Tough Times

By Hannah Wever
Published: March 6, 2008

Signs of a troubled economy are everywhere. Gas prices are soaring, groceries cost more, and a bale of hay costs more than twice what it did last year; but folks aren’t bringing home bigger paychecks. Household budgets are pared down to the bone, and Orange County Administrator Bill Rolfe said the county’s coffers are stretched thin too.

“This is a hard budget year,” Rolfe explained. “We sat down with all the county departments and agencies. We literally scrutinized their budgets line item by line item, looking for ways to tighten our belt a few notches,” he said.

Much of the scrutiny, he added, involved separating required county services, (such as law enforcement and emergency services and schools), and optional county services (like daycare, parks and recreation and tourism).

“We don’t make a product; we provide a service to the public. When the population goes up, we have more people to provide service to, and the cost of providing the service goes up.”

Last week, Rolfe presented the 2008-2009 county budget to the Orange County Board of Supervisors. The budget totaled $165,568,671, a 15 percent increase over last year’s budget. To adequately fund everything in the proposed budget, the county would need to increase real estate taxes $.09.

So far, the proposed budget has generated plenty of community discussion-not so much for what’s in the budget, but what’s not.

Proposed cuts, Rolfe said, were within those optional services. So although there are recommendations for a handful of new county hires in the proposed budget, other departments won’t get additional help, and some may be ultimately be eliminated altogether.

“We’re doing more with less, except in those critical areas that have to do with life, health and safety issues,” he said.

Rolfe recommended one new deputy and three communications officers positions for the sheriff’s office, three fire and EMS staffers at the Lake of the Woods and a second attorney in the Commonwealth’s Attorney’s office.

One potential casualty of county belt tightening is the Child Garden daycare program. The program employs five full-time and 10 part-time childcare providers for 63 children aged between six weeks and five years. But in spite of high enrollment, the program has been unable to break even for several years, Rolfe said, and costs the county more than $500,000 a year to maintain.

“It is losing an enormous amount of money,” Rolfe said. “I’m currently aware we have employees there, and working moms and dads in the county who depend on it. I think with adequate notice, we can make things work. I’d like to think the private sector could see there’s a need for daycare and open one.” Rolfe said the county could make arrangements with a private sector daycare to subsidize county employees’ expenses. Currently, county employees are charged a discounted rate for after-school and before-school childcare programs offered at three public schools and at the Child Garden.

Rolfe said if the Child Garden fees were restructured, daycare rates there would price it out of the market it was designed to serve, not increase the center’s viability. If there were fewer children attending, as a result of a higher fee schedule, the final result would be the same, Rolfe projected, a negative bottom line.

“You’ll lose people if you raise the rates,” he speculated.
The community has made their feelings about losing the daycare service known to Rolfe, he admitted.

“I’ve heard a lot,” he said. “The rumors are running rampant. No decisions have been made on any recreational or childcare programs at this time. All anybody’s doing at this point is studying.”

Rolfe said he’s heard grumbling about proposed cuts to annual county employee salary raises too.

“That’s the kind of year we’re in,” Rolfe said. “We can’t give everyone a cost of living increase. What we can do is recognize plus-performances with merit pay.”

County employees may have been counting on a cost of living increase next year, but county officials weren’t counting on a six-figure tab for the local share of the Central Virginia Regional Jail.

“They need our support for the first time in 17 years,” Rolfe said. “Unfortunately, it’s coming at a bad time for us.”

In the past, federal and state funding more than covered the county’s expenses for housing criminals. Space in the jail occupied by suspects held on federal charges was paid for by the federal government. But now, there are more local and fewer federal offenders, so the counties served by the jail will have to cover their costs.

“There is less room for federal prisoners, so we lose some of that cushioning,” Rolfe explained.

Orange County’s part of the tab is $762,702, a substantial line item on the county’s list of expenses; especially since that’s all new money.

“That’s almost a penny and a half on the tax rate. It’s a significant impact,” Rolfe added.

But the largest item, by far, on the proposed $165,568,671 2008-2009 budget is a fully-funded $44,780,000 for school capital projects, and another $48,069,690 for school operating costs. Within those figures is $45 million for a new middle school and a 7-percent teacher raise.

The county’s revenue is flat, Rolfe said, and next year’s proposed $165 million budget is relying on a $.09 tax increase to help fund it. The county’s current real estate tax rate is $.42 per $100 of assessed value. But in the midst of a real estate market downturn, many find themselves upside down on their mortgages, with property assessed for more than its current value.

Rolfe said another reassessment, with updated values that reflect the tanked economy, isn’t the answer. The expense of the process alone-about $700,000-won’t help lower the tax rate, and won’t help citizens cover the cost of county government.

“I don’t think the cost of local government is going to go down. If we lower everybody’s assessment, we’re going to end up saying the tax rate is going to go up,” he explained.

The solution, he said, was to “Hold the assessments where they are, and be mindful of that when we set the tax rate.”

Rolfe said property assessments will balance out eventually, when the market begins to recover.

“We can’t time the market perfectly. Who knew the market would drop as quickly as it did?” he said.

But whether or not Orange County residents will lose a daycare program or suffer a tax hike has yet to be determined.

“Local budgeting is a two-part process,” Rolfe said.
And Rolfe has completed his part of that process. “I try to put together a budget that makes business sense.”

The budget is now in the hands of the board of supervisors, who have work sessions March 6, 11 and 13 to discuss and analyze the proposed budget before a public hearing April 8.

“We are examining all avenues to look at balancing the budget without breaking the bank,” District 3 Supervisor Teel Goodwin explained. “Reduced funding on the state and federal level has left local officials to hold the bag for services. We either look at reductions in service or increases in the rate. Nothing special has jumped out to save the day, but everything is being scrutinized for potential savings. We have several more sessions, and I am sure we can come to some reasonable resolution.”

The board of supervisors will vote on whether to adopt the proposed 2008-2009 budget April 15.