Board of Supervisors Adjorned Meeting - Joint Work Session with the School Board   9/27/2018

Good afternoon, everyone, and welcome to our Board of Supervisors School Board Work Session, September 27th.

We are going to begin, and I guess I will introduce quickly people at the dais staff.

They're all in the audience, so I will just let you introduce yourselves as you go along.

We'll do that.

This meeting of the Albemarle County School Board, a special meeting with the Board of Supervisors, is now in session.

We do have a quorum.

Ms. Kallsen will be about an hour late, and Mr. Alcaro, not Mr. Mel Alcaro, he's here.

Oh, okay.

Sorry about that.

Very good.

So our first, all right, where's Bill?

Lori's right there.

Okay, I'm looking around waving.

So number three, observations, it says.

So are you going to begin observations, or are we going to?

Okay, go ahead.

Very good.

Good afternoon.

My name is Rosalind Schmidt.

I'm the COO with Albemarle County Public Schools and I'm joined by Lori Allhouse, Director of Office and Management and Budget with Albemarle County.

And together we're going to set the stage before we get into the agenda.

So the agenda and the materials tonight or today were prepared with these outcomes in mind.

We hope that at the end of this you will have an opportunity for discussion early in the budget development process.

This, as you know, is a unique timing for a joint meeting and we're hoping that it is on the front end of a more robust budget development conversation ongoing.

We hope that you have an improved understanding of the county's debt capacity and affordability.

We're going to review and discuss the amendment year process schedule briefly.

That fourth bullet point I think is the beef of this meeting that we consider the county's needs, opportunities, and fiscal constraints and identify ways we can move forward together to address the community's capital needs while also considering the operational needs and support of our growing community.

We really hope that this is a WE conversation.

I wanted to just go over the agenda very quickly with you.

We want to start with a video, which I'll share some more with you about that in a moment.

providing video of partnerships and collaboration and passion.

We are also then moving on to some observations.

We had shared some information with you about the current CIP and that will be a time for your discussion of some observations that you have about the CIP.

Then we're going to have a conversation about capacity and affordability and that will be led by Bill Lettieri.

Bill will also lead the observations conversation, so he'll be the next one up after the video.

And then we're going to just touch very quickly on the amendment year schedule.

Staff's very familiar with it, but we want to make sure the board and school board are aware of the schedule coming up.

And then from 4-20 to 5, as Rosalind said, the meat of the conversation will be collaborative conversations, and we'll be moving you off the dais out into

areas in the room and then back to the dais so there'll be times for some conversations together in some small groups.

And then the way the schedule is is at 5 to 5.55 at the end we will have a conversation about the P3 and PPEA opportunities and then there'll be a meeting wrap-up.

Before I go too much further, I just want to mention one thing that time is going to be really tight.

We're going to have to move quickly from activity to activity because there's a lot we'd like to get in today.

So there'll be a lot of us watching the clock and hope that you will too.

So we'll be watching this clock very carefully as we go through the day.

Are there any questions or comments?

Okay, so I am going to toggle over to the video.

In introducing the video, this was just something recently that occurred.

The video is wonderful.

It was a very exciting opportunity at Willow Tree.

our chief county executive Jeff Richardson is here and Ron Gentry and Dave Shree from the Economic Development Authority are here and lots of county staff

On behalf of Albemarle County, I am delighted to be together with you all today in this iconic Albemarle County site to hear an economic development announcement from the government.

We're very excited about the realization of our dream for this historic manufacturing facility.

This use will connect recreational assets,

create urban vibrancy and bring people to the Rivanna River corridor.

Your company has committed to $12.3 million investment, adding 200 jobs to your company, adding 200 jobs to the Commonwealth of Virginia.

And this is something that is just so, so exciting.

So, Tobias, thank you for having us here today.

The support we've received from Albemarle County and the Albemarle County Board of Supergraduates has made this possible.

So, thank you to all of you.

We basically, we're a group of five or ten folks that wanted to prove that anything that can get built in San Francisco or New York, we can do right here.

and we were going to do it despite the fact that we were located in Central Virginia.

Over the last 10 years, what we've realized, it wasn't despite the fact it was because we were located here that we have been so successful.

These are communities people want to live in.

If we can create a great work environment, people aren't going to go to UVA and Virginia Tech and VCU and JMU and then go to New York.

Albemarle County sends a very warm welcome to Willetry.

We thank you for choosing to be the anchor for an exciting evolution here in the Woollen Mills.

You bring a large impact to our entire region when you choose to grow your workforce here in the community along with significant revenue you bring into our economy from all over the world.

We look forward to a productive partnership to achieve the corporate campus you envision and oh how beautiful it is.

Albemarle County and Albemarle County Economic Development Authority are pleased to provide tax revenue based financial support and workforce development funding to match the state incentives.

The county is also investing in infrastructure improvements in partnership with the property owner to maximize the public recreation, that bridge over the creek, and connectivity elements to the overall site redevelopment effort.

Thank you to Brian Roy for your patience

effort and flexibility in adapting this historical industrial complex into this wonderful corporate campus bringing past and future together.

I'm going to turn this over now to Mr. Bill Letari, who's going to lead you through some observations on the current CIP.

Thank you, Laurie.

Madam Chairs, board members, great to see you all.

We all appreciate very much this opportunity to get us all together to talk about a capital plan in particular.

But I do want to say it's just so exciting to see this kind of county participation in the private sector, as we've just seen.

And it's a good sort of a preview of the discussion we'll have a little later on in the discussion when we talk about P3s and PPEAs.

A good introduction, I think.

Our, of course, intent today was for this to be your conversation, your work session.

We're going to try to keep our comments very much to a limit so that you can spend the time talking.

We do have, and I thought it would be helpful, frankly, to provide a few introductory comments about our capital plan and the challenges we face moving forward, a little bit about our

AAA and how we work the capital plan, just for the benefit of all of you as you do proceed forward with your discussions and your talking, you'll have these thoughts.

So let me begin by basically saying as we work together to develop the capital plan over the five-year period, obviously one of the key drivers is our revenues.

and the projection of those revenues over time because clearly it drives the volume of work that we can do.

It also drives the changes as we go forward.

They are assumptions.

So as we've seen over time, those assumptions can change.

We have seen where our revenues have exceeded our projections and therefore enabling more projects to be done.

That certainly can happen over the next five years.

I think that our revenue projections have been relatively accurate over time.

We have done a good job.

We have a full revenue team that works together in looking at trends and economic situations to best guide us in how that looks.

So I think they've done a great job.

I think you also know when we built this plan over the next five years, we recognized that additional revenues, even beyond those from natural growth, would be needed to support the volume of projects.

And you all have given us direction that 4.2 cents, perhaps additional tax rate,

at a maximum would be incorporated into the plan.

We have done that.

So just so you know that this both includes the natural growth and the tax rate.

The second point is about our allocation to the capital plan.

I think this is an important point, too, that as a locality, you all have made a decision about the volume of your overall revenues of that pie, of how much to transfer into capital.

Historically, and in the current year, that number is about 9%.

And of course, that transfer is adjusted in future years by the amount of revenue growth that you achieve.

But it's consistent each year.

For the current fiscal year, that amount by formula amounts to about $26 million.

Now the $26 million is used both to pay debt service and to support new projects.

One might argue that the volume or the ratio of that $26 million that goes to debt service is pretty high.

Right now, of that $26 million, approximately $24 million goes to pay the debt service that we have outstanding at the moment.

So that's projects that already have been done or that debt we have already borrowed for.

So there's only a small amount going to really support new projects, new debt.

We have to be thoughtful about that, especially as we begin to urbanize and we find ourselves with more challenging needs for the capital program.

It's interesting, too, we have looked around the state to get some gauge as to how does that 9% compare.

And as it turns out, there are a number of localities that we've recently looked at.

Chesterfield, Ryko, Loudoun County.

These counties generally transfer more to capital than we do.

It's more than 9%.

It's more like 12 or 13%.

We might say that's not surprising because these are much more urban counties, perhaps, and they have more infrastructure needs.

But again, it's a gauge.

It's something we should look at, and I think maybe as we do urbanize further, we might want to consider that ratio.

Obviously, part of the capital fund is very debt-oriented, so our AAA rating makes a huge difference to us.

you know every year I have to go before the rating agencies before we do issue debt and I have to talk about the economics of the county but importantly they look at the capital program very carefully they want to know that the county board is

reliable and consistent about its funding of the capital program that we in fact transfer funds sufficient to maintain our current facilities and meet the growing needs of education and other needs in the community.

And we have been very successful in that regard.

But I think as Lori has indicated in our summary slide, there are many, many projects out there that we are not funding at this point that are before us create a real challenge.

The last thing I would say about AAA is that, again, it's quite important that we maintain that.

Even going to a AA plus would be, you know, maybe what they call 50 basis points adjustment.

It's about a half a percent.

And when you're talking about the volume of debt we have, that could mean hundreds of thousands of dollars a year in additional interest expense.

So it's important.

I'll then just make a couple of general comments about the program itself.

As you know, it supports about $212 million in capital projects.

Lori's chart shows how that's allocated generally.

It's about half education, about 40% government projects, then about 9%.

I also want to point out that this coming five years we're contemplating borrowing another $143 million to support the program.

While at the same time, during that five years, we will reduce our debt by paying debt down by about $100 million.

This is a net increase, obviously, but then so too is our resources that are going to the plan to support.

So again, these are just some general thoughts and observations that I would make as we contemplate where to go forward.

I hope that's helpful.

We'd maybe at this point welcome if we might go around the dais and invite you all to give us your observations and your thoughts.

The next slide I have talks just a little bit about concepts of capacity and affordability.

That won't take me much time, but I do want to

Let you know that that's coming up next.

Let me make sure I understand your question.

If we, are you saying if we... Across the line.

If we, if our AA was reduced to a AA+, that wouldn't increase capacity at all.

I was just going to ask, with the additional 4.2 cents being allocated to capital, would that change the 9 percent?

If we're increasing the 4.2 cents dedicated to capital, is that going to change the 9%?

Let me first say that the transfer to capital is based on an algorithm or a standard formula that we use each year.

I believe that the 9% that you've seen is both that transfer and increased by the 9% is happening in just that first year.

The 4.2 cent tax increase happens in later years.

And just the observation is that as Albemarle has transitioned, I don't think we're transitioning anymore.

We have transitioned from being a rural county to an urban county.

A lot of our practices that were developed when we were a rural county are still in practice.

Rick, we skipped over you.

The only comment I've made is I think Bill and Laurie did an outstanding job back in June 6.

As I've referenced, the mapping that they did about what the outstanding debt as a percentage of assessed property and debt service as percentage of revenues would be posed by $70 million referendum.

and obviously an $80 million referendum is a higher figure with a higher level of debt.

But the observation I made back in June was that compared to the AAA average at a $70 million borrowing, there were four occasions where the county's borrowing would exceed the

Triple A average.

And so going above 70 million would increase the likelihood that that number would move from three times to four times.

So maybe what you would be helpful is to explain to the school board

Thank you for your $10 to me to set you up for that.

Thanks, Bill.

I just have a couple very general comments.

As we go through this presentation and look at the facts and the data, it's going to be really obvious, I think to most people, why we're focusing on economic development and revenues, increasing our revenues.

We cannot continue to be a bedroom community.

and have the urbanization that's happening in the urban ring, whether it's in our older neighborhoods or as it affects our schools.

Economic development is really important.

Now, it's also important that we do it the right way.

I don't want to have to go into all of that, but I think people get it.

The other point that I would make is that I think I just forgot it.

That's exactly right, but I'm not running for president so it works.

I've never had one of those moments.

Now, just a point of clarification, Bill.

Those were Henrico and the counties that you mentioned that had up to 12% in their capital.

Were those all AAA bond-rated communities?

I believe so.

Well, parts of them are.

Enrico's pretty urban, but Louden has an enormous rural section that they're in the same argument with themselves that we are as well.

So having spent the last 11 years trying to understand Headroom and all that stuff, I am absolutely committed to the cautious approach and not putting ourselves at risk in any way with

approaching that magic line that the agencies find so important, only because things disappeared so fast in 2009 that it made our heads spin, and we just have to be something along.

As Diantha said, increasing the size of the pie is what my constituents have been arguing about for a long time and they have different ways to get there because some say, and just last week at one of the meetings, well, why don't we just have more money?

And I said, well, please understand how your neighbors will have to deal with whatever those increased costs are because it's such a wide range of ability.

to contribute among our citizenry.

So I just love the work that we've assigned Roger and JT to do and to go out there and save our future by helping our local businesses really become stronger.

And that will help.

I also will remember very carefully in 2009 when the budget was happening and Sally Thomas was arguing vociferously not to give up the capital transfer custom, which had been consistent for 15 years or more.

and used that money for operations because she said it took us 20 years to get here and it's going to be gone overnight and boy was she right because we're finally back almost to that magic 10% now but it took a whole lot of effort last spring to make that happen.

You know, I'm not sure I can answer that specifically.

We are projecting the revenues about somewhere between two and two and a half percent per year over that five-year period.

The generalization would be Dennis Ricker, who always said, look at the counties who have bigger populations and look at their tax rate.

It's a very clear correlation.

I don't have any questions.

I guess I will talk about my fears.

Is that what we're doing?

Observation of any sort.

Rising interest rates and possibly rising inflation.

has got me very concerned right now.

And I'm concerned about how that's going to affect our CIP and our borrowing right now.

The population increase does concern me.

We're at a healthy pace of about fourteen to fifteen hundred people every single year for many years now.

For quite a while it's been predicted, who knows, predictions are just that, that with the increased storms and flooding on our east coast that we're going to have more people moving this way to our lovely community.

I'll just express my fears for the future.

We saw the tax rate or the Fed raised the rate yesterday.

That's right.

Maybe one more this year.

We've had such lovely pleasant surprises of being below 5% for all these years, but I guess we're running out of time on that maybe.

Well, I guess it's more of an expectation or a hope for what this joint meeting could produce or what some outcomes of this joint meeting could be.

But I mean there's a couple political realities here.

I mean, one, there's going to be no political will to put our AAA status at risk.

That's just not going to happen.

and then two, based on the way the voting went this past budget of how we're going to allocate capital, there's a political reality of the six votes.

So if until the pie changes and grows, where the distribution of that money can help us, it's how do you get creative within those two political realities.

So it's either change the minds of those votes or figure out with what that vote limits how we can get creative in leveraging our assets to get further.

And that's where economic development, the P3, some of those things I think can come into play.

in a similar fashion the way the Bond Referendum a few years ago.

It didn't add money to our coffers.

It was just a different variation on a tool that was available and used in a way that made sense.

And everybody agreed it was a good way to go about it.

And it allowed us to pull forward things that would have taken years to get done.

So the P3 presents another one of those types of creative options that could potentially, not that it's going to necessarily add money or a huge amount of savings, but it could allow us to operate or use a tool in a way that brings some things forward so that we can get it done so we're not always chasing capacity issues or knocking out some of these projects.

So it's my hope that the school board members join us as the supervisors in this collective brainstorm of how do we accept the political reality.

You can either make efforts to change votes or look at the current boundary and say what can we do in a way that's different than what we've done over the last dozens and dozens of years.

to try to change the paradigm of how we get these things done within the reality that we're operating.

And that's where the energies have to go, in my opinion.

Okay, I think my question is sort of basically what Mr. Randolph was saying and also what Mr. Gallaway was saying.

Yes sir, and just in a few minutes I will share with you charts that talk about the various financial policies that we have defined here in the county that set those limits both for how much debt service that we can issue, which is a function of your revenues.

We don't allow it to go beyond 10% of our total revenues.

And then there's a limitation on how much total debt you can have.

and that's a function of your appraised value of real estate in the community.

In this case, 2% is our limit.

So if you have, let's just use $18 billion as a number of what the assessed value of all properties in the county might be, that would allow you to borrow as much as $360 million.

This just gives you a general idea based on those financial policies.

But again, I'll go through that with you a little bit.

And I also have a very well done chart that our finance folks and OMB folks have put together.

I totally understand where the Board of Supervisors members are coming from that a solution to this situation is growing the pie, economic development.

In a sense, and I could be accused of putting the cart before the horse, but I don't think I am.

I think the way you get academic development is to attract good job providers to the community.

And I think if you talk to the job providers who have come to this community, one of the key things that they look for in quality of life for their employees is an academic system that is top rated.

And so when you have an organization like Willow Tree come to this community and grow in this community, if our schools aren't top notch, they're not going to keep coming.

And so one of the, you know, I get the fact, hey, we have to have people come in so we can afford it, but you also have to have incredible schools in order to attract the business that you want.

and I hear what Mr. Gallaway is saying regarding you know you guys we want to look creatively we want to be innovative with due respect to my colleague I think the school board has been and I think that you know we if you look at what we did over the past two years we changed the paradigm the assumption was two or three years ago well we need a new high school

and a new high school was a hundred million dollar plus investment and the school board found a way to do something that I quite frankly think will be better than a high school for less than half that price and so it would have been easy for the school board to say look we need a new high school we're gonna have it we're gonna have this is how much it's gonna cost

That would have, quite frankly, been the easy thing to do, would have been the trusted thing to do, and the community would have gone, oh yeah, we need a new high school, because everybody kind of assumed that we did.

But we did challenge the status quo.

We put a lot of sweat equity.

Our staff worked their butts off.

and came up with an alternative that saved tens of millions of dollars.

And so I hear you, Mr. Geller, I totally get that, that we need to be creative, but I just want the Board of Supervisors to understand we've been there.

We're ahead of the race on that one.

And if there are other things that we can look at that we haven't done, God bless, I'll look at it.

I'll just respond.

It's not that I'm asking for you, that I think that the brainstorming or what you've done is not enough.

I'm saying to focus your energies onto the problem that we're dealing with, which is how to pay for those changed things.

I mean, the center's approach, I get it, both from an educational perspective, but then also from a cost perspective.

and then we witnessed what happened in the budget process.

So now the reality is how do we make that happen within those boundaries?

And having been a past school board member, your focus is on how do we make school operations work?

It really is up to the Board of Supervisors to go figure out how to budget it.

What I'm asking for is additional input in that endeavor.

How to help us be creative in figuring out how to pay for the need that you've brought forth and said that this is what you need to deliver quality education.

So I agree and don't dispute anything you've said.

I'm asking as one supervisor to go to the next step and help us try to figure out if you can, brainstorming it, not that you can, I know you can,

But it's a matter of saying that that helps us figure out how to pay for these educational needs.

And I'll speak to it later when we get to the P3s of how these, I think the centers are uniquely aligned.

I think Ned and I would both agree from the years that we spent on the school board, we really know how hard the school system and the school board and administration works to make every single penny count.

We get that and there is not a school system that I know of that has been more innovative.

around that work.

What I'm suggesting and I think what Ned is suggesting is that we really need as two boards to look creatively at a different way of trying to come up with solutions and that this last agenda item might be one of those ideas and we would like for you guys to help us in that brainstorming and thinking about how the school system and the county government can come together to do some things differently to accomplish all of our goals.

Welcome, Katrina.

Yes, yes.

Thank you.

So much of the conversation here really does focus on this issue of capacity and affordability.

I just offer a couple of thoughts about this.

There's so many different ways we can think about capacity and affordability.

This is just one I think about in the context of what you might be able to achieve in terms of volume of projects.

You know, capacity is really something that is responding to a fixed set of circumstances, whether it be your revenues.

We do project those over time.

to establish what we think we have to work with.

It also is influenced by our policies.

So as we just talked about the issues of how much debt are we limiting ourselves to to maintain our AAA.

How much debt service are we okay with issuing.

So as you put all these sort of parameters together it does define what your capacity is in terms of the number of projects you can do within those parameters given those assumptions.

That's the way we kind of think about it going forward there.

I've had legal limits here as another issue.

You know, you might know that cities, of course, are limited as to how much general obligation bonds they can distribute or issue.

Counties don't have that limitation.

And part of the reason is that, of course, to issue a GAO bond, you have to go to the public and ask for permission.

So that is really the gauge that allows you to make sure that you have an appropriate limit.

So that's the capacity issue.

You may have capacity, but not be able to afford to do it.

That's the other part, right?

So it's really how much can this community, based on its desires and its need, and its income levels and asset values, reasonably afford to support the capital program?

That, of course, is your decision.

That's what you all weigh in on.

very, very importantly.

And the other issues I got at earlier was this allocation between operations and capital.

If we could decide that there may be different ways of approaching operations that allows us to afford more toward capital, then that becomes an issue.

and clearly as we talk about economic development and so forth, hopefully that will increase our opportunity to afford to do more.

I hope that helps a little bit.

I do want to take just a moment to share with you a chart and a schedule that our staff has put together, which I think is both instructive in terms of talking about how we make decisions about capacity.

While you're clicking I will interrupt and ask everybody to please move up to your microphone or pull it right up to your face because people are calling in and saying they can't hear us very well.

We want to be sure to be auditory.

Let me quickly explain what's in front of you.

You are perhaps familiar with the two charts at the bottom of the page.

The one on the left is the debt service as a percent of revenues.

I hope you can see my cursor.

We have an established policy of 10 percent.

That's the red line.

That's our maximum.

We would never issue more debt such that our debt service would exceed 10 percent of our revenues.

That's a different number.

That's not borrowing, that's how much money they're putting in capital.

I got you, I got you.

Thank you.

So in this current scenario, these charts represent our adopted capital plan, the $212 million that it supports.

And as you can see, the blue line represents where, in fact, we are by way of actuals.

So it is only until we get to that year 22, fiscal year 22, that we approach or exceed

I would not look at this chart and be alarmed by it.

I would not be concerned about talking it through with the agencies, rating agencies.

I think that they could expect this to happen periodically.

The main thing is that we are trying to maintain a pretty good consistent performance level there.

The chart on your right represents the

Outstanding, total outstanding debt is a function of the appraised value of real estate in the county.

And here again, as I've mentioned, it's 2% as the max.

You can see that many of the localities and jurisdictions that are AAA are in the 1.3% range.

We are doing pretty well and have been doing well.

This particular program puts us a little bit above that.

The one thing I would say that I would caution us about is that

Our AAA lines here are a little different than other AAA's because we do include total revenues for schools and local governments.

Some of these localities are only looking at their local government fund balances.

So that makes, gives us a little bit more room, certainly from the perspective of the rating agencies.

They're very comfortable with where we've been and where we're projecting.

What's interesting about this chart is that

As we go into our work sessions and capital programs I could take this chart and for example in fiscal year 20 I can say suppose that we decide that

and I've just now realized that I was on scenario one, not the first step.

Here's where we are, okay?

If I decide and we talk about the notion of adding debt in fiscal year 20, I can raise this bar.

Let's suppose that we decided we were okay with issuing another $24 million in projects in that time frame.

Everything changes here.

We can see that our lines change.

The ratios are all adjusted automatically, and I can hide these and show you in terms of detail what does that really mean.

If I issue $24 million in additional debt, we're going to need additional resources over and above our current budget of $1.8 million in fiscal year 20, $1.8 million in 21, et cetera, for a total of $7.4 million in additional resources to support

additional capital projects of about $25 million over the five-year period.

So again, it's a wonderful tool that allows us to really look on the fly at different years, and we can adjust these things as we need to.

to see in real time exactly how this will be impacted.

The finance staff has put together a couple of scenarios, this one being the addition of $4.5 million over each of the five years for a total of $22 million in debt.

That would support an additional $24 million in projects, which is this line here.

They've also put together a scenario that says suppose we issued another $75 million over that five-year period.

What then would that look like?

And here you can see, of course, that both of our ratios are very much approaching our financial policy guidelines.

So again, it's a tool.

It's one that as we go forward with our capital planning in the fall again, I will certainly use so that we can see real time what impacts this might have on our AAA rating and our financial health.

Quick question just for clarification.

I think I heard you say that some of these AAA communities are just using general government.

They're just looking at general government.

Does that mean they can separate the two and be more easily put money into the schools and keep their AAA?

But Virginia is.

So that's why my question is.

I understand that.

I'm just asking for our purposes here.

And, you know, I'm not sure I can answer that fully today, Liz, but I'd be happy to follow up with you on that.

Great.

Thank you.

It could be Liz that there are bigger school districts, like I would suspect Virginia Beach, for example, and some of the counties to the north in Nova, that they may have them separated perhaps for

making it easier for them in terms of financing.

I'm not trying to get into a big discussion here because I know we're limited on our time.

It doesn't make a difference in terms of percentage of revenues because you have the additional revenue of the schools included too as well as, but I would wonder if it might make a difference as a percentage of property.

Looking at the chart, do you happen to know what the delta is between the top and the bottom?

But that's the average.

And ours looks like it's just slightly above six, which suggests that there are other communities that are probably above nine.

I don't.

I understand.

So, you know, a one or two percent difference.

It seems to me that you're wondering what the average deviation around that standard is.

Because, I mean, that's sort of an important number to know.

It's sort of like, okay, if 8%, I'm making the number up, if 8% is the average and the top is 9% and the bottom is 7%, that's very different than 8% being the average and it's 12 and, you see what I'm saying?

And let me just say this, I think these charts are really helpful and useful and it's very important for us to demonstrate how we're doing over time with rating agencies.

But our capital and debt programs are only a part of what generates our AAA, right?

It has a lot to do as well with our community, the economics of our community, the stability of our

So there are other factors, let's be clear.

But again, this is an important factor.

It's not an exact science.

We just tried to demonstrate that we have policies that we try to adhere to and in general maintain those.

I didn't get the two terms that you used.

Sure, I will.

I will at least demonstrate how they report their fund balance differently than we do and how those ratios may impact what rating agencies see.

And while she's coming up, so the math of the 10% or 10 times multiplier, that $36 million in cash to service a $360 million debt is where, I mean, that's one of those things burned into my brain.

So that's still current as far as the way the Fed is working now and that kind of thing.

That extra $20 million, we have to make sure we have that extra $2 million to pay the mortgage on it.

Thank you.

All right, Lori.

Development schedule.

Very good.

It's really great.

This is just going to take a moment.

I just wanted to share with you, this is something that staff works on every year as we do the CIP.

Our CIP, as you know, is a five-year plan.

And every other year we do something called an amendment year.

For some of you that have been in our oversight committee meetings, you understand the amendment year is a little bit different than the full year.

So this year is an amendment year so what we're doing is right now all the requests have already come in to the OMB office from both schools and local government and there's a process that we go and you may be familiar with this chart our process basically starts in August and ends in April

I highlighted just a couple blue areas on this chart because that's the ones I wanted to bring to your attention today.

So the one on the left top says the departments and agencies have turned in their requests.

The requests are for urgent things, emergencies, things that need funding beginning in 2020 to keep a core service going or meet a legal mandate or something that we weren't aware of.

So those are the type of projects we look at for the first year in this amendment year.

The other thing I wanted to bring to your attention, we had a dual track going on this particular version of our flow chart.

The track on the bottom, you can see in the yellow box, that's today, that's this joint meeting we're having.

As you recall, we put that meeting ahead of time.

We had a lot of conversations at the end of the process last year, and that's why you all chose to have this meeting a little earlier, to start talking earlier about the CIP as a five-year plan.

and then you can see that the next time that you'll be together is in November on November 5th as the two boards working together is when we go into our sessions that are called five-year planning or long-range planning.

What we've done in the past is we really focus those on the operating side of our house and so this year we're not sure how far we can get but we need to keep thinking about the CIP as a five-year plan.

so that not just having conversations about your operating five-year plans, but also think a little bit about the CIP again earlier in the process.

So we're going to start incorporating that in somewhat in this fall.

And then you can see the other thing that we're doing is some of these boxes are a little smaller than before.

We're still using the same process, but we're going to have a little, not as many meetings.

So for example, the oversight committee, we're suggesting not four meetings, I believe, or how many we had last year, but maybe two.

One of the things we'd like to do this year is think about our process for the future and think about maybe streamlining it.

It's really an elaborate process.

We have a lot of pieces going on, so part of what we want to have conversations with the oversight and others this year is maybe ways we can streamline the process for next year.

So just food for thought as we get ready for the full CIP year when we look at all the needs of the community that maybe we think about this process itself and see is there anything we want to do to streamline it.

We may like it just the way it is, but we may have this opportunity this year to look at our process for future years.

And so this is also a time when we have an amendment year to talk a little bit more about policy and a little bit more about these types of meetings about long-range planning and ways to move forward.

It was just a moment in time.

I just wanted to mention this so that you're aware of it as we move into this next budget year, how we're starting off the CIP this year.

So that's it.

It wasn't a long conversation.

What I want to do, I think the next slide, unless there's questions.

Is there questions about this?

This is actually a time for a break.

You can take the break or not.

We're going to move into the next part of the session, which is some breakout conversations that are going to be held, and then there's going to be time to come back and talk about it as a group.

All right, thank you very much.

Please pick this up.

This will tell you where to go first.

Are you going to help us?

We're going to start at the dais.

I got it.

Okay.

All right, so the next, we heard very clearly from several of you that you wanted lots of opportunities for discussion and opportunities to have conversations with each other.

So this next section, next 40, 45 minutes is intended to do that to provide some facilitated small group discussion.

We're going to use World Cafe Protocol.

Some of you may be familiar with it.

We had a very successful meeting in August through key leadership on the school side and local gov side, and they were hoping to replicate that success here.

At that meeting, John McColkin with our HR staff did a great job facilitating, so we've asked him back again to facilitate this portion.

Thank you.

Good afternoon, thank you.

So as Rosalind mentioned, we had a very successful meeting earlier this summer with the superintendent and county executive's leadership teams.

And for part of that meeting, which we held offsite at the Northside Library, we had some small group discussion using

The World Cafe Protocol, as Rosalind mentioned, and World Cafe Protocol is a very simple but effective format for facilitating conversation and everyone at that meeting felt it was very productive to have some time to meet together in small groups and talk to people that they don't normally get to talk to, that they don't work with every day, and just exchange ideas and so we wanted to build on the success of that experience by giving you the chance to do that.

And that's really what the World Cafe method is about.

It's creating conversation around important questions in service of real work.

And we thought that was a really appropriate way of accomplishing one of today's goals of the meeting, which is considering the county's needs, opportunities, and fiscal constraints, identify ways we can move forward together to address the community's capital needs while also considering operational needs in support of our growing community.

So to give you just a little bit of an idea of what the World Cafe is about, there's several components of it.

One of them is setting, and as you can see we've set up three cafe tables here today for you.

Now if we were doing this for real, we'd probably have like some checkered tablecloths and flowers and maybe a cappuccino machine, but we thought that might be a little much for Lane Auditorium.

So we scaled that part back, but we have all the other components, which include, again, talking in small groups.

So you're going to be in groups of four, two members of each board at each table.

Several rounds of discussion centered on important questions.

You're going to be moving from table to table, so you get a chance to get up and move around a little bit, and the groups will change each time.

And then there will be time to share out at the end.

So, as you can see, you've got your menu, cafe menus in front of you, and they have the schedule for each of the rounds to tell you which table to go to A, B, and C. There's one discussion question for each round.

The sessions are fairly short, they're only going to be about eight minutes, and I'll be keeping time and letting you know when it's time to go to the next round.

Each table has a facilitator.

We have Louise Wyatt over at table A from the county executive's office.

Table B is going to be Jamie Gellner from strategic planning in the schools division.

And table C is Claire Kaiser, assistant superintendent.

So they'll be facilitating and taking notes.

At the end of round one you'll move on to round two and at the very beginning of round two the facilitator will briefly recap the previous session's discussion and then you'll move on to discussing that question.

You'll see on your menu you've got the discussion questions there and there's also a place for you to take notes or write down ideas, draw, scribble, doodle, whatever you like.

That's another part of the cafe model.

You're encouraged to draw and connect ideas and just have fun.

I encourage you to do that as well.

We'll do that for round two and then for round three which is the final discussion round and then at the end of round three I'll ask for each of the groups to pick a spokesperson that will sort of lead the discussion primarily for round four which is the sharing out part.

That's the final component and you'll return back to your seats at the dais for that and the three spokespeople will lead that discussion but of course all of you are welcome to contribute ideas as well.

Sound good?

Okay, so we're going to go ahead and start with round one.

We have about two minutes left in round one.

We're going to need to start moving on to round two.

I'm going to wrap up this last comment.

All right, we need to move on to round two.

You can check your menu for your next table assignment.

All right, if the facilitators will just very, very briefly recap any high points from the previous round and then move on to the round two question.

We have about two minutes left in round two.

.

.

It could be a joint effort, each one just sort of chime in.

Okay, all right.

I guess so, because everyone is mobilized along the way, I don't know.

I think he's gonna say something about that.

I think he's gonna say something about that.

I think what?

Say, Olivia.

All right, thank you all.

That was great.

I guess I'll jump in.

One of the things we talked about in the last group where I was, well actually the last two groups, was how our two boards really needed to work on trust.

and working more closely together so that we have a clearer idea of what the other board is, what their goals and vision might be.

It's our job to balance a budget and I thought it was a nice phrase or statement for the Board of Supervisors not to be irritated by the ask.

That's a great way to put it.

And that irritation sometimes is what we see play out in our advocacy roles when we're talking individual.

There's board, there's the board, when we got into our guidelines of governance, right, there's the voice of the boards, then there's the voice of the members.

It was, but that's okay.

I was trying to.

I will say though that one good idea I think that came out of the group discussion was that the school division presents, I don't know if it's quarterly exactly right now, but a board to board report to the board of supervisors.

That maybe should be a two-way effort and maybe the board of supervisors could be presenting a board to board report to the school board.

I think that's kind of an interesting thought

The way I expressed it was I felt like I didn't really know what you were doing.

Yeah.

And felt that partially that's my negligence for not seeking out that information.

It might be a longer report.

Well I think Mr. Randolph made a good point about where the two points, the boards, the two boards collective conversation about CIP and then the timing of when those conversations should happen and I can let

Yeah, my feeling is having served on that committee in the past, we have a collective of people in the CIP process that are there and there needs to be an opportunity for an earlier dialogue between school board and the board of supervisors because of the compelling nature

of the high degree of the CIP costs that are associated in the school division and to get that early in the process so that when we get into the regular CIP meetings, we're already aware of what the school division is going to be proposing and that we can begin as a board to talk about that

rather than waiting later on.

And something we've talked about earlier with Laurie is to try to get that CIP in the budget discussion moved up.

Not it be the caboose at the end of the train, but have that moved up.

That will also facilitate, I think, trust building because then there's communication on both sides.

Everyone's aware of what's coming down the pike.

Part of the frustration that arose, I think, this spring as you look back,

with maybe rose colored glasses is because of the fact that so many things developed right at the end and all of a sudden there was a feeling of, as David eloquently said, this is our needs bus.

Base budget.

We are advocating for this.

We need this for our schools.

And an explanation is, Kate, you were cited frequently in the press saying, yeah, but we're not going with a $150 million high school.

We're giving you a value proposition here.

But the problem was, by the time the board had really looked at that,

The thing I found interesting, Mr. Randolph said that

It's my voice, I've got a cold, I apologize.

The thing that I thought Mr. Randolph said that was very, it actually was very important to me was, and what I heard him say is that the Board of Supervisors felt a little bit like Charlie Brown and the school board had the football and yanked it away.

And I thought that was very interesting because that's exactly how the school board felt.

and so what that tells me is it was absolutely a lack of communication that should have taken place in October, November.

We both got to the point of kicking the football in April and the football wasn't there.

And so I think it is a matter of communication earlier on with an expectation of what is the reasonable expectation.

To be fair to the school board, your vote on the centers didn't occur until December, if I remember correctly.

You didn't decide how you wanted to proceed, and it wasn't a capital improvement discussion.

I mean, you were discussing education of your high school students.

you made a you made a philosophical vote and it had it did have a dynamic impact on your CIP request but by the time then you go to figure out okay what does this decision mean for our dollars we were already two months in probably I mean you do it quickly because it was part of the superintendent's request but I mean that had to be turned around a couple of weeks so

I guess we did have a hundred and twenty million dollar placeholder in the approved CIP and we came in a lot less than that I mean so how exactly we were thinking through how to

address the learning environment of our 4,000 high school students, we really did take to heart, I mean, not only our needs, but also the county's needs in trying to keep the overall budget down.

So we had a placeholder in the CIP from the beginning, and we came in a lot, lot less than that.

clearly we didn't do a good job communicating.

And I think it is a little difficult for the, I recognize that we feel like we need the information and maybe the cost earlier.

Having said that, the earlier we require it, the harder it is for the school division to really give us accurate information.

So you sort of get into that because construction and design work so I really appreciate the fact that it's sometimes hard for the school division to give us the information as early as we would like it when we're talking about hard numbers and then we can't be so critical when they come back and say well wait a minute

I guess it's timing is what I'm...

It's indicia though that the school board and the board of supervisors are still in the position of playing catch-up, which is why we're being reactive.

We should be planning 10 years out.

And I mean in an ideal world that's what we would be doing to be saying you know what hey look we would like to have this 10 years from now this is what we'd like to have from a practical standpoint at this point.

We're like, we really need this right now.

So I want to be mindful of the time and make sure that we have plenty of time for the next couple of agenda items.

But I want to thank you all very much for your active participation in this exercise.

And also thank you to our facilitators, Claire, Louise, and Dean.

And with that, we're going to move on to the next section.

A couple of things that we heard earlier today involve public-private partnerships.

I just want to thank you for setting this up.

Good afternoon again, Bill O'Leary, Chief Financial Officer.

Good to see you all.

So, first of all, thank you very much for this opportunity again to follow that discussion, a good discussion we have this afternoon about the capital program, and clearly

I think we're together on this notion that we have challenges before us as related to capacity and perhaps that some of these discussions about delivery systems and different models could help us to address some of those challenges.

So we're excited to talk about it today.

I am joined today in this presentation by Roger Johnson, of course, our Director of Economic Development.

and certainly as the county begins to engage the private sector, perhaps in partnerships similar to Willetry and other programs, Roger and I work very closely together, obviously in working those kind of arrangements.

I just want to say I've had really pleasure to work with Roger these last few months.

I think the county is very, very fortunate to have someone with his background and skill sets to help guide us in many of these projects.

So our goal today

Having you all together was to really go through in a general way a discussion about what P3s are, what PPEAs are.

I'm going to turn it over to Roger to talk about P3s and then I'll come back and do a piece on the PPEAs.

I do want to make a couple of general comments.

And again, we've been talking about this this afternoon.

It is an evolving environment that we're in.

I think that we're seeing with urbanization a need for greater infrastructure needs.

I think, too, as we contemplate the kinds of projects that we may want to be involved in, whether they be town centers or partnerships with private sector,

housing and walkable communities where we may even have educational components to this, that these alternative delivery methods or models begin to offer some opportunities for us that I think that are worth considering.

We're not alone.

Governments throughout the state are utilizing these methods.

So it's widespread.

There's obviously many more than 100 projects that are already happening in the state or have happened.

So it is something that the legislators have realized is needed for our communities to move into this room.

So again, we're going to talk about public-private partnerships and PPEAs.

I do want to say generally that these methods often do offer very innovative approaches to projects.

Sometimes there are real efficiencies that can be gained, value added to community projects.

Sometimes there are real great opportunities.

But it also involves a shift in the way costs are distributed.

Sometimes the cost may be distributed back to the locality or to the partnership, depending on the particulars of the arrangement.

Control is often different.

We're used to the current method or delivery method for projects that we really control from day one.

We control the full design project, we hire the designer, we hire the builder.

Partnerships like this are sometimes different in that regard.

You're really shifting some of that control to the partner, depending again on the nature of the environment.

And, of course, risks are different.

So, um,

Let me mention too that there are, I don't think these methods apply to all projects and we think that there are perhaps candidates of projects that would serve us best.

Those would involve where you have multiple owners, for example, or if you have developers that are coming together or trying to bring owners together with a public body and all trying to work out a project together.

Those are very sophisticated, usually larger projects lend themselves to these kinds of projects.

Mixed use projects are another example.

And certainly, Rajo will speak to some of that.

Projects needing to be expedited.

This is important because one of the things that a PPEA does, it allows you to shift from the standard design bid build to a design build program or model.

And there's where the team is both designing and building.

And I will say that's what we use with a Rio grade separated intersection.

And then, of course, when there's a need for real innovation, and I don't mean that to say that we're not good innovators, but sometimes there are design contractor teams out there around the country that really bring very unique, very innovative design systems or programs that we could take advantage of.

And this method, these methods do allow you to immediately engage those kind of people, to take those kinds of proposals and then act on it.

So with that, I'm going to turn it over to Roger.

Madam Chairs, members of the boards, my name is Roger Johnson.

I work in economic development.

I'm going to talk to you a little bit about public-private partnerships, but first I'd like to thank my colleague, Bill Lotteri, for those kind words.

The feelings are mutual.

It is an agreement between a government agency and a private sector company.

They're often used and can be used to finance, build, operate public transportations, parks, parking decks, convention centers, and perhaps schools.

Again, it's an agreement between public agency and the private sector.

A lot of people use public-private partnerships.

They often use those to allow a project to be completed sooner than otherwise could be, or when there's a lack of ability to get the project done, sometimes a public-private

partnership makes it a possibility altogether.

So I'm going to spend just a minute talking about some examples, how other communities have used those, and then I'll turn it back over to Bill so he can take you through PPEAs, which is a form of public privacy.

I work for the city of Wilmington, North Carolina.

Please indulge me board members.

I know you've seen this example before.

In the top left-hand corner, Wilmington was facing an issue where the parking structure in the middle of their downtown area was at the end of its useful life.

It was time to determine what would happen in the future.

The city decided to solicit a public-private partner after having community input.

And you'll see in the bottom left-hand corner of the picture what the community wanted.

And what you can't tell is there's actually a parking deck in that particular building.

They wanted retail on the ground floor, they wanted some community gathering space, and they wanted to connect with some existing parks.

After having eight solicitations in the top right-hand corner, you'll see what's currently being constructed in the center of downtown Wilmington, which includes 171 residential units, 32,000 square feet of retail space, a large parking deck, and connectivity and space for the community.

Here is an example of where a community took a problem and turned it into an asset.

So what's going on around the state of Virginia?

I'll share some examples with you.

City of Richmond was struggling with parking in their downtown area.

They used the building that you see in the top left hand corner to help finance a parking deck.

They used the synthetic TIF, meaning the incremental property taxes that was a result of this building was used to help finance the deck.

In the bottom left-hand corner, Norfolk needed some community gathering space in their downtown area.

They did the same synthetic TIF type structure where they used the building that you see to increase property tax revenue and help offset the cost of meeting space.

In the top right-hand corner, you'll see a picture of an apprentice school in Newport News.

They have a large shipbuilding

Program, and they needed additional space to teach apprentices how to build ships.

They used tax increment financing to help offset the cost of the apprentice school.

This was a much larger public-private partnership, which included schools and other systems, but their problem was a little different than the other examples.

And in the bottom right-hand corner, Roanoke wanted a hotel in its center city.

They didn't necessarily provide financing, but they did have an existing parking structure.

They made a special arrangement to use the parking

So these are examples of public-private partnerships in Virginia where communities had unique problems and turned them into innovative solutions.

There's a different type of PPE and it's called a PPEA and it's special legislation here in Virginia that Bill's going to walk you through.

But before we get to that, I just want to give you an example of what one of those may look like and then Bill will walk you through that.

What you see here is a picture of how Wise County built two public schools using a PPEA and you can see the pictures as the results.

So back in 2002, approximately, the state allowed for PPAs to be available to localities.

And as the name implies, actually, it was principally about education facilities.

and I think in large part it came about as a result of so many localities having frequently problems with the design-bid-build process.

And so this enabled them to look at a delivery method that is more expedited that allows for this design-build program to go forward.

And as this chart illustrates in the design-build scenario,

What happens is that the design construction team works together and they produce a series of designs at a certain phase that allows the construction actually to proceed almost immediately or very soon such that they can continue with the design process and in total shorten the length of the project.

That means that you get your facility sooner and often times it could mean savings and money if in fact time is of essence.

So that just illustrates, now moving to the design build is only one form of a PPA, it could take other forms.

It could be a situation where there's not just a design build but perhaps where there could be a design build maintained or a lease back arrangement and some other more sophisticated models.

But the essence of it is that it does allow this different form of delivery system.

By the way, I had nothing to do with this slide graphic.

It was later in 2009 actually that the PPA and its popularity in the state realized that it could really apply to all kinds of public type facilities, so they expanded the definition to include

Public safety facilities, utility or telecommunication infrastructure might be applicable to our broadband utility, for example.

Recreational facilities, technology infrastructure, even libraries, anything that serves a public purpose is appropriate for use for the PPEA.

And again, what you're able to do here is by virtue of adopting an ordinance

It allows you to receive both solicited or unsolicited proposals.

So we could put out there that, you know, we'd really like to think about building a specialty high school in such and such a location.

Or we'd like to renovate a library and create some other things that might happen in a broad sense and then just let the proposals come to us.

It's not for everyone and it's not for all projects as I mentioned earlier.

And it's interesting, it brings me back to six or seven years ago.

I think I was before this board talking about these things.

And at the time, I think we decided there just weren't the size projects or the nature of projects that lent ourselves to wanting to go down that route.

Because one of the things I'll say is they're not simple.

They're complex arrangements.

You have to do things within the locality to be able to receive these proposals, to evaluate them, and to show that there's real value in moving forward.

A few pros are, as I've mentioned, it does invite creativity.

It often saves time.

If you have an urgent project you need to get out, it does shift the risk that we are used to so often back to the team, if you will.

And often these programs and proposals involve, you know, turnkey projects, so they take care of the management of it and so forth, so our people would be able to do other work.

On the con side, they are complex agreements.

So, you know, often you really, it needs to be worthwhile.

It needs to be a big project.

It needs to bring synergies to what we're trying to do to make it worthwhile.

There is often less control over specifics of the project.

We'll usually define what the concept just needs to be.

We won't get so involved in each and every detail.

There often is reduced transparency.

You don't always know exactly what it is you're paying for because those are not always made available to us.

Now again, the way you structure these agreements can differ and you could even demand for some of this information depending upon how important it is.

I don't think, as a practical matter, it is reasonable for doing small projects.

Fire Station on a county-owned property.

Pretty straightforward.

I'm not sure we would go this route.

Or other more creative or complex projects.

Bill, is there any evidence that any counties have moved to performance measures and thereby they've actually been able to, yes, have less control, but they have control within the constrictions of the performance measures?

Yes.

Absolutely do that.

And in fact, you know, the guidelines that are required for us to establish

set forth a real careful metrics about how do you evaluate these projects?

How can you show definitively that they are of value to the organization to go that route rather than some other route?

I know that the reason why I ask is that I know that the state passed, gave communities the ability to do PPTs for transportation

So if you were all agreeable that at least want to think about this, then the two steps that are necessary is a formal adoption of an ordinance that allows for it to happen, which would happen at the Board of Supervisors.

And with that would come

It would involve a good deal of staff time.

I think that if you were inclined in this direction, my recommendation would be that we come back to you with more of a specific outline, just what it is that it would take for us to do this.

I think just following on what Liz said, I mean, I think we're all thinking about program evaluations.

You know, how do these work?

And my interest, of course, is specifically with schools.

Of the 80 projects that have been done in Virginia, how many involve schools?

Are schools ever part of a mixed-use PPP3 or PPEA?

and how has that worked?

I mean, because a lot of our school projects are small additions.

I mean, our high school project is bigger, but a lot of our projects probably

wouldn't meet the size test that you just talked about unless it was part of a mixed-use sort of thing, like we might conceive of our high school centers or something like that.

And if there's not a lot of information on the schools, and I'm sure there's some, but if there's not a lot I'd like to add to that, any other PPEAs.

And as I said before, I'm wondering if there's been a Jaylark study since it's ten years out, since the act was passed.

I would like to pose the question to the school board members if in fact

JALAC study was positive about using PPEA and lessons learned would be things that could certainly guide us.

But would the school board look at an opportunity whereby instead of committing to two learning centers with the associated operational costs and busing costs, which are hidden costs in the budget,

Which you're well aware of and those costs continue to go up, at least the price of gasoline currently.

Then would you all, how would you all react if in fact a PPEA scenario arose whereby looking at a high school

configured perhaps in a P3 location, for example, hypothetically, a Rio 29 location area.

where there was in addition a commitment from the county to a regional transportation partnership operating as a center within that location which could potentially cut down on some busing costs

because students could actually take the transportation available for all citizens.

Well I think we haven't, obviously we'd need more information.

I think the school board would be committed to listening to all good ideas.

but as my colleagues, Diantha and Ned know, I mean where we put schools put pressures obviously on our feeder patterns and all of that so I mean my colleagues can say yes or no but I think we need more, I would need more information conceptually the idea that I mean if we're making the claim as Mr. Oberg did and I agree that we're part of the economic engine for the community I think it would be

I think the question sort of gets at would the school board be willing and open to look at new information and a new way of doing things.

Would you be willing and open to that?

not to commit to something right now, but we're asking, we're not going to get where we need to go if we continue to do the same thing the same way.

And I think what Rick is getting at is, is the school board willing to at least look at and open to thinking about the different way of working with us to get projects done?

I think part of my commitment, part of my frustration and perhaps poor communication in our last round was that it seemed that virtually, it seemed to me that the school

The Board of Supervisors decision was based solely on capacity when we tried to articulate that we had other needs for an improved learning environment and we needed to address that throughout the community.

So if we're talking about PPE

whatever, P3 approach, mixed development, deal with our capacity needs and transportation.

All I'm saying is, would the school board be willing to look at a different way?

Diantha, in response to your question,

When we went to the center model, part of our going to the center model was the intention for our high school students to be more engaged outside the classroom.

And so that becomes a center close to, just say we're doing a biomedical center, and we have a partnership with a biomedical company

You know, getting our students engaged in the real world, that's part of the center case.

We don't want our kids to be isolated.

We want our kids to be engaged with lots of opportunities to interact with the community around them.

So, speaking for myself, I think that it's logical for the high school center to be looked at that as a possibility.

Second question is dealing with transportation.

And I would remind everybody that we have now a regional transit partnership with the city and with the University of Virginia and at the table with that partnership is Jim Foley from the school division as well as the person who represents the city school division.

Piling on with that, one of the things that came up at a recent transit meeting from Mr. Foley was that the state law requires that the school department transport the children from home to school.

So that may be something we need to go to Richmond and try to get dispensation for in order for us to be able to use public transit as the city does for our school transportation.

But I would say that there's nothing that precludes your students and internships from moving during the day from one area to the other to businesses.

So there are lots of

Speaking for myself, as Steve said, and only myself, I think we would be wide open.

That's what we just got through doing on the last project.

And we had, to Steve's point, been looking at ways to incorporate businesses either on the campus with the center or affiliated with the building.

I will say I think the school division has always been very forward-looking and innovative.

You have to understand it.

You've got to learn it.

I mean, it's not a silver bullet, but PPEAs and PPEAs are being utilized by other localities all over the state, right?

We haven't been using them, so they're new to us.

and it's contingent on us to understand it, one, so that one can analyze it against our other options.

Because it's not a silver bullet, it's just a different tool to use, just like the bond referendum was.

So we have to understand it before you can even figure out how it works for you and analyze the cost-benefit analysis of any approach.

But once you do that, it's more than just being open to somebody bringing something to you.

If you want a partnership, you got to go ask for the partnership and say we're open to hearing about this.

The PPEA was specifically set up that said you could basically do any public venture provided.

It cuts down on costs, time, operational efficiencies.

Now we can debate that, I think.

It may add to cost in one area and decrease it in another and it could balance out.

You've got to be very careful when you make statements about these things because I'm still learning it.

I'm in no way an expert and I'm not ready to start saying for sure.

But I do know what the act in 2002 passed and what it said that it could do, right?

But a P3 is a very different animal than the PPEA.

I don't know, Virginia Beaches High School, that's one of the ones that was provided to me, was built through a PPEA.

A P3 is a different tool.

Those two things have to be clearly understood what they are and what they can do for us.

and then our whole Rio 29 small area plan is speaking out to the development community and going this is what we would like to see.

It's a change in code, it's a change in zoning, it's a change in process, but it's saying bring it forward, this is what we want.

And what we're trying to get at or what I would like to challenge us to get at in the education side is that we do the same thing and that's why I think these centerpieces are precisely set up for that.

because a P3, when you start thinking of cost, if I'm a developer, now I'm going to brainstorm out loud, and I can come into a Rio 29 small area plan and go, well, this is what the government wants, and I can envision a facility that allows me from a business perspective to provide a place where a high school center, not a school, can be provided, that becomes a very different cost-benefit analysis on their end that we could benefit from.

and we have to understand how that can work to do the value for money versus a bond referendum versus our tried and true process that we've used to say is does that work but we it's also very important not just for the supervisors but for the school board to say to that development community we are interested in what you your ideas are.

They make it a very clean point about unsolicited proposals, but an unsolicited proposal can only be initiated by us saying we are interested in what your ideas are.

When we were doing the Rio 29s, Rick will have to remind me, I forget the group, but we were asked on more than one occasion if we were open to getting rezoning applications and to re-emphasize that because of all the proffer stuff.

it was just us publicly saying it and until you do that it doesn't encourage people wanting to come forward and I'm making it very clear to the Economic Development Office that they should be thinking of public education and that that's where I'm at but it's a different for this when a school board member is out there doing the same thing so that

Ned, to your point, and I would ask you and Bill and I'm forgetting your first name.

Roger.

Roger, thank you.

about P3s?

Just some thoughts.

I think that the purpose of our discussion today was to introduce you generally to the concepts.

I think that as we entertain doing this, it's about setting ourselves up such that we can then have those meaningful conversations.

We think about doing a town center.

We think about

Engaging a developer.

They want to know that we're ready to go, that we've established the ordinance.

We can actually receive their proposals and go through the process.

It doesn't just apply to education.

It may be strictly a public thing that we're trying to do.

So again, it's not making the decision to do it.

It does set us up to receive and to evaluate these programs.

And one, the complexity of the analysis is in the actual contract.

So to compare what five others have done and decide if it works for us isn't exactly the right way to do it.

So it doesn't really matter how many others have been done because the devil's in the details of your contract for your community.

So while we can learn stuff, I'm not saying it's a futile exercise,

Ned, my concern is, I mean, I'm sort of not quite where Steve and Jonna were, honestly.

I want to know more about it.

I don't know enough about it to say yes, I'm open to that.

I'm perfectly willing to learn about it.

Lord knows, I study anything I can get my hands on, but

I know, Diantha, it wasn't yours, but that's kind of what I heard from Ned.

He wanted more of a strong commitment.

And I get that.

You want us to put it out there to the community saying, hey look, so that people will come to us.

That's at the end of the ordinance process, though, is what I'm saying.

I'm asking that we recognize that there are more tools than we've been utilizing.

That's what I want commitment to.

Whether you want to do it an individual project is a different question.

And we should take some time to learn about them and figure them out as two boards that doesn't have to take an enormous amount of time, to be honest with you, but to be open to learning about these new tools so that we can move forward with the projects that both of our boards are interested in.

So I'm okay with learning about it.

I'm always okay about learning about anything.

I would say that the devil's

the devil is not always just in the details of that contract because as you pointed out there's a lack of transparency and that I want to find out more about whether we have performance standards or what's allowed I know in some of the other things that we've done and we've approved I've been uncomfortable about the lack of transparency quite frankly and I would have liked more process to those to those decisions

and so I need to know more about it and that's and I think it's important to see how other communities have done it not necessarily because everyone is the same but they may have similar problems that are hard to overcome

and this board or the school board might have problems with those issues.

I think that or I hear a little bit of a tendency to say oh this is a new way of doing things and it's exciting and it's great and I certainly offer looking into it more on the one hand you said 80 communities have I don't think you said completed projects you just said they've applied for them or they've got an authorization so

I think it's more like a couple of handfuls of projects that have actually been accomplished and in that same time thousands of private business economic development projects have been going on.

We have a pretty small economic development department and there is so much going on right now.

Almost every piece of land on 29 North is in play and people are trying to do something.

We have more permits being requested than any time in Albemarle's history.

We have a huge economic development

I think looking for the classic low-hanging fruit and trying to find some of the good projects that are coming up, the incubators at UVA,

you know the entrepreneurs here in our community there's all kinds of educational and biotech and medical businesses that are getting started here and supporting them is is a good way to move into economic development and the p3s is something we should you know keep on top of and be aware of but not have this sense that this is some sort of magic bullet for funding schools or funding a

an economic development program.

Going back to the original question, I think that we really should investigate it because it would help the school system.

You know, just another comment I think I would offer is that, you know, if we're talking about moving forward and doing kinds of projects we've always been doing, you know, school additions, fire stations, and the like, I'm not sure I'd be so inclined to be suggesting we run out and do P3s.

I think this offers, though,

just an opportunity just to really think differently about how we might pull together you know private sector and us and do something really different creative and unless and until you adopt the ordinance and set yourself up to do that you'll never know you don't have to do the project you know but they'll come to you you'll be able to evaluate them and you may say wow this is this is a wonderful opportunity or you may say

We just don't want to do it.

You can pick and choose.

But I think we're at a different place as a community where these kinds of projects and opportunities might be something we want to be thinking about.

So I think it might be worthwhile to go through that next step.

of maybe zeroing in a little bit more on what does this really mean for us?

You know, what might be some opportunities that we could think about?

What is it going to take for us to adopt this ordinance and set up this procedure?

And I do think it's really good when we hear this information for us to hear it together at the same time.

I really do.

So you can start scheduling another joint meeting.

Well, I'm just saying because that avoids the disconnect that we have sometimes in our communication.

So I would suggest that when we come back to hear more about it that we not do it separately, but that we do it together.

I think it's a good idea because my reticence, Diantha, and it has nothing to do with my respect for the people on the Board of Supervisors.

I love you guys.

I hope you know that.

We love you too, Dave.

My fear is that what can happen to this, and I think it has a potential to be awesome, I really do, because it kind of fits exactly what we're talking about centers.

That falls squarely in what we're talking about.

My reticence, and it's because I'm a litigator, I'm somewhat paranoid, is that it could be in a situation, we could be in a situation where

It doesn't fit what we need, but it's a way to get it funded.

So I guess we'll do that, even though it's not really what we need.

And I don't want to do the expedient thing because it's a way to do it.

I want to do the right thing.

And so my concern is that these two boards won't always be these two boards.

And so we're setting ourselves up for stuff ten years from now, hopefully.

And we don't know what will be on those boards, so we need to be very clear, and when we're designing it, we set up systems such that that doesn't happen.

You just need to adhere it together, I think.

Yeah, I agree.

Well, no matter the size of the funnel, it still funnels down to the decision-makers.

I'm just trying to open, we want to open that funnel up to bring in some more ideas.

The decision-making process never changes.

That always comes down to each individual piece and then a vote is taken.

I would ask that Roger and I need to get together and talk about the amount of work or what it is precisely that would best serve you all in terms of information and then get back with you in terms of schedule, if that's alright.

I think I have a pretty clear idea of what it is we need to do next.

Just the only other comment I have is I think my colleagues on the school board share some urgency in terms of solving our high school issue.

We really do have needed to build it now for our centers in terms of our capacity.

We've got 200 kids behind Albemarle High School and a couple years ago, Jay Thomas told me he was sort of eyeing a part of the soccer field for the next eight classroom

Trailer Park.

So whatever the information gathering is, realistic timeline.

I mean, the most obvious project to me that could fit with almost no information in this would be a high school center.

But we are already way behind where we need to be in terms of finding that space.

What you're doing at Seminole Square is a version of a 3P already.

I know Richard is thrilled to have you there and it's working.

A federal courthouse is a PPP.

So you have different examples locally.

Well, thank you all for that conversation.

I appreciate your time.

Thank you, Bill, Roger, Laurie.

Yeah, we have a school board meeting.

Well, I appreciate school board, in particular, to the last topic we discussed, being here to go over this information.

Well this has been the year for trying baby steps of things that are different and so we'll just continue on.

You guys have some time to take a quick break before you.

I don't know, shall we adjourn or recess?

Okay.