Budget plan includes pay raises, business tax cut

The largest expansion of public transit in more than a quarter century, raises for eligible county and school system employees and the elimination of business taxes for certain small businesses highlight Henrico County Manager John Vithoulkas’ proposed Fiscal Year 2018-19 budget.

Vithoulkas presented his $1.3-billion operating budget plan to the Board of Supervisors March 13. The proposal includes a 2.4-percent raise for eligible county employees and an additional 0.6-percent raise for those who have been employed by the county for six years or more. It also fully funds the School Board’s financial request of $485.1 million.

As part of the proposal, county businesses that gross $300,000 or less annually will be exempt from paying Henrico’s BPOL (Business, Professional, Occupational License) tax. The move will cost Henrico about $1 million in lost revenue but will mean that about 13,000 businesses will be exempt from the tax. And, Vithoulkas told the Citizen, the county’s business climate is so strong that despite the change, it still will collect more BPOL money in the coming fiscal year than in the current one.

“We are in a place where the economy is doing really well,” Vithoulkas told the Citizen. “Overall business activity in the county is as strong as I’ve ever seen.”

For the 40th consecutive year, the county’s real estate tax will not increase; instead, it will hold steady at 87 cents per $100 of assessed value.

Other highlights of the budget include:

• the creation of 83 new positions (60 in the school system, 23 in the general government agencies);

• a $2 million allocation for the creation of a Community Revitalization Fund and the creation of a housing advocate position, which will allow the Community Revitalization department to identify and propose improvements to aging neighborhoods (perhaps by installing streetlights, purchasing and renovating an aging home or providing funds to organizations that do such work themselves), with the goal of rejuvenating various pockets of Henrico;

• an increase in the water and sewer fees for an average customer of nearly $7 every two months, to help fund upgrades and the ongoing construction of the Cobbs Creek Reservoir project in Cumberland County. Henrico is building the reservoir, which it hopes to begin operating in 2021 or 2022, as a way to provide water for all its residents and possibly to sell to other localities;

• the introduction of a multi-year effort that ultimately will provide Basic Life Support services through the Division of Fire. As 911 calls continue to increase, county officials have noticed that many “emergency” calls aren’t actually life-threatening events but still require a response. BLS officials will respond to those calls (an elderly person who has fallen out of bed, for example), freeing Advanced Life Support services to focus on more critical calls.

Henrico’s approach to good economic times, Vithoulkas said, is not to spend more but rather to look for ways to save and buffer its already-strong rainy day fund, which current sits at more than $254 million.

“When things are this positive, that’s when we really go into our squirrel mode,” Vithoulkas said.

Credit rating agencies consider such a reserve fund robust if it contains the equivalent of at least 15 percent of a locality’s annual expenditures; Henrico’s will be more than twice as high. That financial strength allows the county to borrow money at the lowest possible rates, saving it millions when it sells bonds to complete capital projects approved by voters, for example.

The proposed $176.9-million capital budget (which will fund construction and renovation projects countywide) includes $53 million in funding from the sale of bonds approved by county voters in 2016. Proposed funding for capital projects includes:

• $8.5 million for the refresh of the Circuit Court building (in lieu of construction of a new courts building, which would cost more than $100 million);

• $10 million in initial funding for the school renovation project at Tucker High School;

• $9.2 million for the installation of turf fields at three high schools, completing the three-year cycle that will retrofit all nine Henrico high schools with such fields;

• $24 million for the Fairfield Library replacement project;

• $10 million for Phase II of development of Greenwood Park;

• $2 million for the construction of additional fields at Dorey Park;

• $2 million in partial funding fort the Staples Mill fire station.

The expansion of GRTC bus service in the county, at a cost of $1.2 million, will extend service on three routes – the Seven Pines route (Route 7), the Laburnum Connector (Route 91) and the Pemberton Route (Route 19), the latter of which also will be extended to West Broad Marketplace in Short Pump. All three routes will operate 7 a.m. to 11 p.m. Monday through Saturday and from 10 a.m. to 10 p.m. on Sunday.

The Board of Supervisors will conduct its annual weeklong budget review with heads of all agencies next week, then hold a public hearing on the proposed budget at 6 p.m. April 10 before voting to adopt a budget April 24.