The Albemarle County Board of Supervisors soon will be approving a Capital Improvement Plan for the upcoming five fiscal years that likely will lead to an increase of the real estate tax rate.
The board is scheduled to finalize its fiscal years 2019-23 CIP, including potential bond referendum projects for schools and local government, at its meeting June 6.
On May 9, the board voted to support potentially putting up to about $59 million in a bond referendum this fall — about $47 million for school projects and about $12 million for other local government projects.
The county School Board last week approved a resolution requesting $96 million in bonds for various projects, including a new high school center; redesigns of Albemarle and Western Albemarle High schools; learning space modernization at middle and elementary schools; and improvements at Scottsville Elementary.
Kate Acuff, chairwoman of the School Board, said she was disappointed that the Board of Supervisors has been “unwilling” to put a larger bond amount in a referendum to let voters decide.
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“I can understand — they’ve got a lot on their plate, we’re behind on capital projects for the past decade — but with this kind of budget, we will never catch up,” she said, referring to supervisors only supporting $47 million in bonds for school projects.
No matter what bond amount for a referendum ultimately is approved, Albemarle property owners likely will see a tax rate increase in the upcoming calendar year.
“Even before we start adding in bond referendums and other projects, just your foundation pieces right now, we look like the revenues needed could be $8.7 [million] more than we have balancing in the plans, so we do look like there is a tax rate increase coming next year, based on the current assumptions,” said Lori Allshouse, the county’s director of management and budget.
A basic five-year CIP that includes mandates, obligations and capital maintenance/replacement projects would require an estimated 1.2-cent increase on the real estate tax rate in 2019, based on current assumptions. The current rate is 83.9 cents per $100 of assessed value.
The most recent bond referendum was approved by voters in 2016, and at the time it was estimated that the tax rate would need to be increased by 1.3 cents. The rate was not increased, though property assessments rose overall.
“What happened in the last few years is our economy did improve,” Allshouse said. “When we made our projections in the model in the past, we were still being a little cautious about the future, coming out of the recession, and the economy did a little stronger than we had projected.”
Staff members have shown the supervisors additional CIP scenarios — options that include funding for the Ivy Recycling Center and future courts-related projects, among other things — that could require an increase in the real estate tax rate ranging from 3.8 cents over five years to 4.2 cents over five years, based on current assumptions and estimated additional needs over already projected growth.
A board-favored CIP scenario that includes the proposed $59 million in bonds in a referendum would need an estimated 4.2-cent or 4.3-cent increase to the tax rate over five years, based on current assumptions, but project timing also could affect when the additional revenue might be needed.
There are additional requests that are not included in any of the CIP scenarios, including for a variety projects from the parks and recreation and police departments.
Funding for the county’s expanded water resources program is also not included in any CIP scenario, after the board in April directed staff to fund the program out of the regular budget process instead of through a stormwater utility fee.
Funding for stormwater-related projects in fiscal year 2019 already are included in the budget.
If the board decides to pursue the water resources capital program at the same level that was originally planned, that could result in an additional 1.5 cents on the tax rate, based on current estimates.
The Board of Supervisors is scheduled to vote on June 13 on a resolution for a bond referendum.