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Localities to shoulder cost of pending stormwater rules
Final regulations near approval after 7 years in making
The cost of managing stormwater for many local governments in Virginia is about to increase. Pending the approval of draft state regulations this spring, most cities, towns and counties must adopt and fund local stormwater programs.
The regulations culminate a process initiated by state law in 2004 to establish more stringent controls for stormwater runoff and delegate stormwater permitting and inspection to local governments. Even though local governments can implement fees to cover administrative costs, they will be forced to spend general funds from their operating budgets to run these programs. Many localities will have to hire engineers, plan reviewers and inspectors.
The proposed final regulations were published in the Virginia Register of Regulations on March 28, which started a 30-day public comment period that will close on April 27. The Virginia Soil and Water Conservation board is scheduled to adopt the final rules on May 24.
The regulations have three major components. Parts I and II establish revised definitions and water quality and quantity criteria, the most significant of which is a more stringent standard for post-construction phosphorous pollution. Part III defines the requirements for delegation of stormwater permitting and inspection to local governments.
Under the 2004 Virginia Stormwater Management Law, all Chesapeake Bay Act localities and Municipal Separate Storm Sewer System (MS4) permit localities will be required to adopt and implement stormwater programs by the summer of 2013. Local governments not required to adopt a local program will be allowed to do so. Most importantly, localities that choose not to adopt a program will have to rely on state review and approval of stormwater permits before projects are allowed to break ground.
VML was a member of the regulatory advisory panel that recommended changing the current phosphorous standard of 0.45 lbs. per acre/per year for new development of one acre or more to 0.41 lbs. In 2009 VML opposed a proposed standard of 0.28 lbs. for new development, arguing that it would make some projects so costly that revitalization of urban areas would have been stunted.
The proposed final regulations require that all redevelopment projects one acre or more must reduce pre-development phosphorus pollution by at least 20 percent. For projects less than an acre, the current standard of 10 percent reduction for redevelopment will remain in place. The new criteria for stormwater quality and quantity will become effective on July 1, 2014.
To review the proposed final regulations go to www.dcr.virginia.gov/lr2d.shtml. Comments may be submitted prior to 5 p.m. April 27 via fax to 804-786-6141, via e-mail to regcord@dcr.state.va.us, or via U.S. mail to: Regulatory Coordinator, Virginia Department of Conservation and Recreation, 203 Governor St., Suite 302, Richmond, VA 23219.
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Agenda set for Town Section meetings
The agenda for the four Town Section meetings that VML will conduct across the state this spring is complete. The gatherings will be held Thursday, April 28, in Pulaski; Thursday, May 5, in Purcellville; Friday, May 6, in Appomattox; and on Thursday, May 26, in Smithfield.
Each meeting will begin at 11 a.m. and run until about 3 p.m. A lunch will be included. Download registration form that includes specific locations and costs . Registration material also was sent to town managers within the past week.
Agenda:
11 a.m. Welcome – VML staff 11:05 a.m. Beginning of presentations Noon (appx) Lunch 1 p.m. Continue presentations 3 p.m. (appx) Conclude meetingTopics to be covered in presentations by VML staff include:
- Summary of 2011 General Assembly session: New laws affecting towns
- New July 4th Fireworks State Regulations
- Smart Beginnings for Prosperous Communities: New VML program
- VML Insurance: Line of Duty and other new coverages
- VML/VACo Finance: OPED, Audit Services and other programs
- FOIA / Conflicts of Interest / Open meetings: Bring your questions
- Go Green Virginia: Kick-off of fourth year
- Overview of VML service programs for towns
- VML Achievement Awards
- Upcoming VML meetings
Questions? Contact Sherall Dementi at VML: 804/649-8471 or sdementi@vml.org.
Proposals calling for service cuts, tax hikes
The General Assembly has finished its work on next year’s state budget, and local budget wonks now have a clearer picture of the available amounts of state assistance. Estimates for local revenues, including real estate taxes, also are complete. Matching uncertain resources to increasing demands for services remains the ultimate challenge as it has been for the past two years.
Here is a snapshot of the budget actions occurring across the state.
In Petersburg, the city manager presented a budget proposal relying on the current real estate tax rate of $1.35 per $100 of assessed value. But, the transient occupancy tax would rise from 6 percent to 8 percent, taxes on legal documents would increase from 5 cents per $100 to 8.3 cents per $100, and water and sewer rates would climb. According to the manager, the proposed budget absorbs numerous cuts in funding and unfunded mandates from the Commonwealth. Although the budget does not include layoffs or furloughs, a 2 percent attrition rate is assumed and is critical in terms of funding a one-time bonus of $500 for all full-time employees working for the city, school division and constitutional officers. In addition, the budget assumes that all new city employees hired after July 1 would assume the financial responsibility of making a 5 percent member contribution to the Virginia Retirement System.
In Richmond, the mayor presented city council with a budget proposal providing city employees with a $1,000 bonus and no increase in health-care costs. Employees have worked without raises since 2008. The budget plan requires no tax increases even though assessments are projected to decline by about 5 percent. The mayor’s priorities include public education, economic development, blight elimination, and new construction of four new schools and a new city jail.
Last week the Albemarle County Board of Supervisors enacted a $304.4 million budget for FY12 that leaves the real estate tax rate unchanged at 74.2 cents per $100 of assessed value. The budget is about $12.2 million greater than the current one, reflecting a stabilization of many local revenue sources. The General Assembly’s action to increase public education funding will provide about $2.3 million more than previous projections made by the school system. Many county employees will get a 1 percent pay increase, while teachers will receive an average increase of 1.95 percent. Also, 44 new teachers or their full-time equivalents will be hired. Although class sizes will shrink, teachers’ total student loads will generally be larger than in fiscal 2010 but smaller than in fiscal 2011.
In neighboring Charlottesville, city council amendments have added more than $368,000 to the city manager’s proposed FY12 budget. The additional funding will be used mainly to support affordable housing, nonprofit agencies and capital projects. About half of the money included in the council amendments is accounted for through projected increases in tax revenues and state aid. The other half is balanced out by cutting spending elsewhere.
The Danville City Council is weighing several revenue options presented in the city manager’s proposed budget. The main recommendation calls for a 10-cent hike in the real estate tax rate. He has offered alternatives for part of the property tax increase by adding a 30-cent per pack cigarette tax and a half-cent increase to the meals tax. This option would reduce the real estate tax increase to 7 cents. A second alternative drops the real estate tax rate to 5 cents by invoking the cigarette tax and a 1 cent increase in the meals tax.
In addition, city council will have to review the manager’s recommendation to cut another 45 positions beyond those already eliminated in the proposed budget. Two public hearings will be held during city council meetings prior to a final vote on the budget. A third meeting will be held to consider the proposed property tax increase.
For the City of Roanoke the good news is that local revenues are projected to grow next year for the first time in three years. The bad news is that fuel costs, health benefits and state-mandated spending have the city council once again pondering service cuts. For 2,000 riders who depend on the Valley Metro bus service the most visible cuts are proposed for them. Other service cuts are planned for regular waste collections and the city’s annual contributions to the nonprofit Total Action Against Poverty and Blue Ridge Behavioral Health groups. “We’ve taken the low-hanging fruit. We’ve taken the medium-hanging fruit, the high-hanging fruit,” said City Manager Chris Morrill, “Now we’re cutting limbs off the tree.”
After four years of spending cuts and no tax increases, city leaders in Suffolk have offered a budget blueprint that would reverse both trends – boosting spending by 4 percent and adding 6 cents to the property tax rate. The budget also calls for an $18.50 monthly trash fee and a 9 percent increase in water and sewer rates.
The city manager said her proposal was “predicated on substance and not smoke and mirrors.” She said it would help close a $10.5 million budget gap, resulting from falling home values and state revenue cuts at a time when the city’s obligations continue to mount. Since 2007, the city budget has been reduced by $17.3 million. Some 35 full-time jobs have been eliminated, a hiring freeze imposed for non-essential positions, and no pay increases for city workers. The budget proposal would also reduce funding for city schools by 2 percent or by about $900,000. The school division had requested a 3 percent increase.
In Portsmouth, the city council floated the possibility of layoffs as members began discussing ways they might avoid a 6-cent real estate tax rate increase. The tax increase would raise some $4.2 million with the bulk of the extra revenue targeted for the school system, a 2 percent raise for general wage employees, a 1 percent cost-of-living adjustment for retirees, and the growing cost of a public safety pay plan that the council approved two years ago. The city manager reported that most departments have been cut by about 15 percent over the past three years and that there is little else to trim without turning to layoffs that could affect government services. Increasing obligations facing the city, including rising debt payments, and sluggish revenue growth have resulted in a $13 million budget gap for next fiscal year.
After two budget-trimming years, the Virginia Beach city manager offered a plan to modestly increase spending to deal with a backlog of city needs, including a 1.5 percent pay raise for city employees (the first since 2008), about 25 new full-time positions, investment in public safety technology, and purchases of replacement garbage trucks and police cars. The budget proposal would increase spending by 2 percent over this year’s operating budget.
To close the budget gap, city officials propose a 2-cent per $100 increase in the real estate tax rate, a monthly $10 trash fee, a 20-cent hike per $100 on the personal property tax rate for vehicles, and higher stormwater and parks and recreation user fees. He also recommends taking $14.5 million from the school division’s risk management fund. But, the proposal includes a 2.5 percent bonus and a 0.5 percent pay increase for school employees along with the elimination of about 130 school division positions, including 48 teachers.
The proposed budget also includes spending cuts, including a program that evaluates and treats indigent clients with mental and substance abuse problems. And, there are provisions to eliminate the machinery and tools tax and to limit BPOL.
School boards finishing work on next year’s budgets
Although the General Assembly’s action to provide a one-time boost for public education was warmly received by school boards and local governments, the $75.6 million surge was not enough to avoid painful changes.
The school budget approved by the Hampton School Board includes a 1 percent raise for all staff along with 106 job cuts and the elimination of health insurance for spouses who are eligible for coverage elsewhere. The school board chairman said the new budget would be at the same level as it was in 2006.
In Waynesboro, the school division may have to work around the loss of $315,000 in leftover local funds from last fiscal year. That could mean cuts in the schools’ instruction budget. City Council is considering using the surplus local funds because state construction funds will not be provided next year to reimburse the city for its contributions to a school construction project.
Lynchburg City Council told the school board that it was not possible to provide the school division with an extra $2 million to give out raises for the first time in three years, pay for more than 14 full-time equivalent positions and scale back planned cuts to the central office. The council said the request, which would have required actions to either raise taxes or pull funding from other services, was too much money.
The school division’s budget has been cut by more than 12 percent over the last three years, largely due to reductions in state aid. In addition to freezing salaries, school officials report that more than 127 jobs have been cut, across-the-board cuts in department budgets have been made, and class sizes have been increased. Starting teacher salaries have also been reduced, and now lag behind all of the region’s other school divisions. The city currently contributes $32 million to the school division’s budget – more than it spends on any other city service and more than twice the minimum funding required of it by the state.
When the extra federal dollars run out next school year, school budgeting will be an even tougher exercise.
Local budgets benefit minimally from improving state economy
The City of Newport News released its annual re-assessment last week, revealing a decrease for the second year in a row, the first time that has occurred since at least 1970. Property values overall declined 2.01 percent for 2011-12, compared to a 4 percent decline in 2010-2011. In nearby Hampton, property values fell by 1.38 percent overall.
In Albemarle County and Charlottesville, housing prices are down by 11. 4 percent and 8.2 percent, respectively, in the first quarter of this year compared to the same time last year. The good news is that home sales seem to have stabilized after two years of decline.
In contrast, state income taxes continue to grow. What gives? The answers are job creation and household income. The Federal Reserve Bank of Richmond reports that Virginia businesses created 3,700 jobs in February along with 14,600 jobs in January. Virginia posted a year-over-year gain of 49,200 jobs in February. At the same time, the state unemployment rate edged down to 6.4 percent, marking its lowest level in two years. Initial unemployment claims in February dropped 36.7 percent from just one month earlier and by 26.9 percent compared to February one year ago. Virginia household balance sheets were bolstered by real personal income growth of 0.5 percent in the fourth quarter of 2010.
State taxes are more closely tied to economic activity than local taxes, meaning no one should be surprised that state collections have been steadily climbing while local revenue collections bump along. It is the prospect of minimal revenue growth at the local level for the near future, coupled with the state’s retreat from historic funding commitments in areas such as public education, that make budget development so challenging.
VDOT seeks comments on land development regulations affecting local review processes
The Virginia Department of Transportation (VDOT) is reviewing three sets of regulations adopted in recent years dealing with the effects of development on state roads. The regulations for review include requirements for traffic impact analysis, access management to state roads, and secondary street acceptance standards. SB 1462, which was pushed by the Homebuilders Association of Virginia in the 2011 General Assembly, exempts these reviews from the Administrative Review Act (APA) and requires VDOT to adopt appropriate revisions to the sets of regulations by Jan. 1, 2012.
The revisions are necessary, according to the homebuilders, to “significantly improve the efficiency of orderly development in Virginia.” The association maintains that the existing regulations are an impediment to “efficient transportation planning and construction in Virginia.”
Of particular concern to local governments are the requirements for traffic impact analysis – more commonly known as a 527 review. Under the current regulations localities with roads maintained by VDOT are required to submit comprehensive plan amendments, rezoning applications, and subdivisions for review when the proposed actions generate a specified minimum number of vehicle trips. For example, if a proposed rezoning would generate at least 2,500 vehicle trips per day on to state maintained roads, then the local government must send the application to VDOT for review.
For localities maintaining their own roadways, requirements for VDOT review are triggered when proposed developments will generate vehicle trips within approximately one-half mile of a state maintained road. Following the example above, if a proposed rezoning would generate at least 2,500 vehicle trips per day within 3,000 feet of a state maintained road, then the local government must submit the application for review even though the additional vehicle traffic originates within their system of locally maintained roads. While VDOT has no statutory authority to approve, deny, or alter land use applications, the review process can be lengthy and cumbersome. This is primarily because of the requirement for a Traffic Impact Statement (TIS), a detailed analysis typically prepared by one or more traffic engineers and/or transportation planners.
The regulations can be reviewed at http://bit.ly/hqDSYn.
Comments should be submitted to: Robert Hofrichter, VDOT, 1401 E. Broad St., Richmond, 23219. Contact: (804)786-0780 or Robert.Hofrichter@VDOT.Virginia.gov.
VDOT also will request additional public comments through the agency’s web site and via electronic and mailed letters to individuals who have previously submitted comments to VDOT related to these regulations. Also, the Commonwealth Transportation Board (CTB) and VDOT will hold a public hearing on these regulations this summer.
High-speed rail is derailed
Just six months ago the Federal Railroad Administration awarded Virginia $45.4 million to begin preliminary engineering and an environmental impact assessment for high-speed passenger rail service between Richmond and Washington.
U.S. Sens. Jim Webb and Mark Warner predicted high-speed rail would benefit Virginia’s economy and its environment. A spokeswoman for Gov. Bob McDonnell said that high-speed rail has a bright future in the Commonwealth and that the $45.4 million takes Virginia a step closer to making it a reality.
However, the director of the state’s rail agency, Thelma Drake, pointed out that the improvements needed to bring higher-speed rail from Richmond to Washington would take at least 20 years and cost an estimated $1.8 billion – money the state does not have.
Drake’s sobering comment proved to be on target. Virginia Secretary of Transportation Sean Connaughton said last week that the Commonwealth cannot build the proposed rail link fast enough to qualify for 100 percent federal stimulus funding. And Virginia does not have the matching dollars needed to receive money from another federal rail fund. To be eligible for federal stimulus dollars, the state would have to complete the Richmond-Washington project by 2017, but the state does not have the federally required advanced environmental impact approvals for the work. Under the state’s best case scenario, the project could be completed by 2021.
To have a chance at making the 2017 deadline, Virginia would have had to apply for money from a separate $800 million pot of federal rail money. However, these dollars require a state to put up a share of the project’s cost, and given Virginia’s strained transportation budget, state transportation officials concluded the 20 percent match requirement was beyond reach. Consequently, Virginia is not going after the billions of federal dollars available now for high-speed rail.
Will the state’s funding woes affect other passenger rail services? According to the state’s Six-Year Transportation Improvement Program (fiscal years 2011-2016), the subsidy programs for additional passenger service for Lynchburg, Richmond and Norfolk will cost $51 million during this period of which only $10 million is funded. The remaining $41 million is unfunded. In FY12, which begins July 1, the Lynchburg and Richmond subsidies will cost almost $6.2 million of which $3.8 million is unfunded.
Traffic congestion and rising gasoline prices might make train service an attractive travel option in the coming months, but will the resources be available to meet the demand?
General Assembly reconvenes; acts on governor’s amendments
Local governments got most of what they worked to achieve during the General Assembly’s reconvened session on April 6 in Richmond.
On the positive side, the House overwhelmingly defeated a proposed amendment to shift additional costs onto local governments within the Comprehensive Services Act (CSA) program. The General Assembly also accepted amendments to legislation addressing property tax relief for veterans that clarified that this relief commences for tax years beginning on or after Jan. 1, 2011. Finally, the Senate upheld Gov. Bob McDonnell’s veto of a bill that would increase physical education requirements in schools without providing any state financial assistance for the increased mandate.
On the down side, the House defeated McDonnell’s amendment to allow local governments to require Plan 1 employees (those hired before July 1, 2010) to pay some or all of the required five percent member contribution to VRS.
Additional information about the April 6 reconvened session actions may be found in the VML Legislative Bulletin at http://bit.ly/hu5ynB.
Virginians gain additional energy assistance
Virginia will gain an additional $12.1 million this year to help low-income homeowners and renters meet energy costs under the Low-Income Home Energy Assistance Program. Counting this supplement, Virginia has received a total of $87.97 million in these funds since Oct. 1.
These block-grant funds are used to help qualified families with home energy needs such as heating and cooling or insulation to make a home more energy efficient.
The announcement of the additional funds came from the U.S. Department of Health and Human Services on April 7.
NLC seeks feedback on regulatory barriers for transportation projects
As part of the transportation funding reauthorization debate, Congress is seeking recommendations from local officials on ways to streamline the planning and construction of projects while respecting environmental concerns.
The National League of Cities (NLC) is working with the National Association of Regional Councils (NARC) to solicit specific examples of barriers local governments face in delivering transportation projects, as well as any other regulatory barriers and concerns regarding federal funds for community projects.
If you have examples of federal rules and regulations that have delayed projects or suggestions for improvements to current rules and regulations that would help streamline the process, please download a regulatory response form from http://bit.ly/fXetd3 and submit to Joe Patterson at intern3@narc.org or contact Leslie Wollack at NLC, wollack@nlc.org, 202/626-3029.
It’s not too late to join a VML policy committee
VML is still accepting nominations from full-member local governments to participate on one of its policy committees. The 2011 policy committees will meet on Thursday, July 28, at the Greater Richmond Convention Center.
There are six VML policy committees: Community & Economic Development; Environmental Quality; Finance; General Laws; Human Development & Education; and Transportation. Policy committees are responsible for developing or revising policy positions that address issues of greatest importance to local governments. They also recommend most pressing issues to the VML Legislative Committee for possible inclusion in the league’s legislative program.
For more information, e-mail or call Janet Areson at VML (jareson@vml.org; 804/523-8522).
Free webinar explains new real estate reassessment law
VML is participating with the Richmond law firm of Sands Anderson on May 4 to discuss what changes to the laws on reassessing real estate will mean for local governments.
Beginning at noon, Andrew McRoberts, an attorney with Sands Anderson, will present information on new legal requirements and the effect on local government assessors that the new law creates. Mark Flynn, VML’s director of legal services, will describe the history of the legislation and why it was adopted.
VML worked with several groups during the 2011 General Assembly session on significant changes to the laws governing how reassessments are to be carried out and how a landowner can appeal the reassessment.
The webinar should be helpful for localities as they prepare to comply with the new law. Registration is done via the internet at www.sandsanderson.com under the “news and events” section of the firm’s main page – click on the link for “Virginia Local Tax Assessment Appeals: State of the Law 2011.”
For more information, contact: Russell Lawson, director of marketing at (804) 783-6799 or RLawson@SandsAnderson.com.
Local governments eligible for bay restoration grants
Local governments working to protect and improve watersheds in the Chesapeake Bay basin are eligible for grants from $20,000 to $200,000 from the U.S. Fish and Wildlife Foundation.
Eligible projects include: habitat restoration and urban stormwater improvements. Online applications must be completed by June 3. For more information, visit http://bit.ly/ga9LLR.
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