Supervisors eye $25 million capital improvement package

Money would build new administration building, buy fire and rescue vehicles

By Heather Michon

With planning for Fiscal Year 2022 (FY22) now in its final weeks, the Board of Supervisors is preparing to vote on a $25 million capital improvement package, including $16.5 million for a new administration building and over $3 million in new fire and rescue vehicles.

Capital Improvement Plans, or CIPs, are expenditures focused on building, upgrading repairing, or replacing equipment and infrastructure, generally over a four-year period.

In recent years, supervisors have taken a fairly conservative approach to CIP funding, balancing the need to keep the county’s debt levels manageable against the pressures of maintaining aging buildings and infrastructure.

The CIP budget was $9.5 million in FY17, $1.4 million in FY18, $2.1 million in FY19, and $4.27 million in FY20. Derailed by the uncertainty surrounding COVID-19, the FY21 budget contained just $513,000 for a handful of critical projects.

FY22 was on track to match pre-COVID levels, with County Administrator Eric Dahl proposing $3.5 million in his budget, and departments asking for around $7.6 million.

But during their March 3 budget work session, supervisors revisited an argument that had come up in earlier years: taking advantage of current low interest rates to borrow a substantial amount of money and tackle many of the projects that had been delayed or deferred for years.

What had been a debate over funding new lighting for the playing fields at Pleasant Grove and the perennial need to purchase new school buses morphed into a larger discussion about critical priorities in the coming years.

One of the most pressing issues for the county government is, simply, lack of space. County buildings are cramped and parking is often limited.

This hit home last year when new state regulations forced the Registrar’s Office to find a new home to accommodate longer voting periods. Because there was no other county-owned office space, the county was forced to lease a space at a cost of tens of thousands of dollars.

Some time ago, the county began discussing the possibility of constructing a new administration building near the Fluvanna County Library and the sheriff’s office, but the cost was seen as prohibitive.

Borrowing money would allow the county to build new county offices and space for the Department of Social Services and renovate the old county buildings either for use by other departments or for sale. It would also allow upgrades to Pleasant Grove, a set of new buses for the school system, and other projects on departmental wish-lists.

“I think it’s an awful lot of money,” said Supervisor Patricia Eager (Palmyra), “and we already have a really high tax rate, so I’m not pleased with this.”

“It seems like we want everything,” she added.

“We do,” replied Supervisors Mozell Booker (Fork Union).

“No ma’am,” said Chair Mike Sheridan (Columbia). “If we wanted everything, it’d be about a $40 million price tag.”

Supervisor Don Weaver (Cunningham) generally agreed with the idea of taking on debt, although he did have questions about specific projects.

Supervisor Tony O’Brien (Rivanna), who has been perhaps the strongest proponent of borrowing for CIP projects, said he believed when all the numbers were in, this would turn out to be a “neutral proposition,” costing nothing to taxpayers and adding minimally to the debt balance because interest rates were so low.

By their March 17 meeting, county staff has assembled the costs of each major project, potential interest rates, and what the county would have to pay in debt service over the coming years.

The estimated total came to $23,833,000. This would fund a new office complex ($16.5 million), repairs to the S.E. Abrams school building ($1.25 million), ten new school busses ($1.1 million), replacement fire trucks ($1.75 million), new vehicles for the sheriff’s office and other departments ($955,000), and a host of other projects.

Dahl said their preliminary estimates indicated loans could range from 7-30 year terms at interest rates of between 2.50 and 3.40 percent annually. Estimated debt service on the total $23.8 million package would be around $1.6 million a year.

This would be offset by $1.6 million in current debt service on existing loans scheduled to be paid off within the next three years.

The county could also see $2 million in reimbursements from the state for moving the Department of Social Services to the new office space, and eliminate the lease for the Registrar’s Office. New vehicles and busses would also cut down on annual repair costs and get the school system on a predictable 15-year bus replacement program.

“Frankly, whether it’s $21 million or $22 million or $23 million, people are either going to like it or they’re not going to like it,” said O’Brien. With inflation on the rise and interest rates inevitably to follow, delaying expenditures would only make them more costly down the road.

After debating a few line items, supervisors were about to bring the work session to a close when John Lye, chief of the Lake Monticello Water Rescue Squad, reminded supervisors that one of fire & rescue’s ladder trucks needed to be replaced within the new two or three years. He said prices for the vehicles were climbing by about five percent annually.

The replacement cost of the truck was estimated at about $1.3 million. When added to the original total, that brought the total CIP tab to $25,158,000.

The public will be able to participate in a public hearing on the FY22 budget, advertised tax rates, and the CIP budget scheduled for April 14 at 7 p.m. The vote on the finalized budget is currently scheduled to take place on April 21 at 7 p.m.

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