Revenues flat, expenses up in town’s budget
As Ashland officials prepare to draft their budget for the upcoming fiscal year, they face a mounting list of capital needs and increased competition for the meals and lodging revenues that predominately fund town operations.
Proposed general fund expenditures currently total nearly $9.2 million compared to last year’s budget starting point of $8.2 million, a number eventually trimmed down to $8 million alongside $3.2 million of capital spending.
This year’s combined revenues of $7.4 million remain flat or down from last year, creating the need for increased cuts, raising new revenue or a larger transfer from the town’s savings account.
Deputy Town Manager and Finance Director Joshua Farrar credits the town’s revenue troubles to increased competition for meals and lodging along Interstate 95, a monopoly that Ashland used to enjoy.
“Lewistown is starting to develop,” Farrar said, referring to the area surrounding Bass Pro Shops. “Inherently, if you start developing an interchange exit right next to us with nice amenities, people now have a choice, where Ashland used to be the lone, northern outpost of Richmond.”
The lag comes despite gains in real estate. Overall, taxable real estate in Ashland rose to an estimated $747.4 million from $719.3 million last year, following a countywide trend of rising property values during the most recent assessment. However, the town’s rate of nine cents per $100 assessed value doesn’t generate enough revenue for the bump to translate into a windfall. The type of housing in Ashland also affects the town’s financial situation.
“The town is essentially workforce housing for the county,” he said. “Assessment increases over time for that stock of housing are going to be very different than the rest of the county.”
The budget process began March 4 as town council held its first work session, which consisted of an overview and presentations from department heads.
Police Chief Douglas Goodman Jr. is requesting a larger budget of $2.48 million, driven predominately by personnel expenditures. Goodman said the department wants to take on an additional sworn officer, approved on a temporary basis in the current fiscal year. The town currently has a ratio of 3.23 officers for every 1,000 people, below the national average for the region of 4.4. The additional officer would bring that ratio up to 3.34 and bring the department back to pre-2010 levels with 25 sworn officers in the field.
The added personnel should help the department address increases in crime, overall arrests and traffic accidents in town. Goodman told town council that his department answered 7,217 calls for service over the last calendar year and also saw a 5.4 percent increase in Part 1 offenses, driven by an increase in robberies.
Goodman also wants $43,000 to better distinguish the department’s salaries based on rank. A career development program that gives officers bumps in pay based on performance in the field and testing has put some officers near the pay rate reserved for sergeants.
Under a proposed scale, entry-level officers would be paid $43,028, 20 percent less than the next rank of sergeant. Pay rates would also increase for the ranks of lieutenant and captain to make Ashland more competitive in the region.
Overall, proposed general government expenditures are up 11.2 percent over the current year. Farrar said that fixed costs like health insurance are impacting the bottom line.
“When health care costs go up by 8 percent, it raises our budget by $40,000 overnight,” he said.
New costs in information technology are also a factor. Farrar has requested going to a “cloud,” Internet-based backup system for all of the town’s computer servers, which would reduce storage space and preserve files in case of an emergency. The initiative would cost $42,000 to cover the seven combined servers in use by the town and police department. Staff is also looking into making downtown Ashland a WiFi “Hotspot,” an effort that would cost $45,000.
Bricks & Mortar
In the coming year, the town has a number of big-ticket capital projects.
They’ll have to pay the remainder of a $700,000 turn lane and traffic signal at Vitamin Shoppe Way and Washington Highway after the receipt of $325,000 of proffer funding.
“The town’s on the hook for the balance of that to get the project done,” Farrar said.
The town has applied for funds through VDOT’s revenue sharing program, but won’t know until later in the spring whether any funding will come Ashland’s way.
“We’re showing it as a town expenditure even though there’s a chance we could get revenue for it later,” Farrar added.
A continuing project to address urban stormwater runoff is in a similar funding situation. Farrar said that the town is looking at a $315,000 project to construct a permeable parking lot at the police station and a restoration of Mechumps Creek.
So far, the town has received $157,000 of state grant money for the project and is atop the list of potential recipients for funding through the Chesapeake Bay Alliance, which could cover all or some of project cost.
The town is also proposing $400,000 of new funding to go toward the Ashland Theater. They had previously appropriated $100,000 as a budget placeholder to fund repairs as needed.
Since acquiring the circa-1948 theater in the fall, the town has been working to find a private sector party to operate what used to be a cornerstone of downtown nightlife in Ashland.
Town Manager Charles Hartgrove could not elaborate on what the new funding was going for, noting the theater’s classification as an economic development project. So far, the town has spent an estimated $11,000 on the facility.
In addition to funding for recurring projects like sidewalks and roads, the capital plan provides for a second $100,000 appropriation for Carter Park Pool renovations. Last year, the town decided to begin tucking away funds for either a repair or replacement of the pool after the discovery of a fairly major leak. The town expects to have a plan of action soon on how to address its aging pool, after talks with the initial architect that helped design it in the early 1990s.
Town council met for a second budget work session Tuesday night. The full, town manager’s budget will be before council by their April meeting, at the latest.
“I will bring you a balanced budget in some shape or form,” Hartgrove told town council Tuesday, adding that this budget is “just as challenging, quite frankly, as 2009 was.”