Tough state budget decisions have yet again trickled down to affect James City County, this time leading supervisors to spend money on school capital projects that had been set aside for school employee retirement pay.
At their Tuesday evening meeting, supervisors accepted the WJCC plan to use extra Virginia Retirement System (VRS) funds to pay for planned capital improvements. The state mandated a halt on VRS for fiscal year 2010, which led to a $4.26 million surplus in the school budget, though the money will likely need to be paid back in the future. Under state law, the funds would be returned to the locality but, due to the joint funding agreement the county has with Williamsburg, the schools can keep $500,000 for whatever they want and can use the rest for capital projects.
WJCC has decided to keep the $500,000, and to spend $1 million in capital funds for instructional technology and the James Blair renovation. The remaining $2.75 million WJCC will use for capital projects that the city and county agreed to fund in fiscal year 2011. These are funds James City County would have had to borrow for, so they’ll save in 2011. But some on the board weren’t happy about the idea that they couldn’t make the state take the money, which will need to be paid back later.
Chairman Jim Kennedy wanted to set the money aside in a fund to use later to pay back the suspended VRS contributions, but John McDonald, the county’s financial and management services manager, explained that the county could instead keep from borrowing the $2.75 million until later.
Kennedy didn’t like the idea that the county would have to repay the money at some point, likely taking on future debt for it that could be at a higher interest rate. “I don’t know where the money comes from in the future,” he said, exasperated.
Supervisor John McGlennon reasoned that the state budget troubles weren’t something the board could fix. “We can’t solve it tonight, here,” he said, but in the short-term the savings would offer the county some benefits and a reduced borrowing in the near-term.
One irritated citizen spoke out against approving the resolution, calling the VRS suspension a “huge fiscal tsunami.” He asked the board to just send the money to the state, or keep it in an account to use for paying back the VRS fund later.
The supervisors approved the resolution, with Kennedy dissenting.