Proposed New Kent County budget comes in with $131 million tag; possible projects may lead to tax increase proposal

New Kent County continues to grow in a variety of ways including in population, businesses, and residences. You can add budget to that category as well.

New Kent County Administrator Rodney Hathaway revealed a budget of $131,071,628 during Monday night’s New Kent Board of Supervisors’ meeting. That amount in nearly $18 million more than the FY adopted budget of $113,379,280.

The proposed budget currently includes no tax increase to the county’s real estate tax, keeping it at 59 cents per $100 of assessed value. Each penny is currently valued at $551,635. But the tax increase is still a discussion topic on the table according to Hathaway.

The county administrator spoke about a pair of potential projects and requests made, as well as addressing how to retain and attract members involved in public safety.

Hathaway spoke about a request from New Kent County’s School Board for the construction of a new elementary school to replace New Kent Elementary School. He also spoke with Judge B. Elliott Bondurant who has requested a new courthouse. While talks are still in the early stages, Hathaway estimates the total price tag of both projects to be around $130 million combined.

The courthouse proposal would require $30 million to construct, with another $5 million for onsite construction. Adding $4.2 million for architecture costs and additional expenditures, the courthouse project comes in at a cost of $49,358,400. Renovations would also will be needed at the existing courthouse, coming in with a $10 million figure.

The elementary school project is estimated at $60 million to complete. A borrowing of funds from contingency comes in at $10,642,000, elevating the total amount of the project to over $70 million.

Hathaway explained his reasoning and several plans of attack if the project is something the board would consider taking the first steps in the upcoming budget.

“How do we fund that?” Hathaway told the board. “If we took out a 30-year finance plan, the annual debt service is $8.5 million per year. That means we would need to increase the real estate tax rate by 16 cents, and I know that’s not feasible.

“This has challenged staff to think outside the box to make it feasible,” the county administrator added.

Among the ways Hathaway proposed tackling the amount including commencing a borrowing in Fall 2026 from VSPA (Virginia’s School Project Association) funds. He proposed an initial funding contribution of $5 million to cover annual debt service and increase the real estate tax by two cents for the upcoming year.

“In a worse case scenario, we would increase taxes by two cents for FY27 and FY28,” he said.

But there are several positives that could dwindle the amount to be taxed. The county will be paying off the debts of several projects within the next five years. Among those debts include those of the Health and Human Resource Building, the vehicle maintenance building, and New Kent High School. The high school in itself would free up nearly $5 million according to Hathaway.

And the amount can also lower if a suggestion made by District 1 Supervisor Thomas Evelyn is followed. Evelyn suggested soliciting different proposals for borrowing, a similar matter that took place when planning the construction of Quinton Elementary School, which led to substantial savings.

In another matter that could impact the recommendation of a tax increase, Hathaway commented how neighboring jurisdictions were offering more money than New Kent when it came to addressing employees in public safety.

“The average starting salary for a New Kent firefighter is $49,000, when compared to our neighboring counties [Henrico, Chesterfield, Hanover, Goochland] where it is $61,000 or more,” Hathaway presented to the board. “We are also suffering from salary compression as current employees who have been here are not moving through the pay grade appropriately.”

Hathaway proposed a public safety pay plan, which is similar to a pay scale and pay grade based on years of experience and rank, to compensate employees.

“It would take $1.1 million to implement this but that can be lowered as well,” Hathaway added.

As part of that proposal, public safety employees would not receive a five-percent salary increase as proposed in the budget. However, those savings would increase the employee’s salary with $540,000 used to assist with the decompression. The remaining amount would be covered with an additional penny tax increase.

In total, a three-cent increase to 62 cents per $100 of assessed value of real estate could be considered if county leaders chose to fund all the projects.
If the 59 cents per $100 of assessed value on real estate remains as presented, Hathaway also has a plan for that as well.

The county administrator’s first action was to show that general fund revenues decreased by $7,329,943 in the proposal. However, Hathaway added that the fund really is increased by $2.8 million as $10 million in the general fund is being separated to create a separate line item for revenue incurred from Colonial Downs.

With the $2.8 million in new money, approximately $1,967,588 is being applied to personnel. Under the county administrator’s proposal, new positions of adding a deputy clerk for court, a part-time administrative assistant for the Commonwealth’s Attorney, a new permit technician for community development, a ground technician for general services, and a GIS technician for the IT department will cost $313,771. Upgrades to four circuit court positions, the commonwealth attorney’s office, and fire-rescue carry a price tag of $122,748.

Hathaway’s budget also includes a five-percent cost-of-living increase for county employees ($769,866), a three-percent pay increase for constitutional officers via the compensation board ($122,564), a 1.5 percent bonus for all constitutional officers and staff with part of the cost covered by the compensation board ($102,896), absorbing a 7.3 health insurance increase ($355,697), and a one-month holiday insurance pay of $60,634. In total, those costs total $1,411,657.

Public utilities will also see a part-time position for customer service upgraded to full-time, as well as a five-percent cost-of-living adjustment increase for permanent employees. That cost to the county is $119,412. Other small items that were included in the budget include increasing salaries of directors who were not at market level.

The Capital Improvement Plan (CIP), which is not part of the operating budget, comes in with a price tag of $25,079,760. Among big ticket items include the Interstate 64 interchange project at Exit 211 (Talleysville) which is rumored to become a diverging diamond intersection. The roundabout project at Route 249 (New Kent Highway) and Dispatch Road is also listed among transportation authority projects, with both totaling $7.1 million. Other big ticket items include work on a new fire station ($5.1 million), a T-Hanger site prep and construction at New Kent Airport ($2 million), and New Kent Middle School HVAL ($1.4 million).

Funding for CIP projects include $6 million from Colonial Downs revenue, $10.7 million cash-on-hand, $5.3 million from Central Virginia Transportation Authority (CVTA) funding, and $2.9 million from state and federal funds.

The public utility fund, which is self-sustaining and paid by the users, has a proposed amount of $25,767,416. Capital Improvement Projects total $17,368,600.

A four-percent water and sewer rate increase is being proposed for the upcoming cycle. There are no proposed changes for connection and availability fees.

Top capital improvement projects for public utilities include $7 million for Water System Interconnections, which is being conducted as part of a major project to withdraw water from the Pamunkey River. Other public utility projects include replacing the Brickshire Water Tank ($6.25 million), Parhams Solid Handling ($1.5 million), and site planning for a utilities operation center site ($1.5 million).

New Kent County’s leadership will attend a budget hearing retreat on Friday, Mar. 14 at the VCU Rice Center in Charles City. A public hearing on taxes and fees will be held on Apr. 14, with a public hearing on the budget expected to take place on May 6. New Kent County’s budget is expected to be adopted at the May 27 work session.