The Price of Vision
Commissioners emerge from retreat

By Scott Nicholson

The Watauga County commissioners ended a two-day, nine-hour budget-planning retreat with Watauga County manager Rocky Nelson’s assessment of, “Your vision has exceeded your resources.”

Commission chairman Jim Deal replied, “Your vision should always exceed your resources.”

The statement summed up the boards’ ambitious plans for the years ahead, some of which won’t even make it onto the drawing board before the upcoming four-year board terms expire. Among the bigger items on the long-term wish list are a new swimming pool to replace the repaired county facility that has only a few years of useful life, a community recreation center, an affordable-housing development, land acquisition for commercial development, a county reservoir or public water system and a senior or community center in the eastern end of the county, all against the backdrop of a $70 million loan for a new high school.

Nelson opened the retreat by cautioning the commissioners that he would be preparing a “conservative budget,” projecting the usual 3-percent growth in property valuation but expecting sales tax revenue to remain flat. He said in his budget message that even though Watauga County is in a healthy economic condition, the amount and rate of growth for the coming fiscal year could be affected by the downturn in the national economy.

Over the three years prior to the 2006-07 revaluation, the average growth in property value has been 3.6 percent and, after the revaluation that took effect in 2006, is now on a four-year schedule, which was adopted to more accurately reflect property values, as some areas saw more growth and activity than others.

The current year’s county budget is $53 million overall, of which $42 million went toward the general fund budget covering county services, operations and education. While the sanitation budget is now an enterprise fund that is expected to pay for itself for the second straight year through tipping fees and revenues, the education budget has increased an average of 9 percent annually over the last 12 years and, including capital outlay and debt service, makes up a third of the county’s total budget.

Aside from the upcoming school loan, the county has $27.3 million worth of outstanding debt service. Next year, the county is projected to pay off $3.6 million in debt and interest, and in the following fiscal year, debt will be retired on the new health department facility and solid waste equipment. Other big-ticket items that will soon be paid off include the 75-acre Brookshire Road property in 2010-11, the Human Services Center the following year, and the 1992 school bond in 2014-15.

The commissioners also discussed boosting the fire-tax supplement to help rural fire departments, which have seen slower population and valuation growth than those in Blowing Rock, Boone and Foscoe. The fire departments are mulling a minor revision to fire district borders to help response times, and most fire tax rates remained the same, while the county commissioners adopted a revenue-neutral tax rate of 31 cents per $100 of valuation last year.

Currently, Foscoe, Beaver Dam, Stewart Simmons, Zionville, Cove Creek, Shawneehaw and Todd have 5-percent tax rates, while Meat Camp, Meat Camp/Creston, Blowing Rock and Deep Gap have 3-percent rates, and Boone’s is at 2 percent. The county also pays small supplements to the Beech Mountain and Seven Devils fire departments through a joint agreement with Avery County.

Commissioner Winston Kinsey, the board’s representative on the fire commission, proposed a supplement increase of about $40,000, to $350,000 a year, which would essentially spread fire-fighting support among all the county taxpayers in recognition that rural departments had lower revenues but still faced the same equipment costs. In addition, mutual-aid agreements mean that departments often respond to calls outside their districts.

Several departments saw big jumps in revenue by keeping their tax rates the same after revaluation. Foscoe went from $266,000 to $379,000, Boone went from $206,000 to $273,000, and Blowing Rock went from $170,000 to $238,000.

Major growth in revenue for next year is projected in Foscoe, one of the fastest-growing areas of the county, and in the Stewart Simmons district, which is benefiting from the upscale development, Laurelmor. Most other districts will see little growth, though equipment costs have risen dramatically over the last five years.

In contrast, Zionville’s fire tax revenues went from $75,000 to $97,000, Meat Camp went from $85,000 to $109,000, and Todd, with a district divided between Watauga and Ashe counties, went from $24,000 to $37,000. Fire districts can raise their tax rates to a maximum of 5 percent, and traditionally, the commissioners accept the recommendations of each fire department.

Departmental budget requests must be turned in to the county manager’s office by March 24, at which time the administration will compile a recommended budget. The commissioners have budget work sessions in May to fine-tune the budget and present it for a public hearing before its adoption, which is usually on the agenda for the last regular meeting in May.