County Looking at Lots More Spending, Debt in Future, Report Finds

Tuesday, December 07, 2010

According to a recent citizen-group report, over the next 10 years James City County is likely facing hundreds of millions of dollars in expenses related to a growing population.

Last week the James City County Citizens’ Coalition (J4C), a non-partisan community group, released part two of a three-part cost of growth study titled “Impact of Rapid Population Growth on Financial Stability.” In the first part of the study, released in August, the J4Cs examined the impact of the county’s rapid growth over the last decade (read a previous story here), which the group concludes has had a negative impact on the county’s debt capacity. The recently released report looks at the financial impact of growth over the next 20 years and lays out some big future costs facing the county and its taxpayers.

The most recent report assumes an average population growth rate of 2.4 percent (as set out in the Comprehensive Plan) that will result in capital spending of about $286 million, which will add about $15 million each year in debt service costs by 2020, the J4Cs estimate. This will increase the county’s debt-to-expenditures ratio beyond the targeted cap of 12 percent, which could affect the county’s excellent bond rating.

“It is clear from this analysis that continued rapid population has a real cost, both for the General Fund and for the JCSA,” the report states. “Should annual population growth fall significantly below the projected 2.4%... many of these incremental costs would be mitigated.”

There are several recommendations in the report, including adding a cost of growth study to the Comprehensive Plan as a way to “cost out” the plan’s objectives.

The report also suggests the county determine water needs for the next 40 years before the next large payment of $33 million to Newport News comes due (based on a recent agreement to buy water from the city).

Considering high expenses in other areas and the recent poor economy, the J4C report also recommends reassessing public desire for the millions of dollars in planned parks and recreation spending.

Another concern the J4Cs have is that, beginning in 2011, all capital maintenance will be funded by issuing new debt versus funding through the general fund operating budget, as has always been the norm. “We believe this policy change should be revisited and the impact on debt capacity evaluated,” the report states.

The future of stormwater funding is the biggest unknown, and because the $30 million stormwater bond referendum failed last month, the group points out the county needs to come up with a way to fund future stormwater projects while keeping them a consistent priority. “It is fair to say that stormwater issues have not had solid sponsorship at the Board of Supervisors level,” the report states, and funding in this area over the years has been “anemic and capricious”.

For example, the 2003 capital budget showed a request for $1.3 million for water quality improvements but only $355,000 was budgeted. After the stormwater utility fee was created in 2007 by one Board, the next Board disbanded it in the following year. Nine stormwater employees in 2007 have been cut to 6.5 employees in the latest budget, and the operating budget has been cut from $2.8 million in 2008 to $749,000 in 2010 and $643,000 in 2011.

Spending on stormwater projects over the last 10 years has totaled only $2.7 million, while during the stormwater bond referendum discussions, county staff estimated there are $30 million in stormwater projects that need to be completed (20 percent of which are federally mandated).

Some of the other key costs over the next 10 to 20 years included in the report are an estimated $99.3 million in county funds to cover new and expanding schools (based on a “most likely” student population growth scenario) and $1.2 million each year starting in 2011 to cover the $13.7 million police building near Warhill High School, with an additional $7 million in 2019 for a training facility.

The Parks and Recreation Master Plan Update outlines an additional $37 million in spending over the next 15 years, the report points out, along with nearly $31 million for the Shaping Our Shores plan.

A community gym and improvements to the library are planned within the next five to eight years, for a total of $19 million.

The county also has $14 million more to spend in approved debt for purchasing greenspace (through the approved Greenspace bond referendum in 2005), which will mean a debt servicing costs of around $1.3 million after 2013.

Jack Haldeman, a spokesman for the J4C, told WYDaily in August that he believes the rampant growth over the past several years is economically unsustainable. Current growth trends “won’t work environmentally, aesthetically, or economically,” he said.

The third part of the cost of growth study will include various alternatives to current patterns.