Capital Improvement Plan helps county prepare for future

Published 10:28 am Saturday, June 30, 2012

The Isle of Wight Board of Supervisors passed its Capital Improvement Plan during Thursday’s meeting.

Unlike the operating budget, which funds the day-to-day operations of the county, capital requests are one-time expenditures for new buildings, major building repairs, vehicles, utility equipment and the like.

It should be noted that the CIP is just that — a plan.

Generally, as we work on a one-year budget cycle, only in the first year of the CIP is funding provided by the board although the following years are taken into consideration. The board reflects the future needs of the county.

That first year of the CIP is called the capital budget, although it is also a part of the overall plan. Capital improvements have traditionally been financed through borrowing.

The board discussed at length the requests for next year’s capital improvements. We had been informed earlier by Davenport and Co., the company through whom our bonds are issued, that to maintain our bond rating, we were limited in our borrowing capacity.

Should the county overextend itself in borrowing limits, the rating is lowered and all future borrowing would take place at higher interest rates. We need, but look across the Atlantic to see the results. Obviously, we plan to take any steps necessary to avoid this.

Now, herein lies the challenge.

The county has certain mandated projects legally required to be funded. Some are the result of past obligations of which we have no recourse and some are state or federally mandated. Consider regional consent order, $200,000; Norfolk water contract, $600,000; Future water, fixed capacity, $2.1 million; Western Tidewater pump station, $200,000; and Western Branch pipeline, $2 million.

Add to these the new IOW VRS Building passed by the board ($2.7 million) and renovating the Health Department Building ($600,000), and we are at $8.7 million before we add any additional requests, such as police cars, fire and rescue vehicles, deteriorating school buildings, utility upgrades, economic development and maintaining our parks.

Compare that with a benchmark-borrowing figure given to us by Davenport of $15.4 million additional borrowing for the next two years. That’s two years. And these needs do nothing, but escalate in the future. Just our mandates require the lion’s share of that figure in one year alone.

We will do what we can. We just approved moving all capital requests for the schools, fire and rescue, and economic development out for a year. This amounted to over $6 million. But we realize this can only be done so much, as the needs mount each time this is done.

I believe we have a responsible, conservative board that will do whatever it takes to keep our county in good fiscal condition. We are working to find ways to creatively address these needs for the upcoming fiscal year and out into the future. We certainly welcome your ideas and comments.