The Patrick County Board of Supervisors discussed ways to address unexpected expenses, that include an additional $83,868 for required line items and an estimated $68,719 for maintenance repairs, plus an additional $75,806 in school funding.
Clayton Kendrick, of the Mayo River District, asked how the $170,431 in unexpended school funds was spent. The funds were returned to the county after the school division’s Average Daily Membership dropped in the last fiscal year’s budget.
County Administrator Beth Simms said the funds were spent to cover expenses in local departments that went over budget.
“We had to appropriate. We had to cover” healthcare expenses at the jail and expenses for other county departments, like janitorial, ” Simms said, adding the county must pay for the jail medical bills “somehow, someway.”
Simms said that when crafting the FY25 budget, county staff were not aware of the unexpected expenses presented to the board on Monday. She explained “the calc(ulation) tool in the state budget changed, after our budget was approved, so there’s additional Required Local Match (RLM) for the school system.”
After re-calculating the local match, and after the school division agreed to provide the county with additional funding for School Resource Officers (SROs), the additional amount the county had to give to the school division dropped to $75,806.
Another portion of the unexpected expenses arose “at the animal shelter,” Simms said. Boyce-Holland Veterinary Services “has gracefully not charged us for veterinary services up until now, is my understanding for quite a long time, and we will need to start paying a percentage of veterinary services that are performed.”
After the meeting, Jones estimated those services would cost $6,000.
Because the Jeb Stuart Volunteer Rescue Squad planned to shutter, the amount of county funding it was to receive was cut from the current budget. The squad recently announced it would continue as a volunteer agency, and Simms said the county’s allocation of $21,062 would need to be added back into the budget.
Maintenance issues at the Patrick County Courthouse, the Stuart site of the Blue Ridge Regional Library, and the Patrick County Historical Society & Museum also were identified.
Jones said one quote received for replacing the library’s heating, ventilation, and air conditioning (HVAC) system is $61,179.
Documentation of the quote was not provided to the board, which also requested additional quotes. The project will be rebid. The board will consider all of the bids and vote during its work session on Monday, July 22.
Repairs to the courthouse are estimated to be $7,540. An estimate for repairs to the museum was not presented.
Jane Fulk, interim representative for the Dan River District, said the county was in the red eight days into the new fiscal year that began on July 1.
“That doesn’t sound good,” Fulk said and asked Simms how the county was to pay the unexpected expenses, and suggested cutting new positions from the current budget, which includes $60,000 for the Director of Facilities post.
The description for that position “is similar to what you do,” Fulk said to Simms. “Four pages. It’s what you do. According to what I’ve got on the facilities director, he’s doing everything you’re doing, plus.”
“Okay,” Simms said, and explained that the positions had been approved by the board and were already in the budget.
Fulk said the job description for the facilities director “needs to be just a little more specific.”
“Thank you,” Simms said, and explained that she consolidated/tailored two positions – Director of Tourism and Director of Economic Development – into the facilities position to fit the county’s needs.
“Instead of having two directors,” Simms said the two departments would be consolidated.
Fulk asked whether the other supervisors were aware of that decision.
“Yes ma’am. We’ve been talking about this for 6-months,” Simms said, adding that at this point, it would be “hard to eliminate” the facilities director post because interviews are scheduled.
“The Small Business Development position hasn’t been posted” yet, she added.
Perry said he believes the facilities director post is needed, but some of the others could perhaps be added back if they were cut.
“If we do need one, I think they should live in Patrick County. I don’t like paying someone that doesn’t have any skin in the game,” Fulk said.
The residential requirement “currently isn’t in our policy,” Simms said.
“The one that I asked you about” included the requirement, but that requirement “was left out when” the position changed, Kendrick said.
Steve Marshall, of the Blue Ridge District, said he believes a residency requirement would result in fewer applicants.
Dipping into the county’s reserve and contingency funds were discussed as options to pay the unexpected costs.
Simms said the reserve fund has been built up over the years.
“Currently at the end of FY23 budget, the balance in our unrestricted reserves was $11,257,000,” Jones said, adding that total was taken from the annual audit.
While the unrestricted funds are not part of any specific funds, Jones estimated $450,000 from the county’s contingency fund is from the $11 million reserve fund.
Fulk asked if the $11 million was supposed to go into next year’s budget.
Jones said no, and noted the county continually holds those reserves.
“It’s like savings that we haven’t spent from prior years,” Jones said.
Doug Perry, chairman, and of the Smith River District, asked what percentage the audit recommended for the reserve fund.
“The audit just kind of tells us what we have. We have an unassigned fund balance as percentage of total expenditures of 22 percent. The best practices are to keep 15 to 20 percent of that,” Simms said.
Noting that funds for the courthouse were not to replace the unit, but to repair it, “that’s just a band aid,” Fulk said.
“Which is what we’ve been doing for a long time,” said Simms.
In addition to using some of the county’s unrestricted reserve funds, Perry asked if the board may want to consider raising the county’s meals tax by one percent to five percent, increasing the Transient Occupancy Tax (TOT) from five percent to six percent, or raising the county’s personal property and the machine and tools tax.
Fulk opposed raising the meals tax because most of the local restaurants and small business owners struggled to update their systems with the last increase.
Another one would mean “they would have to redo everything. It would put a burden on your small businesses to do that. Also, that meals tax was done by a vote of the public, and I don’t know how you’re going to go up” on that “unless you want to go back and have a referendum with the public. And they voted it down seven times before we ever got it the first time, so I think that’s a little no brainer,” she said.
Kendrick said he didn’t believe the machine and tools tax should be increased. “I think it’s high enough,” he said.
Perry also wasn’t a fan of increasing the machine and tools tax.
“Business machines are expensive. They’re even more expensive to maintain and keep in service, and you have to do that to keep your business running to make the money to pay the taxes. I’m just not a fan at all of machine and tools tax,” he said.
Marshall also was unwilling to raise taxes.
And in the future, “as far as the budget goes, I think that ought to come out of committee. I don’t think it should be two people” on the budget committee deciding it, Marshall said, adding that the county also needs to budget for planned maintenance and track the life expectancy of its equipment.
Jonathan Wood, of the Peters Creek District, said he didn’t have a problem with using some of the unrestricted reserve funds to pay off the unexpected expenses such as the HVAC system or the courthouse issues.
However, “I don’t want to dive into our unrestricted funds to pay for things that are going to be a reoccurring expense, like the school system, the animal shelter, (the) funding of Jeb (rescue). I really think we should try to find a better way to fund those because like I said, I hope if we reach in there to pull out for HVAC and pay the circuit court issue, that’s a one time, every 20 years deal,” Wood said.
“If we’re looking at raising any tax, the Transient Occupancy Tax (TOT)” would affect “very, very few of any Patrick County residents. I don’t want to touch the meals tax and I don’t want to touch our small and medium and large businesses by fooling with the machine and tools tax,” Wood said.
Simms said the TOT – sometimes called the lodging tax in some areas – applies to any short-term, 30-days or less rentals like Airbnb, hotels, and campgrounds.
“So, anytime you go anywhere, and you stay at Myrtle Beach or wherever, you’re going to see on your reservation a local tax, and that’s what it is. Virginia gives localities the right to charge a lodging or transient occupancy tax. It’s taxed to whoever is coming to stay overnight in Patrick County,” Simms said.
She also noted that a potential increase to the TOT would not go into effect until January 1, 2025.
Kurt Bozenmayer, chairman of the Planning Commission, recommended the board read the enabling legislation regarding the TOT before any decision was made.
“When that transient occupancy tax was initially approved by the state, it was written that anything over two percent of that five percent that was initially there was specifically to be earmarked for tourism. So, the county’s portion of that transient occupancy tax is limited to two percent,” he said.
Simms said the county had checked with its legal counsel on the matter and learned that “it is legal for us to do this and to fund. I mean, if we have a tourist here and they call 911, or we have to pay the commissioner of revenue to process TOT finance, has to process tourism invoices. We did have to check with legal to be sure that we can do this.”
The board will hold a public hearing on August 12 to get input on raising the TOT by one percent.
Meanwhile, the board agreed to take some of the necessary funds from the county’s unrestricted reserve funds, and replace them with the estimated $140,000 the TOT tax increase is expected to generate.
The board approved paying the circuit courthouse bill from its unrestricted reserve funds, but tabled discussions about funding JEB Stuart Volunteer Rescue Squad’s contribution, the animal shelter, and library until next month’s meeting.
In other matters, the board:
*Approved the June 10 and June 18 meeting minutes.
*Approved the bills, claims, and appropriations.
*Recognized the Patrick & Henry Community College (P&HCC) Softball Team for winning the NJCAA Official 3 Softball World Series and Coach Robbie Campbell.
*Scheduled a public hearing for the August 12 meeting regarding the FY2024-2025 Patrick County School system unsent funds.
*Approved authorizing the county administrator to take in all invoices outside of current procedures of $5,000 or less with a 4-1 vote.
*Approved an appropriation to the Department of Social Services (DSS).
*Approved the purchase of 20 chairs for board meeting attendees, a $60 podium, and $3,600 for two additional cameras for the Patrick County Administration Building. Funds from the American Rescue Plan Act (ARPA) will be used for these purchases.
*Heard the administrator’s report.
*Heard the supervisors’ reports.
*Appointed Kurt Bozenmayer to the Tourism Advisory Council (TAC) for the Smith River District.
*Appointed Jeanie Clark to TAC for the Mayo River District.
*Appointed Bessie Weber to TAC as the at-large member.
*Appointed David Lusk to the Planning Commission for the Dan River District.
*Appointed Jane Carlson to serve as the at-large member for Piedmont Community Services (PCS).
*Appointed Clayton Kendrick to serve on the West Piedmont Planning District Commission Executive Committee.
