Gloucester County’s FY23 budget season is already underway. This year’s budget may be one of the more challenging in recent years. The crux of the challenge is due to recent changes supervisors made to use of the additional 1 percent sales tax.

The 1 percent sales tax generates funds that must be used for new construction and major renovation of schools. Last year, supervisors approved a budget for FY22 that used part of the sales tax proceeds for debt mitigation of past school construction and major renovations dating to the early 2000s. The mitigation of this debt alleviated pressure on the general fund, and allowed for other county projects to be funded.

At the end of 2021, Virginia’s former Attorney General Mark Herring released an official opinion that contradicted Gloucester’s use of the sales tax, deciding the proceeds could be used only for new school construction and renovation, and not debt mitigation.

The statement caused supervisors to change the county’s use of the tax to match Herring’s opinion. The board is now adjusting to those changes.

Supervisors’ chairman Dr. Robert “JJ” Orth said in an interview that the change is causing some major hurdles, but that fighting the change would have been a losing battle. He said the board and county staff are meeting those challenges head on and will do everything possible to avoid raising any taxes. He said there is a great deal of uncertainty this year in whether they will be able to avoid it.

A silver lining for the county comes in Gloucester’s economic growth. Orth said many businesses have been able to thrive during the pandemic thanks to a plethora of factors including federal relief programs and fewer Gloucester residents traveling out of the county. Orth said he is seeing similar trends in neighboring counties and cities.

The success of Gloucester’s economy does provide a positive outlook to the county’s future and further growth. Acting County Administrator Carol Steele said that Gloucester always expects about a 1 percent growth year to year. That growth is not enough to change how tight the budget will be for FY23.

Like other counties, Gloucester has been building very conservative budgets in the last two budget seasons that were impacted by the pandemic, said Orth. To prepare for the FY23 budget presentation in March, board members are meeting with Steele in pairs to discuss every aspect of the finances.

Steele said during this year’s budget process the county and board want to be optimistic while remaining aware of the reality of the situation. The budget for FY23 will start with an almost $2 million deficit due to the sales tax change. The county at this time does not have the capacity to take on any more debt for bond financing. She said to fund the needed projects, the county will either have to cut more essential projects or raise taxes.

High school renovation

One upcoming request the board will have to approach carefully is the additional Capital Improvement Plan request being made by the school board regarding an additional request for the renovation of Gloucester High School.

The supervisors previously approved a $45 million renovation of the high school, but to cover other construction for the school will require almost $35 million, if the project is added to the CIP. Steele noted that this project would not cost additional tax dollars if approved.

Steele also noted that with the high school’s renovation, the members of both boards can see the need because of the building’s age (opened in 1975) and condition. A public hearing on the CIP will take place during supervisors’ March 1 meeting.

Employee retention

Another challenge facing the county is the hiring and retaining of employees. Orth said it’s a problem most localities are facing. Some departments, such as Utilities, have been especially tricky to hire for. In other cases, employees have been offered other jobs elsewhere and the county has been unable to keep them.

Steele said a major focus right now is employee morale. She said the county staff is like a family and keeping morale high is key to having a healthy family. She said there have been recent surveys sent to county employees to receive feedback on how the county can better serve its employees.

The survey showed that salary and time off were the biggest factors that employees said would either keep them here or see them accept a position elsewhere. Steele said they also want to feel more involved in what is going on with the county and want more town hall meetings to voice their opinions.

One major hiring that the county will make this year is of its new County Administrator. Brent Fedors resigned from that position following a leave of absence last summer. Since then, Steele has served in an acting capacity.
Interviews for County Administrator will take place in March, said Orth, with the hiring set for early April. Until then Steele will continue to fill the role.

Countywide broadband

Also on the horizon is the arrival of wireless countywide broadband, said Steele. Open Broadband will be getting its first customers access to high-speed internet in the spring. Those without access to high-speed internet will be given priority before others will be able to access the service.

There also is great anticipation among county staff for the return of events such as the Daffodil Festival. Orth said he’s optimistic that come spring, Gloucester life will return a pre-pandemic normal.