County to legislature: ‘Don’t hurt us’

"Don't hurt us."

That's the clear and simple message being delivered by Henrico County's elected officials, administrators and lobbyists to the General Assembly, which convened in Richmond for a 60-day session last week.

The missive represents a change from years past, during which county officials annually presented "wish lists" of top priorities to the county's General Assembly delegation. Six years ago, that list contained 14 items. This year, it's down to just one: Do no harm.

By placing their sole focus on those three words, local officials hope to make a salient point to lawmakers: localities – Henrico included – are struggling to deal with their own financial problems and cannot afford additional funding cuts from the state.

County lobbyists have, for the most part, kept their mouths shut in recent years as state funding to localities have declined annually. Though other jurisdictions in the state had to lay off employees, raise tax rates or trim services – or all three – Henrico has not.

County officials are adamant that no layoffs, service cuts or tax increases will occur in the coming fiscal year either, but by sounding the warning bell to legislators, they hope to illustrate how dire times have gotten statewide.

During the past several years, as state funding to localities fell during the recession, Henrico was able to make up those lost funds in its annual budgets thanks to years of conservative financial planning, Deputy County Manager and Finance Director John Vithoulkas said. (The county annually has capped its growth at 5 percent – during strong and lean economic years – which helped buffer it from the recession.)

But now, the state's failure to meet its funding obligations is having a real impact even on Henrico, which begins its 2012-13 budget process facing a $70.8 million budget shortfall before the process even begins. That's a significant hurdle even for one of the most fiscally sound counties in the nation (Henrico was the first county to have its triple AAA bond rating reaffirmed last summer after the U.S. government's rating was downgraded by Standard and Poor's.)

The shortfall is the result of a combination of factors:

• an estimated $10.8-million decline in tax revenues;

• a projected increase of $32.5 million in the county's required payments to the Virginia Retirement System;

• $6.1 million in additional debt service payments;

• $10.2 million in operating costs for new projects constructed through bond sales;

• $4.2 million in additional healthcare costs;

• $1.5 million in additional diesel fuel for school buses and vehicles;

• $5.5 million in other costs.

"In the Fiscal Year '13 budget, the VRS cost increase is the single largest budget driver that we have, both for general government and for schools," Vithoulkas said.

The VRS provides retirement payments for eligible state employees and teachers and is funded by the state and localities, all of whom make payments into one fund, from which it is then distributed.

But while localities – including Henrico – have been required annually to fully fund the VRS rates established by the VRS Board, the state has not fully funded its share in any of the past four-plus years.

For example, in Fiscal Year 10-11, the VRS board set the rate of payment into the system for teachers at 12.91 percent; Henrico and other localities paid that percentage in full, but the state paid only 3.93 percent – less than one-third of the amount it owed.

Part of the problem was that the VRS investment fund took a significant hit during the recession, losing 28 percent of its value between 2007 and 2009. The fund rebounded to gain 20 percent last year; Virginia Gov. Bob McDonnell's budget assumes that the fund will show 8-percent growth in the coming fiscal year.

McDonnell has proposed funding the VRS with $2.21 billion in new money in the coming fiscal year – including $876 million in state general fund dollars – as a way to begin addressing what he termed the "woefully underfunded" system. McDonnell also is proposing that public employees pay 1 percent of their salaries toward the fund, which would raise another $5.1 billion.

Critics of his proposals argue that the bulk of that new money will come from the very localities who have been paying their shares all along and from employees, for whom the money is intended.

A number of bills related to VRS funding are under consideration in the Assembly, but each would require concessions in other areas to fund VRS.

"There are only so many resources," said Henrico's legislative liaison Mike Schnurmann. "If you squeeze in over here, it's going to pop out somewhere."

Positives and negatives
The county has seen some key economic indicators pointing in a positive direction during the past year:

• residential foreclosures in 2011, through October, were lower than during the same months in 2010 with just two exceptions (May, which witnessed one more and October, which was equal to the previous year);

• the county's unemployment rate dropped from 7.5 percent in February 2010 to 5.9 percent in April 2011, before rising slightly to 6.5 percent in September – a figure that still was 0.8 percent lower than the same rate for Metro Richmond;

• the county's sales tax receipts were up $2.5 million from Fiscal Year 2009-10 to FY 2010-11 (to $57.2 million) and up 2.9 percent during the first quarter of FY 11-12.

But, there are negatives too.

County officials are estimating that Henrico's taxable real estate base will drop from $31.7 billion last year to $30.05 billion this year – a decrease of 5.19 percent. Since 2009, the taxable base has dropped by $4.7 billion (or 13.5 percent).

Other local sources of revenue – chiefly personal and business property taxes – are projected to remain flat in the coming fiscal year.

Also during this year's Assembly session, legislators will consider a number of proposals to restructure the way road maintenance is handled throughout the state. Henrico – one of just two localities that already maintain their own secondary road systems with money provided by the state – will watch the issue carefully, said Schnurmann.

Henrico – which for years lobbied to have its road maintenance allocation rate increased to bring it more in line with that of Arlington County – may now be content to live with its current rate, given that all but one of the new proposals likely would reduce that rate even further, according to Schnurmann.

County officials don't expect any of the proposals to pass the General Assembly this year, but they caution that anything is possible.
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Crime Stoppers’ Crime of the Week: May 22, 2017

This week, Crime Stoppers needs your help to find the suspects vandalizing Dominion Energy equipment in Varina.

On Feb. 6 and May 3, someone shot at equipment belonging to Dominion Energy. Both incidents occurred near Kingsland Road between the hours of midnight and 3 a.m. The equipment was damaged, causing a major inconvenience to customers who lost power and posing a safety hazard to people nearby. > Read more.

A place to excel

It's no surprise when a business deal begins to take shape during a golf outing.

Perhaps less common is the business deal that percolates during a youth football practice. But such was the case for Varina District Supervisor Tyrone Nelson.

During a visit to former Varina High School football star Michael Robinson's football camp, Nelson was discussing with Robinson his excitement for the new Varina Library, whose opening last June was at that time forthcoming.
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Business in brief


Long & Foster Real Estate recently named Amy Enoch as the new manager of its Tuckahoe office. Enoch brings more than 15 years of real estate expertise to her new position, and she most recently led Long & Foster’s Village of Midlothian office. Enoch has served in both sales and management positions during her tenure at Long & Foster. Prior to her real estate career, Enoch worked in information technology and hospitality. She is a graduate of Radford University, where she earned a Bachelor of Science degree in economics, English and history. Enoch has also received the designation of Graduate, Realtor Institute (GRI) from the National Association of Realtors, and this showcases her expertise in the fundamentals of real estate. > Read more.

Henrico recognized as a 2017 ‘Playful City USA’ community


A national nonprofit organization, KaBOOM!, has selected Henrico County as a 2017 Playful City USA community. The organization encourages communities to bring fun and balanced activities to children every day.

Henrico's selection is joined by the city of Richmond, town of Ashland, as well as the counties of Charles City, Chesterfield, Goochland, Hanover, New Kent and Powhatan. All of the localities make up the first region completely recognized through Playful City USA. > Read more.

Gallagher Foundation serves more than 14,000 teens in first year


In its first year, The Cameron K. Gallagher Foundation reached 14,000 teens through its programs from Spring 2016 to date. The foundation is dedicated to spreading positivity and erasing stigmas by educating and creating awareness on depression, anxiety and stress among teens. CKG delivers programs at schools, community events and its West End office.

“Students are in need of the information in the workshops, whether they know it or not, and they aren’t getting it anywhere else,” said Beth Curry, Director of Health and Wellness at The Steward School. > Read more.

Henrico Business Bulletin Board

May 2017
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CAT Theatre, located at 319 N. Wilkinson Rd., will present “When There’s A Will” May 19 to June 3. The play centers around a family gathering commanded by the matriarch, Dolores, to address their unhappiness with Grandmother’s hold on the clan’s inheritance and her unreasonable demands on her family. This dark comedy by local playwright Philip Ventrella will conclude CAT’s 2016-17 season. Tickets are $23 in advance and $25 at the door; opening night tickets are $33 in advance and $35 at the door. For details, call 262-9760 or visit http://www.cattheatre.com. Full text

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