ACE program funding from fiscal year 20 to 23.

It does have a $2 million reserve for advancing strategic priorities.

Includes the Ivy Recycling Center.

It has a volunteer facilities pilot project.

It has a partial design cost associated with the police evidence processing and vehicle storage project.

And now in your capital budget, which you have included in your proposed budget, includes a high school capacity improvements phase one, which is center one at $35.1 million.

Laurie, could I just ask two questions?

The first is, of all the items that you've included under scenario three, are there any items that carry with them any expectation of a future tax increase?

Am I correct about that?

So I would not say absolutely it's a tax rate increase.

I would say that there would be additional debt expenses associated with any project that is built in your third or fourth year of a CIP.

But there's probably a pretty good opportunity that you would need to put additional resources into that, which may or may not be a tax rate increase.

But there will be additional debt that will be coming on board.

because we should keep that in mind as we look over the five years.

There's a wild card here with a potential need for additional revenue.

The other question I had was actually directed at the police evidence processing and vehicle storage, which is now included in scenario three.

Is the police department aware that that's included and thereby

Public Safety Training Academy and the Police Satellite Training Academy are not.

The reason why I raise that is for the police department it might be worthwhile to try to get part of a training program

done in one year in the CIP and then hopefully try to bite it off kind of following the salami tactics instead of getting the whole salami at one time you bite off a piece at a time so over multiple years they might actually get that training academy completed.

In other words, my question is, is this something that the police department has really signed off on and has their enthusiastic support?

Because from where I'm sitting, I know evidence processing is really important.

That's critical for the mission of the police department.

They're the same thing.

These are vehicles that are evidence.

These are not vehicles that are being grown.

I just wanted to clarify that.

Well, I'll answer.

First, I want to clarify one part of that.

The police evidence processing vehicle storage only has partial design included in your CIP.

There's actually no funding included in the current CIP for actually building that storage facility.

My understanding is it is very critical for the police department.

I don't know if someone is here or here comes Mr. Walker can come up and share more.

Thank you Madam Chair, members of the board, Doug Walker, Deputy County Executive and that was the basis of my answer was going to be acknowledging that the pursuing a satellite police academy in conjunction with the Central Shenandoah Criminal Justice Training Academy is a priority but not at this current time and so it is more in the out years.

You would expect to be seeing that project again in a year or two as they get close to then that window of opportunity for their next

getting out of, but the next opportunity to kind of do something different with respect to their current relationship at Central Shenandoah.

Not so confidently that they would agree with that.

They're also pursuing even some interim opportunities within their current facility to try to always improve their ability even in addition to what they're doing at Central Shenandoah because they also have their own program that they do additional training here.

So there are a number of those efforts that are ongoing but the larger project associated with a

But a lot of that has to do with the time it takes until you get to extract yourself from the current contract.

Yes ma'am.

Lori, do you mind taking a couple of questions because I have a question as well.

Since scenario three includes right off the bat the ACE program funding, I'm just curious.

I know board members have been supportive of the ACE program and I'm not saying we're not.

I'm just questioning how it ended up as an absolute in scenario three.

I guess I'm thinking $500,000 a year

will fund about $6.5 million in projects in our CIP.

So is that an absolute?

Are these Scenario 3 items absolutes, and how did the ACE end up?

I remember talking about all these others, but maybe I just missed it.

Would you like to answer that?

The recommendation from the CIP committee was that rather than the ACE always being the foster child that got the leftovers for the budget was to put it back in as a line item, which I think is sort of what this

Means, to have a standard funding plan for it, as it had from 2003 or 4 up until 2009, to have a little more predictability to it.

And so that was the decision that was made by it, because all these others I sort of remember talking about, and I think maintenance is a given.

I mean, we recognize certain ones of these at the very beginning that are absolutes.

but I was just curious about the ACE, $500,000 a year while I grant you that it's good to fund ACE.

That seems like a lot and it would fund a lot of debt service.

Okay.

All right.

Just curious as to how.

And I would say that in an environment where assessments are going up and we're talking about tax increases, the ACE program becomes even more important for our rural farms.

Well, and I wasn't suggesting taking it out completely.

It's a good question.

And I guess I was thinking, do we have, does it have to be $500,000?

Oh, about where we were before the recession.

Yes, and just a general question is this will be the board's approved CIP.

Now as we move into the scenarios that we're gonna share with you, the folks in OMB thought it would be important to share a little more information about scenario planning and how we use our model and some of the assumptions that go into models because if you change your assumptions, it can change your amounts and change timing and those types of things.

So we highlighted a few of these that I just wanted to touch on in scenario modeling with our current model in the CIP.

There's a lot of timing variables.

So when you do different things, it can really affect your outcomes.

So for example, the sooner you increase ongoing resources, the greater the overall capacity.

So what this means is if you would consider potentially raising a tax rate for the CIP, if you do it sooner in the five-year period, it's cumulative.

And it does give your CIP more overall capacity.

So if you raise rates over the five years or more towards the end of the model, it doesn't have as much capacity.

So that's just an important consideration.

The scenarios that we're going to share with you today will have some timing elements on when additional resources could be raised.

The second box there is called short-term borrowing.

As you know, this year we are introducing a new concept called short-term borrowing and basically what that allows the county to do is only go out for bond issuances every other year.

There's a lot of costs associated with bond issuances and you can do some short-term borrowing.

This is a recommendation from our financial consultants.

and basically you can borrow from yourself from your own cash flow or you can get a short-term note that you can pay back.

So this just provides you some capacity over a couple years that you might not have had in the past and it can provide you with some timing elements that can be helpful.

The third box talks about out years.

So basically this is to Mr. Randolph's comment earlier, spending in fiscal year 22 and 23 of your CIP may require additional resources in out years.

So you just have to keep that in mind because of debt payments and spend plans.

You might not owe the debt until a couple years out based on the construction schedules.

The third blue box up there is called, we're titling it end of year contributions.

So as you end a year, as you know, we do a reconciliation at the end of every year.

And that gives the board some opportunities to use one time money that might become available from the general fund.

and basically end of the year capital contributions can be really powerful in your CIP.

So if you move that end of the year funding over to your CIP that can add capacity, it's cash funding.

We don't use that for paying debt over time because debt's an ongoing cost but it can help you to not have to borrow something, you can pay cash for something.

So that's a very important consideration.

and then on the bottom line we have something we just titled it cost variables.

We have interest rate assumptions built into your five-year model.

As you know those can change and actually we had some favorable rates on the last bond referendum and that was really favorable and helped the CIP.

So you make assumptions now but they may change later or they may go up but you know five-year period those rates can change.

The ones we have currently there are based on Davenport's recommendation who are financial advisors.

The second box there says project costs may vary as you know.

Costs are estimates and some estimates may need to be re-looked at or you have to be thoughtful about your cost estimates.

Some of the ones I'm going to share with you in a few minutes are initial cost estimates so they may change a little bit so be mindful of that.

And then the final box down there is operating costs and impacts require further scrutiny.

So you have operating costs to operate something after you've constructed it.

You have to be mindful that there might be some costs that hit your operating budget for either the schools or local government.

Sometimes too to put projects on the ground you may need some additional costs for buyers or project managers and so there's a couple different types of operating costs that always have to be mindful of.

So those are just some, there's many other assumptions as Ms. Biddle sitting next to me could tell you that goes into our model but those are some ones that really affect some of the outcomes.

Any questions on that just before we go on?

So with all that I know I built up to this next slide with a lot of information but we're providing you three additional scenarios today based on your recommendation on March 29th and as we talked just a few moments ago the one on the left is three is what we're calling scenario three so we're staying kind of in connecting to the scenarios that we provided on the 29th

And that term that we called that was enhanced foundation plus the high school phase one center.

So that was basically that set of assumptions and set of projects that we just talked about.

And then the three new ones are 3A, B, and C. And 3A was a specific request from one of the board members.

To add in the Scottsville Elementary Edition, there's been a lot of conversation about that important project.

And so what would it be if you added in the Scottsville Elementary Edition?

So I'm calling it, as you can see it's three plus that.

So you would go to the one we just talked about and now add in the Scottsville Elementary Edition and see how that plays out.

The yellow box is again starting with scenario three.

So this one now removes Scottsville Elementary.

It starts with your three and then adds about 12 million in projects.

And these projects are kind of generic.

I'm just going to say the word wrong.

Genetic, generic.

If I can interrupt, Laurie, that's an arbitrary number.

You just came up with that number.

I did.

You just chose a number.

I chose a number.

It could have been 15, it could have been 10.

That's correct.

So you can change that number to any number you want.

Thank you.

And then 3C was, again, starting with 3 as you instructed.

And then we did another arbitrary number.

We just doubled the 12 to 24.

And we said, well, what could you get for 24?

And again, we were staying within that additional resource requirement per the direction of the board.

So with that, and this slide looks similar to the one we provided to you on March 29th when we went from scenario one to five.

So you can see the dollar amounts here and then you can see some estimated additional resources that would be needed and again these are over what

are built in the five-year plan based on natural growth and the natural revenue growth over the five years.

So this shows you would need some additional resources within your CIP over the five-year period.

And basically, you can see, if you, if,

Our assumptions are all correct and all the timing and all the cost estimates and everything that we've done actually hit on all these projections.

You would see that if you needed to use real estate tax revenue to generate that additional revenue, you can see the estimated pennies on the tax rate that that could be equivalent to.

So you can see on the 3.A it's a four cent increase in taxes over five years based on all those assumptions.

The same thing with B.B.

The Scottsville Elementary addition is $12.1 million and so 3A and B are basically the same as far as dollar amounts.

There's some differences in some timing.

And then 3C you can see the 4.2 cents.

Just a clarification.

If one did, it looks like if I do the math correctly that it's .2 cents is the difference between 3 and 3B, just like .2 cents is the difference between 3 and 3A.

So we're not adding left to right, we're just going left to one right and then go back to left and jump over to two.

So the worst case scenario if one referendum was supportive of all these things would be 4.4 cents if we're adding the extra 0.2 along.

to get to, including C. C would be 4.2 total.

Right, because it's above the, based upon the 3.8 as the starter, plus .4 cents more to get the extra 24 million.

Okay, and I'm going to be looking a little bit to Holly here, because she's close to you.

Yes, the difference you start with three and if you add in Scottsville Elementary you need that two additional point two additional cents in the tax rate and then if you look from three and you go to 3B you're using scenario three you're adding 12 million in projects of whatever kind and taking out Scottsville

That's why it's 4.0 even.

And then if you're looking at 3C, you're taking Scenario 3 and then you're adding $24 million in projects.

And there's, we made a bunch of assumptions and timing and things, but then that is 4.2 cents.

So basically it's 3A is 0.2.

3B is 0.2 and 3C is 0.4.

Additional.

Correct.

And these include operating impacts for the high school center one.

That's good.

Okay.

The one observation I would make is that if we took 3A and we added Red Hill and whereby we would then have rectified educationally the impact of the closure of Yancey

in Southern Albemarle.

We would have addressed it with upgrades of facilities in both of those elementary schools.

We would be adding, it would look to be the combination of those two adapt to approximately $16.8 million that we're going to be well shy

of the 24 million, so we're going to be somewhere between 12, 3B and 3C, so somewhere between 4.0, 4.2 cents, and that would mean we would be paying .3 approximately.

beyond scenario three to cover the needs, the institutional infrastructure needs of both of those schools at the same time.

The reason I brought up Scottsville originally was I just wanted to look at Scottsville first, obviously because it's in my district, but

Works for me.

I guess I would just, and it's certainly an interesting idea, I just have to clarify for my own, I want to make sure that the school division and school board is prioritizing what their priorities would be.

Not to say that I know Red Hill is in there somewhere, but Lori, when you all were working up what

Yes, we have been in touch, yes.

You actually had meetings with, I know you had a meeting with Rosalind.

Yes.

Yeah, my understanding I'm looking over at Greg to make sure I have this right the school board would would be requesting remember we said that May 24th the school board would say we would like these items on the referendum they will make a request to you

I think it's important for you all to also look at all projects as well, but it's my understanding it's a school board that would make the request to the board.

If we don't necessarily have to put everything in a referendum either, I mean we can keep the referendum small and go ahead and do what we need to do and then if the economy is such and we're doing well in two more years we can go ahead and do another one.

I'm a little bit concerned about putting too much into it because it commits us and we don't know what the next five years are going to look like.

The other thing is that I'd like to just point out, which I know everybody knows but I'll point it out anyway, I believe that the storm water program now has

takes up about 1.6 cents of the budget.

And I'm not trying to get into it right now.

I'm just trying to say that we have been told that that's another outlying issue, regardless of how we, I'm not trying to get into how we're funding it.

That's not where I'm going.

you've already said that that would be about 1.5 additional cents so we have to concern about that and we also have in this whole estimate a 2% increase in assessments built into this program over each

year for five years.

And we all know that a lot of people don't get a 2% assessment increase.

You know, it's all over the board.

Some people get 20%.

It's the average.

And I just wanted to make sure that we weren't going to be doing something that was finalizing decisions that should be school board decisions about what projects, that's all.

That's exactly right.

So those are all great comments.

I can move to the next slide to Liz's, Ms. Palmer's most recent comment to share with you a little chart that those of you that have been on the board before have seen this type of chart before on some averages and what would a potential tax rate be for a certain house and all that.

So if you'd like to look at that, that's on the next slide.

We can go there.

We're still gonna talk more about the scenarios, but since it's the next slide and we just discussed that, I'd like to share that right now.

So, for those who've been on the board for a while, there was a chart that we would put on our webpage so that someone could actually go, I could look up the assessment of my house, and I could go, what if a change would occur in my tax rate, what would be that impact on a particular house?

I couldn't put that whole large chart, of course, on a slide, but we did a sample so that you could just get an idea of how something could, how it could impact a specific homeowner.

So, first I'm just going to orient you to this chart and then talk through some of the specific numbers in it.

so on the left column of course it's a fiscal year we've never set it up this way before they would be on five years so this is thinking about it over a five-year time period because we're thinking about the CIP over five years that next column is a home value and then it's assuming a 2% reassessment each year on that particular home so this is all theoretical so if it's basically if your home was $300,000

How would it just change if it was just the reassessments?

So as you go down that column, as you go down, you can see the changes that would just occur based on a 2% reassessment each and every year for that particular theoretical $300,000 house.

Then the next column you can see what the tax bill would be at the current 83.9 cent tax rate.

So then you can go down that column and just say based on just if there was a reassessment every year as Ms. Palmer mentioned at 2% you can see what would occur on that particular property.

And then you can see how much the property value would also be reassessed in that column before.

And so then the next two columns are kind of a combined set of assumptions and we're going with Scenario 3B.

So that's the one which was Scenario 3 with the extra $12 million in projects.

and you can see this is a cumulative so now you got to think with me on cumulative pennies on the tax rate you can see that there's a timing element of when the tax rate again all based on assumptions would change so you would see the change of a 2.2 percent increase in fiscal year 20 and then another penny

in 21, and then you can see the .8 occurring in 22 for the operational cost estimates associated with the center.

So then you can see it going all the way to the four cents total there.

And then there's the impact.

Now if you go to the next column, you can see the impact on the tax bill based on that change in a penny on the tax rate.

and then finally over to the right, you can see the estimated total tax bill over that time period.

So that just gives you a little bit of, just a little different perspective.

We talk about pennies on the tax rate.

It's nice to see it in an example like this.

So we provided that for you.

on real estate?

Yes.

And that was equivalent to three something on the three equivalent pennies.

So that's just one example of the way I've tried to put it in my head is this year we were very fortunate due to the strength of the economy, etc.

to have that kind of, so that's another way

that this revenue can be achieved.

Yeah, I think the seven million, and again, I'm going off the top of my memory here, but it was the reassessments and it was also new growth.

And I thought three million was the new growth within that seven million dollar number.

But the revenue was over and above last year.

That's correct.

That's the equivalent to several pennies, right?

The only observation I'd make when we look at this, it's easy to focus on the cost side of the cost benefit relationship, but the benefit side is what the county would be getting in terms of the high school project and $12 million in referendum projects, bulk of which I'm assuming would go also to the school division.

So we would be producing meaningful results

as a result of that.

And I think it's important to keep that in mind.

It's easy to focus on the costs.

The other thing I wanted to mention on this chart just not to leave you with the top part we are there is conversation about the stormwater program and one one view of it could be if you did not use a utility and wanted to support it with a change in your tax rate that chart shows you below there what that impact would be and we also went down the five years on that although it's

That also means if you switch over the stormwater program and put it into the existing property tax system, the people that have the largest properties and pay the highest taxes will pay more than they would under the utility.

I'm not sure all of them, the people that have written us are really cognizant of that reality, but you've just reinforced that here as just a reminder for people as

So the next slide I was gonna share with you, we were asked also on March 29th to bring back the debt capacity policies.

As you know in your financial policies, you have a couple related to debt.

And one is debt service as a percentage of revenues.

So when we say debt service, that's your debt payments as a percentage of revenues.

And you'll see several different lines on here.

Let me orient you to it.

Your policy is there's a 10% maximum.

The triple A average is the yellow line.

We used two of your scenarios, 3 and 3C, so we showed the scenario 3 that we've just talked about and went up to 3C, which would have been scenario 3 plus the $24 million, and you can see in the purple and green lines stay within your policy for that particular category of...

The dotted line is our cap.

Well, the dashed one is our triple A.

Just want to make sure I'm reading that right.

The yellow one is the double A. I couldn't see the dash on my screen.

Yes, you're right.

Well, the dash is the average of the triple A's.

That's not any policy-driven mark.

That's just the average triple A's.

and then over to the right you can see outstanding debt as a percentage of your assessed property.

That's another metrics that you look at.

It's again in your financial policies.

The red line is the cap at 2%.

Again, the yellow line is your average, I'm sorry, the blue line on this one is your average triple A and the yellow line is the double A on this chart on the right.

So you have two,

You have the AA and the AAA on this particular chart, and then you'll see the purple line and the green line again are a couple of the scenarios that we looked at.

So, again, you are within your debt policies on both of these metrics.

I was looking at the wrong chart, sorry.

That's okay.

So if the referendum passes, we are, there's certainly community expectation that all this gets done, I would think, and it gets done within eight years, or 10, we have two extra years.

But what you've done here, for purposes of the CIP, not a complaint, is try to put that in five years.

Yeah, you're raising a really good point and it's kind of based on that time assumption.

You know, time is something that you can work with.

And in addition though which concerns me as we are in an environment where interest rates are rising and on the last referendum we found it very beneficial to go ahead and borrow all the money at one time and so if we found ourselves into that decision-making

That's a good point as well because you want to make your best decision for saving as much resources as you can and those are the kind of considerations that you would do.

Yes.

And it really is fluid.

Yeah, and it's a plan and that's why it's real important to emphasize this is a plan.

Good point.

One of the biggest heartbreaks during the recession and running up against that headroom cap that Rick was mentioning was not being able to benefit from the lower purchase costs and all that because we were in disarray and didn't have ourselves organized.

So I'm so appreciative, first of all, of the five-year compression that you've done here.

Compression is not the right word, but

to shrink the financial part so we have almost a worst case scenario rather than dreaming about something that turns out to be a bad news deal in five years.

Okay, so now I've shared the information that we had and now it's time for some questions for you.

So there's a lot to consider and I know we're doing things in a pretty fast track way.

My first question for you is should the county pursue a November 28th referendum for the high school capacity improvement phase one center, which is in your proposed budget right now.

Should we do that?

Because that will trigger a lot of activities that we need to get moving forward.

I'll go through all these questions first and then we'll go back to each one.

The second one, if the board says yes, we should do that.

Should the referendum also include any other quality of life projects?

And they could be school projects or other projects in those categories that I'm going to share with you in a minute that we looked at earlier.

I know this is a hard way to ask the question but it's one way one way that would be helpful for us is what would be the maximum amount you know you've seen some scenarios and you could say well we don't want to go over this dollar amount give us some maximum amounts would be very helpful to staff because that could help us bring back some some ideas for you and what and then if you gave us that you if you said you know don't go over this dollar amount and again the ones the dollar amounts I gave you were arbitrary but you say don't go over let's say 10 million or whatever you would say

And then we would ask next, well what categories?

Do you want them all to be in one category of funding or do you want to go across some categories with it?

If you could give us a maximum amount and then amount kind of even per a category, those two things would be very helpful.

And then we would then ask you to provide some thoughts and some projects that we should really consider to be in.

Ultimately you approve the projects that would go on the referendum, but this could give staff some good guidance so we could continue to bring back information to you to help us move through this.

So I'm going to go back, if there's no questions, those are the kind of things we would like to discuss.

We have another, looks like about half hour, 45 minutes.

Could we start with the first question?

yeah this is a slide and I want to explain what this slide is and we can go back and forth and I can go through some projects but this is if you remember the oversight committee actually looked at some recommendations like what would you put on a referendum in 18 and then what would you put on it in 20 and what would you put it on in 22 and we looked we use some criteria we use this criteria

The team that went out and worked on that looked at high ranked TRC projects and we looked at a lot of criteria like geographic diversity, quality of life, non-mandated projects.

There's a lot of energy around not putting a mandated project on the referendum a couple years ago.

timeliness, importance to citizens, conditions of facilities, project diversity, strategic initiatives.

So we started thinking about all those types of criteria.

And then staff basically said, these were the categories.

And we said, this one was, I think, a $39 million referendum.

And it did not include, at that point, we didn't know what the high school improvement project was when the oversight committee was looking at this in November.

and so these are some ideas and these are some high ranking projects and again it was for illustrative and it does still give us, there's several on here that are still of interest but it just gives you an idea of some categories of fun, you know, a balance and then I do have some information in a few minutes about some other details on some of these projects that we wanted to share with you today that could be included in some of those buckets, so to speak.

So that's just one way to think about it.

So if you think about quality of life, sometimes you think about a spectrum, and this is just one group of categories that we were talking about.

So back to the question again, are we ready to talk a little bit about the high school capacity improvements phase one?

We've had a lot of conversation about that project.

Again, it is in your proposed fiscal year, to start in fiscal year 19.

in your proposed budget right now which is still not finalized.

I guess I'll go with my comments first.

I approve of the CIP.

I think they're all good projects.

I think that you guys have done a great job in getting all this material together.

My concern is I'm very concerned about putting all this in the referendum because it ties us.

I recognize it's good to have citizens vote on things.

I like that idea, but I'm very concerned about future boards being locked into these kinds of tax increases, not knowing the future.

So I would feel more comfortable if we would not have so much in the referendum.

I think assuming that we have a 5.3,

I recognize we can spread it

Theoretically, a five-year period with a 2% increase in assessment.

And the last couple years, we've seen what the average assessment increase looks like.

For some people, it can be 10, 20% increase in their assessments.

And they're all over the board.

And so I just feel very uncomfortable about that.

Yeah, that would be my preference and then we could see how it goes because we don't even know what we're doing with the storm water either at this point.

I'm not saying that I don't want to do all these projects.

I will ask a clarifying question and that is how far down in the project list do we need to do today or are we really needing to say yes or no on the process of a referendum in order to start Greg's calendar going forward and at subsequent meetings we come back and discuss because I think you have discussions planned going forward to identify which of these particular things we're going to do.

Secondly, if we have an approval on a referendum and we decide not to do it, that's not a problem legally as far as I know.

So, I don't feel like we're being trapped into some future board being committed when we have to still raise the money or they in addition have to raise the money.

We don't need absolute certainty today.

So feedback on the kinds of questions we still need staff to answer will be very helpful.

And I certainly have plenty of things to say.

I'm just trying to rein myself in, and I wanted to figure out which things I should focus on before I pounced on you.

So other questions?

It's hard to do it in different ways, right?

It is.

talking about it as staff like we would need to know what projects do we want to buy or how much money do we have, you know, so it's that funny place you get into, right?

Can you go to a dollar amount without going through and looking at a lot of projects or can you go to a dollar amount and go there first?

So we understand the difficulty that there is at this moment.

I guess the first question, if we could get at least, which was scenario three, you know, we heard from Ms. Palmer on that, if we could at least get to that place, that would at least,

I would like to comment.

As the sole member of the board who voted against the 2016 referendum, I think I have some credibility when I say I look carefully at projects and vote accordingly.

I voted against the 2016 referendum for four reasons.

One, it was not solely bricks and mortar.

Secondly, most of the projects outside of the Woodbrook expansion were already included in the CIP

for future year funding.

Thirdly, there was a lack of empirical comparative data and evidence for improved learning results associated with the modernization of classrooms.

And fourthly, it utilized, the referendum utilized scarce CIP dollars outside of Woodbrook and Western Albemarle High School's Environmental Academy for less than essential projects.

This year I will support the referendum because I see Scenario C and a modification of Scenario C with some elementary school expansion

as essential projects that meet all of the criteria that I cited on public record two years ago in opposition to the last referendum.

So I will support this, but I will go beyond scenario C. I want to see a scenario where we can actually address

and Red Hill sooner rather than later because I think that sends a message that Southern Albemarle is desperately seeking right now to get validation that this board cares about elementary education in the southern part of the county.

I don't want to tie the hands of the school board.

that's not my intention but I would like to have at least the amount of money in there with a C modified that if they felt that that was appropriate the money is there for it.

So when you say C you're talking about the school center which is three and then plus an additional 24 million

That's where I would come down to try to cover.

I would feel better knowing I could cover both of those costs in the referendum.

I just want to say one really quick thing about Red Hill, because I always support Red Hill.

But in talking, you know, just two years ago we got 1.5 million for Red Hill, which of course I wanted the whole entire project.

But in talking to school board members and school staff, I got the impression that they thought that that was the right thing to do at that time.

And so again, like I said,

And it'll be three years before this is happening.

Just think about that.

It's not tomorrow.

The only point I would use to clarify with that is that that was prior to the Yancey closing, that decision.

Correct.

So all the rationale around the project being done at Red Hill was not bringing more students in from a closed school.

I'll just point that out.

No, that was very appropriate you got that in.

Help me a minute, and it might just be me, but I need some clarification and I think from the discussion it's pretty obvious, but I just want to make sure.

The last time we advertised and had a referendum on the ballot, it was a funding tool.

In other words, we were talking about the referendum passing and using the bond referendum as a way to fund the project.

We were pretty clear that that project was going to go forward.

I thought we were anyway, because it was in the CIP.

And we were talking about the referendum to the public as a way of funding that project.

It would seem like to me when we're talking about this kind of money going to referendum, we're not talking about a funding mechanism anymore.

What we're saying is, do you want to do these projects community?

and if these projects don't pass the referendum, then we go back to the drawing board and we figure out how to do them in absence of the monies that we would have gotten from the referendum.

Do you understand, am I clear on my question?

Because before I make a decision on what we're doing here, I kind of have to have that answer, I think.

We talked very clearly to the community that the referendum was about the funding mechanism.

We could get it cheaper, the money cheaper, if we went the way of bonds.

So I am comfortable asking the community what projects they want to fund.

Absolutely, absolutely.

But I guess I just wanna make sure, so if the, let's just say, and I don't think this would happen, but if the school center

which was number one, which is what Liz is talking about doing, didn't pass the referendum.

Are we going to say that we're going to do it anyway or we're going to use a different mechanism?

I'm trying to sort this out.

It's in our CIP.

So then the more things you add, obviously, and Ann has talked about on the referendum projects that the community could say yes, no, yes, no.

I think that's what you've said.

And we would be using from the bond.

And I think from the perspective of the discussions which I heard in 2016, people thought they were getting a choice.

they absolutely did get a choice and that's why the school board was so glad that it passed and justifiably so because they really felt there was real support for that topic it wasn't a given and an empty request to vote on this and I think that's a very important thing for people to understand is that if we're going to ask the voters if they support this we need to pay attention to what they say so that was the frame of mind I was asking was

We've had these other projects languishing for 10, 15, 20 years.

Is there something you want to do about that?

That's a yes or no question that I want to ask them.

Because our list of projects is so long and has been built up for so long, that's why I'm hopeful we'll be able to take that other expanded route.

Excuse me, Jeff.

No, ma'am.

I apologize.

And Madam Chair, the only thing I was going to go back and not to be repetitive, but to go back to Greg's comment,

It's a way to accelerate major capital projects and it really is a mechanism to also sensitize the community that big capital programs typically cannot be absorbed into your current budget.

even in a healthy economy where you're seeing good strong local economy growth, economic growth as we've seen here for several years.

This economy is a strong local economy and I think that's reflected in our operating budget that we're going to talk about this evening at six o'clock with all the things that you're getting accomplished in maintaining your current tax rate.

there's an ambitious level of capital needs and you're grappling with that and there's been a lot of work and so I think your referendum, your packaging of your recommendum is really trying to manage the expectation of the community that we're doing all we can do with a strong economy but to do ambitious CIP programs, it contemplates a tax rate increase.

It really does because you cannot, even with a strong economy, you're not gonna be able to fit into

our existing operations in CIP, the kind of things that we're talking about.

Well, and I want to, you can't understate the acceleration component of it.

Prior to the bond referendum being approved that year by the Board of Supervisors, if that was a method, the school division, I remember the votes between should they do security enhancements or Woodbrook?

and the additional pieces of the labs at Western I believe was in that debate.

So had the bond referendum not been used to accelerate those projects, you could very likely right now be considering one of those three projects that got pushed into the bond referendum.

You're absolutely right.

Scottsville Elementary security improvements were scheduled in fiscal year 19.

They would be on the CIP this year.

That's right.

So your point is well taken.

The other point here, we often talk about the fact that we still have a CIP that is 2.4 pennies behind where it should have been because money was taken out in the near depression.

But that only generates today 4.32 million.

So even if that money was in there, you do the math on that,

that is only $4.32 million.

That does not really help us.

It would have a cumulative effect when we would have used some of that money.

It would pay for the learning center because you leverage that to $40 million in borrowing.

I mean, that's what that cash gets us is 90% more in the borrowing.

So we absolutely would pay for center one if we had had that 2.3 cents in there.

I guess I just want to throw one more thing in.

In 2014, I think 15 and 16, I can't remember exactly now, I should know, we increased the tax rate.

I was very supportive of that, very supportive of that, and we really needed it.

We've also had increased assessments during that time and we're looking at increased assessments and I guess that's what bothers me about committing everything into a referendum.

It's not that I don't think the projects are all good or necessary.

It's committing it in a referendum and giving the community the expectation that it's all going to get done in a certain length of time.

when I'm concerned about the folks that might have a jump in their assessment and we're increasing, a significant jump in their assessment and we're increasing the tax rate and we're committing to that.

So that's my concern.

I just want a little more control and I see if it's not all in the referendum, it gives the board and future board a little more control over what's happening with the tax rate.

I think the board has complete control with the annual budget process to make these decisions I really do and as I said before I was late to the program of understanding how helpful the bond referendum can be because I saw it as a cop-out that board members just didn't want to and the ten years ago didn't want to make the choice for themselves so they wanted the voters to do it and the only way I see that we are going to get some of these other projects

which if we're trying to fit them in without this accelerated process are never going to happen.

It's for the voters to be able to get our attention by this voter, by this referendum.

So I have a couple of questions.

The enhanced foundation list, ACE, the Advancing Strategic Priorities.

Yeah, it's a reserve and I'm, Christy was here a little earlier who had, has a lot of information about your strategic plan.

It can take me a minute, I have to pull up the page on it, but it's basically your strategic plan priorities that have some capital impacts.

We've been talking about this chunk to go on the bond referendum.

We can't, can we put advancing strategic priorities on a bond referendum?

That's actually not in the referendum.

The only thing on this scenario three right now was your last bullet on that page is the high school capacity.

Well, what I'm getting at is that the way that we're looking on this chart at the pennies on the tax rate does include those.

So we keep talking about the bond referendum as if it's going to have this impact.

So we talk about that, but then if we go out and it's a lower amount combined with this other one, well, where did that tax come from?

I mean, this has to be

I'm not criticizing how it's being presented but we have to understand cleanly that if we're right now we're having a conversation saying we put this on the referendum and we've been talking about these tax figures and then in three months if we go out and these tax figures are off by a half a penny or three-quarters of a penny it we're already off to kind of a bad start so what I'm getting at is I would like to know cleanly on the bond referendum with the projects I don't think this is a now thing I don't know if you can do it now

I don't think we have to identify the exact projects.

I think we can do a lump sum amount right now and we have some time to figure that out over the next couple of months.

I'm going to go back to this one slide here that might help.

You might note on this one, this is the slide we share with you on the 29th of March.

You can even see that on this chart right here, that it's 2 cents just for the

one level of it.

When you add the high school phase it's 3.8 so that's just the 1.8.

That's a good point.

I mean, I certainly think the reality is going to be a mix on a bond referendum of projects that we're saying, do you approve of doing these projects?

There will also be some that were saying this is the better way to fund them.

It's not going to be one or the other.

And I don't think that impacts how you ask the questions on the actual ballot, but it does impact how you build the rationale when you go to the public and say,

With all that being said I mean I would be comfortable going to 3C for conversation knowing full well that that's not

I think where I'm at is doing just the three.

I think we should be conservative.

I think the nuance of whether we're using it as a funding mechanism or we're giving approval or not, I think that's lost on most of the people that would be voting.

They feel like they're voting on it, yes or no.

And if we then start doing things anyway, no matter how we explain it, I think that's going to not make us look very good.

So I think we should have high confidence that it's going to pass, which I do have high confidence, but I think we should be conservative.

I'm a little concerned that we've only done one referendum that we're maybe a little bit too excited about the

the magic of referendums that we get a lower rate, everybody's agreeing to it, that votes on it, that it's some sort of, I'm exaggerating, but easy money kind of attitude that's, oh, let's do the referendum, then we'll all happily go along.

We're still going into a lot of debt and our tax rate's going up and I think we're in very uncertain times.

I guess my only reaction would be is I think the expectation is being as efficient as possible and taking 15 years to do a section of projects that you can do in half the time and using a mechanism in a way that's more efficient yields things that people can actually realize the benefit of.

I think a lot of the projects we're talking about though are things that many other communities don't even dream about that we have a very special place here.

We have the parks and the best schools in the state pretty much.

We have a lot of quality of life in existence right now and I think for some people that I talk to they feel like no matter how much we get we want more and more and more.

I'm not sure that that's the right

I do think that we have to figure out how to do some of these projects though that are impacting if we're going to continue to say all the development is in the development area.

And that's what those other buckets do.

Well, the rural area is great and I get a little frustrated when we have discussions that pit the rural area against the development area and I'm not willing to do that.

All I'm saying is that if

I certainly wouldn't argue that.

I'm just speaking to what Norman was saying, though.

I'm very concerned that we make sure that we can support the growth area where the growth is happening.

And to be honest with you, that's why we are where we are right now to some degree.

Yeah so and as Jeff says we're not going to be able to support that kind of commitment and

And to be fair, when we started the conversation about all of these projects, you only have to look to number five, with a total projected cost of almost $300 million, which we were still within

If you look at the chart with our averages and AAA and all of that, we were still within it, but boy, we were pushing the ceiling of it.

So, you know, looking at something in between, you know, a very conservative approach versus an extremely liberal approach, we're actually striking right through the middle right now.

No, that's not going to happen.

And I think timing of the projects and phasing, not all the, everything's going to happen in the same September or same June to September.

It's not like we're lining up ducks here in a row that we're doing referenda every two years and we're funding all of these projects.

We discussed earlier that we want to see how the Learning Center works out.

the school board will be doing a test run of it as a model this year to determine its efficacy and the buy-in and the problems that will arise especially transportation is a challenge that needs to be worked out but we'll have time to phase that in and assess it and determine where we're going from there but

There's a unique opportunity here.

In government you have to step up at times and make the hard calls and do the right thing.

The need is there.

There's no question about that.

The case for supporting this project in terms of the learning center presented by the school division is inescapable.

I mean, we don't have the resources to take on a $105 million project, so we're already phasing through the school division who's showing a real conservative approach, mindful of where the board is and where the economy is.

I certainly am not against, as I've said before, doing the high school.

That's not my issue.

And I know absolutely every one of us, and I shouldn't need, I probably shouldn't even say this because I know we all have these folks, but we do have a lot of elderly folks on fixed income in this community.

And while we have this vibrant, growing economy and we have, we want to do the best for the

and I'm not going to figure out the how much's and whatever right now, but it is important also as we consider this what we can save by having, what I learned from the 29 Solutions Project where I first panicked and was trying to argue with the Secretary of Transportation that lumping all these things together was too risky and he said no, that's how you get somebody who's big enough and experienced enough to do the job right and fast.

and that made a big impression on me and so in the same way that we have multiple school projects and you can get multiple contracts over time or something I mean this is completely outside my wheelhouse but I think there are possibilities for some really good management and really good savings if we're thoughtful enough about a big picture we can always decide that we have to wait and do this one in two years and that one two years after that

but they still could be in the same bond process and have one $500,000 expense for the bond and not two of them or three of them or four of them.

I would just like to comment that as a supervisor with the highest percentage of elderly poor in the county, according to Rich Schuyler's figures several years ago, certainly I understand that this will have an impact, but we have to balance the impact here to the good, to the benefit of the community, and you balance seniors

on fixed income and children needing in overcrowded classrooms and a need therefore to address that.

And it's a balancing act and on this case, you know, I voted earlier against the referendum.

Did you have anything you wanted to add?

Or you said?

No, I agree with both of you.

I didn't want to cut you off.

Okay.

No, we're fine.

Alright, next question, Lori.

Can I summarize just to make sure I have it?

My understanding is that the board would like the county to pursue the November 28th referendum for the high school capacity center.

I feel like that was, I felt like I saw or heard that that would be yes.

I think on the next question, I think there was some discussion that was still going on whether we would be adding to that or not.

I'm listening to the conversation.

I don't know if you want to weigh in on that or you want to move on.

I know we're at the end of our time together today.

I want to, do you want to, Madam Chair, would you like me to just move through these slides real quickly or move to the end?

I have the first question answered.

You might remember that we talked about, this was the oversight committee categories, we talked about it as quality of life, we talked about schools, transportation, community facilities in green space and public safety as broad categories, and in November we had these specific items as something to consider.

Since then we've had more conversation, you know those were based on October's priorities, October's information, we've since then looked at those categories and then are providing a little more information for you.

We did have some additional information.

You can read this later.

I know we're about out of time, but the schools project, we had some additional information on this slide for the Scottsville addition program.

Also, the schools and meeting with them, the learning space modernization for elementary and middle schools were something we talked about on the 29th, and there's also the high school modernization or areas that the schools are interested in.

So I just wanted to share that information with you.

The next category we had to share with you, and again you can look at this and please let us know if you have questions afterward, was transportation as a category.

We thought about the Albemarle Bicycle Pedestrian Construction Program as something to consider.

It included the North Side Trail, North Town Trail, and it seemed like it was a category that would be interesting for a potential referendum

Obviously of interest to the board.

We shared a map on here, the items in red are items of connections that could be constructed.

The estimated cost for all the red lines on this map are 9.8 million in total cost based on a unit cost basis.

and they would be able to be leveraged with state and federal funds.

So it wouldn't be that the local government would have to put all 9.8.

We just did it as a total group.

You could do a piece of that or pieces of that.

I just have to add, Lori, I'm sorry, but when we look at this list of projects, I think it's really important to remember that many of these projects could also be considered an economic development.

as part of our economic development.

They will support economic development in this community.

And they really are.

So that's something of consideration.

And then the next slide was community facilities in green space.

You know you have a parks and recreation needs assessment that's about complete.

As Mr. Walker shared with you on the 29th, we did have enough information to provide you with some preferences and some of the high ranking recommendations that will likely come from that plan when you get it.

So this is kind of a preview of the results.

These estimated numbers are very initial estimates on the numbers, but just gives you a little bit of perspective and cost ideas about some of the walking, hiking, and biking trails, athletic fields, open space conservation parks, and large community parks.

So again, give you something else to think about.

And again, this is per those four categories, so this would be that third category on your list there.

And just for clarification, that $4.1 million is the total cost, or is that just the admiral cost?

Because that would be a multi-jurisdictional thing, probably.

And there may be some offsets, so that might come down.

So those are just ideas for you to consider.

What we were thinking as a potential next step and I know I'm being mindful of time and I work very tight schedules in my world of budgeting and requirements that one thing we could do and this is just a suggestion

We could provide you a list of these projects kind of by email or some other way to you and you could provide some ranking preferences.

Again, we have to move to some decisions if you wanted some quality of life projects in addition to the center.

And if you don't, we wouldn't pursue this.

But if it's something the board wanted to still consider, we could do something like this and then on May 9th, you'd have to determine your projects.

The challenge is you will have to determine some projects or some general questions

that you'd want to put on a bond referendum in May timeframe to make this June, you know, to make these deadlines that we have to have with filing for this referendum.

It would really help us.

So that was kind of our thought because we're thinking what would be the next steps to do here today because I know it's really a lot to think about in a 90 minute meeting.

Laurie, to add on what Norman just said, when you provide the list, so the Northtown Trail would be the example, it won't be provided to us as 9.8 million.

There should be ways to go in there to segment it out.

So I hope it's not total projects.

and some of these are already on our revenue sharing list anyway so those that that bulleted list will shrink if like the Greer project is already doing something and so anyway I hope that that list will shrink down with other sources and maybe I'm wrong I see people giving me the evil eye here so I'm gonna stop talking about that

I didn't look too evil.

The other clarification or the slow down put the brakes on.

The distinctions between the 0.8 million for North Town Trail on page 10 and the 9.8 is a little sort of scary.

Well we'll proceed with that if that's okay with you and I feel like just to summarize again that we do get the indication that a referendum is coming so that we can start the wheels on that and then we can still talk about some potential additional projects for early May.

Thank you very much.

Thank you Lori and Holly for all the work you did on this.

Thank you very much.

Thanks to the whole OMB staff.

They did a lot of work on this.

Everyone in the office.

All of them.

As a quick political anecdote, back in 2015 I had the opportunity with something I was involved with to travel around some other counties.

And sometimes different boards get political labels tossed at them or certain politicians get political labels tossed at them.

But I had the event to be in a county where the board members would be the opposite of us if you wanted to address political labels.

and it was a county that did a lot of bond referendums and they were campaigning on that they had passed a bond referendum and came in under cost so saved based on what was approved in that so bond referendum while it's new to Albemarle is something that's very appears to me to be something that's very regular throughout this throughout the Commonwealth

and doesn't seem to be politically motivated on who uses them.

Yeah, that's great.

Well, and to some degree, the longer you put these projects off, the more they're going to cost.

Two million dollars down the drain because we didn't act when we should have.

Absolutely.

So I'm trying to avoid that again.

Any other announcements before we go to break?

Then we will go to break and come back at six.

Thank you.

Good evening everyone and welcome to the Board of Supervisors meeting of Tuesday, April 10th at which we will receive comments on proposed and operating capital budgets for fiscal year 2018-19.

Our officer tonight is Officer Meyer and wants to greet.

our County Attorney, Greg Kamptner on the right and on the left our County Executive, Jeff Richardson and L'Oreal's House Office of Management and Budget.

Okay, I did not, sorry.

Very good, well thank you both for being here.

So we will turn it over to Jeff to begin.

Good evening Madam Chair, members of the board.

It's an honor and a privilege to be here this evening for tonight's public hearing for the fiscal year proposed operational budget for Albemarle County.

I will very briefly this evening

reintroduce the proposed recommended budget and my goal is to wrap up quickly because I know that for this organization our goal tonight is to hear from our citizens in Albemarle County and tonight I come before you respectfully after six budget work sessions and I thank this board for your time and your energy and the amount of

focus that you've put into this budget with our staff.

And so I'll very briefly tonight hit the highlights, and then Madam Chair, I'll turn it back over to you.

And I will emphasize that staff is here tonight, and we're happy to answer any question that the board may have, the general public, about what is in the recommended budget.

And so want to certainly emphasize that.

So I start out please in recognizing also Lori Aushaus and her staff for a tremendous effort this year and I appreciate the continued effort that they've given us throughout this process.

For today, again, I will do a brief overview of the proposed budget.

This board has worked diligently to examine what the budget supports and also we take a broad two-year approach

in looking at the decisions for the coming fiscal year and how these decisions intersect with fiscal year 2020.

And as you know, board, tonight is your public hearing where we formally invite our citizens to give their opinions and thoughts about where we are.

Fiscal Year 19 highlights as we continue to deliver what we believe is impressive results on a wide array of initiatives as our community continues to evolve.

I'm proud to say that this recommended budget does not contemplate a need for a tax rate increase, and this board has already, consistent with state law, set the ceiling for this coming year's tax rate, and that ceiling is 83.9 cents.

One of the reasons that we are able to do so many things for the second year in a row off that 83.9 tax rate is that we are experiencing a nice local economic vibrancy.

And we've talked about that with our local revenue streams, we've studied that, and I'll say just a little bit more about that in a minute.

We are continuing to implement strategic priorities, but we're also continuing to reserve some of our capacity for some emerging opportunities that have came up in the last 12 months.

This budget also maintains our current levels of service to our community across all operating departments.

and as you know board, we also with our positive revenue results over the last 12 to 18 months, we have been strategic in working with this board in identifying what our positive cash flow is at the end of the year and we have worked with this board diligently to look at what strategic reinvestment of our savings, what we would be able to do with one-time funds.

I'll remind the board that we do have a total proposed budget of just over $432 million and that's total.

That's money coming from local level, state and federal.

That includes everything coming in and coming out of the budget.

and even with that in mind, you can see on the left hand side of the page that we do have a significant reliance on our local economy and that is suggested in our property taxes equating to approximately 43% of all the revenue, all of our revenues that come through Albemarle County.

Over on the right hand side, I think what is most poignant to me is the partnership and the commitment we have with our school divisions.

Our school division with approximately 47% of all the money coming in from all of our different funding sources being focused on ensuring that we have high quality public schools.

Okay?

When we drill down one level and ask ourselves, okay, the general fund, our local money, our general fund, which oftentimes is a more close reflection of our local economy, then we see again an even more significant reliance on the general property taxes, two-thirds of the revenue that comes in the door.

I will point out that we do also keep an eye on state and federal funding and that's something that we look at the uncertainty of our state and national economy and that's why we need to be cognizant of our fund balances, of our triple, triple A rating, our debt capacity, all these things come into effect where we are leaving some level of capacity for the level of uncertainty that we have.

Again, on the right hand side of the page where the money will be spent at the local level, we're able to again drill down and see that we've got a significant investment in schools, but in addition to that, we're also making a sizable contribution to public safety.

and as well as health and welfare and then the pie is cut into smaller slivers but all of that suggests that we have competing needs, we have a lot of expectation from our community and this board does a good job with its strategic planning efforts to determine what is most important that we focus our resources on at this moment, okay.

You've seen this slide quite a bit during our past two months of discussions.

We do have strong local revenues, and there are several major drivers.

The first is real estate, and I'd like to point out that we've made a process improvement during this past budget process.

That number I believe was approximately 7.5 million on the real estate revenues when we first talked to you about what our budget looked like for the coming year.

And that was estimates that were done prior to Christmas.

And so we went back at the board's direction and revisited our revenue assumptions with about three more months of work.

and we were able to conservatively estimate that we're gonna see approximately one more million dollars of revenue come through the door in next budget year.

And as this board gave direction in one of the work sessions, we applied the funding formula that exists with our school system and we were able to distribute some of that money back to our school system which was over and above what we typically do with our funding formula and it was recognizing

the unanticipated gap in state funding that had occurred through this past legislative process at the state level.

But we do see a nice amount of local growth, real estate, consumer driven activity along with business driven activity all suggest that we have a nice local economy that's doing very well for our region.

What this budget supports, again, we're looking at really three areas.

The first is supporting our local education.

It emphasizes a shared commitment to continue a strong partnership with our public school system.

recognizing that as we provide learning and training opportunities for our kids and also for people at all ages that we are strengthening our local economy and that's evident in several areas including a low unemployment rate.

We also, and we've showed this slide quite a bit to this board over the last several months, we've really looked in three areas.

We've looked and tried to focus in sustaining a high quality organization, and that's taking care of our obligations and our requirements.

That's also supporting our existing workforce.

We have a 2% adjustment for all county employees loaded into this budget, and I appreciate this board's support of our existing workforce.

Thank you very much for that.

and we're also going to maintain our current levels of service that we provide to our community across all departments.

This board is continuing to work hard in the middle part of the page in advancing your strategic priorities.

There are eight high level priority objectives and we have 22 action objectives and we keep that strategic plan in front of you.

We provide quarterly updates.

And that's important for us, and I hope it's important for you.

And as we wrap this year up and go into next year, we'll look for a planning opportunity later in the summer that we can come back and talk to you more specific about updating our current strategic plan.

And finally, the right side of the page is for

saving just a little bit of our capacity for maximizing transformation and emerging opportunities, new initiatives and opportunities that we may not have been able to identify over our five-year planning process, but things that just come up that we really need to have resource capacity to devote to it to be able to take advantage of that opportunity at that time.

We are beginning to be at a crossroads and I think this earlier discussion that you had this afternoon on your five-year CIP, your bond referendum, talking more broadly about the opportunities, the affordability, and where this community is, that does speak to the fact that we are at a crossroads.

And we do have a continuation of unfunded mandates that's evident with the most recent gap that we attempted to assist our school system with.

We've also got continued challenges with our capital program.

This board has been sensitive to that and I appreciate this board's appreciation and sensitivity to our ongoing capital needs.

I've mentioned our national economic uncertainty.

We continue to work diligently to identify staff capacity issues and with a focus on customer service and service deliverables to our community and we'll continue to do that.

We are balancing a desire for quality of life opportunities along with our capacity and financial affordability issues.

And this again is evidenced with our CIP discussion and our 2020 forecast as we move out of 2019.

I'll mention one thing specific to the board as it relates to 2019, and I'm wrapping up, Madam Chair.

Our Water Resources Stormwater Program, there's been a lot of attention that has been devoted to that program since we decided in February to move to a more public discussion with the publication of FAQs and some public dialogue with citizens in our community on the possibility of a stormwater utility program.

I wanted to clarify several things this evening that is in our operating budget.

Our stormwater program is fully funded in the FY19 proposed budget.

What this means is that we continue to dedicate 0.7 cents out of our general fund for the ongoing operations of the water resources stormwater program.

In addition to that, with this board's support, we've also identified 1.5 million dollars of capital, one-time money, that is right now in the fiscal year 19 CIP.

So that money will be used for some of the mandated programs that we're doing, dam repair, but it's also gonna be used for the continuing

Cameron, of our gray infrastructure areas to learn more about the repair and the investment, the future investment that we're going to need in the program.

So I'm confident that we're going to continue to make nice progress in fiscal 19.

with the 1.5 million of capital funding that's dedicated.

And then finally what I would say is that tomorrow afternoon you have scheduled a work session that will just talk about the stormwater program funding alternatives beginning in fiscal year 20.

So right now for your CIP five-year plan,

We do not have any dedicated funding from 20 through 23 in the stormwater program, but rather we just have that with a placeholder and we'll look for policy direction from the board tomorrow afternoon as you begin to discuss what alternatives you may have to consider after fiscal year 19.

I hope that's clear.

I think this is a clarity question.

Yes, ma'am.

In some previous board meeting, Greg Harper gave us a graph that showed that although it's 1.7 that's dedicated now,

.7 dedicated now, the stormwater program is actually consuming about 1.6 cents now.

And so what you're saying is that the way that you modeled it

You weren't continuing that in there and that you've kind of set aside and just have a blank space there.

1.6 penny, essentially.

The development side plus the .7 bucket.

And we're going to be able to go through next fiscal year and be able to continue to operate, maintain all our programs, inspections, all of the operations as they are today, services will continue.

through 19.

But in addition to that, on the capital side next year, we have a 1.5 million dollar earmark.

It's one time money one year to continue to invest in our capital infrastructure side.

A lot of that will be used for camera monitoring and learning and

updating and learning what our systems are in our urban areas where our problems areas are better to be able to identify future priorities for funding and what's necessary and that will get us through fiscal year 19.

Fiscal year 19 will be a very active year for us.

As it relates to tomorrow, I think what we'll be talking with you tomorrow about is getting some general direction from the board.

on what type of future revenue options, revenue modeling that you would like for us to consider.

And we're looking at the earliest that that would be connected into the CIP would probably be fiscal year 20.

And so we'll have some, you know, Greg will be able to provide the history tomorrow of where we started with this discussion of a utility.

So, Madam Chair, that's it, and I appreciate the questions on the storm water.

Thank you very much.

We have one person signed up, and then we will welcome others as well.

If you want to come up and speak, you have three minutes to speak.

Good evening.

I'm Vicki Bravo with Impact and Congregation Beth Israel.

And I live at 1135 Locust Avenue.

We have Impact appreciate the housing fund.

and we are very pleased that it remains in the proposed budget.

We have some ideas about how this fund can help seniors and others in the county who desperately need affordable housing.

We have meetings scheduled with you and with others who are interested in this fund such as Habitat for Humanity and the Piedmont Housing Alliance.

We look forward to meeting with you this week and next.

Thank you.

Thank you very much.

Is there anyone who didn't have the chance to sign up that would like to have three minutes to speak?

All right.

Well, in that case, if there truly is no stampede, I will close the public hearing and bring the matter back before the board.

So we have motions and we're leaving our motion.

This was strictly for listening tonight and we will have our discussion and motions next time.

Is that the plan?

All right with everybody?

Sure.

Very good.

Well, in that case, I will ask if there are members of the board who have committee reports or other matters to share with us.

Nothing?

All right.

I will just add that hopefully each of us will come with some comments tomorrow that we can to talk about the stormwater process to help to start that along.

No ma'am, nothing to report this afternoon.

Alrighty.

In that case, our agenda says we can adjourn to April 11th at 2 p.m. right here.

Great.