Proposed county budget "is very tight"
By Greg Pearson STAFF WRITER

Because of declining revenue growth and rising expenses, "Chesterfield is facing the most difficult financial outlook since 1979," according to County Administrator Jay Stegmaier. "It's a perfect storm" with the general fund growing only 3.6 percent in FY09 (that starts July 1) while "costs are rising very rapidly." Leading those rising costs are fuel, health insurance and retirement benefits.

As proposed, the total budget would increase $126 million to $1.29 billion. Chesterfield has figured the budget based on the county adding 5,000 more residents and 900 additional children in county schools. Half of the budget increase is slated for the public utilities capital improvements program. With utilities, spending climbs 10.86 percent. Without utilities, the budget would only increase 5.5 percent.

The general fund, which covers the operation of the county government and makes up most of the total budget, would be $759.6 million. The major expense there is transferring $322.8 million to the Chesterfield County Public Schools (CCPS) for the county's share of school funding. CCPS represents slightly more than half of all county's total budget.

Police, fire and EMS is budgeted at $138.2 million while Human Services is $88.1 million. That department includes social services, health, parks and recreation and county libraries, and it runs programs like Medicaid and food stamps. Human Services has 1,529 full-time and part-time employees.

The general fund increase is just $26.3 million with $11.8 million going to employee compensation and benefits. "We're already the most efficient government of our size in the state, and we're going to become more efficient," forecasted Stegmaier

The county will add 26 new positions including four police officers, four school resource officers, four firefighters/EMS personnel and nine extra personnel in the mental health field. Typically, 80-120 new employees are added annually.

There are about 30 vacancies in the police department with a turnover rate of 10 percent annually. An additional $241,000 in funding adjustments is being added to that department's budget.

The budget puts the emphasis on public safety, education, employee retention and economic development. Since adding more businesses helps lower the property tax rate, the county hopes removing the Business Professional and Occupational License (BPOL) tax cap will allow the county to build an interchange for Meadowville Technology Park at Interstate 295 in eastern Chesterfield, encouraging white collar business to locate there. While Stegmaier said the business community supports the idea, Chesterfield's largest business group - the Chesterfield County Chamber of Commerce - supports it with strings attached. The chamber wants the BPOL cap reinstated once the interchange is funded. The group also wants the supervisors to dedicate one penny of the real estate tax rate to fund the interchange, which would be eliminated when the funding is raised.

In the general fund, about 43.5 percent of the revenue comes from property tax revenue. Since higher tax assessments were received last January, supervisors have been hearing the call for reducing the rate downward from 97 cents per $100 of assessed value. To be revenue neutral, the rate would have to be dropped to 88 cents. Each one penny rate decrease cuts county revenue by $3.2 million - two thirds of it from CCPS spending.

The revenue side of county spending is also impacted by the state's financial woes and the uncertainty (at press deadline) on which version of the state budget will prevail. Chesterfield is estimating $1-$2 million less for itself and $1.7-$3.7 million less for CCPS.

To raise additional revenue, Chesterfield proposes to hike utility fees $2 per month, increase waste and recovery fees and charge the development community more for building inspections and some planning fees.

"Being on a tight budget can be good because it forces you to evaluate your priorities," said Stegmaier.

On that basis, FY09 is apparently a warm-up for the following year. New construction and existing property values grew 13.6 percent last January compared to an anticipated 8 percent for January 2009.

The public will get to weigh in with their views on the budget on Apr. 2 at 6:30 p.m. during a hearing in the public meeting room. A week later, the supervisors will approve the budget, including setting the property tax rate.