Colonial Downs, VHBPA dispute impacting New Kent’s proposed budget; supervisors to begin work on $65.2 million proposal

Last month when county administrator Rodney Hathaway introduced a proposed $65.2 million next fiscal year budget to county supervisors, the revenue/expense structure appeared not just balanced but reasonably sound.

Since then, however, the ongoing squabble between Colonial Downs and the Virginia Horsemen’s Benevolent and Protective Association (see related story this issue) over the number of live racing days has escalated to the point that this summer’s thoroughbred meet at the New Kent racetrack is in serious jeopardy. And under state law, no live racing contract between the two entities means no thoroughbred wagering at Colonial Downs’ eight off-track betting sites. Most revenue generated for the county by Colonial Downs comes from OTBs.

In building his budget proposal several weeks ago, Hathaway estimated next year’s revenue at just over $44,000. But now with the OTB revenue loss coupled with racetrack officials’ decision earlier this week to break ranks with the VHBPA, he says the county now stands to lose close to $403,000 in annual revenue. The figure takes into account money the county could miss out on if the summer thoroughbred meet is canceled.

“This is very concerning to the county,” Hathaway said about the situation following his formal budget presentation to supervisors last night (Thursday).

“We have a long track record with Colonial Downs so we feel we’ve come up with an accurate [revenue loss] estimate,” he added.

“But it’s more than just a revenue loss to the county,” he said. “It’s a loss to our businesses, restaurants, and gasoline stations. And then Colonial Downs is a major employers when racing season is on, so there’s a lot of impact on the county.”

For now, Hathaway’s budget proposal totals $65,241,278 and includes a one-cent reduction in the county’s real estate tax rate from the current 85 cents per $100 of assessed value to 84 cents. No other tax increases are included.

The proposal also lists reinstating the currently vacant community development/planning director post and hiring a new fulltime firefighter. Combined salary and benefits for those two positions are pegged at almost $160,000.

To help offset the anticipated Colonial Downs’ shortfall, Hathaway has presented supervisors with an option that eliminates both positions. Accounting for the remainder of the $403,000 loss would be accomplished by reducing most of a $96,000 debt transfer and adding in close to $148,000 in new real estate tax revenue that New Kent’s revenue commissioner says the county should reap based on updated assessment totals. (The $148,000 added to $931,609 identified earlier by the commissioner gives the county well over $1 million in new real estate tax revenue, despite the proposed 1-cent tax decrease.)

Hathaway, meanwhile, has placed two additional options on the table for supervisors’ consideration. Both address the Colonial Downs’ revenue loss, but included is $962,000 to help pay for a new public safety radio system for county emergency services, something the county administrator says is sorely needed.

Going the radio system route, however, would entail a 4-cent increase in the real estate tax rate. One of the scenarios, meanwhile, cuts county school funding by $100,000.

“We’ve got a lot of work to do,” supervisors’ chairman Thomas Evelyn said afterward.

Work commences April 23, 9 a.m. That’s when board members meet for their first budget work session. Hathaway has penciled in a possible decision on the tax rate for that day. Another work session is tentatively scheduled for April 30.

If supervisors opt for a tax increase, a public hearing on a proposed rate hike would be held May 12 during the board’s next regular meeting. A hearing on the overall budget, by law, could not take place until June 9. No tax increase, however, means the overall budget could go to public hearing on May 12. A new budget must be in place before July 1.

In his presentation Thursday night, Hathaway told supervisors that the proposed budget has been built with a goal of maintaining county department spending at current fiscal year levels. The proposal is almost $4.9 million more than the current year’s $60.3 million budget.

Other highlights are:

–$13,104,595 in county funding for schools, an increase of $570,000 over the local contribution to schools for the current year. The school system’s proposed budget totals just over $28.5 million.

–6 percent increase in water/sewer rates for customers on county-owned systems.

–$11 million in Capital Improvement Plan spending, including $5 million to be borrowed for converting the county’s Historic School into an elementary school. Also included are two projects almost entirely funded by grants ($1.5 million for taxiway upgrade at New Kent Airport and $989,000 for a 100-foot tower ladder truck for the fire department) and just over $1 million in school projects. Hathaway proposes to use $3.5 million in cash on hand to pay for part of the CIP bill.

–Five new employee positions (information technology support, firefighter, deputy revenue commissioner, project manager for Historic School renovation, human resources director), reinstating the vacant community development/planning director post, and upgrading, adjusting, or reinstating an additional seven positions at a total cost of $389,382.

–No pay increase for county employees.

“We took a very hard look at our ability to offer pay raises, but due to demands on expenditures we were not able to offer raises this year,” Hathaway said, adding that employees will see a rate increase on health insurance.

As for new and upgraded employee positions, Hathaway said most are generated by growth in the county, increased workload, and changing technology.

District 5 Supervisor Ray Davis put the upcoming budget task in perspective following Hathaway’s presentation.

“Look in the newspaper and see the counties around us. Some are tax happy and some are cutting to the bone,” he said. “Budgets are not a four-letter word, but they ought to be.”

In other business Thursday, supervisors voted 5-0 to pass a resolution authorizing the issuance of up to $1.5 million in bond financing for the Route 249 waterline project. The project extends lines from Farms of New Kent and Watkins Elementary School westward to connect with the Quinton Estates, Greenwood Estates, Kenwood Farms and Deer Lake subdivisions.

Plans call for advertising for bids later this week with bid opening and awarding of a contract in mid-June. Work could commence 4-6 weeks later.