Bedford County supervisors March 9 took their first look at the “big rock” issues facing the initial budget for fiscal year 2021, which included increases in tax revenues, as well as changes to health insurance and pay rate adjustments, unfunded mandates and issues surrounding the landfill and transfer station.
According to documents presented to supervisors, the county is anticipating an increase in total revenue of about $3.8 million. Ashley Anderson, interim finance director, said there has been no talk of increased tax rates in Bedford.
“We don’t have a tax rate increase; we just have an increase in revenues due to normal growth,” Anderson said. “Right now there’s been no discussion at all about increasing tax rates.”
Anderson said property tax revenues are up about $500,000 from last year to an estimated $43.5 million. She added every penny added to the tax rate would generate an estimated $871,500 if supervisors wanted to consider that option further.
She noted personal property tax revenues are projected to increase by about $900,000 to $15.5 million.
“That was a huge jump, but that is right in line with where we’ve been. Historically we jump about 5% ever year,” she said.
The initial budget also outlines a jump in sales tax revenues of $400,000 from fiscal year 2020. Anderson said other revenues, which include charges for services, fines and fees, recovered costs and transfers, are projected to be $28.1 million.
Anderson pointed out to board members the interest income is projected to decrease by about $95,000 due to a dip in interest rates.
“Our interest rates are just dropping all over,” she said.
When discussing compensation adjustments for employees, County Administrator Robert Hiss said he was hesitant to include figures in the budget because of the challenges they are facing. He noted for future discussion a 1% increase would equate to about $222,000.
Anderson said the conversation to include compensation adjustments still is in the works.
“It hasn’t happened, but given the budget challenges, we just wanted to put it out there that this is how much it would cost and we just kind of have to see how things shake out,” Anderson said.
Hiss said as of March 9, the budget for fiscal year 2021 currently has an increase of $638,000 in the employer costs associated with health insurance, which documents note is “not a realistic amount for implementation.”
He said the county is considering its limited options on how to address the increase, which he said boils down to really two options: changing the plan itself or changing the rates employers and employees contribute.
“Those are really our two levers we have to move up and down in terms of health insurance,” Hiss said to board members.
Another big rock issue for fiscal year 2021 presented to supervisors was unfunded mandates, which are the programs the state requires localities to implement but does not provide funding for. Hiss said in total, the four unfunded mandates outlined by the state cost an estimated $713,000.
Hiss said these costs include implementing early voting in Bedford including paying for workers, training, computer equipment and other related operating supplies and equipment; minimum wage rates set by the General Assembly; Department of Social Services pay scale adjustments and new positions; and a Virginia Retirement System employer increase from 7.39% to 8.87%.
Anderson said based on the preliminary nature of the budget, it is unclear how Bedford will pay for those unfunded mandates.
“That’s the question we need to continue discussing,” Anderson said.
Budget documents also predict a revenue shortfall concerning the dual operations of the landfill and transfer station. The document outlines a needed increase in transfer station tipping fee rates from $41 per ton to a recommended $51 per ton to cover expenses. The document also notes a decrease in revenue of about $590,000 because waste that traditionally was taken to the landfill in Bedford County now is being transferred to the landfill in Pittsylvania County.
To offset the operating deficit, budget proposal documents outline a transfer from the general fund balance or landfill closure fund to the solid waste fund of $1.5 million to $1.75 million.