By Christopher Twarowski
Sunday, November 9, 2008
Facing a tight bond market, a slumping economy and a projected $176 million shortfall in next year's budget, the Loudoun County Board of Supervisors voted last week to suspend 22 capital projects for 90 days.
County officials said the decision, in addition to allowing time for the credit market to thaw, would give them a chance to examine whether the projects should proceed. Those put on hold include improvements to schools, roads, public safety facilities, libraries and community centers.
In another move related to the budget gap, county department heads have been notifying some employees that their positions may be eliminated by July 1, depending on the spending cuts.
The capital projects suspended for 90 days include:
Advertisement
"This is real," said County Administrator Kirby M. Bowers, referring to the possibility of layoffs. "We're not talking about expansion here; we're talking about retraction, right-sizing, whatever you want to call it, to match up with our economic circumstances. And so it will have implications."
The project suspensions were recommended to the board by county and school staff members, who also suggested projects that should proceed. That list was also approved by the board at its meeting Monday.
Capital projects are funded through bonds, and Loudoun, like other local governments, typically sells bonds through competitive bids. The financial crisis and lack of liquidity have left many would-be bidders on the sidelines, and government officials say they are worried they might have to pay higher interest rates in the current market.
Loudoun officials say they hope that 90 days will be enough time for the market to improve. After that period, Bowers is to present county supervisors with an update.
"We need cash to operate the county, we need cash to pay bills," said Supervisor James Burton (I-Blue Ridge), chairman of the board's committee on finance and government services and operations. "Since the bond market has tightened up ... there are projects that we could delay the start of."
Among the suspended projects are a high school, elementary school and fire-rescue station that voters approved Tuesday in bond measures. The projects that were given a green light include 10 school facilities, three fire-rescue stations and nine transportation improvements.
The board also voted to authorize $49.3 million in lease revenue bonds to finance the second phase of construction of the county's adult detention center.
The county department heads' meetings with employees whose jobs could be eliminated have been going on for a few weeks, Bowers said.
He said he is preparing budget proposals for next fiscal year based on four scenarios: the same local funding level as this fiscal year, and funding cuts of 5, 10 and 15 percent. Department heads have been drafting lists of priorities in their agencies and notifying employees whose jobs are at risk.
Related Coverage
Advertisement
Bowers said the county is trying to be as straightforward as possible with workers as it makes tough decisions about which services and jobs it might have to eliminate to achieve a budget that does not include tax increases.
"They're letting folks know that it's going to be tough fiscal times," Bowers said of the agency heads. "And if in fact the board eventually adopts a budget that's at those 5, 10, 15 percent reduction amounts, that may well involve service-level reductions in positions. We want to be upfront with people."
He would not say how many workers have received such briefings. The notifications do not mean that those employees will be laid off, he said, only that layoffs are a possibility.
Bowers is to present his budget proposals to the board in February.
Copyright 2009 The Washington Post Company