Report: County coffers increased in fiscal 2014

WOODSTOCK – Shenandoah County collected more in property taxes and spent less money than expected last fiscal year.

The Board of Supervisors heard a presentation of its fiscal 2014 audit on Tuesday that showed the county came out ahead in the period from July 1, 2013 to June 30, 2014. James Kelley, with the accounting firm Robinson, Farmer, Cox Associates, presented the county’s financial performance results. The audit coincides with the county’s Comprehensive Annual Financial Report.

The county budgeted expenses of $54.1 million in its general fund but only spent $53.6 million, or “underspent” the budget by $512,574. The county also estimated $61.1 million in revenue in its general fund for fiscal 2014, but collected $63 million.

The Comprehensive Annual Financial Report states that the county collected $37.48 million in general property taxes in fiscal 2014 — $890,838 more than noted in the final budget, “primarily due to increased real property tax collections that were higher than anticipated.” The county has raised its real estate tax rate each of the past two years — 51 cents per $100 of assessed value to 54 cents in 2013 and to 57 cents in 2014.

Real estate tax money accounted for $717,892 of the $890,838 in unbudgeted revenue, according to the financial report.

Finance Director Mandy Belyea explained later Tuesday that the budget-making process might not anticipate certain revenue changes. The fact that real estate tax rates are effective for a calendar year but budget cycles run from July 1 to June 30 also make it more difficult to estimate revenues.

“I’ll be budgeting for fiscal year ’16 and it’s going to include calendar year 2015 second-half taxes,” Belyea said. “I know what that tax rate has been set, but I won’t know what the tax rate is for next fiscal year.”

The Board of Supervisors has not set the tax rate for calendar 2015. Belyea said she will use the present rate in her calculations while helping to make the fiscal 2016 budget.

“Some of the [unbudgeted revenue] could be because there was a tax increase that we didn’t know was going to happen,” Belyea said.

The county also collected $1.15 million in “miscellaneous revenues” more than budgeted. Of that amount, $676,756 came from the county’s insurance provider to cover the loss of the Alms House destroyed by fire earlier in the year.

The county also increased its savings to $12.8 million — 23.8 percent of the general fund, according to the audit. The amount exceeds the county’s policy on setting aside at least 12.5 percent of the general fund for savings. As Belyea explained, the fund balance is not intended to be used to cover operating costs such as salaries or other, ongoing expenses. Fund balances or savings usually are reserved for one-time expenses such as capital needs or emergencies.

Other findings include:

• The county reduced its overall debt by $4 million;

• The county’s debt was 3.72 percent of personal income as of June 30, 2014, compared to 5.13 percent as of June 30, 2005;

• The county’s debt payments for governmental funds accounted for 10.86 percent of its non-capital spending, compared to 21.8 percent in 2005.

Also during the presentation, Kelley said the auditors suggested the county make some changes in the way it handles finances. Kelley noted that at the end of the audit process, the county had already implemented some of these recommendations.

After the meeting, Supervisor Cindy Bailey remarked in an email about the audit findings and the county’s increasing amount of savings.

“I would argue that we should not be raising taxes while holding such a large increase above the recommended 12.5 percent in unassigned funds,” Bailey stated. “I question why we have such a surplus and continue to raise taxes. I think it is wrong.”

Bailey, in her email, also questioned the debt picture, noting that county will soon have to start making payments on the new regional jail that opened in Warren County in July.

Contact staff writer Alex Bridges at 540-465-5137 ext. 125, or abridges@nvdaily.com