Navy: Only Congress can approve PILT
Published 8:47 am Friday, January 15, 2010
FRANKLIN—If Congress approves the U.S. Navy’s plans for an Outlying Landing Field, it would also need to approve any payments to the host localities to make up for lost real estate tax revenues.
Meanwhile, the Navy says it has not awarded any contracts other than design of an OLF, a facility that would use federal hiring guidelines to fill available positions.
OLF IMPACT ON LOCAL TAX BASE
To be sure, an OLF would affect its host locality because land used for the airfield would not be subject to local property taxes. The Navy says that it can’t do anything to make up for the shortfall.
“There is currently no legal authority for the Navy to provide payment in lieu of taxes on federal property to include land acquired for an outlying landing field,” Ted Brown, media relations officer for the Navy’s Fleet Public Affairs Office, said Thursday. “The legal authority for the Navy to do that would have to come from Congress.”
The federal government makes payments to county and local governments that have some types of federal land within their jurisdictions under the Payments in Lieu of Taxes, or PILT, program. PILT was established in 1976 to help minimize the impact of lost property tax revenue on local governments.
“Congress appropriates and authorizes each year payments to counties in lieu of the taxes they lost by not being able to tax those lands,” Frank Quimby, spokesman for the U.S. Department of the Interior, which administers the PILT program, said Thursday. “It’s not complete or full reimbursement, but it does provide some relief.”
Quimby said the Interior Department uses a formula based on population, acreage and land type to calculate PILT payment amounts.
“The amount allocated does fluctuate every year, but not widely,” Quimby said.
Congress allocated $381.6 million for approximately 1,850 localities under the PILT program in 2009, of which $3.8 million went to 66 localities in Virginia. The largest PILT payment in Virginia went to Augusta County, which received $362,266 for the 206,586 acres of qualified federal land within its jurisdiction.
Locally, Prince George and Surry counties received $1,212 and $305 respectively for the 517 and 130 acres of federal land within their borders. The cities of Chesapeake and Virginia Beach received $1,217 and $602 respectively for 2,528 and 257 acres. But some localities — including the City of Portsmouth, which has 23 acres — received nothing.
Southampton County Administrator Mike Johnson said he was skeptical that PILT funds would be a substantial reimbursement for lost real estate tax revenues, which in Southampton is 72 cents per $100 of assessed value. He said a similar program at the state level has been reimbursing Southampton for more than 10 years.
“We already have a program in place where we assess service charges to the Commonwealth of Virginia for the correctional facilities that are here,” Johnson said Thursday. “But the service charges we assess — which are based on a formula that’s prescribed directly out of the Code of Virginia — aren’t anywhere near comparable to what a private individual would pay as far as real property taxes.”
Besides the state correctional facilities in Southampton, the state gives the county funds for the Southeast Virginia Farmers Market in Courtland, the Virginia Department of Agriculture & Consumer Services’ Ivor Laboratory, and public boat landings.
Johnson said the concept of sharing revenue with the City of Virginia Beach — home to Naval Air Station Oceana, which an OLF would support — had not been discussed.
“We have not had any discussions with Virginia Beach about something like that,” Johnson said. “There has to be specific statutory authority for local governments to agree to share revenues. I suspect that would require a voter referendum in whichever locality was sharing their money.”
Johnson said a revenue sharing agreement between Southampton and the City of Franklin was enacted in the mid-90s.
“That was subject to voter referendum because under the Constitution of Virginia it’s considered a debt,” Johnson said. “Virginia Beach may not be subject to that referendum requirement because they are a city, but as a county we are.”
Brown said the Navy “wants to work with the local, state and federal elected officials to see what we can do for a community to offset any losses to the tax base, (but) we obviously can’t do anything that is not within our authority.”
Tony Clark, who serves as chairman of the group Virginians Against the Outlying Landing Field, agreed that the Navy doesn’t have the authority to give communities anything and questions those who are calling to open negotiations over citing an OLF.
“Who are we supposed to negotiate with?” Clark asked Thursday. “The Navy has been telling us the same thing for years, that they don’t have the authority to give us anything. They haven’t even made any bad offers. The reason there’s nothing on the table is that there’s nothing there to give.”
CONSTRUCTION, ONGOING CONTRACTS
Brown said the bidding process for construction of an OLF would be open to anyone, but emphasized that process has not started yet.
“We have not opened for bidding, nor are we in a position to open for bidding, any construction contract,” Brown said. “The contract for the construction was never awarded at the original site (in Washington County, N.C.), and it has not been awarded at any new site. When it is awarded, it will be awarded under a full and open competition.”
Brown added, “Any company that is awarded a contract with the Navy — whether it be design, construction, or anything else — would obviously have to be qualified to perform the work. But typically there are also subcontracts that would be awarded throughout the process for portions of that work. A job of this magnitude would be a very large job. One company is not going to likely do all of the work, so they’ll probably subcontract some of that out.”
Brown said a Virginia Beach firm, HBA, had been awarded a contract to perform all of the design work for an OLF. The contract took effect during the Navy’s consideration of the Washington County site, and remains in effect.
While the Navy says between 506 and 631 workers would be needed over a two-year period to construct an OLF, John Smolak, president and CEO of Franklin Southampton Economic Development Inc., remains skeptical.
“You’ll have some temporary construction jobs, but I doubt there will be very many,” Smolak said last week. “I’m sure the Navy will pick some kind of a national contractor. How the local contractors will be able to play into that, I’m not sure.”
WHAT JOBS AT AN OLF WOULD PAY
According to the Navy, an OLF would provide 62 full-time permanent jobs for civilians. Collectively those jobs would pay $4.2 million a year in payroll and benefits.
Brown said that although he doesn’t have a breakdown for what each job would specifically pay, federal hiring guidelines would ensure that new hires would be paid according to their prior work experience.
“For instance, an experienced firefighter would be hired at a higher (pay) grade than someone who had never done it before and just had school and training,” Brown said. “It would be the same with security, etc.”
Assuming that payroll comprised 70 percent of the $4.2 million total, the 62 jobs would pay about $47,400 a year. With other benefits included, the average becomes $67,742 per employee.
The Navy has said it would hire 10 workers in aviation fuel support, five in ground electronics, 18 in fire and rescue, six in law enforcement, one in physical security and nine in security for an OLF. Additionally the Navy would hire one worker each in the fields of information technology and occupational safety and health.
An undetermined number of contract workers, who would perform various jobs including maintenance and landscaping, would also be hired to support the base.
Clark said that while he believes some residents of Southampton County would get jobs at an OLF, it would be ridiculous to assume that they would all be local hires.
“The federal government can’t hire people from just one geographic area,” Clark said. “Other communities, like Sussex and Isle of Wight (counties), are going to be affected if an OLF comes here. Southampton is not going to get all 62.”
He added, “The six best jobs aren’t going to come from here. I’m unaware of any unemployed airfield administrators or unemployed air traffic controllers living in Southampton that are waiting for an OLF.”
The Navy announced in August that it would delay the release of an environmental impact statement on the OLF issue until it decides where to station its new fighter plane, the F-35C Joint Strike Fighter.
“We are still hoping to see (the environmental impact statement released) sometime in the spring of 2010,” Brown said last week.
The OLF would be a practice field where Navy pilots could simulate landings on an aircraft carrier. It would support aircraft squadrons from Oceana and Naval Station Norfolk Chambers Field. The Navy would need to acquire about 30,000 acres for the facility, which would have an 8,000-foot runway.
The Navy has identified five sites, three in Virginia and two in North Carolina, for the proposed OLF. The three Virginia sites are Cabin Point, Dory and Mason. The Cabin Point site is near the confluence of Surry, Prince George and Sussex counties, while the Dory and Mason sites straddle both Sussex and Southampton counties.
In North Carolina, the Sandbanks site is mostly in Gates County, but part of Hertford County would also be affected. The Hale’s Lake site comprises parts of Camden and Currituck counties