~Recommendations for a Tough Economy~By Peter Wurzer, Director of Research
Albemarle Truth in Taxation Alliance Albemarle County is facing challenging budget decisions, brought on by years of favorable economic conditions and excessive spending.
We are experiencing tough economic conditions, and the county must effectively balance its spending habits against expected revenues from taxpayers. County government cannot continue to be the first solution to many of the challenges we face, and we must focus more closely on differentiating "wants" from "needs."
ATTA's consistent focus since its inception has been on the spending side of the equation. Specifically, are our tax dollars being spent effectively and efficiently? There is no better time for county government to focus on spending as a priority, while also providing more scrutiny to our fiscal processes and revenue streams.
Here we propose a range of new and revised fiscal processes, better scrutiny of spending, and methods to enhance revenues. These proposals make good sense, especially in these challenging economic times, but are by no means exhaustive.
Process RecommendationsManaging BudgetsCurrently, it appears budgets are loaded in the beginning of the year by department and line item. There is no public record identifying how much of the annual budget is targeted to be spent by month.
If each department loaded its budget by month, then management and the Board of Supervisors could look at the year-to-date spending versus the budget and understand whether county spending is on track. In essence, budgeting by month provides: greater transparency for the Board and the public, better budgetary planning by department heads, and reduced likelihood of year-end "spend it or lose it" decisions.
Part of this process should be an analysis of spending by department and line item for each month of the year for the past three years for both local government and the school division. Spending in the last month or two of the fiscal year should bear particular scrutiny.
Revenue ForecastingThis is challenging as it largely hinges on the State of Virginia's economic conditions, as well as movements in the local real estate market. It appears that when revenues are declining the county underestimates this reduction. ATTA recommends a detailed analysis of the last five years to determine what methods may have provided better insight into the direction of cash flow from both state and local taxes. If revenues are better known, decisions can be made earlier to ensure real needs are funded.
Eliminate Frozen PositionsThe county anticipates over 60 positions will be vacant or frozen by the end of this fiscal year. It is unlikely that tax revenues will recover enough in the near future to enable the county to fill many of these vacant positions. In fact, it is likely that the organization has been modified to the point where many of the positions are no longer required to provide needed services. ATTA believes staff additions above the rate of population growth was one of the causes of the doubling of real estate taxes between 2000 and 2008. Elimination of the frozen positions will provide a safeguard, because it will require Board action and public input to increase staffing.
Revenue SideNon-Performing County AssetsOver many years, the county has purchased land and other assets that may no longer be needed or productive. An example is a 50-acre parcel near Walton Middle School. It was recently declared to be inadequate for the purposes of building a new elementary school for the southern feeder pattern. Does the parcel have a value in the open market that could generate revenue? ATTA believes all assets not providing operating value (e.g., parcels of land, buildings, vehicles, office space, computers, cell phones) need to be analyzed to determine whether alternative use, leasing, sale or disposal of the asset could be a net gain to the county.
County Business BaseThe Resource Management Review noted that Albemarle had an unusually small business tax base (13% of total) given the county's size. This means homeowners bear a larger portion of local government's tax burden. ATTA believes that
increasing the business tax base will not only assist in lowering the county's dependence on homeowner real estate taxes, but it will improve the job market and potentially lead to greater revenue from sales taxes. ATTA supports Albemarle County becoming more business friendly to businesses of all sizes.
Spending SideIdentify Essential Capital ProjectsPrioritize them based on real needs and identify ways to reduce cost while providing value. For example, the county is planning a new Crozet Library (currently on hold) based on anticipated population growth. The $9.8 million total cost and square foot cost of $490 raises questions. Given that the building will be complete with stylish architecture, community meeting room(s), and a lower level that is not initially required for library function, this project is becoming reminiscent of the Hollymead Fire Station. ATTA suggests the county revisit the entire project to determine whether current size, design and cost match the library's needs (not individuals' wants). The county should also reconsider use of the old Crozet School if it can be rehabilitated for a reasonable cost.
Efficiencies Through CooperationVirtually every service Albemarle provides to its citizens is also provided by Charlottesville to its citizens. Herein lies a tremendous opportunity for combining or at least sharing services and reducing costs. The Revenue Sharing Agreement, in addition to transferring tax dollars from Albemarle to Charlottesville, was to be a tool to help both the city and county find ways to reduce mutual costs through sharing services. ATTA believes it is time to seriously pursue those cost-sharing opportunities with the city and neighboring counties. On a small scale, we could begin by sharing costs on SWAT teams, hostage negotiation teams, or a crime lab. Perhaps there are efficiencies in vehicle maintenance or fire protection. We cannot let "turf" issues stop good ideas from becoming realities.
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Albemarle Truth in Taxation (ATTA) is a non-partisan group of citizen volunteers from all socio-economic groups and political affiliations. We are dedicated to ensuring effective and efficient use of our tax dollars by Albemarle government and to protecting the rights and interests of Albemarle taxpayers.
