P.E. Supervisors Adopt Five Cent (12%) Real Estate Tax Rate Increase

As previously reported in the Southside Messenger, the Finance/Budget Committee of the Prince Edward County Board of Supervisors met on a number of different occasions and identified many possible expenditure (spending) reductions for the Fiscal Year 2015 (July 1, 2014 to June 30, 2015) County budget.  They presented these recommendations to the entire Board of Supervisors at the regular Board meeting on June 10, 2014.  The P.E. budgeting process has changed somewhat this year, primarily based on the recommendations of Supervisor Bob Timmons.  This is how the process has worked this year.

1. Local governmental offices or agencies made requests for funding for next year.  As an example, the P.E. Commonwealth Attorney’s office requested $642,450 for FY 2015.

2. Other local or regional organizations, nearly all of which are  non-profit, made similar requests.  These are sometimes called the Donation Requests.  An example might be that the YMCA asked for a total of $68,000 for FY 2015.  The County has also recently approved a $50,000 interest free loan to the YMCA.  So the total cost for the YMCA would be $118,000 for 2015.

3. The County Administrator took these requests, information about costs of required County services, and information about costs mandated by law or contract and developed a proposed budget for next year.  The amounts in the proposed budget for the office, agency, or organization were not necessarily what had been requested.  County Administrator Bartlett recommended reductions in 17 of the 40 Donation Requests.  One example is that the $75,000 request for Crossroads Community Services was cut to $62,643.

4. Because the proposed budget would have required a real estate tax rate increase of approximately 19%, this year Supervisors set up a Finance Committee to look at the proposed budget to see if additional reductions in expenses were possible and reasonable.

5. The Finance Committee met multiple times to identify additional recommended reductions in FY 2015 expenses.  Of the 32 requests from governmental offices or agencies, the Committee recommended additional reductions in ten of these.  They recommended additional reductions in 19 of the 40 Donation Requests.  An example would be that the Committee recommended cutting $23,000 from County Funds for the YMCA in FY 2015.

6.  The entire Board of Supervisors met to decide whether to adopt the changes (expenditure reductions) recommended by the Finance Committee.  On June 10, the Board approved nearly all of the Committee’s recommended reductions.  A major exception was the restoration of the $92,000 recommended cut to the Prince Edward County Schools proposed funding level.  The recommended $92,000 reduction in the Schools allocation was based on the fact that the debt service that the Schools have to pay will be reduced by $92,000 in FY 2015.  The Committee had also recommended that Supervisors take a $100/month pay cut.  This would have saved taxpayers more than $10,000 per year.  At the June 10 meeting, Supervisor Jim Wilck made a motion to delete the Supervisor salary reduction in the FY 2015 Budget.  The three Supervisors on the Finance Committee, including Bobby Jones who originally suggested the Supervisor salary cut, voted to keep the salary reduction in the budget.  Supervisors Pete Campbell, Charles McKay, Howard Simpson, Jerry Townsend, and Jim Wilck voted to restore their recommended salary cut.

7.  The Finance Committee met again at 5 PM on June 16, 2014.  They decided to recommend two more changes in the 2015 Budget.

a)  The recommended real estate tax rate for Calendar Year 2014 should be  $.47 per $100 of assessed value.

b)  The County will join the Virginia Growth Alliance, a regional economic development organization with ten county members from Greenville to Buckingham.  The annual membership cost will be taken from the Prince Edward Economic Development Fund.

8.  The Board of Supervisors met at 7 PM on June 16, 2014 to approve the final FY 2015 Budget.  At this Board meeting, Supervisor Jim Wilck was in favor of a $.48/$100 tax rate, which would not require that any money be taken out of reserves (the County General Fund).  Supervisor Chairman Howard Simpson was in favor of a tax rate of $.46/$100, which would require using about $250,000 of the General Fund reserves in order to have a balanced budget.  Supervisors rejected Mr. Simpson’s motion for $.46, then approved the Committee’s recommendation of $.47 per $100 of assessed value.  This five cent addition to the present $.42 tax rate would be about a 12% increase.  Adopting this real estate and mobile home tax rate increase will require taking about $90,000 out of General Fund reserves.  As part of this new budget, Supervisors also approved joining the Virginia Growth Alliance at a cost of up to $23,368.

The reductions in the proposed FY 2015 budget recommended by the Finance Committee and approved by the entire Board, when combined with the savings from changes in P.E. employees’ insurance plans, resulted in expenditure reductions of approximately $375,000.  These expenditure reductions made it possible to lower the proposed Fiscal Year Real Estate and Mobile Home tax rate from $.50 per $100 of assessed value to $.47.  The final total Prince Edward County Budget for FY 2015 is $52,447,422.  The total budget financed out of local funds is $21,558,669.  Of this amount, more than $8.3 million will be transferred to the School Fund for use by Prince Edward County Schools.  Supervisors voted to appropriate these funds by categories, as defined by the Supervisors.  Then, the School Board or School Administration could spend funds within categories in any way desired, but could not transfer funds between categories without prior Board of Supervisor’s approval.  Examples of School Categories are Instruction, Pupil Transportation, and Operation & Maintenance.