Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, November 9, 1993 TAG: 9311100260
SECTION: CURRENT PAGE: NRV3 EDITION: NEW RIVER VALLEY
SOURCE:
DATELINE: CHRISTIANSBURG LENGTH: Medium
Just days after two bond referendums won voter approval with flying colors, the Montgomery County Board of Supervisors got a look at how paying the debt service for that borrowing could affect real-estate tax bills.
At the request of board Chairman Ira Long of Prices Fork, county number- crunchers updated a memo Thursday on the possible tax impacts of the Blacksburg library project, the health and human services building and financing for improvements to the Falling Branch industrial park site.
Those projects, which the county has yet to start on, were added to the tax impact of borrowing to pay for a new elementary school outside Blacksburg, which is already under way.
If the board were to start all those projects in the next budget year, it would have to come up with $1.45 million in debt service, the equivalent of an added 7.67 cents per $100 assessed value on real estate tax bills.
That figure, county officials stressed, is only to give the board an up-to- date estimate; it doesn't mean taxes are going up that amount, or even that they may.
And if recent history is any indication, they won't. Last spring, for instance, the board rejected a proposed 3-cent increase and kept the real estate tax rate at 70 cents per $100 of assessed value, where it's been since 1991.
The actual tax impact of the projects could be lower because of several factors, including growth in tax revenue, less spending on existing debt service because of decreasing principle and whether the board goes forward with the borrowing while interest rates are low.
The Board of Supervisors must decide in coming weeks what type of financing it wants to pursue on the Falling Branch project, a proposed industrial park beside Interstate 81 outside Christiansburg. Though two months ago the board authorized the county Industrial Development Authority to pursue a $900,000 bond package to finance the purchase of the 141-acre site, the IDA rejected the bids it received.
It is now pursuing a 40-year, $3.27 million loan through the Farmers Home Administration. Economic development officials want the higher amount to fully develop the site; they believe that sales of parcels in the park will allow the county to repay the bonds. The Board of Supervisors has yet to approve the newer financing proposal.
The board must decide when to start the five-month process to sell bonds to finance the $1.88 million library project and $2.9 million health and human services building. The county finance staff estimated debt service on the former at $216,792 for 1994-95, and at $333,491 for the latter project. That would be the equivalent of 2.9 cents of the real estate tax rate.
Though voters approved the projects, the Board of Supervisors has no obligation to immediately seek the general obligation bonds. Once the bonds are issued, however, the county has two years to spend all but a small portion of the money.
Board members will get their feet wet in the budget process when they receive revenue estimates from the county administrator later this month. The process picks up steam in January and February, when the School Board debates and adopts its budget and forwards it to the supervisors. As in past years, the Board of Supervisors is scheduled to hear from the public in March before adopting the fiscal year 1995 budget by April 1.
Memo: ***CORRECTION***