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York County Board of Supervisors seemed receptive to County Administrator Neil Morgan’s proposed budget Tuesday, raising few concerns about the proposal during the work session and instead directing their attention to future challenges.
Morgan acknowledged four unmet challenges the county will be facing in the near future when presenting the $187.7 million budget comes with $135.4 million for county and York County School Division operations and no tax increases for residents: growing competition in the labor market; tax base reduction from the loss of the Dominion Virginia Power plants; sustaining the capital improvement plan; and the anticipated need for additional personnel in public safety because of population growth in the county.
Morgan said the proposed budget, which offers raises targeted primarily at employees in the lower quartile of pay, is a good step in offering competitive compensation as the labor market begins to become more competitive with the retirement of Baby Boomers – those born roughly between 1946 and 1964.
“I think by targeting the raise this year toward the lower quartile we do have a pretty respectable compensation package this year, probably a little bit above average for the region,” Morgan said.
In addressing challenges to sustaining the Capital Improvements Program, Morgan said the county has addressed some concerns in the next budget to help make the plan more realistic and aggressive in the future.
Morgan changed what was previously a 10-year plan to six years, which helps rid the plan of projects that were seemingly unrealistic after being deferred to the out years and focus on real numbers in a more obtainable future.
His focus on the CIP also resulted in a reduction of $96.2 million over the next six years for capital projects, including $22.1 million less for schools.
“The six-year plan that we put in there are real numbers. That’s sort of the maximum you can afford over that period of time with the revenue base reasonably projected without any tax increases,” Morgan said. “We now have maybe numbers that don’t make everybody happy, but the math is real.”
The new budget also includes an additional $700,000 for debt service, however, more has to be done in order to sustain a more aggressive CIP, Morgan said.
He said that starts with a capital reserves fund since he believes the amount of responsible debt the county can take on is maxed out in his proposed CIP.
Morgan said the school division will receive at least $4.3 million in surplus from Federal Impact Aid, a portion of which could be used as capital reserves to help the school division with projects in the next few years.
“What that will do is allow us some flexibility over the next two or three years to turn up the gas a little bit on the capital budget. It doesn’t solve the revenue-base problem, but it gives you a little more time and little more flexibility,” Morgan said.
The county will also have to hire additional public safety personnel in coming years as the population continues to grow in the county, Morgan said, which will have to be addressed in the operating budget.
One hit to the budget in the next couple of years is the closing of the Dominion Virginia Power plant in the county, which will result in about $1.5 million loss in revenue for the county.
The projected loss is about $1 million less than what had been originally projected as a worst-case scenario.
Morgan said the county does have some time because the plant will not close entirely until 2020, but there will be a loss of some revenue during that time as the plant winds down.
County staff has had a number of conversations with officials from the power company with the ultimate verdict on what is to become of the site being “it’s too early to tell.”
The Board of Supervisors will discuss salaries and benefits for county employees in greater detail during a work session April 5. There is also room for additional work sessions in April as needed.
A public hearing on the proposed budget is scheduled April 21, followed by scheduled adoption May 3.