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Spotsy OKs tax districts
Spotsy approves tax districts for hospitalDate published: 4/29/2009 BY DAN TELVOCK Spotsylvania supervisors agreed last night to create two special service tax districts to help Silver Cos. build critical roads near the under-construction Spotsylvania Regional Medical Center. "We did not look forward to asking the county for this assistance," said Chris Hornung, Silver Cos.' vice president of planning and engineering. Originally, Silver Cos. agreed to pay for the $16 million in road work immediately, and have it done in time for the 126-bed hospital's planned opening in May 2010 near Massaponax. Hornung said Silver Cos. and other businesses are finding it very challenging to get any credit because of the economic downturn, so they need the county's credit to ensure the work is finished. By creating the service districts, the county would issue general obligation bonds for the road work, including a bridge over Interstate 95, extending Spotsylvania Parkway past the hospital and building Hospital Boulevard to connect with the parkway. He said only Silver Cos.-owned commercial land is in the two service districts, called Lee Hill West and Lee Hill East. Currently, the commercial property is mostly undeveloped. "Right now, loans are nearly impossible to get," Hornung said. The Lee Hill West district will have a real estate tax rate of 75 cents per $100 of assessed value, tacked on to the 62-cent rate commercial and residents pay annually. The Lee Hill East district will have a rate of 33 cents per $100. The length of the districts is estimated to be 25 years. The county will also institute a fee on 60 of the 92 acres, at $50,000 per acre, to help pay the debt service. The public hearings were held jointly with the Planning Commission for a quicker process. Both boards voted 6-0-1 to approve the districts. Supervisor Benjamin Pitts abstained from voting because he said he had a financial interest in one of the projects. He did not say what the project is and he left the room during the hearing. Four residents spoke, and all urged supervisors to prevent residential property from ever being taxed for these improvements. The current ordinance says the district boundaries can be changed "from time to time." County Attorney Jacob Stroman said that by law, the county cannot tie the hands of any future boards by including that language in the ordinance. "To me that's like having a back door to anything that is possible," said Marty Work, a resident who lives in the Massaponax area. Al King, a Fawn Lake resident, said the county is already coming close to reaching its debt capacity. "If we are giving the Silver Cos. the benefit of the county's credit rating, what are they going to do for us?" he said. The county already has a Massaponax Service District and a Harrison Crossing Service District that taxes only commercial property to pay for new road work in those areas. Supervisor Hap Connors said those two service districts have been a success. Dan Telvock: 540/374-5438
Date published: 4/29/2009
how the county gets credit
(posted by
incognitoergosm
, Apr. 30, 2009 9:21 am)
The county gets additional credit because they refused to tap a large reserve of moeny to assist county services, instead reducing the budgets of public safety and schools, and laying off employess. So now, when they need to protect their ratings again, instead of county residents, they will cut budgets to county services in order to go into debt for further debt creating projects like more housing communities. The board can't tie the hands of future boards, but they can screw residents forever.
Up until this point - Silver Companies have done exactly what they promised
(posted by
larryg
, Apr. 30, 2009 8:44 am)
and they've done a good job of it - getting road
improvements done in spectacularly fast fashion as
compared to VDOT.
They obviously had a financing problem - proof at the
local level of what is being said about the availability of
credit - even to heavy hitters like Silver.
So I don't see this as them reneging on their commitment
but I did wonder if Silver cannot get credit - then how can
the county get it?
but I also wondered how developer CDAs compare to
County tax districts - for future projects.
Missed the point..
(posted by
Blk97F150
, Apr. 30, 2009 6:26 am)
This is an obligation that Silver had agreed to pay.... now they change their mind and ask to pass the financial burdon on to the residents (one way or another, the residents are going to pay.. either directy, or indirectly), after the project has been started? And the stuporvisors fall for it? WTF?
How come the county can get a loan but Silver cannot?
(posted by
larryg
, Apr. 29, 2009 6:21 pm)
must be more to this story than meets the eye. Also... how
to CDAs compare to Tax Districts in terms of who has the
loan and how it gets paid back?
I would agree - county citizens will certainly benefit from
the new hospital.... and yes.. if you get medical/physician
services in that area in the future - you'll be paying your
share of the road improvements.
Some clever person could probably figure out how much
per cust transaction but businesses don't pay - they pass it
on.. just like the sales tax.
there is no free lunch
(posted by
larryg
, Apr. 29, 2009 6:14 pm)
The road improvements to Massaponx/Cosner's Corner and
Harrison West are either CDAs or tax districts. Either way,
those businesses pay pro-rata share of the assessments to
service the debt for the bonds that financed those road
improvements.
Businesses have expenses that they must pay before they
can make a profit. The taxes/assessments are expenses and
incorporated into the price of goods and services.
I don't know how much it works out on a $20 sale but I bet
it's not much.. and well worth it.
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