Craig Meadows

Montgomery County Administrator

| Sharla Bardin

sharla.bardin@roanoke.com, 381-1669

CHRISTIANSBURG -- Montgomery County leaders will soon consider some tough scenarios to deal with an estimated budget shortfall of $2.8 million for next year.

The scenarios could include eliminating positions through attrition or layoffs, increasing the real-estate tax rate or reducing or eliminating some services.

The board of supervisors discussed at a special meeting Monday night the early projections for the next fiscal year, which starts in July. County staff quickly pointed out during the meeting that the figures are estimates and will likely change, such as when the state releases its biennial budget Dec. 18.

County Administrator Craig Meadows said the meeting was intended to give a sense of "some of the challenges we're going to be facing as we compile this budget" and to get some guidance from the supervisors.

Supervisors then asked Meadows and county staff to develop suggestions from the scenarios discussed and to present them to the board.

Meadows said he plans to bring them to the board in January or early February.

Supervisors didn't discuss the scenarios in-depth in the meeting or take official action on any one option, although many said they do want to protect existing employees.

Annette Perkins, chairwoman of the board, said she understands the county's budget needs and the tough decisions leaders will have to make, but she also said it's important to "not put so many of our people in a bind."

The county now has 393 full-time and part-time employees and spends from its general fund $23.6 million on personnel costs, which includes salaries and benefits.

The estimated $2.8 million shortfall includes state budget cuts, a $719,391 shortfall in local sales tax collections -- with people not buying as much now -- and the paying back of $98,479 to the state after an error was made in the collection of the telecommunications tax.

County officials said the state overtaxed companies that provide telephone, wireless phone, cable television, satellite television and other such services in error. The county did receive revenue from the tax and is required to pay back the money to the state.

Another reason for the shortfall is estimated increases in expenses, including an increase in the Virginia Retirement System contributions that the county and county employees pay into now and increases in maintenance costs for county property and equipment and utility costs for county facilities.

During the meeting, the board was presented with options to consider to address the shortfall projected for next year, such as a reduction in positions or an increase in the real-estate tax rate. The real-estate tax rate is now 71 cents per $100 of assessed value.

Other options include a possible reduction or elimination of services and possible reductions in the county's funding to outside agencies.

The county now spends about $1.1 million in funding to 41 outside agencies, which include human service, public safety, educational, cultural, environmental and economic development agencies, officials said.

County officials said some of the strategies they have been using in the current $158.9 million budget to keep costs down has included reduced training, travel and conference costs for employees and freezing vacant positions.

Meadows said with the hiring freeze now positions are left vacant unless the case can be made by a department leader that the position is needed to fill a critical need.

Meadows also said for the next budget year there will be no salary increases and no new positions.