Hanover County Administrator John A. Budesky has proposed a Fiscal Year 2024 budget to the Board of Supervisors which maintains the current tax rate and ”continues to make critical investments which residents from every region of the County will be able to enjoy.”
“This budget reflects the priorities of the community as we see them,” Budesky told the Board. A major focus of his spending plan is on major capital projects – replacement facilities for Battlefield Park and Washington-Henry Elementary School, both of which are more than 80 years old, for example – that have been long deferred.
Inflation and assessments are prominent in the minds of many, and Budesky said County officials “have heard loudly and clearly residents’ concerns on the impacts of inflation and rising residential property assessments on their lives.” He emphasized that these concerns are taken seriously and that several options for relief will be proposed and discussed with the Board of Supervisors in upcoming meetings.
The Board will hold special budget meetings on February 22 and March 22 before holding its public hearing on April 5 at 6 p.m.
But the County Administrator added that the County has had to contend with many of the same inflationary challenges while still responding to the operational and capital needs of the community.
For example, the cost of capital projects such as the new John M. Gandy Elementary School and Laurel Meadow Fire Station 17 has risen dramatically due to more expensive labor, materials and supplies, resulting in increases of 15-25% or more from last year’s estimates.
Hanover also faces workforce challenges, including high turnover rates, extended recruitment time and the availability of skilled workers to fill critical positions. This extends to Hanover County Public Schools , which continues to have growing recruitment and retention challenges at all levels.
“The increasing departure of employees for other opportunities and retirements presents significant challenges for Hanover and its ability to provide timely and effective public services to residents,” Budesky said. “We’re in the people business. We need to take care of our employees that provide services to our residents.”
Budesky’s budget recommends a merit increase of 5% for county and school employees in addition to funding for targeted, market-based salary adjustments. New positions in the proposed FY24 budget (non-schools portion) include two to staff the new Montpelier Recreation Center and Library, two for the solid waste convenience centers, two for capital projects and grant oversight and two in technology as well as one in facilities management.
Budesky’s FY24 budget represents only the first year of a multi-year plan that encourages the Board to set long-term priorities. In the next five years of the capital investment plan, not only would Battlefield Park Elementary and Washington-Henry Elementary be replaced, but major renovations would be done to Beaverdam Elementary. Three campus-style elementary schools – Elmont, Mechanicsville and Pearsons Corner elementaries – are scheduled to be replaced. All are more than 60 years old.
The capital investment plan also calls for the replacement of three fire stations. None of the three were designed for 24/7 occupancy and none were designed to mitigate carbon hazards. The three stations are Doswell, Courthouse and Montpelier, with the first replacement station (order to be determined) to be cash funded in FY24 – a best financial practice.
Budesky said one of the things he is most proud of is the development of a 25-year capital improvement outlook, which in early drafts has identified over $3 billion worth of future capital needs.
Fulfillment of the plan is contingent upon a continued 81 cent per $100 valuation tax rate, Budesky said. The County has maintained its 81-cent tax rate, the lowest among the four big localities in the Richmond region, since 2007. Budesky said the five-year financial plan is balanced in years 2-5, based on reassessments returning to a normalized 2.5% annual rate each year. While homes in Hanover are still selling at strong prices, recent trends show slowing numbers of sales.
Maintaining the tax rate, Budesky said, “allows the County to reinvest the market driven increases in real and personal property tax revenues collections into deferred capital needs. Staying true to its roots, the County has utilized a conservative and sustainable approach by creating a strong cash capital investment strategy as well as building the balanced five-year financial plan with an assumption that reassessments will return to normal.”
Also committed to relief
However, both Budesky and Board members demonstrated a strong commitment to providing relief from the increase in real estate assessments to residents. A focus in upcoming budget meetings will be decisions on a menu of tax relief options for residents that Budesky presented to the Board. These include expansion of current relief programs such as tax relief for the elderly and disabled; one-time rebates, and reductions in the tax rate. Each penny of the 81-cent tax rate generates about $2 million annually.
Budesky’s recommended operational budget continues to focus most heavily on supporting education and public safety. Combined, education and public safety operating budgets make up 50% of overall spending, followed by capital and debt service and human services.
The County’s administrator’s proposed FY24 budget can be read at https://www.hanovercounty.gov/1086/Fiscal-Year-2024-Proposed-Budget