Nelson County supervisors review debt‑capacity scenarios and authorize public hearing on one‑cent real estate tax increase

Nelson County staff walked the Board of Supervisors through multiple debt‑service and cash‑flow scenarios on March 22 as the county figures out how to balance capital needs and school funding demands.

County Administrator Candice W. McGarry and Finance Director Linda K. Staton presented three approaches for managing up to $57 million in debt capacity, each combining recurring transfers (including a recurring $610,000 transfer referenced in the scenarios) and one‑time cash infusions to shore up the debt service reserve. The scenarios differ in timing and use of recurring versus nonrecurring funds but result in similar total outlays across the planning horizon.

McGarry noted a related state legislative item that could materially change the county’s borrowing picture: General Assembly bills under consideration would allow localities to put a one‑percent sales tax for school construction to referendum. "It could possibly generate about $1 million per year for the County," McGarry said, if enacted and approved locally.

Supervisors also discussed the Schools’ yet‑to‑be‑finalized FY25 request. McGarry said the School division was likely to seek about $1.8 million in additional local support over last year’s funding; the total school operations ask could reach roughly $20.2 million. Finance staff emphasized that recent changes to the Local Composite Index increase the county’s local share of education costs, complicating the budget outlook.

On the revenue and tax side, staff presented major revenue estimates: Real Estate tax projected at $20.89 million; Personal Property $6.01 million; Local Sales and Use $2.19 million; Transient Occupancy Tax $2.268 million (projection uses a 7% rate after a recent change); and projected interest income of about $1.346 million. The recommended use of year‑end balance included roughly $3.5 million in net FY24 savings and additional nonrecurring funds for capital and reserves.

On a motion tied to the tax‑rate advertisement process, Supervisor Jesse N. Rutherford initially moved to keep FY25 tax rates level. Supervisor Ernie Q. Reed moved to amend the motion and add one cent to the Real Estate tax (raising it from $0.65 to $0.66 per $100 of assessed value). After discussion, the Board authorized a public hearing on the one‑cent Real Estate tax increase; the amended motion passed by roll‑call vote 3–2, with Chair J. David Parr and Supervisor Jesse N. Rutherford recorded as voting no.

County staff will advertise the rate for public hearing on April 11; McGarry reminded supervisors that advertising a higher rate is permissible but the Board cannot adopt a rate above the advertised ceiling.

The Board also agreed to continue budget work sessions in early April and to confirm the School Board’s official request before finalizing transfers.