Board of Supervisors Adjourned Meeting - Joint Work Session with the School Board   11/13/2019

1. Call to Order.

• • SPEAKER_06
  • 00:00:04
    Good afternoon everyone.
• • Ned Gallaway
  • 00:00:20
    Thank you for being here.
  • 00:00:21
    A couple of housekeeping items.
  • 00:00:23
    I would like to introduce obviously the members of the Board of Supervisors and school board around the table and quickly at the table is
• • SPEAKER_09
  • 00:00:31
    Hi, I'm Maya Kumazawa, Director of Budget and Planning for the School Division.
• • SPEAKER_10
  • 00:00:36
    I'm Lori Alshaus, the Director of the Office of Management and Budget.
  • 00:00:39
    Rosalyn Schmidt, the Chief Operating Officer for the School Division.
• • Ned Gallaway
  • 00:00:42
    and we have supporting staff from both county executive's office and school division around and accounting and finance.
  • 00:00:49
    If I say the department's right, I better say the department's right.
  • 00:00:51
    So one thing to remember, the microphone's in here.
  • 00:00:54
    We do have to make sure we're speaking.
  • 00:00:55
    Usually with your face up is a little bit better so your voice goes up, but also use your nice diaphragm to support your words so that it all gets clearly recorded.
  • 00:01:05
    With us today also, we have Officer Eric Risling with us.
  • 00:01:08
    Thank you, officer.
  • 00:01:12
    I appreciate his attendance as well.
  • 00:01:16
    And with that, I'm handing things over to...
  • 00:01:23
    I guess to me.
  • 00:01:26
    To very reluctant participants.
  • 00:01:30
    All yours.
• • SPEAKER_14
  • 00:01:31
    All right.
  • 00:01:32
    Thank you very much for this opportunity for us all to work together and talk about long-range financial planning.
  • 00:01:39
    So, your next slide.
  • 00:01:42
    This is really an important time for us because we're going to be soon heading into the annual budget process.
  • 00:01:48
    And before we do, it's really important to think long-term.
  • 00:01:51
    Think about our annual budget in a long-term concept.
  • 00:01:55
    So this is a time for us to think about all of our major areas.
  • 00:02:01
    School division and capital improvement plan will be the ones we'll talk most about today.
  • 00:02:06
    This creates our framework for our annual budget development process.
  • 00:02:10
    It is a critical process for us for our AAA bond ratings.
  • 00:02:14
    Long-range financial planning is a very important component of what people look at when they look at the county.
  • 00:02:20
    And the assumptions, the other thing I want to share with you, you'll see a lot of slides today, you're going to see a lot of numbers.
  • 00:02:25
    The numbers are assumptions.
  • 00:02:27
    As you go out longer and longer in the five years, they're not as solid as the earlier numbers.
  • 00:02:32
    But they're going to change their assumptions as of today.
  • 00:02:35
    And as we get closer to budgeting, we know we'll have revenue updates.
  • 00:02:38
    We're going to have updates along the way.
  • 00:02:40
    So I just wanted to let you know that this is just early numbers.
  • 00:02:44
    So take that into account as we proceed.
  • 00:02:48
    This is also the first meeting of many meetings.
  • 00:02:52
    This is our one joint meeting, though, to talk about long-range financial planning together.
  • 00:02:56
    But the school board will also have a couple meetings on November 14th and December 12th.
  • 00:03:01
    You will be working on long-range planning, but you head into your annual budget before we do.
  • 00:03:07
    you work on your annual budget in December when we actually start building ours a little bit later and it's presented to the Board of Supervisors in February for general government.
  • 00:03:17
    So you're the first kind of out of the gate so you'll be working at moving it to your annual budget more quickly than we will and the Board of Supervisors has two more meetings that we talk about long-range financial planning so we're not done yet.
  • 00:03:29
    So this will be our first meeting.
  • 00:03:31
    There won't be a lot about the general government.
  • 00:03:33
    There will be some other items today.
  • 00:03:34
    And we'll have more meetings with the Board of Supervisors over the early part of December.
• • SPEAKER_09
  • 00:03:41
    We have three high-level desired outcomes for today.
  • 00:03:44
    First, we'll continue efforts for the two boards to work together and build commonality.
  • 00:03:50
    This desired outcome has been taken directly from our newly re-advisioned CIP process that we are currently in.
  • 00:03:58
    We've had great success so far, staff to staff and board to board, in this transformative CIP process.
  • 00:04:05
    So we're hoping that we can carry this forward into our operational planning as well.
  • 00:04:09
    We will also review preliminary long-term plans and projections from the perspective of revenues, CIP, and the school division.
  • 00:04:20
    And then finally we've dedicated some time for you all to discuss what you hear regarding these topics.
  • 00:04:26
    We've broken out the time this way.
  • 00:04:29
    First we will receive revenue forecasts and then a CIP update, an overview of basic shared
  • 00:04:39
    and then finally we'll receive the school division five-year forecast.
  • 00:04:46
    During each of these presentations please feel free to jump in and ask clarifying questions.
  • 00:04:51
    We built in a little bit of time for reflections for each of the topics but remember that after you hear all these different pieces and how they fit together we built in that time about 45 minutes at the end to react to and discuss amongst each other what you've heard today.
  • 00:05:08
    Are there any questions about
  • 00:05:11
    All right.

2. Five-Year Revenue Assumptions.

• • SPEAKER_09
  • 00:05:13
    At this point, I will turn things over to Steve to discuss revenues.
• • SPEAKER_01
  • 00:05:22
    Good afternoon.
  • 00:05:23
    Steve Allshouse, Department of Finance.
  • 00:05:25
    I'm going to speak this afternoon about general fund revenues and where I see they're going in the next five years.
  • 00:05:31
    Something of a tall order.
  • 00:05:33
    The first year is much easier than the remaining four.
  • 00:05:35
    That being said, I'm going to keep the discussion to a fairly high level.
  • 00:05:39
    If you have questions, please do ask as we're going along.
  • 00:05:49
    So as I mentioned, I'm going to be talking about general fund revenue.
  • 00:05:51
    These are primarily state, local, federal tax revenues and fees that we receive.
  • 00:05:58
    They do not include any sort of transfers.
  • 00:06:01
    It's strictly general fund.
  • 00:06:02
    And so this is somewhat limited in scope.
  • 00:06:13
    So the five-year financial plan creates a preliminary framework for long-range financial considerations technical difficulties
  • 00:06:46
    The revenue forecast, I'll just get off generally and if you're on the board of supervisors, you've heard this talk before.
  • 00:06:52
    We have a committee, we have the revenue team here at the county consisting of people from across a number of departments and divisions on the local government side as well as receiving input occasionally from the school side.
  • 00:07:03
    It's headed by me.
  • 00:07:04
    We use a number of different analytical tools to try and figure out what's going to happen with revenues.
  • 00:07:09
    We look at trend lines.
  • 00:07:11
    I've done some econometric modeling.
  • 00:07:13
    And most importantly, we look at the institutional environment.
  • 00:07:17
    By that, I mean what's going on in the economy, both globally, locally.
  • 00:07:21
    How is that likely to affect our revenue series?
• • SPEAKER_05
  • 00:07:25
    So we keep an eye on what's going on.
• • SPEAKER_01
  • 00:07:27
    And our results so far have been pretty good.
  • 00:07:29
    The revenue team has been in existence since 2012.
  • 00:07:31
    I helped co-found it with another All's Hails.
  • 00:07:36
    And we've been, generally speaking, if you aggregate all the revenues in the general fund together, we've been generally within about 2% of what we forecast.
  • 00:07:45
    So it's a pretty good track record.
  • 00:07:51
    What's going on right now, what I see happening is,
  • 00:07:55
    Given the economy where I think it's headed, where we think it's headed, given the state of the current economy locally, I think that we're likely to see FY20 remain fairly solid.
  • 00:08:04
    There might be, capital M, might be a slowdown in FY21 or FY22.
  • 00:08:11
    I'll talk a little bit about that.
  • 00:08:13
    The administrative growth is premised on a potential slowdown in the next 12 to 18 months.
  • 00:08:19
    That being said, I don't think we would see a slowdown or downturn anywhere near as severe as last recession.
  • 00:08:27
    We all remember the Great Recession, seeing that was the local economy.
  • 00:08:31
    We're not looking at anything like that at this time.
  • 00:08:34
    But be aware there are some headwinds that we're looking at.
  • 00:08:39
    Negatives out there.
  • 00:08:41
    The yield curve inversion.
  • 00:08:42
    Again, the board has heard me talk about this before.
  • 00:08:46
    Back in the summer, everyone was mentioning, everyone was talking about this particular economic phenomenon.
  • 00:08:50
    If you're not familiar with it, U.S. Treasuries have different maturity yields.
  • 00:08:55
    So something, I'm sure you're going to say three months, generally has a lower yield than something maturing in 10 years.
  • 00:09:01
    What happened over the summer was those yields flipped.
  • 00:09:03
    We had three month treasury yields higher than 10 year yields.
  • 00:09:08
    That situation historically has been a pretty good indicator that a recession would be coming or a slowdown would be coming.
  • 00:09:15
    That was the situation for about a month.
  • 00:09:17
    The yield curve has since flipped back.
  • 00:09:19
    It's looking more like a normal yield curve.
  • 00:09:21
    So there is talk in the financial media and among economists that we might have dodged a bullet, that if we did have a downturn or a slowdown, it might not feel that severe.
  • 00:09:29
    But still, we'll keep an eye on that.
  • 00:09:34
    That's not been resolved yet.
  • 00:09:37
    That's affecting the macro picture.
  • 00:09:38
    There is a manufacturing slowdown in the US.
  • 00:09:41
    I was looking the other day at the ISM Institute for Supply Management's index.
  • 00:09:46
    That is now below 50.
  • 00:09:47
    That would seem to indicate a slowdown in manufacturing or potential drop off in manufacturing in the next 12 months.
  • 00:09:54
    A year ago, that figure was above 50, indicating an expansion.
  • 00:09:57
    So that has flipped.
  • 00:09:59
    There's also talk that Europe has entered a recession.
  • 00:10:03
    That's kind of tentative.
  • 00:10:05
    I know that I was looking at Germany's economy recently, and they're experiencing certainly a slowdown in their manufacturing sector and perhaps their economy overall, and that is the economic heart of Europe.
  • 00:10:14
    So there's some issue that this might spill over the rest of the continent.
  • 00:10:19
    On the positive side, US state and local labor markets are still very strong.
  • 00:10:24
    As of September, Albemarle's unemployment rate, for example, was 2.3%.
  • 00:10:30
    That is within what I would call a range of a labor shortage.
  • 00:10:34
    Not just full employment, but a labor shortage, which is why I think we're starting to see some upward pricing pressure on wages and salaries.
  • 00:10:42
    Another good thing going on right now, interest rates are still low.
  • 00:10:46
    I'm going to use the example of the 30-year fixed rate, which is, if you're taking out a mortgage, you know what this is.
  • 00:10:52
    A year ago, the rates were about 5%.
  • 00:10:55
    They have since gone down more than a percentage point.
  • 00:10:58
    I think the 30-year fixed last time I checked was about 3.7%.
  • 00:11:00
    So interest rates are low.
  • 00:11:03
    That's also very positive.
  • 00:11:05
    Another issue, U.S. equity markets.
  • 00:11:07
    The stock markets are near an all-time high.
  • 00:11:10
    Why is that important?
  • 00:11:11
    Well, people tend to be invested, either through a pension plan or the 401Ks.
  • 00:11:15
    When the stock markets are high, they feel as if they've got a certain amount of wealth they can spend out of.
  • 00:11:21
    It just generally is a good sign for consumption.
  • 00:11:27
    Okay, let's get to the heart of the matter.
  • 00:11:34
    What's going on here?
  • 00:11:44
    What's driving this?
  • 00:11:54
    It's primarily real estate revenues.
  • 00:11:58
    What we're looking at is probably, for the rest of FY20, a very solid real estate market.
  • 00:12:07
    As far as I can tell, Peter Lynch is actually sitting in the audience.
  • 00:12:09
    Peter, if I say anything that's outlandish, feel free to jump up and say, no, you're wrong.
  • 00:12:14
    But he and I have talked about the real estate market.
  • 00:12:16
    We both agree that, for the time being, there's nothing really that's on the horizon that would look or that would suggest a recession in the real estate market, which is good, of course,
  • 00:12:26
    One thing I should point out about this chart is this is showing this curve right here from FY16 to FY19 is fairly steep, steeper than this portion here.
  • 00:12:42
    Keep in mind that this is historical data from FY19 backwards.
  • 00:12:46
    It's historical data.
  • 00:12:47
    And those numbers include tax rate increases that the board adopted.
  • 00:12:52
    Now, if we were to factor those out, this portion of the curve would be flatter and always resembling what's going forward.
  • 00:12:58
    So just keep in mind, anything in the current fiscal year or anything in the future subsequent years is calculated with 85.3% tax rate.
  • 00:13:07
    The historical data, on the other hand, includes tax rate increases.
  • 00:13:13
    And again, this is just to illustrate that this curve looks like the previous one that showed total revenues.
  • 00:13:18
    This is a real estate revenue curve.
  • 00:13:20
    Again, it did quite well.
  • 00:13:22
    Again, FY 1622 due to a number of tax rate increases that we had flattening out some.
  • 00:13:30
    Not really predicting a downturn here.
  • 00:13:32
    Even if the economy goes into a slowdown, I don't think we're going to see much of a change in real estate values.
  • 00:13:41
    And then finally, you've seen these before.
  • 00:13:44
    I take a look at sales tax revenue because private consumption is a major portion of the local economy, also true at the national level, by the way.
  • 00:13:53
    BPOL, or business license tax, is an indicator of how businesses are doing in the community.
  • 00:13:58
    And then food and beverage also gets at the issue of consumption.
  • 00:14:01
    Again, these numbers, historically, there was no rate change in aware of these sort numbers.
  • 00:14:07
    But something about flattening out, and then an increase in some
  • 00:14:11
    Thank you very much.
  • 00:14:16
    something of an oddball in terms of local revenues.
  • 00:14:18
    B-poll is a backward-looking revenue function.
  • 00:14:21
    These payments, B-poll is collected once a year in June, and the receipts reflect what happened in the previous calendar year.
  • 00:14:28
    So for example, in June of 2020, businesses will be giving the county, paying the county their B-poll revenues.
  • 00:14:36
    That would reflect business activity that existed in calendar year 2019.
  • 00:14:42
    So if we did have a downturn in, say, FY21, it likely would have
  • 00:14:45
    and in fact shown here in employee 22.
  • 00:14:49
    So just keep that in mind as something of a backward looking indicator.
• • SPEAKER_08
  • 00:14:53
    Steve.
  • 00:14:53
    Yes.
  • 00:14:54
    Can I just ask you, your slope there for sales tax accelerates very dramatically in fiscal year 21.
  • 00:15:00
    Yes.
  • 00:15:01
    Are you looking for the county to be recouping internet revenue?
• • SPEAKER_01
  • 00:15:06
    Yes.
  • 00:15:06
    That's exactly right.
  • 00:15:07
    We're looking at use tax.
  • 00:15:08
    And for people who aren't familiar with this, when a sale is done in the county, if you go out to Fashion Square, the county is collecting sales tax on that sale.
  • 00:15:16
    What's going on now is if you shop on Amazon, if you order something on Amazon and it's delivered to your address in Albemarle County, we get what's known as use tax.
  • 00:15:25
    Use tax is collected at the same rate to sales tax.
  • 00:15:28
    It's just the facility you might be ordering from might not be located in Albemarle County.
  • 00:15:32
    We're starting to see more and more of that come in.
  • 00:15:34
    I was talking to our finance admin, or excuse me, finance rev tax people a few weeks ago, and we're really starting to see that pick up now.
  • 00:15:42
    So that accounts for that increase in the slope in that
• • SPEAKER_13
  • 00:15:53
    Max's are.
• • SPEAKER_01
  • 00:16:00
    Let's say I had a company up in Manassas that were selling on Amazon, we would still get the use tax from that as long as the product is delivered to an Albemarle County address.
  • 00:16:20
    If you had your product delivered to say Charlottesville, then Charlottesville would get the use tax on that.
• • SPEAKER_07
  • 00:16:25
    Since we have two fairly sizable mail order retailers in Albemarle, wouldn't we lose, but right before we were collecting out of sales tax in this location, it was shipped anywhere in Virginia.
  • 00:16:42
    Now if that's, we're going to lose that revenue.
  • 00:16:44
    So did you calculate that loss of revenue?
  • 00:16:46
    We've taken this and we've taken this.
• • SPEAKER_13
  • 00:16:49
    And with, I'm sorry.
• • SPEAKER_01
  • 00:16:51
    Oh, sorry.
• • SPEAKER_13
  • 00:16:53
    Go ahead.
  • 00:16:56
    If Charlottesville, obviously, I live in Albemarle County, but my address is Charlottesville.
  • 00:17:02
    That doesn't make a difference?
• • SPEAKER_01
  • 00:17:04
    No.
  • 00:17:04
    If you're physically located in Charlottesville, theoretically, theoretically, the realtor knows that you're in the county.
  • 00:17:11
    They should remit the use tax to us.
  • 00:17:13
    But that's why we have auditors, because for years, what was happening was people with a Charlottesville address were ordering things on the internet.
  • 00:17:19
    They were going to that Albemarle County address, but it was showing up in the city.
• • SPEAKER_13
  • 00:17:23
    Well, we have auditors.
• • SPEAKER_01
  • 00:17:27
    I don't want to claim that we solved it, but we are working on that to say the least.
• • Diantha McKeel
  • 00:17:36
    The business is located in Raleigh, Michigan.
  • 00:17:40
    It doesn't matter.
• • SPEAKER_01
  • 00:17:41
    It does not matter, as long as the product is being shipped to an animal.
• • Diantha McKeel
  • 00:17:44
    To it, exactly.
• • SPEAKER_01
  • 00:17:45
    And as long as, I have to put a preface on that, or a caveat, as long as there's a nexus.
  • 00:17:51
    Actually, this is the stated information.
  • 00:17:53
    These days, yeah, that would be true.
  • 00:17:55
    It used to be there had to be a rational nexus between the company.
  • 00:17:58
    That's why Amazon, which had a distribution facility in Virginia, got hit with that.
  • 00:18:02
    But now the law has actually been interpreted differently.
• • Diantha McKeel
  • 00:18:07
    Other questions?
  • 00:18:09
    Sorry, because I'm slow on the uptake.
  • 00:18:10
    Would you go back to the real estate revenue?
  • 00:18:12
    I think it was just the one before.
  • 00:18:14
    So you were talking about the fact that we had tax rate increases that affected the increase.
  • 00:18:24
    Right.
  • 00:18:25
    And then you said something about the after 20, that line was predicated on it.
  • 00:18:33
    And I just want to make sure I understood.
• • SPEAKER_01
  • 00:18:35
    85.
  • 00:18:42
    That's all it looks at.
  • 00:18:44
    Before, of course, this is historical data.
• • Diantha McKeel
  • 00:18:51
    Thank you.
• • SPEAKER_01
  • 00:18:52
    Other questions?
• • Ann Mallek
  • 00:18:53
    I guess I still have concern about the 22901 because of all the mess that we had six or seven years ago.
  • 00:18:59
    So is that a full-time assault on that issue that's going on all the time by one person?
• • SPEAKER_01
  • 00:19:05
    You're talking about the auditing issue?
  • 00:19:07
    Yes.
  • 00:19:07
    Yeah, we have two auditors currently in our revenue administration division.
  • 00:19:11
    They worked diligently to try to make sure that our revenues are going to us and not to the city.
• • Ann Mallek
  • 00:19:16
    And secondly, do you have any analysis
  • 00:19:19
    based on primary business versus not.
  • 00:19:22
    Because that dollar's going around in the community, or dollars of product made here and bringing in outside money to our locality would be very different circumstances.
• • SPEAKER_01
  • 00:19:31
    And I don't have an analytical framework.
  • 00:19:33
    I don't have the analysis on that, Brian.
  • 00:19:37
    Other questions?
  • 00:19:39
    Right, OK.
  • 00:19:43
    Okay, so in summary, what I'm saying is basically for F-flight 20, the economy looks pretty solid.
  • 00:19:49
    I don't think we're going to see a downturn in the current fiscal year.
  • 00:19:52
    There was a potential slowdown given the headwinds that I talked about earlier in F-flight 21.
  • 00:20:01
    We'll see this as being as severe as the most recent recession or downturn, if you will.
  • 00:20:06
    Overall, I think that what you're likely to see is that our revenues will continue to grow, but perhaps not at the same rate they've been going in the last several years.
  • 00:20:16
    Other questions, thoughts?
• • SPEAKER_14
  • 00:20:27
    OK, so this is back to me.
  • 00:20:28
    We're going to be team tagging some things so you hear some different voices through this conversation today.
  • 00:20:34
    So one thing that we were asked to add to this slide is just, or to this presentation, is to talk a little bit about how local revenues are shared.
  • 00:20:42
    Because we talk sometimes about what we call 60-40.
  • 00:20:44
    So I just wanted to show just briefly how they're shared.
  • 00:20:48
    We keep a detailed piece of information about how it's done in our budget documents.
  • 00:20:53
    So if you want to read it, you can look at it.
  • 00:20:55
    But just in general,
  • 00:20:57
    First we project the shares, we project local tax revenues.
  • 00:21:02
    And then, again, this is how we do it each year.
  • 00:21:05
    We adjust for some committed expenditures.
  • 00:21:09
    So revenue sharing to the city is an adjustment.
  • 00:21:12
    As you know, that revenue sharing payment has decreased for many years in the past.
  • 00:21:17
    We don't see that trend continuing like it was in the past.
  • 00:21:19
    So that affects both schools and local government.
  • 00:21:23
    We have dedicated water resource funding.
  • 00:21:27
    The Board of Supervisors increased the tax rate years ago for water resources in the general fund and so that increase, the tax rate changes as the tax rate, the value of a penny on a tax rate increases, a small amount continues to increase that we dedicated to the water resources category.
  • 00:21:45
    Tax relief for the elderly and disabled is also an adjustment we make.
  • 00:21:51
    Refunds that come back in so we plan that some of the taxes we receive will be refunded back out for a reason for you know some reasons along the way so we plan for that and then the capital and debt services many of you know when we're working on capital and debt together that is also some funding goes to capital and debt
  • 00:22:12
    And then if there's any board of supervisors' dedications of revenues, in the past, over the past year, sometimes the board of supervisors would raise revenues and dedicate it just to capital and debt service.
  • 00:22:24
    Sometimes there was dedication to the schools, to general government.
  • 00:22:28
    Over the years, there's been dedications based on certain things that are going on in different parts of our organization.
  • 00:22:35
    So that would be something that's taken into account.
  • 00:22:38
    So then we share it 60-40.
  • 00:22:41
    60 goes to the school division and 40 to general government.
  • 00:22:45
    And again, this is guideline.
  • 00:22:47
    This is how we all start our budgeting process.
  • 00:22:49
    So as we start moving forward into the process, that's generally how we work together.
  • 00:22:54
    And these things get updated quite frequently.
  • 00:22:56
    And the revenues will continue to be updated the closer we get to the budget.
  • 00:23:00
    We work very closely with our office, with the school's offices, to make sure we keep everybody aware of any updates along the way.
  • 00:23:07
    And then, this is just the change in revenues that we're talking about, then it's added to what we call the base.
  • 00:23:13
    So the base funding is a certain, the current funding that say the school division is receiving, this increase, usually it's a change, but this usually is an increase unless we're going through something severe like a recession or something, but this increase then is
  • 00:23:27
    We have a number of schools that have been added to the base for the schools for the number that they're working with on the local government side.
  • 00:23:35
    They also receive state funds directly and other funds directly.
  • 00:23:38
    So this is just to share with you how the local revenues are shared.
• • SPEAKER_06
  • 00:23:44
    Lori, one question is, would you flesh out why it is that you are saying that the revenue sharing
• • SPEAKER_14
  • 00:23:52
    Yeah, it's a formula.
  • 00:23:55
    So the contract we have with the city has a two-year lag to it.
  • 00:23:58
    So there's a formula, and it takes a lot of things into account.
  • 00:24:03
    And the Finance Department does the calculation.
  • 00:24:06
    Some of the calculations come in kind of late in January, so we can't really see the full picture.
  • 00:24:10
    But it has to do with relative changes in taxes that are received by the city and the county.
  • 00:24:16
    So you can see a little evidence of the past.
  • 00:24:18
    You can do part of the formula.
  • 00:24:20
    So you can see some of the information that's going into it.
  • 00:24:23
    So based on that, we don't have the full picture yet, but we're thinking that it's no longer going to continue to decrease like it has in the past.
  • 00:24:29
    We had a very significant decrease last year, and this calculation's done in January, so it comes in kind of late, but it really did positively impact the revenues that were shared with schools and local governments.
• • Ann Mallek
  • 00:24:42
    But if the city's growing a lot, and we're not growing as much, then that would reduce that, we would pay for that.
• • SPEAKER_14
  • 00:24:47
    There's a relative, yeah, and I don't know all the details of the formula, but there's a relative, how we change relative to how they change.
  • 00:24:54
    And then it has real estate sales tax, what's it called, the sales tax ratios.
  • 00:25:00
    So there's a lot of components to that formula.
• • Diantha McKeel
  • 00:25:03
    But it is a two year lag.
• • SPEAKER_14
  • 00:25:05
    Yeah, that's what gives us an indication.
• • SPEAKER_07
  • 00:25:08
    We're a tax, a real estate tax rate adjustment so as we increase our tax rate the amount that we have to pay in the city goes down.
• • SPEAKER_13
  • 00:25:19
    So we can use that as a positive.
  • 00:25:23
    I'm joking.
• • Diantha McKeel
  • 00:25:28
    But it is down, I think the latest bill I saw was
  • 00:25:33
    14 million, something like that, and it has been as high as 18 million.
• • SPEAKER_14
  • 00:25:39
    If anyone would like to look at it, page 170 in our adopted budget, which is online, it shows the history, and I don't know if you can see this from where you are, but you can see the black, meaning it's been going up.
  • 00:25:51
    for years and years since 1982.
  • 00:25:53
    And then right in here, you can see the red.
  • 00:25:56
    So that when it was red, when we're actually decreasing it, it does provide a positive impact on us.
  • 00:26:03
    And then you can see, in general, for the past period from 2012 on, you can see some decreases.
  • 00:26:10
    And then just this last year, 2020,
  • 00:26:14
    14.2 million dollars, it was a decrease of about 1.5 million from the years before.
  • 00:26:21
    So that was extremely significant.
• • Ann Mallek
  • 00:26:23
    What absolutely killed us that 18 million dollar a year was that based upon two years earlier, we were hard in the recession by the time we had to pay that enormous amount of money, which made it even more punishing for everybody.
  • 00:26:34
    That's exactly right.
• • SPEAKER_05
  • 00:26:36
    I'm curious what the cutoff point or how the elderly
  • 00:26:41
    I'm going to look towards Laura on that.
• • SPEAKER_14
  • 00:26:50
    Do you know the details on that?
  • 00:26:53
    The finance department has a calculation as for CO here.
  • 00:26:58
    We could get that information to you.
  • 00:27:01
    And we watch it and we watch the usage of it and we budget accordingly to the usage and I think just recently we had to increase it some.
• • Ann Mallek
  • 00:27:16
    It is increasing as the numbers of elderly, more people are qualifying.
• • SPEAKER_05
  • 00:27:21
    You have to apply for it?
• • Ann Mallek
  • 00:27:24
    This is the property tax waiver for disabled and low income seniors.
  • 00:27:28
    So it's senior low income and for disabled of any age and with assets below $200,000 not including the house of 10 acres.
  • 00:27:40
    up so much over the last 20 years, that that has really put so many people who have no cash into a real program, that this program is wonderful, but that we need much more to be able to help those folks who are right on the margin.
  • 00:27:55
    And I guess my question I would leave for Greg is, are we maxed out on our state limits on this program for some of the time?
• • SPEAKER_08
  • 00:28:10
    Certainly.
• • SPEAKER_13
  • 00:28:12
    We were told by your predecessor four years ago that we were, I think it was about four years ago.
  • 00:28:17
    But the statutory changes happen.
• • Ann Mallek
  • 00:28:20
    And if there are other programs that we do not have that may help people who are on the margins, then that gives us perhaps some flexibility to increase the pie.
• • Ned Gallaway
  • 00:28:52
    Before we leave this slide, Laurie, after years of hearing what comes off the top, I think the breakout of explaining how this works is very well done and clean in this version.
  • 00:29:02
    So I appreciate the way you've done the project and how you adjust.
  • 00:29:06
    This is good, I think, for explaining it and not just to us, but to everyone.
  • 00:29:15
    I hope this will continue as a way we explain how this works.
• • SPEAKER_09
  • 00:29:40
    All right.

3. Five-Year Capital Improvement Plan Update.

• • SPEAKER_09
  • 00:29:41
    We're going to turn things over to the CIP and provide you with an updated recommendation.
  • 00:29:47
    As I mentioned previously, we are currently in a newly re-advisioned CIP process.
  • 00:29:51
    And this year, it's new that we're talking about the CIP within the context of five-year planning, as the CIP is a five-year plan with revenue implications and impacts to both the general government and the school division.
  • 00:30:07
    So it began with a kickoff meeting in May where you all discuss affordability and you can see all the process and the steps that have been taken along the way.
  • 00:30:17
    Today's meeting, where you see the red arrow, is where the CIP track meets up with the full operational planning process so that we can consider and discuss the recommended CIP within the full context of the operations of the school division and operations of general government.
  • 00:30:32
    A lot of work has been put in by both the boards and the CIP Advisory Committee, so Lori will provide you with what that update is.
• • SPEAKER_14
  • 00:30:43
    Thank you, and there's many of the folks in the room today who are on the CIP Advisory Committee, so I hope you feel comfortable with just joining in on this, but I just have a few slides just to provide an update.
  • 00:30:55
    That committee meeting in October was the month we had three meetings that we talked about the CIP.
  • 00:31:01
    And if you remember, there was an affordability conversation that you all had in May that said, let's not go higher than this amount.
  • 00:31:10
    And we said, let's not add more than $55 million, and this is just for projections and for conversation, up to $55 million over the next five years as a place that we would say, let's not talk about anything much past that as far as building it into a model for CIP.
  • 00:31:26
    And as you know, the CIP is a plan.
  • 00:31:28
    The first year is a budget.
  • 00:31:29
    And so on the right side of the slide, if you recall on September 17th, you had a meeting in this room where we talked about the priorities from the schools and the priorities for general government.
  • 00:31:43
    Then you talked about putting them together.
  • 00:31:45
    And you said, well, what are our top priorities?
  • 00:31:47
    And so what we did from that meeting, if you remember, we had the boards around the room.
  • 00:31:51
    And you all were working on boards.
  • 00:31:53
    We put that and combined it into one list for the CIP advisory committee to work from.
  • 00:31:58
    and then we organized it.
  • 00:31:59
    So if you see the numbers on the side, so there were some ties.
  • 00:32:03
    We organized what came in the top versus how it was ranked by the two boards.
  • 00:32:09
    So for purposes of the consideration today and in the future, four from the very top were considered.
  • 00:32:19
    You didn't want to go over the cap of the $55 million.
  • 00:32:22
    So those are the four projects that are modeled into the five-year plan.
  • 00:32:28
    So just before you go, just to read them, we have transportation leveraging program, the economic development funding for the P3s, Kale expansion and site improvements, and Crozet addition and improvements.
• • SPEAKER_13
  • 00:32:42
    So you're suggesting from this that we're dropping all the things?
  • 00:32:58
    Yeah, and that was in our operating budget.
• • SPEAKER_14
  • 00:33:03
    So some things are in your operating budget and some things are in your capital budget, but you're exactly right.
  • 00:33:07
    The Board of Supervisors just was able to move some funding over to climate action planning in the operating budget.
• • SPEAKER_13
  • 00:33:14
    Anything else on there that would be in the operating budget below those four?
• • SPEAKER_14
  • 00:33:24
    I recognize that.
  • 00:33:26
    I recognize that.
  • 00:33:27
    Sometimes it's a gray area.
  • 00:33:28
    Yeah, I understand that.
  • 00:33:29
    Just off the top, I'm thinking about, of course, the general government side, and you might have some observations from the school side.
• • Ann Mallek
  • 00:33:41
    These are the bricks and mortar things we've been talking about, not for operations.
• • SPEAKER_14
  • 00:33:45
    Right.
  • 00:33:48
    So if we go to the next slide, you can always go back to this look at it.
  • 00:33:52
    If you can see that from where you're sitting, I'm going to go slow on this slide.
  • 00:33:57
    This has a lot of numbers on it, so I apologize for that.
  • 00:33:59
    But we tried to make it as simple as we can.
  • 00:34:01
    So basically, when the committee got together to work, they started with something we called the base.
  • 00:34:07
    and so as you know the base has ongoing programs that we do as far as maintenance of our current buildings and those types of things and there were some things built in from the past that end up in the base because you've done CIP just doesn't start in a vacuum you've done some work over past years so the base had basically and we have a list of it in our document here but basically it had of your maintenance and replacement programs for parks and rec schools and general government we had some ongoing programs that we've been funding an ongoing
  • 00:34:35
    Basis due to the nature of the projects that we need to continue.
  • 00:34:40
    It has courts in it from previous conversations and decisions.
  • 00:34:45
    The bike-ped funding came into this time period.
  • 00:34:49
    If you remember back in fiscal year 19, we approved Center 2 and $12 million of extra school projects as well as $12 million of what we call quality of life general government projects, which was bike-ped and transportation
  • 00:35:03
    So some of that's already prior to 21 in the budget and some of the debt and some of the timing of debt and those kinds of things are planned out in these next five years so all I'm mentioning is what are the new projects coming in in 21 and 25 but there's always you have to always remember you have some prior years
  • 00:35:28
    on your financials.
  • 00:35:31
    And so the five-year total that was in the base was $155.6 million.
  • 00:35:35
    And if you recall, and these were from prior conversations, there was an estimated equivalent.
  • 00:35:41
    And when I say that, it's just a way that we look at additional resources that are required in the CIP based on all the modeling and all those assumptions we talk about.
  • 00:35:51
    It had an estimated additional equivalent
  • 00:35:55
    Pennies on the tax rate of 2.3 cents.
  • 00:35:57
    1.5 was needed in calendar year 21.
  • 00:36:01
    And 0.8 wasn't CIP, but it was CIP related.
  • 00:36:06
    It would be related to the operating costs of center two.
  • 00:36:10
    So there was an estimate of when center two opens, there'll be some additional operating costs.
  • 00:36:14
    So we didn't want to lose that, so we actually built it in here.
  • 00:36:16
    But it would be an operating.
  • 00:36:18
    If you think back to my slide about the sharing of revenues, it would be a dedicated revenue.
• • Ann Mallek
  • 00:36:26
    So I have to clarify this again because I thought this was going to go away after our discussion at the CIP meeting last time as far as the way it's described.
  • 00:36:35
    It is not borrowing money.
  • 00:36:37
    We're not borrowing money for operations and it's going to be factored into the school budget when they come forward.
  • 00:36:43
    So I just, that troubles me that it's even sitting there because it makes people confused.
  • 00:36:49
    One lesson we learned years ago was never ever borrow money for salary and things like that because it's really going to get you.
• • SPEAKER_14
  • 00:36:57
    That's exactly it.
  • 00:36:58
    And so it's basically there just described just enough to forget that when we think about a tax rate increase that may be needed that a part of that isn't just CIP but it would be an operating impact related to CIP.
• • Ann Mallek
  • 00:37:09
    But it's part of the discussion the school board has to have about how they're expanding some things and maybe not doing other things as far as that.
  • 00:37:16
    It's not necessarily an increase.
• • SPEAKER_14
  • 00:37:17
    Yes, and so the other thing that it would require we use end-of-year funding if funding is available at the end of the fiscal year that we actually in its cash end-of-year cash that we go into the CIP so this assumption built into the model was that there would be about four million over the five years of coming as cash at a minimum to
  • 00:37:39
    On the green side is the recommendation that came out of the CIP Advisory Committee.
  • 00:37:47
    If you remember the slide before, there were four projects that were added and it was $55 million and you can see the projects there.
  • 00:37:56
    The same ones that were on the other list, Transportation Leveraging, Economic Development, P-Free Funding, Kale and Posey.
  • 00:38:04
    There was also reserve built in.
  • 00:38:06
    If you remember we had talked about the importance of some type of reserve built in the CIP because things come up.
  • 00:38:12
    where things happen that you can't just fill it completely up as a reserve that was actually built in.
  • 00:38:18
    Five year total would be $210.6 million if this was something that would be accepted.
  • 00:38:25
    And on the equivalent, again this isn't a tax rate increase, this is just a planning number of what would be an equivalent tax rate that would be required
  • 00:38:34
    and the committee had recommended that what if it's instead of having odd numbers of like 2.3 in one year and something in another year to just kind of make it a smoother approach to it and so the way we had put it into our financial modeling would be one cent per year.
  • 00:38:52
    Yes and it's not it's not an addition into 2.3 that incorporates the 2.3 in.
  • 00:38:58
    And it also does include the impact of Center 2 as far as just be mindful that that does include that still.
  • 00:39:05
    So you wouldn't need any extra for that.
  • 00:39:07
    And then the additional, there would need some additional one time end of year money as well for that, the way the model is working right now.
  • 00:39:16
    So I believe that's the last slide that I actually have on the CIP.
  • 00:39:22
    If you have any questions about any of the projects, we can talk about it.
  • 00:39:25
    The next slide is just a thank you for the CIP Advisory Committee members.
  • 00:39:34
    I want to thank everyone for your work on that and it was three pretty intense meetings and what I want to do at this point is this is a pause in our conversation.
  • 00:39:42
    We're moving along pretty well today for anyone to have questions of the committee or committee members that want to add something to this conversation.
• • Ann Mallek
  • 00:39:52
    I'll add something that I think is good news, really.
  • 00:39:54
    Last slide talks about the transportation leveraging, which means we would be drawing down an equivalent amount of money from the state.
  • 00:40:01
    which have never done adequately in the past because we haven't felt like we could.
  • 00:40:05
    And the economic development funding is also something which has tremendous leverage and capability to bring in many, many times more than what the county's putting in.
  • 00:40:13
    So I sort of help myself sleeping based upon those two things because I think that will change our numbers going forward, change the game.
• • Diantha McKeel
  • 00:40:22
    So Laurie said another way.
  • 00:40:24
    We're looking at about $55 million
  • 00:40:29
    I do have one issue that I have to bring up.
• • SPEAKER_13
  • 00:40:51
    I very much appreciate the work of the CIT committee.
  • 00:40:56
    With respect to our solid waste management planning, which we've been doing for several years now, there were two additional drop-off spots that were recommended in that.
• • Diantha McKeel
  • 00:41:08
    This has been narrowed.
• • SPEAKER_13
  • 00:41:18
    That's very concerning to me.
  • 00:41:19
    I spent some time yesterday reading the new DEQ report that came out just very recently on where Virginia is going with solid waste management and recycling.
  • 00:41:35
    And I also spent some time last night just reading through what different counties are doing
  • 00:41:48
    in putting out these services for their people.
  • 00:41:51
    So it's not that I have anything against the county.
  • 00:41:54
    I'm just saying they're small.
  • 00:41:55
    They are small, and there are a huge number of counties that do a better job.
  • 00:41:59
    And we are, as we all know, the sixth largest in area.
  • 00:42:04
    So our people actually needed more than a lot of the smaller communities.
  • 00:42:11
    We also have co-benefits with climate change.
  • 00:42:20
    benefits with economic development to be able to have this money in our CIP.
  • 00:42:27
    So I have a hard time just letting this go after six years and four years of talking about this report and the need that this committee has put forward for this for a whole host of reasons.
  • 00:42:42
    So I just
  • 00:42:45
    I think that's something we've been working on for years and we don't have a spot for it because we're trying to figure out where we're going to do it and if we're going to do it on the north side, et cetera, how's that going to work with construction debris and fission, all these kinds of things for redevelopment.
  • 00:43:04
    So I have to say I'm extremely disappointed in just throwing out everything of all these small things
• • Ann Mallek
  • 00:43:15
    I guess I would respond I think it's very important and I think that they're not thrown out they're just perhaps that the reserve fund would be maybe a quarter of the reserve fund could be used to implement that the one location when it has a site and or some economic development leveraging money could also come in.
  • 00:43:36
    to jumpstart that.
  • 00:43:38
    I'm not giving up.
• • SPEAKER_13
  • 00:43:40
    It's hard to plan for a site without having the money in the budget.
  • 00:43:45
    So if we don't have the money identified, staff would, you know, I can't see anybody spending an incredible amount of time looking for a spot if that money
• • SPEAKER_08
  • 00:43:58
    Well, the observation I would make is politics is the art of having to make hard choices, limited resources, and the decision of the committee was not to go
  • 00:44:10
    with a low or middle funding strategy of base plus $17 million or base plus $24 million, but base at $55 million.
  • 00:44:19
    And clearly, leveraging transportation and smart scale funding was viewed as a very high priority because the one thing that keeps coming up on every single land use application in the development area is transportation.
  • 00:44:38
    where is the best way going forward that we can stimulate additional non-property tax revenue for this county.
  • 00:44:47
    And then the third issue, and I don't need to tell colleagues on the CIP Advisory Committee this who represent the school board, is
  • 00:44:59
    the over enrollment problems at Kale and Crozet and there are other needs here that the school board is well aware of especially in technology that they would love to have another half million to a million dollars to begin to address as it would be wonderful to have another million dollars in here to do waste, solid waste but we couldn't find it.
  • 00:45:24
    It's not currently available
  • 00:45:27
    Given all the other high profile, high value
  • 00:45:31
    priorities within the CIP.
  • 00:45:34
    I'd add, just for consumption of school members as board members who didn't participate in the CIP, we did discuss going forward if, in fact, we were going to fund that additional $55 million rather than resorting to a proposed basically sawtooth pattern of 2.5 cents in calendar year 22
  • 00:46:07
    too by .8 cents and then calendar year 23 with one penny is try to look for a steady amount of pennies going forward and that there's a need concomitantly for both the school board and the board of supervisors to work together to really help inform the public as to where this money is going and what
  • 00:46:34
    which otherwise looks like tax and spend Democrats.
  • 00:46:39
    There they go again, as we heard in this fall in the campaign.
  • 00:46:43
    Well, that isn't at all.
  • 00:46:44
    This is a question of meeting essentially needs within the county that are currently already not being met.
  • 00:46:52
    We're not talking about the needs in five years.
  • 00:46:55
    We're talking about the needs that are here today and were actually here a year ago and a year before that haven't been met.
  • 00:47:02
    So we're playing catch up here and that's why it's critical is to look at these priorities that are here that are established and again I come back where we started.
  • 00:47:19
    Our role on the CIP Advisory Committee was to come to some hard choices and there were some things
  • 00:47:25
    that the school board wanted that are not included in here.
  • 00:47:29
    And there were some things that supervisors wanted that are not included in here.
  • 00:47:34
    So we reached consensus.
• • SPEAKER_13
  • 00:47:36
    I am totally in recognition of the fact that the CIP committee had hard choices to make.
  • 00:47:43
    What I am trying to do is just say
  • 00:47:51
    Really not done a good job on it for a community that produces Seven pounds of trash per person per day over the average of four pounds per person per day It's amazing that we can't do a better job at meeting people's Needs and expectations now I recognize that
  • 00:48:15
    We get more complaints about transportation issues than we do about trash issues, but I'm also very concerned that there's a changing landscape out there and we won't be able to take care of some of the economic development situations that we want to take care of, some of the redevelopment
  • 00:48:37
    we have our fill and waste problems in the county and many of us have a vision that this next center could be somehow connected with a construction debris demolition thing which would be an economic development thing so there are co-benefits and I just want to put that out there because I think that
  • 00:49:05
    Many of us, we get our trash picked up.
  • 00:49:08
    We never see these bottles.
  • 00:49:10
    But there's a lot of people out there who do see bottles.
• • Diantha McKeel
  • 00:49:13
    I know we disagree with what you're saying at all.
  • 00:49:15
    And there may be other ways that we can get at what you're talking about.
  • 00:49:21
    Because we do have some land that could possibly be used, which we certainly don't want to talk about.
  • 00:49:25
    Having said that right now, I think any number of us could go through and say the same thing about it.
  • 00:49:31
    I would say that when you're looking at,
  • 00:49:34
    drainage infrastructure.
  • 00:49:35
    We haven't dealt with that in 20 years.
  • 00:49:36
    So we could go through.
  • 00:49:37
    And I appreciate what you're saying.
  • 00:49:39
    We could go through everything.
  • 00:49:41
    But we deter a lot of needs.
  • 00:49:42
    Two boards.
  • 00:49:43
    We set that $55 million.
  • 00:49:46
    And some of us at this table argued that that was way too high at the time.
• • SPEAKER_13
  • 00:49:51
    Oh, I know.
• • Diantha McKeel
  • 00:49:51
    And some of us argued that we needed to raise it a little bit.
  • 00:49:55
    So that was our number that we came up with.
• • SPEAKER_13
  • 00:49:57
    Everybody here would probably change these numbers around a little bit.
  • 00:50:05
    We're all making concessions.
  • 00:50:07
    But I can't move on without saying that this is, in my opinion, a critical issue in our county.
• • Ann Mallek
  • 00:50:16
    And we need to be aware, because something's going to be done to us as far as state or federal that we're going to have to be responsible.
• • SPEAKER_07
  • 00:50:23
    I was just going to say, I'd like to put this conversation in a historical perspective.
  • 00:50:28
    When I was first on the board, I don't know why, we had plenty of CIP money to build schools.
  • 00:50:34
    And somewhere 15 years ago, 12 years ago, the Board of Supervisors cut money out of the CIP, cut the tax rate, and took a whole bunch of money out of the CIP to fund operations.
• • SPEAKER_13
  • 00:51:12
    The board of supervisors was trying to close the only transfer station that we had in the entire 725 square mile county.
• • Ned Gallaway
  • 00:51:40
    And the nice part, as Supervisor McKeel alluded to, is that this year we did meet in May as both boards.
  • 00:51:47
    We all were on the record as to speaking to what we thought the affordability should be, and now it's playing out as such.
  • 00:51:55
    So our constituents can definitely draw the thread back to where we stood if the decisions were being made.
• • Diantha McKeel
  • 00:52:03
    If you argue that that 55 should have been low,
• • Ann Mallek
  • 00:52:14
    We can always produce outbreak, but we will never do it.
• • Diantha McKeel
  • 00:52:17
    We have priorities all along the way.
• • SPEAKER_05
  • 00:52:18
    I'm disappointed for somewhat different reasons about the solid waste provision, too.
  • 00:52:23
    But I think part of the problem is the kind of muddled Rivanna solid waste authority also being involved.
  • 00:52:30
    And I just have some of the issues that we've talked about.
  • 00:52:32
    It seems like it's not really clear who's supposed to be budgeting for what.
  • 00:52:36
    Where's the line drawn?
• • SPEAKER_13
  • 00:52:38
    We pay them to take care of everything.
• • SPEAKER_05
  • 00:52:40
    Right.
• • SPEAKER_13
  • 00:52:41
    They don't get revenue for this thing.
• • SPEAKER_05
  • 00:52:43
    So they don't have that much initiative to try to make things better?
  • 00:52:46
    Oh, it's not an initiative.

4. Five-Year Compensation/Benefits Assumptions.

• • SPEAKER_14
  • 00:52:47
    So you might remember that every year another thing you do in a pattern
  • 00:53:19
    as we move forward in our planning.
  • 00:53:21
    And so if you recall, the human resources folks came forward in October and talked a little bit about what they're seeing in the world of market.
  • 00:53:32
    And they do the world of work, and they look at market based on history and how we're doing with our comparison groups.
  • 00:53:42
    And they mentioned about a 2.7% salary increase for employees
  • 00:53:47
    Plus, they said a performance metric to it.
  • 00:53:50
    And what we always do, too, is we say, thank you for your information.
  • 00:53:54
    We also have to think about that in context of our finances.
  • 00:53:57
    And so we don't automatically, as two boards, go, hey, we're going to go with that without just a little bit of thought of the timing and our financial situation.
  • 00:54:07
    For purposes of our planning, and very quickly now we're going to turn to the schools that are going to share their operating assumptions and forecasts moving forward.
  • 00:54:16
    Just wanted to give you two items that we are doing, and we're going to do the same when we present ours to the Board of Supervisors on December 4th.
  • 00:54:25
    We thought about providing a salary increase between 1.5% and 2.7%, so we're still talking a rage because the numbers aren't done yet.
  • 00:54:33
    So we have to just be mindful that we're very considerate of what we heard from our HR specialists.
  • 00:54:40
    But for the five-year planning purposes, as we're presenting some operational numbers in front of you, we're placing 2% in each year of the five years.
  • 00:54:48
    So just for planning purposes, I just wanted you to see how we're addressing it in the five-year plan that you're going to see shortly for the school side.
  • 00:54:56
    And then you'll see ours in December.
  • 00:54:59
    And then health care is another area that we do together.
  • 00:55:02
    And the health care program is doing really well right now, so calendar year 20.
  • 00:55:08
    If you recall, we had a plan year for the health care program, we had a fiscal year for our budgeting, and we had calendar years.
  • 00:55:14
    So what we've done is we've moved the plan year for our health program
  • 00:55:18
    to the calendar year.
  • 00:55:20
    So I had a plan year on there before.
  • 00:55:22
    I'm like, well, this is just calendar year.
  • 00:55:23
    So the calendar year 20, there'll be no change for employer or employees in the health care program.
  • 00:55:29
    So we feel like we can just continue where we are right now.
  • 00:55:32
    And then for calendar year 21 to 25, just based on the numbers we see and the projections that are consulted in the health care
  • 00:55:41
    It seems to me that 2% seems awfully low and I think it
• • SPEAKER_07
  • 00:56:05
    I guess it depends on the economy.
  • 00:56:21
    If we had a recession, we might make the 2%.
• • SPEAKER_13
  • 00:56:30
    We can share with you the information.

5. Five-Year Financial Forecast - School Division.

• • SPEAKER_10
  • 00:57:07
    All right, so we're going to move it on to schools.
  • 00:57:10
    Good afternoon.
  • 00:57:12
    Roslyn Schmidt, Chief Operating Officer for the school.
  • 00:57:15
    I will present our five-year financial forecast and a preview into the early stages of our FY21 budget development.
• • SPEAKER_13
  • 00:57:22
    The title of this forecast is a work in progress.
• • SPEAKER_10
  • 00:57:25
    It is intentionally synonymous with our recent State of the Division report that the school board is unpacking tomorrow night at their work session.
  • 00:57:32
    So I'd like to share an excerpt from that intro of that report explaining that title.
  • 00:57:37
    The phrase holds dual meaning in that the core of our work as a public school system is about generating progress.
  • 00:57:43
    And as a community of learners, we regard ourselves and our school division as unfinished works in progress.
  • 00:57:48
    We fuel this perspective with a determined belief that improvement is always possible.
  • 00:57:53
    The annual report has its growth.
  • 00:57:55
    We're celebrating, but it also reveals efficiencies.
  • 00:57:58
    We embrace both.
  • 00:57:59
    With every failure comes a focused effort on discovery and improvement while each achievement inspires a more efficient
  • 00:58:07
    As with all our work, our strategic plan is our framework for financial planning.
  • 00:58:12
    The core purpose of Albemarle County Public Schools is to establish a community of learners and learning through relationships, relevance, and rigor one student at a time.
  • 00:58:21
    The board docks by annual strategic priorities, so the current priorities are to create a culture of high expectations for all, to identify and remove practices that perpetuate the achievement gap, and to maximize opportunities for students at all levels to identify and develop personal interests.
  • 00:58:40
    As I mentioned, we are a work in progress.
  • 00:58:42
    We are a great school system, but we also have work to do.
  • 00:58:45
    Equity is and will continue to be the focus of our work.
  • 00:58:49
    This is our shared mission of our school, the definition of equity.
  • 00:58:54
    And this is an excerpt from our equity table highlighting inequities we have in our school division.
  • 00:59:00
    This excerpt is just two examples of many data points that are concerning.
  • 00:59:05
    If we were equitable, the percentages in the blue column, which are our overall student, would match the percentages in the pink or purple column.
  • 00:59:14
    So as some examples, black students represent 11% of our student body, yet only represent 5% of our students who passed the third grade in ESL.
  • 00:59:24
    31% of all of our students are economically disadvantaged, yet only 13% of our students earning
  • 00:59:34
    Again, we have work to do.
  • 00:59:38
    In alignment with our strategic plan and our work around equity, our annual budgets are informed and developed by tools such as school improvement plans, our state of division annual report, employee and advisory group feedback, community surveys, and the state standards of quality.
  • 00:59:55
    With broad stakeholder input and strategies rooted in data, we aim to realize the school divisions.
  • 01:00:04
    So here is our five-year financial forecast.
  • 01:00:07
    As you can see, our forecasted expenditures, the orange line, are exceeding and outpacing our anticipated revenues.
  • 01:00:16
    A gap of $4.4 million may grow to as much as over $12 million in five years.
  • 01:00:21
    We'll go into further details on both our anticipated revenues and expenditures, but please keep in mind that this only includes expenditure changes
  • 01:00:33
    include expanded or any new proposals.
  • 01:00:37
    So we've just got the revenue side.
  • 01:00:39
    We receive revenue from federal, state, and local sources, but the majority of our revenue is and will continue to be local.
  • 01:00:47
    Prior to the recession, the state supported over 30% of our budget, and it is now at 26%.
  • 01:00:53
    So we continue to be grateful for the support of the board of supervisors and the local community to make up for lagging state aid.
  • 01:01:01
    A large portion of local revenue is the local transfer.
  • 01:01:04
    As Mr. Allhouse mentioned in his revenue forecast, local revenues are increasing but at a slower rate than in recent history.
  • 01:01:12
    Therefore, we are only forecasting a slight increase in our transfer.
  • 01:01:16
    In terms of the state, at this point, all estimates are highly preliminary.
  • 01:01:20
    The governor will release his budget in December when we'll know more certainty.
  • 01:01:25
    But at this stage, there are two favorable conditions that will likely mean additional revenue.
  • 01:01:33
    That calculation is done every two years.
  • 01:01:35
    And if you recall, this time two years ago, there was a pretty dramatic increase.
  • 01:01:41
    That LCI is a calculation done by the state to determine the local abilities to pay.
  • 01:01:46
    So it's kind of restored.
  • 01:01:46
    It has restored back to a more normal level.
  • 01:01:50
    So those theories, yeah, so that was good news.
  • 01:01:53
    That's a positive one.
  • 01:01:55
    Second, our enrollment is growing.
  • 01:01:57
    So we anticipate additional revenue for the additional students.
• • SPEAKER_07
  • 01:02:01
    On the LC?
  • 01:02:02
    On the LCI, 40% of it is wealth or income of Albemarle residents.
  • 01:02:12
    And if we have a few wealthy individuals sell stock in December, it plays havoc.
  • 01:02:21
    So I think there was a billion dollars more revenue at Albemarle,
• • SPEAKER_10
  • 01:02:30
    This is a historic illustration of the amount the local transferred for the last five years to provide some context.
  • 01:02:54
    In that timeframe, we have been fortunate to benefit from a high year-over-year increase that supported our needs.
  • 01:03:00
    But based on preliminary assumptions, the local transfer is only anticipated.
  • 01:03:19
    A similar illustration of the state revenues with some historical context.
  • 01:03:23
    You can see it's much more volatile as compared to local revenue.
  • 01:03:26
    That dip in FY19 is related to that LCI increase that we just talked about.
  • 01:03:33
    And in FY20, it rebounded due to increase in supplemental lottery funding and if you recall, it funded teacher raises.
  • 01:03:41
    So again, we're anticipating an increase in FY21, but state aid will still not reach pre-recession funding levels when adjusted for inflation.
  • 01:03:50
    So in summary, combined, we anticipate $5.7 million in additional revenue.
  • 01:03:54
    But as I mentioned, our forecasted expenditures will exceed that, and here's why.
  • 01:03:59
    These are our primary expenditure increases.
  • 01:04:02
    First, compensation and benefits.
  • 01:04:05
    BRS, they have reduced the rate of return assumption, which will require a higher contribution from employers.
  • 01:04:13
    Currently, we're estimating that may be $1.4 million.
  • 01:04:16
    Again, that's preliminary.
  • 01:04:18
    As presented in the October joint board meeting, we need to remain competitive with our local market to ensure we can recruit and retain high-quality staff.
  • 01:04:28
    UVA is raising their minimum wage for full-time employees to $15 an hour beginning January 1st.
  • 01:04:35
    Since our October meeting, they also announced their major contractors will also raise their minimum wage to $15 an hour beginning January 1st.
  • 01:04:45
    We will need to take a multi-year approach to get there, but we are forecasting an increase to 1275 to start.
  • 01:04:55
    Lastly, as Laurie mentioned earlier, we are using a joint assumption of 2% increase for our teachers and classified staff.
• • Diantha McKeel
  • 01:05:02
    So the minimum wage to 12.75 equates to 1.6 million for you all.
• • SPEAKER_10
  • 01:05:13
    In the way the pay structure was proposed by H&R.
  • 01:05:17
    And that deals with the compression issue as well.
• • Ann Mallek
  • 01:05:22
    And then if it's correct to divide it in half, then the 1% salary increase equals about 1.4 million for the schools.
  • 01:05:33
    Next, we are anticipating serving more students.
• • SPEAKER_10
  • 01:05:43
    We are growing school division.
  • 01:05:45
    Our overall enrollment increase anticipated for next year will require in the magnitude of approximately 30 teaching positions.
  • 01:05:53
    That is a historically high number, which I will explain shortly why.
  • 01:05:57
    But we also have increases to support demographic changes in our SPED and English learner population.
  • 01:06:03
    And last, a little less, but we do anticipate some non-discretionary operational increases.
  • 01:06:08
    For planning purposes, at this early stage, we model a 2% inflationary increase in operational support.
  • 01:06:15
    When we build our actual budgets, it's a little more specificity.
  • 01:06:18
    So these are just examples.
  • 01:06:20
    We anticipate some increases in utilities.
  • 01:06:23
    This is a minor example, but the rate of police officers and the sheriff has increased.
  • 01:06:27
    And so that impacts budgets for securities at games and our daily traffic control at intersections.
  • 01:06:35
    So I mentioned growth.
  • 01:06:36
    As a primary driver of the increase, here is a chart of our enrollment in the last five years in the solid grade and our enrollment projections for the next five years in the hatched columns.
  • 01:06:47
    I'll draw your attention to FY20, which is the current school year.
  • 01:06:51
    We had projected and budgeted for 13,733 students, but we have today enrolled over 300 more students than that, or about 14,000 students.
  • 01:07:03
    We are projecting an additional 200 students next year.
  • 01:07:06
    That's FY21, so that is a budget to budget increase of 500 students.
  • 01:07:12
    For us, that is large.
  • 01:07:14
    So you can also see how those additional students we currently enrolled this year influence their out year projections.
• • Ned Gallaway
  • 01:07:21
    Where are they?
• • SPEAKER_10
  • 01:07:23
    Where are they?
• • Ned Gallaway
  • 01:07:23
    Where are you projecting them to pop up at?
• • SPEAKER_10
  • 01:07:27
    Where we received the unanticipated students were Kale and Stone Robinson, most dramatically but also a little more Brownsville and Baker Butler.
  • 01:07:46
    All alignment where we see new developments.
• • Ann Mallek
  • 01:07:57
    and I was at the CCAC a few months ago.
  • 01:08:00
    We'll start that out.
• • SPEAKER_05
  • 01:08:03
    Do we have any sense of whether the additional students are homegrown, entering the school system?
  • 01:08:10
    Are people moving here?
• • SPEAKER_08
  • 01:08:14
    Are they organic or inorganic?
• • SPEAKER_10
  • 01:08:15
    Is that what you're getting at?
  • 01:08:19
    I wanted to compost and fertilize it.
  • 01:08:22
    One of the hardest things to predict is a kindergarten class.
  • 01:08:25
    This year we received a hundred more kindergartners than we were anticipating, so that's a big jump of the increase.
  • 01:08:31
    We predict our kindergarten class based on birth data from five years prior.
  • 01:08:36
    Historically, when we compare birth rate to kindergarten, we don't receive as many kindergartners as we had births, so typically around 95%.
  • 01:08:45
    This year, we received more kindergartners than we have had births at 105%.
• • SPEAKER_07
  • 01:08:54
    I think one of the trends that we're seeing over time is as the city gentrifies, more poor people from the city are moving into the county.
  • 01:09:26
    House Department complex that went up, right next to where I live.
  • 01:09:33
    And so I think we're seeing that trend.
  • 01:09:37
    So we look at live versus from people who live in Albemarle, but as people move out of the city into the county, it's increasing our enrollment.
• • Diantha McKeel
  • 01:09:47
    Because that presented that data for the other side of the urban brain where we are, about four or five years ago.
• • SPEAKER_07
  • 01:09:53
    That's a long-term trend.
  • 01:09:56
    It's been happening for years.
• • SPEAKER_13
  • 01:09:58
    And we're putting more affordable housing into the gales.
  • 01:10:01
    That's right.
• • SPEAKER_07
  • 01:10:02
    We've got another designated one coming up.
  • 01:10:07
    Is that you're talking about the one that you're just about finished building?
• • SPEAKER_13
  • 01:10:10
    Yeah.
• • SPEAKER_10
  • 01:10:30
    So again, here's our anticipated funding gap, assuming only those expenditure changes I discussed.
  • 01:10:39
    But I do want to conclude, this is my last slide, to preview other funding considerations.
  • 01:10:44
    Again, these are not included, but are needs.
  • 01:10:47
    Expansion of existing programs, such as foreign language in our elementary schools or our STEP program.
  • 01:10:53
    additional work related to equity, safety, and mental health.
  • 01:10:57
    We know these are all valued by the majority of our stakeholders.
  • 01:11:01
    Special education, it continues to be an evolving, expanding need in not only the overall increase which we've captured, but in the severity and complexity of the service needs.
  • 01:11:10
    And lastly, there are additional growth considerations beyond teachers including additional bus routes, custodians to clean the trailers that we've been adding, and other things
• • SPEAKER_13
  • 01:11:28
    Do you anticipate any more funds coming from the state given the political changes that have come in the past?
  • 01:11:39
    Is there any expectation?
• • SPEAKER_07
  • 01:11:41
    I feel like there should be a groundswell of more support.
  • 01:11:49
    I think the latest figure I heard was that statewide, adjusted for inflation, the state is paying $600 less
  • 01:12:03
    We really need to try and get the state to commit significant more revenue for education across the state.
• • Diantha McKeel
  • 01:12:21
    Because that also frees up other monies here that we can be using in other ways.
• • SPEAKER_13
  • 01:12:26
    Is there any initiative that you're aware of to deal with mental health issues?
• • SPEAKER_07
  • 01:12:32
    what it is to me it's the size of the pie okay I mean the state's pie is too small and if they so what now they do well we'll put more money in mental health and we'll take it away from guidance councils or you know so I mean that you know we can decide how to use it if they'll increase the pie.
• • SPEAKER_10
  • 01:12:56
    In the Board of Education
  • 01:12:59
    Last month released some potential SOQ changes and there was a component of mental health that the big unknown is, will it be funded?
• • SPEAKER_08
  • 01:13:08
    I'd make one observation from the last arrow here, additional growth in transportation.
  • 01:13:14
    Given your repeated curve showing the gap as it widens with time, I think one thing that the new board will look for
  • 01:13:26
    Board of Supervisors will look for from the school board is a coherent transportation plan of how the school division plans to meet the busing needs of two learning centers going forward in as cost effective manner as possible, operating large diesel based
  • 01:13:50
    almost 40 seat buses when you're transporting a smaller number of students in each bus is both counterproductive in terms of cost.
  • 01:14:03
    I think going forward there are efficiencies available there that money that can be freed up there with more creative transportation strategy and I'd encourage you all to be thinking about electric transportation and on-demand transportation and maybe both of those along with autonomous transportation going forward.
  • 01:14:32
    as a way of meeting those needs and reducing transportation outlays that currently are committed very expensively in both the CIP for replacement of buses and in your operating budget as well, which is getting more expensive because the cost of hiring drivers is going to go up and retaining drivers is going to continue to go up.
• • Diantha McKeel
  • 01:14:58
    In doing that,
  • 01:15:07
    to talk about that transit issue.
  • 01:15:10
    As Rick says, on demand, looking at it from a different lens rather than just what we've done for the last decades.
• • Ann Mallek
  • 01:15:19
    And I think Mr. Foley said that state law changes would need to be done too because they're currently required, I think, to transport from home to school in their own bus.
  • 01:15:29
    So that's something we have to be able to participate in.
• • Diantha McKeel
  • 01:15:31
    Things that can be done during the day.
• • Ann Mallek
  • 01:15:47
    You had mentioned about games and traffic control and sheriff's and things
• • SPEAKER_10
  • 01:16:05
    I just wanted to give a tangible example of an increase, but the other side of it is
• • Ann Mallek
  • 01:16:23
    I wrote down 5.7 million, but I couldn't write fast enough to know what that was.
• • SPEAKER_10
  • 01:16:33
    That was the sum of our total additional revenue that you might get from the state.

6. BOS and School Board Discussion.

• • SPEAKER_14
  • 01:16:51
    Okay, so we're just going to move forward to the last part of this day and it is for your discussion so you've already been discussing but we have just a couple leading slides to it and you can approach this in any way you'd like to.
  • 01:17:04
    We just wanted to mention as you go into your conversation, you've heard a lot about schools today.
  • 01:17:10
    We haven't had a chance to talk about local government much because we're not doing that until December.
  • 01:17:14
    Fourth, and we don't do that together.
  • 01:17:16
    So I just wanted to just show you that we have a multitude of services that general government provides.
  • 01:17:23
    In addition to our departments, like Department of Social Services and our Public Safety, we support a lot of agencies, such as solid waste, such as transit, such as ECC libraries.
  • 01:17:36
    So this is just a slide to demonstrate the
  • 01:17:39
    The breadth of different types of functions that are provided when we say this word general government.
  • 01:17:45
    So we talk about schools and general government.
  • 01:17:48
    And so we just wanted to share with you what services are in the general government side.
  • 01:17:52
    And there's no details on it.
  • 01:17:54
    I just wanted you to see this.
  • 01:17:55
    There's a lot of other items that we have to look at in addition to the school division's needs as well.
  • 01:18:02
    So the school board and the board of supervisors do not jointly have a work session
  • 01:18:11
    Welcome to you attend or listen in or read the minutes from it or notes, but I just wanted to share with you, we do ours a little bit differently per our policy, our current board policy, we take the five-year plan and we balance the first two years.
  • 01:18:25
    So ours is a little different approach.
  • 01:18:27
    We say, how could we get it balanced based on the current tax rate and show that to our board of supervisors?
  • 01:18:33
    So we're working a little bit differently.
  • 01:18:34
    So ours will be demoed a little bit different for our board of supervisors.
  • 01:18:39
    We will also have very similar expenditure drivers.
  • 01:18:42
    You're going to see the same pattern.
  • 01:18:45
    We're working on ours right now.
  • 01:18:46
    We have the compensation and market increase challenges.
  • 01:18:50
    The full year impact, we have some current obligations that we put in play for this year, such as some leases and things.
  • 01:18:56
    We have to pick that up full year.
  • 01:18:58
    We want to maintain our current level of services in many areas.
  • 01:19:04
    Transit, solid waste, these are just examples, public safety, and we also have a
  • 01:19:12
    details, just wanted to place that out there before your discussion because we're both here today and we want to make sure that we've mentioned that as well.
  • 01:19:20
    So if we move to the next slide, this is a slide that we're using some of the same things we did in the capital conversations.
  • 01:19:28
    You might remember this slide.
  • 01:19:29
    There's a lot of considerations you had to think of when you were looking at the CIP, and the five-year plan for the operation should be similar.
  • 01:19:39
    So you have to think about growth.
  • 01:19:40
    You've heard some information about growth today and our operations.
  • 01:19:44
    And CIP debt is a factor that we have to think about collectively with operations.
  • 01:19:49
    We have to think about our taxpayers' considerations.
  • 01:19:52
    And so what we've done, if you want to move forward, we've put together an idea for how the rest of the day can go.
  • 01:19:59
    We have until 4.30 today, so we have about 40 minutes for your discussion.
  • 01:20:04
    We want to make sure that you have that time as well.
  • 01:20:08
    And so we thought about two different approaches to go.
  • 01:20:10
    This, again, is similar to something you might remember from the CIP discussions.
  • 01:20:15
    We thought in small groups of two or three that you just spend a little time and talk about what might have surprised you from this conversation, what pleased you, and what concerns you.
  • 01:20:25
    And it's just amongst yourself.
  • 01:20:27
    There's no report outs or anything on that.
  • 01:20:30
    And that would be for about 10 minutes.
  • 01:20:31
    And then the large group discussion would be 30 minutes.
  • 01:20:34
    We would talk as a larger group after that conversation.
  • 01:20:39
    We put some guiding questions out there, but you can have any discussion you would like.
  • 01:20:42
    But the first one is what can we do together to meet our longer term community needs?
  • 01:20:47
    What can we do together?
  • 01:20:48
    I heard some conversation a little bit already on that.
  • 01:20:52
    And then we have to have balanced budgets.
  • 01:20:55
    Both schools and local government, at the end of the day, would balance our budget.
  • 01:20:58
    And so then we'd invite you to some conversations.
• • SPEAKER_09
  • 01:21:02
    So I would say turn to the person next to you in groups of two or three try to talk about these three questions that have been presented.
• • Diantha McKeel
  • 01:21:18
    So just to clarify, you're not expecting any votes, anything to come out of this meeting?
  • 01:21:27
    No.
  • 01:21:27
    Because I mean in the past, we haven't been getting away from that.
• • 01:21:40
    You're going to be a big group.
  • 01:22:18
    and so what do you feel about Texas?
• • SPEAKER_00
  • 01:22:52
    This face dot is really dots that we did.
• • 01:22:55
    Remember, nobody changed anything.
  • 01:22:58
    See, I probably based that on a dot.
  • 01:23:01
    Because in my group, there was no cool stuff.
  • 01:23:05
    And I thought I had put a note on here as to whether I was going to hold on to it or not.
• • Ned Gallaway
  • 01:23:13
    It's still very prioritized.
• • Diantha McKeel
  • 01:23:15
    Yeah, that's way down.
  • 01:23:16
    Sharing was a surprise to me.
• • Ned Gallaway
  • 01:32:51
    Let me bring us back to, it sounds like we've had some robust discussions.
  • 01:32:56
    When I checked into the other group over there, I saw some lively gesture again.
  • 01:33:00
    I won't point out the fifth part of it.
  • 01:33:05
    If we could come to order behind me, please.
  • 01:33:08
    If we could come back to the large group discussion and have our conversation here.
  • 01:33:15
    I'm presuming this is a large, for everybody, Lori, is that what we're designed to do?
• • SPEAKER_09
  • 01:33:19
    So the idea for this part is to take what you've discussed in your small group and start to brainstorm alternatives.
• • Ned Gallaway
  • 01:33:27
    I'm sorry, could you please cut out the conversation behind me so I can hear what's going on at the table?
  • 01:33:33
    I'm not looking at anybody.
• • Diantha McKeel
  • 01:33:34
    I'm not pointing any fingers.
• • SPEAKER_08
  • 01:33:39
    Chris, please.
• • SPEAKER_09
  • 01:33:41
    We have a board meeting.
• • SPEAKER_08
  • 01:33:43
    All right, thank you.
• • SPEAKER_09
  • 01:33:46
    So the purpose of the second part is to take what you've discussed in your small groups, pull that forward, and think about alternatives and options we have to address any concerning thoughts you had, what do we do moving forward.
  • 01:34:00
    Maybe try to be creative.
  • 01:34:01
    This is the time to be creative.
  • 01:34:02
    This is very preliminary.
  • 01:34:04
    As the question was asked, we're not asking for any votes or anything official.
  • 01:34:09
    Well, I will say this about decreasing
• • SPEAKER_08
  • 01:34:39
    That didn't happen.
  • 01:34:45
    And I think one of the benefits of that
  • 01:35:03
    which I refer to as a white elephant, it really forced the school division to think more clearly about the role of high school education, especially
  • 01:35:19
    with the need for employable skills coming out of high school and a different way of operating secondary education than classically it's operated in the American educational model, much more of a European
  • 01:35:39
    Model of Education.
  • 01:35:41
    And that has significantly reduced operating costs that otherwise we would currently be struggling with in the budget because of not only, you know, you're going to have operating costs in your school budget for Learning Center 1 and Learning Center 2, but they will be comparatively minor
  • 01:36:06
    versus what those costs would have been to operate a full high school, janitorial costs, maintenance costs, as well as all the specialized services would have been associated with it, specifically sports and extracurricular activities.
  • 01:36:23
    So I think already the school board has made a long-term decision that is going to generate a significantly increased return
  • 01:36:35
    on each taxpayer's dollars in Albemarle County as a result of that.
• • Diantha McKeel
  • 01:36:42
    And I would, you know, I'd just like to see when you're talking about the gap that we're still, that existing gap from state funding for education, I'd like us to seize the moment right now and try to influence somehow or another
  • 01:37:03
    and I think VEA needs to step up to the plate.
  • 01:37:07
    I'm serious and then I think we should help them, the school board should help them get some synergy around the state funding education at least to cover that gap that they have taken away from, that all those monies that they've taken away from us because every cent that the state pays towards education is something
  • 01:37:33
    And we're supplanting right now a lot of money that the state has not been stepping up to the plate and paying.
  • 01:37:40
    And I just think that is an issue right now.
  • 01:37:44
    Everybody in the state, I take that back, most everybody in the state, economic development
  • 01:37:51
    Right on across, everybody says that education is the number one way to what we need in a community to go forward, for the strength of a community.
  • 01:38:04
    And we ought to, this is the time, I just think, to get that going.
  • 01:38:09
    And I think it means BEA is going to have to do some stepping up to the plate, too.
• • SPEAKER_02
  • 01:38:12
    I mean, just to predicate what you just said, it translates to between 600 and 650 over the past 10 years.
  • 01:38:22
    Per student.
  • 01:38:23
    So you do the math with 14,000 students.
  • 01:38:26
    We're talking $8 to $10 million a year for 10 years.
  • 01:38:30
    $80 million would have come in handy.
  • 01:38:33
    And they still haven't funded us at the level they were doing in 2009.
• • SPEAKER_06
  • 01:38:40
    And I don't think it's going to happen automatically.
  • 01:38:42
    There's going to be an education process, especially for the new people coming into office to really explain what this
  • 01:38:55
    And so I think you're right.
  • 01:38:56
    The DEA's got to step up.
  • 01:38:58
    I think for those of us in our board, we're going to go down to the advocacy, both at the federal level and at the state level.
  • 01:39:07
    And then I know that there is at least one member of the board that tends to be a real presence during the down enrichment, in addition to Helen Dunn in the communications department, who's our lead.
• • Diantha McKeel
  • 01:39:35
    how important education is.
  • 01:39:37
    So we shouldn't have a whole lot of education around those.
  • 01:39:41
    But I understand exactly.
  • 01:39:43
    I understand what you're saying.
  • 01:39:44
    I just think there's a role for VEA because this affects everyone in the state of Virginia.
  • 01:39:49
    This is not a single look at the issue.
• • SPEAKER_13
  • 01:39:52
    Are there current bills that turn year after year after year that would be, you know, that we could support now that we already know of?
• • SPEAKER_07
  • 01:40:01
    I'd just say that
  • 01:40:06
    and so they're working with a very limited pool of money and education gets what's left.
• • Ann Mallek
  • 01:40:18
    There's a huge surplus this year, so getting that redirected in some way.
• • Diantha McKeel
  • 01:40:21
    It gets back to exactly what Steve was saying.
  • 01:40:23
    They keep dicing and slicing the pie a different way rather than making the pie bigger.
  • 01:40:29
    It's always a good idea to ask for something specific.
• • SPEAKER_06
  • 01:40:31
    Yes, I agree with that.
  • 01:40:32
    Yes, I agree.
  • 01:40:33
    We have our legislative kit put together, and I'd be glad to send it out to the board of supervisors.
• • Diantha McKeel
  • 01:40:38
    Yeah, share that with us.
  • 01:40:39
    And we should share ours with you as well, if we haven't already.
• • SPEAKER_02
  • 01:40:42
    I just want to thank the community and the board of supervisors for taking up much of the slack.
• • Ned Gallaway
  • 01:40:59
    the state, Jaylark did their own study in 2015 that showed that in the southeast portion of the country that Virginia, more so than any of the other states in the southeast region, picked up more of a burden to fund education.
  • 01:41:12
    And if your own state study says that, then it shouldn't be questioning that the rationale's there that hey, there should be a swing back the other way.
  • 01:41:20
    And understood there should be specifics to go after, but Diantha's absolutely right.
  • 01:41:26
    And we're all guilty of this as well.
  • 01:41:28
    We all tout education as a campaign issue.
  • 01:41:32
    But now it's time to step up and make it a legislative priority.
  • 01:41:35
    And we've seen what's happened over the last 22 years, I think it's been.
  • 01:41:39
    So these are folks from a party that I'm a member of who purport to be the champions of education.
  • 01:41:44
    I've certainly been hearing other issues being out there that suggest now's the time.
  • 01:41:48
    Well, this is a basic everybody touches everybody issue that everybody should be able to get behind.
  • 01:41:53
    So I hope that doesn't get lost in some of the other political issues that could be out there as well.
• • Diantha McKeel
  • 01:42:02
    Could the DEA come up with a plan or I'm just saying because if all the voices are
  • 01:42:13
    Statewide right or at least some help with that.
  • 01:42:16
    It's not that we can't do it, but we need their help Yes, I agree with that too.
• • Ned Gallaway
  • 01:42:26
    Others that haven't had a chance to weigh in yet?
• • SPEAKER_13
  • 01:42:51
    Well I've been capsulated with local groups so I'll use affordable housing as a piece so when people come to us about wanting an annual budget for affordable housing and want to have the conversation about where do you find the money for that
• • Ned Gallaway
  • 01:43:21
    And I say to a local group, one in particular that's been on affordable housing for two years and puts us in a very public situation and answering what we will support.
  • 01:43:30
    So if your group goes and advocates that the state
  • 01:43:32
    So it's constantly advocating to go, you know, go hit the state legislators to put the money there, freeze up the local money that now I can put over there.
  • 01:43:47
    So it's constantly re-educating folks who are advocating to us that yes, that's appropriate, but you also need to go advocate here, maybe on this different issue.
  • 01:43:57
    And then us go down and, you know, step up too, right?
  • 01:44:00
    Like I hear the calls.
  • 01:44:05
    So it probably is I'll be able to get over there in January and February and do my own advocating.
• • SPEAKER_08
  • 01:44:12
    Our new representatives come on board.
• • Ned Gallaway
  • 01:44:14
    And for those of us who, some of you around the table have decades on, some of the people will be serving in our state government.
  • 01:44:22
    And to be able to connect those historical dots about how this issue over here could impact your issue over here, we just have to kind of trace those lines.
• • Diantha McKeel
  • 01:44:31
    We'd be full for bit for bit.
  • 01:44:33
    Our community, if we had something visual, I don't know, just a one-pager that talking points and something that just hits you in the face that $600 and some dollars per pupil, 14,000 people, students, this much, our community is not more than a decade.
  • 01:44:55
    I'm serious.
  • 01:44:55
    Is there a way we can have maybe a one-pager?
  • 01:44:58
    And if we did that, then of course, how would we best use it?
  • 01:45:02
    But I do think it would be helpful for us to have something like that.
  • 01:45:07
    It would be something to at least start to give our representatives and help our community understand.
• • Ned Gallaway
  • 01:45:15
    I appreciate that the increase of the pie would do it, but it's also the state
  • 01:45:22
    understanding that when they give a teacher raise that it's not raising, they're not paying for the full teacher raise.
  • 01:45:29
    So that also could be something that could be looked at that also could free up local dollars to be used for other priorities.
• • Diantha McKeel
  • 01:45:35
    That is confusing even to the public.
  • 01:45:38
    They hear that states giving two percent raise, well that doesn't mean that Albemarle County receives.
  • 01:45:45
    Well the county had to match it in order for
• • Ann Mallek
  • 01:45:51
    and the forty percent.
• • Diantha McKeel
  • 01:45:53
    I just think we need to keep it as simple as possible but I'd love to have something.
• • SPEAKER_00
  • 01:45:58
    Okay, well I have two ideas that are questions really and sort of off as a tangent compared to what we've been talking about.
  • 01:46:04
    But Rick mentioned some ideas about transportation and so I wonder when
  • 01:46:11
    those ideas and who could be discussing those ideas because using transportation to bring kids to the centers or either transportation for some of our disadvantaged students to different programs within the county.
  • 01:46:24
    So transportation needs would be one thing.
  • 01:46:27
    And then the second main one that I've shared with my group is I'm a real, just like Liz is sort of on the bandwagon for the recycling center, I'm on the bandwagon for AHS and WAHS renovations.
  • 01:46:40
    Because when we first talked about this, that was one of the main things that would be a part of the program, that when we would have the centers, both of those two high schools, in fact all three of their high schools, would be renovated.
  • 01:46:51
    So that seems to have dropped off the table completely so I wanted that to be sort of also in the forefront that we still need to think about that.
• • SPEAKER_07
  • 01:47:00
    I just want to follow up on the transportation idea.
  • 01:47:10
    Okay, Charlottesville area transit.
  • 01:47:22
    I'm sorry, I don't know how many millions we're spending on school bus transportation off the top of my head.
  • 01:47:27
    We've got a huge transportation system.
  • 01:47:30
    If we could find a way to leverage that to serving not just students, but serving residents,
  • 01:47:40
    I think there's a huge possibility for improving services and ultimately reducing costs.
  • 01:47:47
    And do we have anybody who's working on that project?
  • 01:47:50
    It may take some changes to state code, but I think that's something we need.
  • 01:47:58
    We need better bus service for our citizens.
  • 01:48:01
    We're going to need better bus service for our students to go to internships.
  • 01:48:09
    So I'm just saying that's both a challenge, but it could be a real opportunity.
  • 01:48:18
    And it seems like I don't know who we get to do that, but we need a champion.
• • SPEAKER_02
  • 01:48:24
    We need a project manager to really... We may need some outside expertise to craft a mega plan.
  • 01:48:33
    You're a transportation person, right?
• • Diantha McKeel
  • 01:48:36
    The Board of Supervisors is already looking beyond CAT recognizing that they're not right now in the position to be able to help us with our transportation.
  • 01:48:50
    And we just recently received a presentation from Brad Sheffield, from John, about an on-demand service in the spring that we're going to start at Loaves and Fishes.
  • 01:49:03
    You'll be coming back to us.
  • 01:49:05
    It's a, you can sort of think of it as a pilot, but it's, and we're starting with Loaves and Fishes because it's a discreet area and they have their open certain times and it's a great place to start.
  • 01:49:20
    But I would suggest, I do think we really need to get Jim Foley and some of the transit folks, myself, I don't know who else, around the table and talk about what this would look like
  • 01:49:34
    and how we could look at transportation differently for Albemarle County residents and the schools.
  • 01:49:40
    That was why, Steve, we originally had Jim Foley at the table with a partnership because we were hoping ultimately to pull the school divisions in.
  • 01:49:48
    I think it's time to start having that discussion.
• • SPEAKER_00
  • 01:49:54
    It would have to be for the entire county and not just the urban arena.
• • Diantha McKeel
  • 01:49:57
    Oh yeah, absolutely, absolutely.
  • 01:49:59
    But the centers, talking about getting kids to the centers, I have said many times we ought to be talking about how we're going to move our kids around from internships.
  • 01:50:09
    I represent a whole lot of kids whose parents don't, can't buy them a car or can't leave their jobs to move them to their internships.
  • 01:50:18
    I want another way of getting those students around and
  • 01:50:23
    reduce those barriers for children.
  • 01:50:26
    Put everybody, talk about equity, let's put everybody in the position of being able to have an internship if they want it.
• • Ann Mallek
  • 01:50:33
    And that's what Green County Transit has been doing for their kids after school for years.
• • Diantha McKeel
  • 01:50:37
    So I think it's, as many of you all are saying, it's just getting the white people at the table to start that conversation first.
• • Ned Gallaway
  • 01:50:51
    is the right system.
  • 01:50:53
    And like you were saying, can it come out of the school division's piece?
  • 01:50:57
    But if you come at it from this on-demand, it could be a very realistic fix for the issue of the centers and internships and stuff like that.
  • 01:51:05
    So as that starts to develop out,
  • 01:51:07
    I think you'll see how that'll go in, because as Brad said, sometimes an on-demand route can tell you where a fixed route is needed and necessary.
  • 01:51:16
    So it informs how to make your fixed route system even better.
  • 01:51:19
    So that could help tighten up.
  • 01:51:21
    I mean, think about that.
  • 01:51:22
    You probably have buses you could free up that aren't having to do on-demand if there's a different type of service for it.
  • 01:51:28
    And then maybe that eases up demand to be able to do field trips.
• • Diantha McKeel
  • 01:51:31
    So what I'm talking about with Brad, for example, is just we use this as an example.
  • 01:51:35
    Lowes and Fishes is right there by the Lance Lane campus.
  • 01:51:39
    There is no bus stop for the families and students that are using that campus.
  • 01:51:47
    Why?
  • 01:51:48
    If we're having to fix demand that's going to go to Lowes and Fishes, then let's see what we can do for that Lance Lane campus with an on-demand and how it might tie together
  • 01:52:02
    I'm not a transit person.
  • 01:52:03
    I can't figure that out.
  • 01:52:05
    But we have to have the right people at the table who can.
• • Ann Mallek
  • 01:52:08
    Well, I could get kids from the high school up to the center of what?
• • Diantha McKeel
  • 01:52:11
    It's right there in the same neighborhood.
  • 01:52:12
    It may be a way to get some field trips for those children over there.
• • SPEAKER_13
  • 01:52:17
    My understanding, just from asking Brad, is that the school board or the school division
  • 01:52:27
    I think others did too.
  • 01:52:29
    So I'm just saying that to answer this question here needs to start with maybe reaching out to John also.
• • Ned Gallaway
  • 01:52:48
    Well, I think, at least we have a transit professional that we know is well-adverse in the issues of what we've all just talked about in grad, and is a parent, so he obviously knows the challenges of moving kids around, so you've got somebody that's brainstorming this, is passionate about it, who, whether you reach out to him or not, has probably got it on the mind.
• • SPEAKER_07
  • 01:53:11
    Probably require a vote of both boards, but we ought to maybe create a joint committee
  • 01:53:18
    I'm responsible for getting the right people in the room, talking about it, doing that kind of work to make this vision happen.
  • 01:53:29
    But I do think it would require both boards to make it official and to give it some status.
• • Ann Mallek
  • 01:53:38
    I think that's what the partnership is for.
  • 01:53:40
    But I'm just saying.
• • Diantha McKeel
  • 01:53:41
    This is going to be a little bit outside the partnership, Ann.
• • SPEAKER_07
  • 01:53:44
    Well, it can be.
  • 01:53:45
    But not necessarily.
  • 01:53:48
    As far as I know, our school board has never been asked to endorse that we want to create this partnership.
• • Ned Gallaway
  • 01:53:54
    Well, we haven't.
  • 01:53:55
    We just got an update on if we're interested in pursuing an on-demand pilot.
  • 01:53:59
    So we're not too far down this path.
• • SPEAKER_07
  • 01:54:02
    What I'm saying is if the boards were to vote and we're going to create a joint
• • Diantha McKeel
  • 01:54:31
    It would be great if Superintendent Hawes and our county executive could have a discussion and maybe think about how we might be able to move forward with two boards to at least examine the topic.
• • Ned Gallaway
  • 01:54:46
    So we're closing in our time.
• • SPEAKER_05
  • 01:54:48
    Are there others that wanted to get the topic up?
  • 01:54:50
    I'll bring up the issue of online learning.
  • 01:54:52
    Three of my kids graduated from Western Albemarle,
  • 01:54:59
    For companies in different cities, my daughter Rebecca works for an education company, including educators based in Chicago.
  • 01:55:07
    She lives in Atlanta.
  • 01:55:08
    My son in Atlanta works for Charlottesville.
  • 01:55:13
    I think in some ways hearing you all talk about driving huge buses with kids going all over the county and all, it just seems like so many people are doing online teaching and online learning that it's got to be part of our future too.
  • 01:55:35
    Certainly lots of colleges are doing online programs.
  • 01:55:38
    I don't see this any reason why a high school kid can't learn a lot online too and not spend two hours a day
  • 01:55:46
    but spent quality time online.
  • 01:55:49
    So I'm certainly not the expert on even remotely close to what kind of online learning would look like, but it would be environmentally more friendly, it could be better educationally, safer, lots of things.
  • 01:56:04
    So I'm just throwing that out as I'd be curious as time goes on of what's the future of online learning within our
• • SPEAKER_07
  • 01:56:13
    Just one of the things that we're talking about with our centers and looking also, I think, to change KTEC from a half-day model to an every-other-day model.
  • 01:56:26
    If we do that, that would cut our transportation times for our students and our transportation costs in half because you cut the number of trips in half.
  • 01:56:41
    Ann, did you?
• • Ann Mallek
  • 01:56:44
    What has pleased me is this process overall and I think we all have such a better understanding of it.
  • 01:56:49
    And I think we're confident in where we're going based on what we've been through over the last six or so months.
  • 01:56:55
    One of the things that continually jumps out at me and I think the citizenry in the county really begins to understand now what the cost is of growth and the new people who, the new units, wherever they come from.
  • 01:57:07
    the new units never pay for themselves.
  • 01:57:08
    And so we have got to expand our economic pie through all the other aspects in addition to taxation, whether it's our local businesses growing and better jobs and primary businesses bringing money from outside, et cetera.
  • 01:57:22
    So those are really important.
  • 01:57:25
    Somehow focusing this General Assembly's attention on the fact that they need to follow their own rules.
  • 01:57:31
    It's not like we're saying give us more money because
  • 01:57:34
    We would not be in the crowded situations in which we are right now.
  • 01:57:49
    So I think that's a really powerful argument.
  • 01:57:57
    all march forward and go visit and talk to people and continually pound on that.
  • 01:58:02
    Because certainly from the BACO perspective, education funding is a very, very high priority.
  • 01:58:09
    And all across the state, our salaries are so pitiful compared to, I think, everybody but Mississippi.
  • 01:58:16
    So we know from economic development from the statewide that when Governor Kean brought all that focus on education, that's what put the state in the number one spot.
  • 01:58:26
    and the minute those cuts started happening was when it slid off down the line.
  • 01:58:31
    So the governor over the weekend did take a lot of credit for all the teacher raises and I really wanted to shout, yes, but we had to match them.
  • 01:58:41
    So it is not exactly found money, shall we say.
  • 01:58:46
    And just one last thing, I was reading minutes, my November assignment was from one of our earlier
  • 01:58:54
    combined meetings.
  • 01:58:55
    And under increasing revenues, one school board member had made the question about, well, we need to change the land use program.
  • 01:59:01
    And I just wanted to remind everybody that every house, every barn is assessed at market rate no matter where it is.
  • 01:59:09
    And so this is not something that is the basis for our growth management strategy for the whole county.
  • 01:59:18
    And I just think the repercussions when those kinds of arguments are thrown out there is
• • SPEAKER_06
  • 01:59:32
    I have got a total non-sector to everything we're talking about and I've got two commercials.
  • 01:59:41
    One is K-Tech pies are now available for Thanksgiving.
  • 01:59:47
    And I haven't had their pumpkin pie, but I will tell you their apple pie is something special.
  • 01:59:51
    You can still order until Friday.
  • 01:59:56
    three days of the week before Thanksgiving.
  • 01:59:59
    And so I really recommend them.
  • 02:00:00
    I've already put in for two.
  • 02:00:02
    And then secondly, this Saturday at Sutherland Middle School, starting at 830, there's a 5K run and walk that's open to all city and government employees and school employees.
  • 02:00:18
    And while families and friends are welcome to be there to cheer on,
  • 02:00:22
    They're there to greet everybody at the end because this run is just for the city people and the school people and the county people.
  • 02:00:31
    So I encourage any of you to spread the word, and I'll send the link to the KTEC pods when I send out the legislative kits.
• • Ned Gallaway
  • 02:00:46
    I didn't announce it at the beginning, the Board Supervisors, we do have the need for a brief closed session after this meeting so it hasn't been communicated yet.
  • 02:00:57
    Lori, any final wrap-ups?
• • SPEAKER_14
  • 02:00:59
    No, I really took a lot of notes just for myself personally through this conversation.
  • 02:01:05
    I appreciate it all very much.
  • 02:01:07
    I know that we all appreciate the kind

7. Meeting Wrap Up and Next Steps.

• • SPEAKER_14
  • 02:01:20
    Let's see the next steps.
  • 02:01:21
    We talked about that before.
  • 02:01:22
    School board has a couple meetings coming up to provide additional information.
  • 02:01:28
    January 23rd is when the school board will receive the superintendent's funding request.
  • 02:01:40
    Thank you all very much.
• • SPEAKER_05
  • 02:02:20
    Take your conversations outside, please, because I'm moving that the board go into closed meeting pursuant to section 2.2.1a of the code of Virginia under subsection 3 to discuss the disposition of county-owned real property in the Scottyville Magisterial District where discussion in an open meeting would adversely affect the bargaining position or negotiating strategy of the board related to under subsection 8 to consult with legal counsel regarding specific legal matter
• • SPEAKER_11
  • 02:03:04
    She has to get the high sign from the mic check.
• • SPEAKER_13
  • 02:03:31
    I move that the Board of Supervisors certify by a recorded vote that to the best of each supervisor's knowledge only public business matters lawfully exempted from the open meeting requirements of the Virginia Freedom of Information Act and identified in a motion authorizing the closed meeting were heard, discussed, or considered in the closed meeting.
• • SPEAKER_11
  • 02:04:00
    Ms. Mallek?
  • 02:04:01
    Yes.
  • 02:04:01
    Ms. Palmer?
  • 02:04:02
    Yes.
  • 02:04:02
    Mr. Galloway?
• • Ned Gallaway
  • 02:04:03
    Yes.
• • SPEAKER_11
  • 02:04:03
    Mr. Dill?
• • Ned Gallaway
  • 02:04:04
    Yes.
• • SPEAKER_11
  • 02:04:05
    Mr. Randolph?
• • Ned Gallaway
  • 02:04:06
    Hi.
• • SPEAKER_11
  • 02:04:07
    I started to read further on.
• • Ned Gallaway
  • 02:04:08
    It was like, it's different.
  • 02:04:09
    And who has an agenda in front of them?
  • 02:04:11
    Did you have something you were going to say?
• • Ann Mallek
  • 02:04:13
    I just have one super quick and very important announcement to everybody, even people who are no longer going to be on the board.
  • 02:04:18
    By December 31st, you have to do your conflict of interest training, which is online through bank codes.
  • 02:04:25
    Thank you to the class over at the conference and it was really fun and very, very worthwhile.
  • 02:04:30
    So super, super important not to forget because they will come after you.
  • 02:04:34
    Even after you're out of office, they will come after you.
  • 02:04:37
    Thanks to the legislature who doesn't care about themselves doing it, but they definitely are open to do it.
• • Ned Gallaway
  • 02:04:42
    I asked Claudette required by who?
  • 02:04:45
    It's the General Assembly.
• • Ann Mallek
  • 02:04:48
    And you'll get a little certificate like this that you can give to Claudette because she's the one who has to keep it.

8. Adjourn to November 20, 2019, 1:00 p.m., Lane Auditorium.

• • Ned Gallaway
  • 02:04:54
    With that, we will adjourn to November 14th, 3 p.m. at 1350 Arrowhead Valley Road, Charlottesville 22903.

9. Non-Agenda: Closed Meeting.

10. Non-Agenda: Certify Closed Meeting.