Mattaponi District Supervisor Floyd Thomas.
By Floyd Thomas
Caroline Board of Supervisors
Editor’s note: Floyd Thomas delivered the following State of the County address to the Caroline Rotary Club on Jan. 8. It has been edited for length.
When we talk about the State of the County, we need to look at not only where we are but how we got here and most importantly, where we are going. We’ve been in slow recovery mode since 2008, when we had the worst decline in the economy since the Great Depression. The job market shrank and housing prices plummeted. Oil was over $100 per barrel and gas prices reached new highs. Understanding the impact on our citizens, we did not raise taxes and provided some stability in uncertain times. The average tax bill was $1,060 per year in 2008 and remained so until 2011. During that time, we trimmed the County budget to the bones, did without, decided to wait on some projects and yes, financed quite a few needs. We did a reassessment that took effect in 2011, and the average tax bill went up $82. Some paid a little more; some paid a little less, but the average went from $1,060 to $1,142.40. There was a $67 average increase in 2012 and no increase in 2013. Two increases in six years amounting to a yearly increase of only $149, or $75 on each bill. At the same time, the local contributions to the schools’ operating fund was increasing $400,000 per year. The same time that the State funded 24 deputies, and due to needs the County funded 26 more. The same time that we built Lewis and Clark at $22 million; had a $10 million renovation at Bowling Green Elementary; funded numerous other school capital projects from the School Board; again with a $149 yearly increase in taxes.
Last year, 80 percent of the voters authorized the borrowing of $25 million to improve the high school and Madison K-5. The Federal Communications Commission mandated an upgrade to a digital radio system for the Sheriff and public safety, which is the other item that we are paying for in this year’s increase.
Coupled with the fact that we can’t really run the County like our home budgets because at home we can wait to buy a new car or ride with a co-worker, but I can’t have the Sheriff taking FRED to a crime scene. Nor can we afford to wait 20 years to save enough money to replace the roof on a school building. We used what we had as effectively and efficiently as we could before any tax increase was considered. We made tough decisions and admittedly had to finance quite a few of our needed projects.
I’m sure that there are very few people that would agree with all of the County projects included in the $200 million debt number, but each and every one has value. Even with our debt number, our fiscal condition is good, not great but good. We are close to the debt limit our financial advisors suggest for good fiscal management. Close but not over. Our projected debt numbers will begin to decline next fiscal year as a few items are paid off. Recent procedural changes will send unused funds back quickly to reduce that number faster.
With respect to our financial condition, the County has never been denied a new loan. Most of the County debt is in 20-30 year projects that had higher interest rates than we have today. While we have refinanced many of those loans to save interest costs, we did have one bank turn down a refinancing arrangement. I believe that had more to do with their bottom line profit than the County’s credit worthiness since their reason was our tax rate was too low. Again, our financial condition is good, and this was confirmed by our ability to finance $25 million for school projects. Another example of our financial stability is the unencumbered balance. That’s the number that would be left if all taxes were collected and all bills were paid within the fiscal year. That number went from a low of $3.5 million in 2009 to over $14 million in 2014. Of course, we never get all of the revenue on time, but that number is where our financial advisors say it should be for good fiscal management. We are at the point where the line of credit we use for cash flow between tax collection dates was not needed this year. This was a net saving to the County of over $150,000.
As stated, a major portion of our debt is the investment in school buildings. All of the County schools will be updated and modernized for the first time. That’s really what our debt represents, a pledge to future generations and creating an environment for success in the County.
The other major area of investment is the County utility system. The early system designs were aimed at commercial development in the Carmel Church area only. The system expanded to Ladysmith, added major subdivisions: Belmont, Pendleton and Ladysmith Village, expanded to Caroline Pines when their wells went bad and provided emergency water to Lake Caroline. In addition to digging new wells to meet demand, we created the Dawn Wastewater System and expanded the County’s Wastewater Treatment Plant. The expansion of the County system was perhaps the most significant event in terms of cost and future revenue to the County. A public/private partnership was created to construct the plant, reducing the cost by $15 million. We have just recently surpassed the old capacity and without the expansion would be prevented from any additional growth (revenue) by the Department of Environmental Quality (DEQ), probably for a three-year time period. The operating side of the system is paying for itself and has been for a few years. The debt service numbers need more user connection fees. The amount of revenue generated by the system affects every citizen by reducing our taxes. You may not be on the County water system, but it helps you. When we add the revenue and impact from the businesses on the system, our tax rates are lowered. Again, we have created an environment for success and future economic growth now, not three years down the road.
That’s where we are and how we got here. Now, the where are we going. The key theme is creating an environment for success.
We are going to continue our support of education and help make the school system the best it can be. We are looking at a plan for teacher salaries to make sure they are competitive so we can hire and keep the best teachers. Our continued commitment to education in the County has secured a pledge from Germanna Community College to locate in the County. An announcement for a temporary location should come soon, and when enrollment reaches a certain point, a permanent campus will be secured. Not only will Germanna offer college classes but also workforce development classes.
I’d like to commend the school system for their joint enrollment program with Germanna that allows students to take classes at the high school and get college credit. This is one of the many things that differentiates Caroline from other localities. I also acknowledge the quality of the school system and commend them on their improvements, as you will see from the soon-to-be-announced test scores. Even though the start of the building renovations has been delayed, that delay has ensured that we work within the budget and adhere to the original scope of work. While not perfect, the main problem with our schools is perception and not reality. We have great teachers and great students. I remind you of the Caroline Middle School History Club that not only came up with the idea but did the work to create the nationally recognized Korean War Memorial. Our future is very bright when we think of the next generation.
We are going to continue to invest in every area of the County. Port Royal was granted a boundary adjustment allowing Town Council to pursue development as it wanted. In Dawn, we created a wastewater system and built a new library. They now have access to the Internet, storytelling for children, and job information in what was an underserved community. We are starting to get inquiries from retail establishments in that area—something that had not happened during the best of times.
We are going to push the Carmel Church Station project—a very large commercial and residential development trying to bring some form of rail access to the County. Development of the commercial area would be the largest in the County.
In the Milford area, we have begun an aggressive revitalization project through property maintenance. Milford’s Industrial Park will also benefit from the expansion of the natural gas line. At no cost to the County, natural gas will run from 207 near Russell Stover’s to Hoover Wood Products in Milford. The savings in fuel costs now has Hoover’s expansion plans a reality. That same natural gas line will run past the high school and middle school, reducing energy costs and providing more money for actual education.
Some of our investments have a more indirect benefit. While some may not use the YMCA and we can debate the funding mechanism, realtors have said the Y will attract more development and spur additional growth in the designated growth area. More commercial growth helps the real estate tax rate stay low.
Even the jobs outlook is improving. Locally, we added over 200 jobs in 2014, and that number looks like it will continue to grow in 2015. Economic Development revenues for 2014 grew by almost $900,000 when you count sales tax, meals tax and additional real estate taxes.
Yes, we have tough choices and difficult days ahead, but we have created an environment for success and our future is getting better every day.