Stormwater Bond Question On Hold; Supes Want Help with Tax Increase Wording

By Desiree Parker Thursday, June 24, 2010

At their Tuesday meeting, James City County supervisors were set to decide on language for a $30 million referendum to fund stormwater projects, but after discussions in their earlier work session they decided to postpone the decision for a few weeks. They did, however, make a decision to continue to pay employee retirement contributions, though two supervisors opposed the idea.

During their afternoon work session, supervisors heard a presentation from staff on the stormwater projects lined up for the next decade and more, which would be funded by the proposed referendum dollars. They also had a discussion on what the debt would do to the county’s bottom line and what tax implications the decision might have on residents.

Staff explained that the projects planned until 2011 would cluster as many as possible into the first five years as requested by the board, but that some had to be delayed due to the length of the planning process. Also, it wasn’t cost-effective to try to jam everything in at once, according to General Services Manager John Horne, nor could all $30 million be used at one time. The plan for later years includes projects that aren’t as critical.

Generally, staff explained the projects would focus on treating untreated water areas, fixing the ravages of time, treating for water quality, improving drainage, flood mitigation and stream restoration. To view the powerpoint presentation with details on the projects, look here.

County Administrator Sandy Wanner pointed out to the board that the state should have funded many of these projects, but they’ve instead been left to the county to deal with alone. “You’re stepping in to take over state responsibilities,” he told them, which is something the county is being forced to do in many other areas as the state sheds funding commitments to ease budget woes.

According to a capital funding report by Davenport and Company, the impact of the debt on the current tax rate would be 2.25 cents. This doesn’t mean the county would need to raise real estate taxes by that amount, only that the funding – the 2.25 cents – would need to be committed out of county revenues to cover the debt.

Because the county has had lower revenues over the years it may mean the tax rate would need to be increased, though staff explained that if growth or improved conditions brought more revenues, the county might not need to begin an increase.

The board also heard details on the debt, including the 10-year time limit for tapping the money and the need for interim funding to start projects before the cash becomes available.

They discussed whether enacting the 2.25 cent increase ahead of the funds being available would help ease the process.

Though the county now has a very high bond rating, the debt service to revenue ratio is concerning, staff said. Right now, the county is above its target for the ratio from 2010 all the way through 2016, and rating agencies will likely look at the numbers in the future. Increasing taxes by 2.25 cents would likely help ease this problem.

Supervisors talked about how best to explain to voters what the tax implications would be when they went to vote, which was difficult because the tax increase – if there is one – hasn’t been decided on yet.

Supervisor Bruce Goodson expects there will be an increase related to the referendum, and he wanted language included in the question to reflect this to voters, though staff said language couldn’t refer directly to a tax rate increase.

The board decided to wait to decide on the issue until it could review previous referendum questions to see how possible tax increases related to debt were dealt with in the past.

Though the bond referendum wasn’t discussed at the board’s evening meeting, supervisors did have a chance to hash out their thoughts on the new state retirement system change.

Wanner explained that the state has changed employee retirement benefits, and part of the change includes localities having a choice whether to continue to contribute the five percent it currently does towards employee retirement. Wanner said the state began offering this payment instead of offering a pay raise to employees decades ago. He suggested the county continue the policy because it would make things equitable and because it might hurt the county’s ability to attract employees.

Supervisor John McGlennon pointed out that times are tight again, and state employees hadn’t seen a raise in years, and said he supported the idea of continuing the payment.

The city of Williamsburg and several other localities have recently vote to continue picking up the payment, though they’re free to stop at any time. If they do decide to end the payment in the future, the decision would retroactively affect all employees hired since July 1 this year.
Goodson didn’t support continuing picking up the five percent because he said it was a good time to bring the government practices in line with the private sector. Supervisor Mary Jones agreed, citing the county’s poor economic situation. She said she didn’t think it would hurt the county’s ability to attract employees.

Supervisor Jim Icenhour said a county employee making an average salary around $30,000 would take home about $125 less each month if the contribution were cut off; McGlennon pointed out that staff making $40,000 would take home about $200 less a month.

While chairman Jim Kennedy agreed with his Republican counterparts’ points and generally wanted to stop the payment, he said public safety employees should be able to keep the five percent contribution. Because the public safety employees can’t be offered this separate treatment under the law, Kennedy voted for continuing the payment but he wants the county to urge the state legislature to allow the separation in the future. He said he’d reconsider his position next year, but he felt that the county wasn’t hiring many new employees at the moment anyway so the impact regarding new hires would be small.

The board voted to keep the current five percent contribution, with Jones and Goodson dissenting.

Other business
Supervisors deferred a vote on changing the water fee to connect independent water systems outside the primary service area. Only one development would be affected currently by the new rule – Liberty Ridge – and the developer told supervisors it would have a tremendous negative effect on his development. Staff agreed to alter the wording slightly so the fees would be charged at the time of recordation or when the building permit is issued, and staff will bring the revision back to supervisors at a later meeting.

Supervisors also approved a cell tower application for a 114-foot tower on Constance Avenue.