Supervisors Look to Proffers to Ease Budget Woes

By Melissa Arseniuk

Wednesday, March 26, 2008

The Loudoun County Board of Supervisors continued to struggle through financial woes last night during its latest budget work session.

But instead of debating how much to spend on what, the evening's questioning revolved around how much they could get from where -- specifically, which proffer could be used to offset financing what project.

During last week's budget work session, supervisors requested Loudoun's deputy finance officer, Benjamin Mays, look into county proffers to determine how much money is available and where it could be spent.

At the time, Mays told the board there was $5 million in proffers -- payments made by developers to offset the cost of providing roads, schools and other government services -- allocated for school funding, and that he and his staff would look into the accounts to see how much could be spent elsewhere.

"We'll get as much as we can find," he assured last week.

After seven days of digging, Mays told the board last night that at least $8 million in existing proffers could be used to ease financial strain.

"The capital budget staff ... have been combing through the files diligently since last we met … (and) I think there's $8 million that we can do without putting ourselves out on a limb," he said.

"I believe at this point in time, we can get ... probably about $4 million worth of proffers … to create fund balance for this year," he continued. "I believe there is another $4 million … that we would be able to pick out and (use) over the next fiscal year."

Supervisor Stevens Miller (Dulles District) explained the situation as he saw it, then asked Mays to confirm he had his facts straight.

"The $8 million ... could be used to pay debt service ... and that would, in turn, free up whatever $8 million that would have been paying debt service out of the general revenue so it effectively adds $8 million to the general revenue," Miller stated, pausing several times to verify he got it right.

"That is correct," Mays replied.

Board chairman Scott K. York (At Large) was encouraged, but skeptical.

"If (proffers are) there and available to use, I'm happy with that, but if we're ... thinking that it's available, I personally don't think it's good policy to count on it, if it's not available at this point in time," he said.

York reminded Mays that some of the unrealized projections he made last year were partly to blame for the current bind the county finds itself in.

"You played some dangerous games and it's coming to bite us back in the rear end," York said.

Supervisor Jim Burton (Blue Ridge District) echoed the chairman's remarks.

"We got into this situation, as Mr. York indicated, last year because the board cut things too closely -- way too closely -- on projections and on expenditures. And as we sit here right now, if we keep the same tax rate, 96 cents, we will not have enough revenue coming in to finish this year in the black. We will have to dip into the fiscal reserve. And that's a situation I don't want to get into again."

Miller appeared equally nervous and resistant.

"It's very tempting to reach into the honey jar," he said, "(but) I'd rather not make a budget decision that presumes on the availability of these finds because to find out we were wrong means we'll have to get the money someplace else, meaning someplace in the budget."

Miller continued: "So this late in the game I really can't support this ... based on money that we can't be sure we're going to be able to get our hands on."

The board's vice chairwoman, Susan Klimek Buckley (Sugarland Run District), was more trusting.

"Although I would prefer a more orderly process ... Mr. Mays is saying to us that he feels very, very confident that he can find $8 million. So I don't view that as speculative," she said. "He's saying he can find it, so I'm willing to bet on him finding the $8 million, and making it work for Loudoun residents this year."

Over the last week, supervisor Lori Waters (Broad Run District) and her staff have worked with Mays and the county finance department staff.

She said the group effort has been fruitful, and shared the findings with fellow supervisors and the hundreds of Loudoun residents who looked on from their seats in the audience.

"There is $4 million sitting in an account for one project alone -- South Riding Station -- so I think that it's very conservative to just say we can only use $4 million next year, or a total of $8 (million), depending on how you want to calculate it," she said. "There's six accounts with over a million dollars and (there is) the one account with $4 million dollars -- that's $10 (million) right there," she said.

She said the county can count on the proffers that were identified.

"We do want to be careful, we don't want to play games, but if the account says capital facilities ... we should go to that fund first before just relying on the local tax fund rate (to finance) these projects," she said.

Waters also suggested using appropriate proffers to finance upcoming capital projects to avoid acquiring additional debts.

"If we have some funds … to not incur the debt on (the) Eastern Loudoun Sheriff's Substation, I think we should take that opportunity to do it ... Otherwise, we'll have debt service payments higher next year," she said.

Waters also suggested the county's projected debt could be reduced if capital project proffers were used to help finance the Dulles South Multipurpose Center.

The work session Tuesday night began with a pair of ideas for revenue generation.

Representatives from the county's Parks and Recreation Department told supervisors that $359,000 could be raised if the current $5 fee all 55,000 young people pay to play each sport each season was raised to $6.50. This money would help subsidize maintenance and facilities, officials said.

The board was also told that if library funding was slashed $500,000 in the wake of the current budget crisis, user fees and monetary fines for late returns would have to be instituted.

Loudoun County Public Library director Douglas Henderson opposed introducing fines into the library system, warning fees would deter children from reading and decrease both circulation and access. Meanwhile, Supervisor Eugene Delgaudio (Sterling District) circulated a detailed memo and argued that fees are necessary to make Loudoun's libraries sustainable.

Supervisors weren't able to get through their five-point agenda last night. After failing to progress beyond the second order of business after 3 1/2 hours of discussion, the board adjourned just after 10 p.m., promising to pick up where it left off at 6:30 p.m. tonight.

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