425 MINUTES BOARD OF SUPERVISORS COUNTY OF YORK Work Session March 27, 2025 4:00 p.m. Meeting Convened. A Regular Meeting of the York County Board of Supervisors was called to order at 4:00 p.m., Tuesday, March 27, 2025, in the East Room, York Hall, by Chairman Sheila S. Noll. Attendance. The following members of the Board of Supervisors were present: Douglas R. Holroyd, Sheila S. Noll, M. Wayne Drewry, G. Stephen Roane, Jr., and Thomas G. Shepperd, Jr. Also in attendance were Mark L. Bellamy, Jr., County Administrator; Brian Fuller, Deputy County Administrator; Susan Goodwin, Assistant County Administrator, Richard Hill, County Attorney; and Heather L. Schott, Assistant to the County Administrator/Deputy Clerk. WORK SESSION TABB HIGH SCHOOL RENOVATION Dr. Victor Shandor, Superintendent for York County School Division, presented background information on the capital project for the Tabb High School renovation. He highlighted the schools' history of collaboration, the challenges of keeping up with aging infrastructure, their successes in completing most smaller projects, and the outstanding large projects at Tabb High, Queens Lake Middle, and Waller Mill Elementary. He provided the history of the schools' major system renovations, noting that Tabb High's entire building had the oldest HVAC system and roof in the school division, which were both renovated in 1998. He provided examples of library renovations at their other high schools in comparison to Tabb High's. He noted that the current library space at Tabb High was not large enough to accommodate a new learning commons area, but could be renovated to create four new classrooms. Bill Bowen, Chief Financial Officer for York County School Division, presented the factors and prioritization of projects, cost estimates, and their schedule. The factors include County agreements, enrollment shifts, priority shifts from building maintenance status, and programming/rezoning actions. He explained that when a project first was put in their Capital Improvement Program (CIP), Capital staff generate preliminary estimates based on historical data of similar projects, market analyses of construction costs, and input from contractors. As a project moved forward in the CIP timeline, architects and engineers provide rough cost estimates to refine the projections. As the project moves into the actual year of funding, the scope and cost estimates are further refined by their contracted architecture and engineering firm. He noted that the latter step was where they are currently at with Tabb. He added that costs were still estimates at this stage; when construction was underway, there may be unforeseen issues that resulted in further contingency costs. The final cost for the Tabb High renovations would not be determined until the competitive bidding process occurred, which was a few months away. Finally, he provided an overview the annual CIP calendar. Dr. James Carroll, Chief Operations Officer for York County School Division, presented budgetary information for the Tabb High School renovation capital project. He provided historical CIP information on the costs and schedules for the Tabb High renovation items. He noted that there had been identified capital projects for Tabb in past fiscal years, but in FY25 the scope of the project had widened due to the changes in school programming and rezoning, ultimately providing CIP funding for a full renovation for Tabb High. Mr. Shepperd asked why the timeline for the renovations were slated for two years rather than five. Dr. Shandor replied that it would be most beneficial for students and the community overall to reduce disruptions to school operations with a shorter construction timeline He noted that this timeline was responsibly meeting their debt service obligations. 426 March 27, 2025 Mr. Shepperd asked if there were any savings in terms of resources with this construction timeline. Dr. Shandor said that it was too early in the process to provide specifics; however, they would be reducing the future impacts of inflation and potential economic uncertainties by completing this project expediently. Mr. Holroyd asked what changed between the first estimate of $10 million to $37 million. He asked what they added to Tabb to result in that tripling cost. Dr. Carroll replied that they had expanded the scope of the project to include renovations that encompassed the whole building, which they did by reallocating the unused funding from the Dare Elementary CIP project. He noted that the increased costs were partially due to renovating the back entrance to the school in tandem with the construction of the pumphouse for the geothermal HVAC system. Mr. Shepperd asked if the difference between the geothermal HVAC and standard HVAC was $2.5 million. Dr. Carroll confirmed that was correct. Mr. Shepperd asked what the cost benefit was for this new system. Dr. Caroll explained that the cost of heating and cooling Bruton High School with a geothermal HVAC system over the past three years was $405,000. This was half as expensive as heating and cooling Tabb High School with a standard HVAC system, which was $709,000 over the same time period. It was over $100,000 more expensive each year to use a standard system. Additionally, the geothermal system had a longer lifespan than a standard HVAC system due to the permanent infrastructure of the wells, pumphouse, and electrical systems. Mr. Shepperd asked what the total cost of the geothermal system installation would be for Tabb High School. Dr. Carroll replied that the construction costs, not including design and contingency costs, would be $12.5 million for standard HVAC and $15 million for geothermal. The Board, School Administration, and County staff discussed the cash funding and debt servicing for school capital projects in future CIP years. They further discussed the estimated costs and benefits for specific renovation projects at Tabb High School. Dr. Carroll provided information on the remaining opportunities to reduce costs on this renovation project, which included the following: Combining the LED lighting conversion bidding with the turf field lighting should bring costs for both projects down Adjust the scope of architectural & engineering (A&E) initial "vision" of this project Renegotiate A&E design cost based on adjusted scope o Revise the 10% estimated contingency cost off of reduced scope Competitive construction RFP bidding process and following negotiation Utilize the A&E work at Tabb High School to share the cost with the approved Bruton High School locker room renovation Continue to apply for the State's School Construction Assistance Program Possible federal energy credits around $850,000 for the geothermal conversion Theresa Owens, Director of Finance, added that the latter item was something that came in with the Inflation Rate Act, but was on hold right now. It would be 30% of the cost of the geothermal installation, with solar power being within the same Act but with different rules and percentages. She noted that this money would come in much later, after the project was finished. Mr. Shepperd asked if they had discussed all the details of the $44 million. Dr. Carroll confirmed that he had listed out all of those seven items, which were on the schools' CIP. He would send a copy to the Board to ensure everyone had that information. 427 March 27. 2025 Dr. Shandor noted that School Administration had worked to ensure that all the descriptions of their CIP were clearly defined, which they would continue to refine to reduce any confusion on what was covered in each item. The Board and School Administration discussed the Tabb High turf field upgrade. Mr. Holroyd asked why York County had the highest starting teacher salary in the Peninsula region. Dr. Shandor clarified that York County had the highest starting salary on step zero of their 31- step program, which was higher by $25. There are 11 steps ranked second in the region, 17 steps ranked third, and two steps ranked fourth. He reiterated that overall, they were not the highest paying locality in the region. Mr. Bowen noted that they had fewer vacant positions due to the work they had done to improve their pay scales. They previously compared their salaries to all school divisions in Region 2, including Virginia Beach and Chesapeake, but had difficulty keeping pace with those divisions. They changed their focus instead to the Peninsula, which was where they were hiring most of their teachers from and therefore were most competitive. Mr. Holroyd expressed concern that the Board of Supervisors was not keeping County staff salaries regionally competitive in the same way they had with their teacher salaries. Mr. Shepperd noted that they were paying less overall in the region compared to other localities. Their education system was ranked first in all ofHampton Roads and third in the state. He asked why people came to York County to teach when they were offering lower salaries than their neighbors. He suggested that the community provided benefits outside of salaries that attracted teachers. Mr. Roane emphasized that parity in salaries was important in order to retain employees for essential services. Dr. Shandor explained that all of their salaries were driven by competition with other localities, which varied year to year based on market conditions and cultural climates. Mr. Shepperd said that it was difficult to determine where to find the money for the positions they needed in the community, but that was the duty of the Board. Chairman Noll expressed her thanks to the School Administration for joining the Board today. She looked forward to continuing to work together in the County. OPTIONS TO REDUCE TAX INCREASE Mark Bellamy, County Administrator, presented information in response to a request from the Board, which was for him to provide the Board with options to reduce a potential tax increase in his proposed budget for Fiscal Year 2026 (FY26). He expressed his gratitude to all of the staff who showed up to their meetings, including Finance staff, Video Services staff, and Information Technology staff, who all helped them through this process. He expressed his gratitude for the engagement they had with the public so far with this budget, which helped give perspective on their goals. He provided information on the main budget process, including how it was formulated and how staff evaluated it. He provided an overview of the evolution of the County's Capital Improvement Program from August 2025 to May 2025. Mr. Bellamy elaborated on the changes the CIP Committee made to the CIP, which ultimately resulted in a cut of $40.3 million. These included delaying school projects and condensing Tabb High renovations to cut $20.9 million from the school capital expenditures, as well as removing new project requests unless alternative funding was identified and delaying non-critical equipment replacement to cut $19.4 million from the County capital expenditures. He continued that senior management, including himself and Greg Gillette, made changes to the CIP which resulted in further cuts of $5.9 million to the County capital expenditures and $209,000 to school capital expenditures, totaling $6.2 million. These included condensing IT consolidation in FY26, reducing public safety building renovations cost estimates, delaying Sheriff and Fire mobile data terminals to FY32, reducing transportation improvements, and minor timing and cost 428 March 27, 2025 adjustments. At the Board retreat meeting, the Board decided to reduce the scope of the Tourism Information Center, Dockmaster Building, and Waterfront Operations, reduced the scope of York Hall renovations, delayed the Lightiot/Mooretown Road project, and added funding for strategic property acquisition, for a final cut of $6.7 million. He summarized that in total, they had made $53.2 million in reductions to the CIP. Mr. Drewry asked if staff could provide the specific numbers for what was removed from the CIP and what was being pushed back in their CIP timeline. Mr. Bellamy confirmed that he and Ms. Owens could provide that information to the Board. Mr. Bellamy continued to present information to the Board regarding the evolution of the Operating Budget from October 2024 to May 2025. He explained that Budget staff's changes to the Operating Budget resulted in a $2.1 million cut, which was composed of reductions in the following departments: Sheriff's Office ($700,000) Fire & Life Safety ($500,000) Public Works ($700,000) Other departments ($200,000) Mr. Bellamy stated that next, the County Administration changes resulted in a further cut of $13.1 million, which included: School Division Operating request ($2.7 million) New full-time positions ($3.6 million) Other compensation OT, career ladders, WAR ($300,000) Compensation Study Implementation Half-Year ($2.5 million) External Agency Support ($1.1 million) Restored Professional Services for Public Works ($200,000) Capital Outlay ($3.1 million) Mr. Drewry asked for clarification as to whether these items would be funded at a later date. Mr. Bellamy clarified that these were operating items that would not be funded at all this fiscal year. Mr. Drewry noted that the new full-time positions would eventually need to be funded, along with the career ladders and compensation study. He expressed concern that they would have to pay for these things eventually. Mr. Bellamy replied that it was possible something could change in the environment SO that they would not have to fund those, but otherwise, yes. Mr. Bellamy continued to explain that the total reductions to the preliminary Operating Budget were $15.2 million. He clarified that these numbers were what the Board had requested, but not what he had recommended. He expressed his belief that the right budget was what he had presented to the Board on March 18. Mr. Bellamy presented further reductions to the budget in half-cent increments. He explained that $0.005 was equivalent to $644,250 on the tax rate. He provided potential reductions as follows: Remove Grounds Maintenance FY 26 Increase ($200,000) Remove Digital Library Increase ($50,000) Debt fund Riverwalk Stage ($330,000) Reduce Regional Radio Lifecycle CIP ($64,250) Mr. Shepperd asked if Mr. Bellamy could clarify the impacts of these reductions, such as the regional radio lifecycle. Mr. Bellamy stated that if they did not pick up the funding for the regional radio system at a later time, they could be jeopardizing the integrity of the 911 radio system. 429 March 27. 2025 Mr. Bellamy presented further reductions at one cent, which was equivalent to $1,288,500 on the tax rate. This included those previously listed with the half-cent reduction, with two additional items: Move Charles Brown Park CIP out 1 year ($120,000) Reduce Economic Development CIP ($88,500) Mr. Fuller added that, regarding Charles Brown Park, the neighborhood around it had changed significantly over the past 20 years and the park was mostly open space with lacking amenities. Additionally, 256 homes were being built down the road at Rose Hill. He emphasized that this was one of the only real neighborhood parks they had, with Kiln Creek Park being the other. Mr. Bellamy presented further reductions at 1.5 cents, which was equivalent to $1,932,750 on the tax rate. This included all items previously listed at half cent and one cent reductions, with two more items: Reduce Regional Radio Lifecycle ($500,000) Reduce Economic Development CIP ($300,000) Fire & Life Safety Operations ($216,375) Sheriff's Office Operations ($216,375) Mr. Bellamy emphasized that public safety and Public Works departments were their largest departments and therefore where they would need to look for cost savings. Other departments' costs were almost entirely staffing costs, which would require personnel reductions in order to save costs. Mr. Bellamy presented further reductions at two cents, which was equivalent to $2,377,000 on the tax rate. This included all items previously listed at 1.5 cents, with one additional reduction of CIP cash ($644,250). For items that were cash-funded, they would have to distribute the cash funding across multiple items or only fund a few items with the available amount. Mr. Holroyd asked why the CIP cash reduction was only included in the two-cent reduction and not the smaller reductions. Mr. Bellamy replied that he believed that the CIP was one of the most critical items that they should preserve. Chairman Noll emphasized that the CIP was crucial to ensure the County was able to plan and fund their future work. Mr. Roane asked if they had normalized the CIP since COVID-19 or if they were still behind. He noted that they had not funded the CIP due to the uncertainties of the pandemic, sO he was wondering if they had caught up yet. Ms. Owens replied that they took a one-year break during COVID-19. They had previously discussed the CIP as a "maintenance CIP," and they were back to normalizing it to a maintenance CIP. In terms of moving them forward, that was a next step. Ms. Goodwin replied that her answer would be no, due to all of the cuts they took in the CIP. They were not only pushing back "want-to-have" items; they were pushing out "need-to-have" items as well. Renovations, rehabs, and other essential items were being pushed as well, and the only thing staying in were public safety, maintenance, and repairs. Mr. Roane asked for more information regarding the trolleys. Mr. Bellamy replied that those would be paid for out of the Tourism Fund. The Board and staff discussed the projects funded by the Tourism Fund. Mr. Bellamy noted that a comment had been emailed to the County about how they touted their low tax rate, which would still be lower than those in most of the neighboring localities with his proposed increase. The comment noted that the tax rate was not the only consideration; the value of their homes in York County outstripped the low rate. He explained that with the proposed real estate tax rate of 78 cents, when evaluating the tax burden on the median home 430 March 27, 2025 value and median income, the proposed rate resulted in a tax burden of 3 percent of York County median household income. Compared to the neighboring localities, this was the second-lowest tax burden in the region. He thanked Ms. Goodwin and the Finance staff for compiling this data. Mr. Shepperd stated that his takeaway from this information was how much they had reduced their County's tax rates over time, which spoke to their frugality as a local government while still providing services to their citizens. Chairman Noll noted that raising the tax rate this year would be a small increase. Mr. Roane asked if staff could contextualize the 3 percent tax burden. Ms. Goodwin emphasized that the tax burden on their local households was one of the lowest in the area. Mr. Roane stated that he believed the conclusion was that the cost of living in York County was less expensive. Ms. Goodwin noted that when they were working through these numbers, staff found that their real tax rate would have to exceed 86 cents in order to be higher than James City County's tax burden. This meant that their position in the region would remain unchanged unless they raised the real estate tax rate to that level. Mr. Bellamy added that Gloucester County had proposed a 4.3 cent increase in their real estate tax rate. Further, James City County would not be rebating again, which effectively meant they would be having a tax increase. Mr. Shepperd noted that according to staff's date, the median home value in Newport News was $243,000, but the tax burden on their median household income was outsized at 4.4 percent. Mr. Bellamy stated that he believed this data on the tax burden and the data on the $22 million of unrealized tax revenues from the past tax reductions were the most significant pieces of this budget presentation. CONSENT CALENDAR There was none. NEW BUSINESS There was none. OPEN DISCUSSION Chairman Noll stated that the next town hall meeting would take place on April 3, 2025 at 7:00 p.m. at the Sheriff's building. Meeting Adjourned. At 6:00 p.m. Chairman Noll declared the meeting adjourned sine die to 6:00 p.m., Tuesday, April 1, 2025, in the East Room of York Hall. A - / Mark L. Bellamy, Sheila S Nell, Chaifman County Administrator York County Board of Supervisors