Prince William Requires 3.8 Tax Increase to Fund Priorities

Posted

County Executive Melissa Peacor presents budget information to the Prince William County Board of Supervisors. County Executive Melissa Peacor presents budget information to the Prince William County Board of Supervisors.

During Saturday’s Board of County Supervisors work session, the supervisors realized they would need to raise real estate taxes 3.8 percent in Fiscal Year 2016 (FY16)  to include all the programs they consider necessary.

The Board met Saturday morning at the Buckland Mills Fire Hall to hold a second work session on the budget. This session was non-televised but open to the public. It is the last work session before the Board will advertise a tax rate on Mar. 3.

According to Virginia law, once a tax rate has been advertised, the Board will not be able to increase it, but they may vote to decrease it.

First Work Session

One-week earlier, the Board met for its first work session at the McCoart Building. Supervisors reviewed the budget and determined which programs were priorities to them and which could be eliminated from the budget.

During that budget process, Supervisor Peter Candland (Gainesville) decided to abstain from all votes, because he disagreed with the process of voting “aye” or “nay” per program. Candland explained he would have rather reviewed the budget as a whole.

After voting in support of the DORM program, Supervisor Jeanine Lawson (Brentsville) joined Candland in abstaining from any more votes.

Supervisors Frank Principi (D-Woodbridge) and John Jenkins (D-Neabsco) voted to fully fund the budget, and thus, the real decision making came down to the four remaining Board members: Chairman Corey Stewart, Maureen Caddigan (R-Potomac), Michael May (R-Occoquan) and Marty Nohe (R-Coles).

The supervisors voted to include 2 percent employee increases in the budget. They also voted to maintain programs that are not mandatory, but which they believed to successful in keeping residents safe, healthy and improving the community's economic outlooks.

See the list of programs they decided to support and eliminate here. The Board considered the items in blue for elimination. The check marks indicate that the majority of supervisors voted to have the line item remain in the budget. None of the votes are binding.

Revenue Stabilization Fund

Going into this Saturday’s meeting, the supervisors hoped to find some revenues that would help buffer cuts or could decrease taxation. They did not find much.

The work session began with a presentation on the Revenue Stabilization Fund (RSF.)

As per the Board’s request, the County Executive was asked to see if their AAA bond rating was secure. Deputy County Executive Christopher Martino presented to the Board, telling them their Revenue Stabilization Fund (RSF) is on the low side for jurisdictions with a AAA bond rating. He recommended the Board consider raising it from one percent to two percent of their budget as dropping to a AA bond rating would cost the county $2 million annually.

The Board had been replenishing the RSF funds via year end savings. However, due to zero based budgeting, which began in 2010, Prince William County now has no more year-end savings.

County Executive Melissa Peacor cautioned that the supervisors only use the RSF funds for one-time expenditures, or else they will be creating “a fiscal cliff.”

“If you want to go back to use the RSF for on-going, you certainly have that right. At some point, you're going to reach a point that you’re going to have to raise taxes even more,” Peacor said.

The County also keeps 7.5 percent of their general fund in reserve. County staff explained that this is also key to keeping a AAA bond rating, and recommended it not be used as a “rainy day fund.”

Reserves should be used in a crisis or emergency, Martino said, but once used, it would be imperative to replenish them.

Fire Levy Funds

Supervisors learned last week that the Fire Levy has a healthy reserve, and they were hoping to tap into some of that money to help fund fire expenses in the budget.

Peacor proposed taking an addition $2 million from the Fire Levy to help pay for career employees working for the Prince William Fire Department.

She explained that the Fire Levy’s funds were a little more than $1 million in excess of their expenditures, so that $1 million could go back into the general budget. Additionally, it earned nearly $1 million in interest, which could also go towards the general budget.

Legally, the Fire Levy funds have to be used within the fire budget; hiring career employees fits that purpose.

Because the Fire Levy is well funded, the Fire Department has been able to use those fund to buy equipment trucks and even land without having to take out bonds.

Considering the county’s AAA bond rating, supervisors said they would look into whether paying cash for property is the best option. However, with the date to advertise the tax rate quickly approaching, they could not change the system at this point.

Police Staffing

The supervisors dedicated this coming year's budget to increasing staffing for police officers. However, that is an expensive line item. To help ease the burden, they are considering not hiring those new officers until January of 2016, rather than in July of 2015. This would save the county $1.4 million.

Parks

The supervisors also have to decide whether to fund park projects, include Long Park, Catharpin and Rollins Ford fields. The county passed a bond referendum, which only lasts for one more year.

A few supervisors said they would not want to delay the parks any longer.

Other Initiatives

Principi said it was a priority of his to fund mental health services in the county as the waiting list is 600 people long since that agency is underfunded.

What it would Cost 

At the end of the meeting, county staff said a 3.8 percent increase in the average real estate tax bill would be need to fund the Fiscal Year 2016 (FY16) budget including items the supervisors voted to keep in the budget. However, it would require going beyond the 4 percent to fully fund the budget, according the priorities of the 5-year plan, and require a 5.8 percent increase.

The supervisors adjourned for lunch, and then resumed to meet with the School Board.

bocs, buckland-mills, budget, featured, feb-28, fire-hall, prince-william-county, saturday, supervisors, work-session