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Last Updated: Nov 14, 2008 - 12:49:26 PM |
The Board of Supervisors listened attentively on Friday as Chesterfield County Budget and Finance Director Allen Carmody broke down the numbers pulled from the county’s first-quarter financial results. Chesterfield’s 2009 fiscal year began July 1.
Many of those in the meeting room at Camp Thunderbird knew that the report wouldn’t be rosy, but it wasn’t nearly as bad as some other Virginia counties of localities across the country. “Our real estate market is not experiencing the dramatic adjustment as what we are seeing in other areas, such as counties around the D.C. area,” Carmody said.
Carmody spent over half of his presentation laying out background information for the board and county staff members. In several instances, Carmody compared Chesterfield’s current financial standing to that of 1992, the fiscal year following the ’90-’91 recession in which Chesterfield experienced a budget shortfall nearing 4 percent.
The budget update was postponed from October 22 so that the budget department could be more precise. The budget staff reported that county’s projected revenue is down 3.1 percent, for a total of almost $23 million. The shortfall in revenue reflects a downturn in local sales tax, telecom taxes, business, and license taxes as well as shrinking vehicle registration fees, recordation taxes, and the county’s interest on investments. New vehicle registrations in Chesterfield are down over 10 percent, and home appreciation, which equates to real estate tax assessments, is flat.
Carmody pointed out that the good news is that the Richmond metro area is experiencing only a quarter of the foreclosures that Washington D.C. is shouldering and less than half the national rate.
Retail sales in Chesterfield are down over 12 percent when compared with 2007, mirroring an unemployment rate, which at 4.4 percent is the highest since 1992.
The county is also faced with reductions in the funding it gets from the state. Carmody projected that Chesterfield will lose about $3.4 million from the Commonwealth. It is expected that Chesterfield County Public Schools could take further hits on state funding.
“While other areas are struggling, we have strategies in place to address those shortfalls,” said James “Jay” Stegmaier, Chesterfield’s county administrator.
The budget department is taking aggressive steps to curb spending, while not forcing layoffs or a reduction in services for county citizens.
“Chesterfield County has always paid particular attention to our citizens and we want to continue to do that especially during these times of struggle in the United States,” said Art Warren, chairman of the Board of Supervisors. “We are lucky to have such a diverse economy.”
In order minimize the impact on citizens, budget reductions will not affect public safety. No additional positions will be added, but vacancies will be filled.
Travel by county employees will be restricted and the county will implement new practices for the use of county vehicles. The will also be a review on equipment purchases. In addition to saving money through these initiatives the budget office also plan to dip into the county’s “revenue reserve,” otherwise known as the rainy day fund. The county maintains a balance in its revenue reserve fund for situations just like what the county faces today. The current balance, per county policy, is about $8 million. Budget officials are proposing to use $1 million of that fund.
Next year could be more challenging, according to Carmody. His staff has projected that the revenue shortfall will be almost double that of this fiscal year, totaling $37.6 million.
Stegmaier said, “It is reasonable to expect state funding [shortfalls] beyond what has been stated, possibly in the tens of millions of dollars. But we just don’t know yet how much.”
Strategies to address the continuing onslaught of economic challenges for the county next year include adjusting levels of service, eliminating programs, and postponing capital projects. Chesterfield will also look into using additional reserves, and increasing revenue by adjusting fees or implementing new fees for county services.
Warren said he expects that District Supervisors will be holding community meetings to explain the current situation and giving details about the solutions that have been proposed. The board did not make any policy decisions at the meeting.
mfausz@villagepublishing.com | 751-0421
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