The Southampton County Board of Supervisors on Wednesday got its first look at the draft budget for the 2010 fiscal year, which begins July 1.

The proposed budget, embodied in a 575-page document, currently totals $56,885,219. Southampton County Administrator Michael Johnson explained that despite budget cuts mandated by the board, two factors — increases in debt service on capital projects and solid waste disposal fees — drove proposed spending to increase $2,208,848 from the previous fiscal year.

“The budget did go down,” Johnson told the board “but those two things caused the overall budget to go up.”

The county plans to spend $1.6 million for debt service associated with the Courtland wastewater treatment plant and the extension of a sewer line to Riverdale Elementary School. Another $735,000 will be spent for solid waste disposal through SPSA, based upon a tipping fee of $170 per ton.

But otherwise, most of the 51 departments covered by the general fund will get less money.

Taxes will not rise, but neither will the salaries of any county employees. However, medical insurance premiums, which are shared between employees and the county, will be going up.

“Employees’ take-home pay will be less next year with salaries staying the same and their share of the hospital insurance (being) higher,” Johnson said.

The county plans to use $1.73 million from its unappropriated general reserve to avoid raising taxes.

“That’s a lot of money, no question,” Johnson said. “That’s going to put a strain on your reserve, and that’s a one-time fix. That fix won’t be available to you next year. But your reserve fund is a ‘rainy day fund,’ and it’s raining. It’s an appropriate use of that fund at this time. But that’s not a solution to your longer-term problems. That simply helps you get over the hump and hopefully the economy can begin to recover and your revenues will begin to grow again.”

Other highlights from the proposed budget include providing $100,000 in legal fees for the county’s defense against an Outlying Landing Field and a proposal to increase the incremental rate for water and sewer customers who use more than 4,000 gallons per month.

The county board will meet again to discuss the budget at a work session on Wednesday.

Newsoms District Supervisor Walt Brown commented on the near 79 percent increase in refuse disposal.

“I can imagine that it would have been greater than that had we not mandated sites for collecting trash,” Brown said.

Johnson said Brown’s observation was correct. “It would have been almost twice that,” he said. “We’ve cut our volume down by 45 percent from where they were three years ago with the attended sites.”

The public works department maintains 16 refuse collection sites across the county.

Funding for Southampton County Public Schools was pegged at $31,795,467, a decrease of $90,108 from the previous year, or about one quarter of one percent.

“You may think that doesn’t sound like that much of a cut,” Johnson told the board. “But keep in mind that we’ve got the debt service for Riverdale in the school budget this year. Even with the stimulus money, the schools have about $700,000 less to spend on operations expenses next year than they have in the current year. Overall, the school budget is down and down significantly.”

Commenting on the school division’s budget, Brown said, “I understand that this is somewhat predicated on the stimulus package that was initiated this year. What happens next year (in FY 2011)?”

Said Johnson: “2011 looms for a number of reasons, but that’s one of them that will loom largely for the schools, because they plugged in that stimulus money to help cover operational shortfalls. That money won’t be there in 2011. So they’ll have to make some hard choices about the cuts again.”

Several board members expressed concern about the dwindling balance of the county’s unappropriated general reserve, which stood at $6,537,278 on June 30. But after several encumbrances, including $361,550 for SPSA tipping fees retroactive to Feb. 1, the reserve was estimated to be near $3,741,605 at the end of the current fiscal year. Assuming the county plugs another $1,738,796 into the 2010 budget, the reserve’s balance could get down to near $2 million.

When Supervisor Carl Faison, who represents the Boykins District, asked how much a healthy general fund would be, Johnson answered “$5 million plus. $2 million is the bare minimum to avoid cash-flow problems. You don’t want to get yourself into a position where you’ve got to borrow money to make payroll. We’ve been down between $2 and $3 (million) before. We’re comfortable with that number, if we have to be. But it’s not somewhere you want to stay for a sustained period of time.”

Berlin/Ivor District Supervisor Ronald West said, “I liked it at $6 million. I can’t stomach $2 million.”

Two suggestions for bringing in additional revenue were also discussed by the board: imposing a fee on households for solid waste disposal and raising personal property taxes.

Special legislation currently permits five Virginia counties — Accomack, Augusta, Floyd, Highland and Wise — the authority to impose a fee for solid waste disposal and empowers them to contract with utility companies to collect fees on the counties’ behalf.

“It would be great if we had a vehicle or tool with which we could pass the cost of solid waste disposal on to the generators of the waste, which are the households,” Johnson said. “Our problem now is we can levy a fee per household, but we have no way to bill. We don’t know who lives in rental properties. All we know is who owns the property. So there’s no good way to levy a fee on the residents. But if we could get that legislation approved, it would authorize us to contract with the power companies who already collect our utility taxes for us.”

Faison asked what was special about the five counties that are allowed to impose the fees.

“The whole game is, ‘Mother May I?’” Johnson answered. “They’ve just asked and been granted the permission.”

Johnson said Southampton would first need to see if all of the power companies were interested in levying the fee on the county’s behalf. Five power companies serve the county: Dominion Virginia Power, Community Electric Cooperative, Mecklenburg Electric Cooperative, Prince George Electric Cooperative and the City of Franklin.

“The residents should pay for the disposal,” Brown said.

On the personal property tax issue, the rate is currently $4 per $100 of value. An increase of 50 cents, Johnson said, would be the equivalent of a 5- to 6-cent hike in real estate taxes.

“There are many communities in the state that are up to $4.50,” Johnson said. “That’s not out of the ball park. A lot of it hits the same people, but you do also hit other people. You hit people that rent, that don’t own real estate.”

Board chairman Dallas Jones said, “That sure would help us a whole lot.”

West agreed, adding that an increase in the personal property tax “seems the fairest way for equal distribution. Face the facts: If you have a nice car, you pay for it. You drive a lesser car, you pay less. But it gets into every household, instead of just those who own a home or just the land itself, and that burden is deep.”