No tax increases, but new debt, in proposed Surry County budget

Published 5:02 pm Friday, April 12, 2024

Surry County’s $69.5 million budget for the 2024-25 fiscal year isn’t calling for changes to the county’s tax rates.

The total budget reflects a 6% increase over the $65.2 million Surry’s supervisors voted last year to adopt for 2023-24.

Despite the unchanged real estate tax rate, which at 71 cents per $100 in assessed value makes Surry’s the lowest in Hampton Roads, County Administrator Melissa Rollins is projecting a $359,000 increase in real estate tax revenue. The majority of the projected increase, some $296,000, is tied to the Cavalier solar farm, Rollins said.

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Construction of the Cavalier project, which will span 1,750 acres across the Isle of Wight-Surry county line, began in 2023 and is expected to be complete by the end of this year, according to its Arlington-based developer, AES Corp. In addition to real estate taxes, a siting agreement Surry’s supervisors signed when approving the project that year specified payments of $1,400 per megawatt, or at least $252,000 annually, upon the 240-megawatt solar farm beginning its commercial operation.

“We will definitely see that in 2025,” Rollins said.

The solar-related increase in real estate taxes and siting agreement collectively account for just under half of the total $1.2 million increase in the county’s proposed $32.2 million General Fund.

What isn’t in Rollins’ proposed budget is the roughly $600,000 in additional local funding requested by Surry County Public Schools. The School Board voted in March to adopt an $18.5 million 2024-25 budget that called for just under $13.7 million, or a 4.8% increase, from county supervisors. Rollins, however, is proposing to keep the county’s contribution to its school system level with last year’s $13 million.


New debt for swimming pool

The proposed budget calls for Surry to take on an additional $10 million in debt to fund plans for a new public swimming pool, amphitheater and banquet hall operated by the county’s Parks and Recreation Department. Plans for the swimming pool were cut from the 2023-24 budget.

The $10 million for Parks and Recreation accounts for the largest share of the county’s $14.1 million budgeted in 2024-25 for Surry’s five-year capital improvements program. The plan lists $32.6 million in planned one-time expenditures through 2029.

Surry’s annual debt service payments are budgeted at $2.2 million for 2024-25, or 6% of the planned $32.2 million in General Fund expenditures.

County policy mandates debt service payments per year not exceed 12% of Surry’s General Fund expenditures.

The county is currently carrying $23.2 million in tax-supported debt, which includes $19.4 million in principal and another $3.8 million in interest through 2039. County policy further requires that Surry’s total debt not exceed 3% of the assessed valuation of real estate and personal property in the county.

“We are well below those policy guidelines, so as our financial advisers have shared with us, there is opportunity for the county to maybe take on additional debt without impacting those financial policies,” Rollins said.

Other one-time expenses budgeted this year from the capital improvements plan include a $1.1 million upgrade of the well at Surry County High School. Roughly $969,000 of this cost was recently funded in a second round of federal infrastructure grants, with the remainder accounting for Surry’s 20% local match, Rollins said.

The CIP allocates another $1.9 million this coming fiscal year for school-related improvements, $720,400 for major infrastructure repairs at county facilities, just under $152,000 for economic development, and a $150,000 remodeling of the county treasurer’s office to add DMV Select services, a local alternative to visiting a Virginia Department of Motor Vehicles center.

A public hearing on Rollins’ proposed budget is scheduled for May 9 at 6 p.m. The supervisors are scheduled to adopt their budget and tax rates on May 16, also at 6 p.m.