Friday, December 12, 2008


Concerns have been expressed that some of the information circulated regarding the plans on the new court complex has been inaccurate. I would like to point out that I do check my facts and numbers with staff. However, the editorial comment regarding those facts and numbers is my own and does not represent the views of staff or other members of the City Council.

So what are the next steps if we continue to adhere to the timeline currently being discussed. Here is the outline as confirmed with staff:

In January 2009, City Council will:

· Consider/Approve conceptual site plan of Courthouse/Mixed Use Development, and interior space layout of new courthouse
· Consider/Authorize Keating to proceed with Phase II work under the MOA (pre-development studies, land options, etc.)
· Consider/Approve the “Recommended Plan” to build the courthouse all-at-once.

In June 2009, City Council will:

· Consider/Approve master development agreement with USPS and Keating. This agreement/contract will define the financial and legal parameters of the project, including establishing the GMP (Guaranteed Maximum Price) for the project.

The formal City review processes won’t begin until Architectural/Engineering plans are more advanced. Schematic design is currently shown from July–Nov 09.

The City Council should authorize debt issuance at about the same time it executes the master development agreement (June 2009). Payment on the debt is not planned to begin until 2014. Council can, if it so chooses, either wait until 2013 to raise taxes to support the debt or phase in tax increases between now and 2013.

From the City Manager’s Transmittal and Summary of the FY2009 budget:

“…the outlook for FY2010 is extremely difficult. The City continues to call upon its dwindling fund balance reserves, while at the same time the construction of the court complex, the expansion of the Rappahannock Regional Jail, cost of inflation, and deferred maintenance items creates additional pressure to raise expenditure levels just to maintain consistent service levels. The City will not be able to use its fund balance reserves in a significant way to construct the FY2010 budget. Without significant new revenue growth, the current austerity climate for the City will continue for at least the next two or three years.”

As previously posted city council cut the current FY2009 budget and more cuts are on the way in FY2010. Even with these cuts current forecasts on city and state revenues indicate that we will still be facing a budget deficit in the area of $1.5 million, which is a 4-cent increase in the tax rate. There is nothing on the horizon for 2011 or 2012 at this point that will have a significantly positive impact on revenue.

The projected revenue for Wegmans and the hotel are already being factored into next year’s revenue figures. While we hope to have significant projects like Kalahari move forward we have no confirmed timeline on this project and it will take some time for it to get up and running and start generating significant revenue for the city. Right now, whether the tax increases are phased in, or done all at once in 2013, the major burden will fall on the real estate tax rate—city residents.

Just to maintain city services in the coming year, or two, real estate taxes will probably have to be raised. This would be in addition to any tax increase for the court complex if Council were to decide to phase it in. If not, then the entire increase, in the area of 9-cents, will just be another in a series of increases. At a time when we hope to be pulling out of a national economic downturn we will be hit with the debt service for the court complex.

No one right now is predicting how long this recession will last beyond 2010 or how bad it will get. Yet City Council will be deciding next June whether to commit to at least a $47 million dollar investment for the new court complex.

I understand the reality that local judges can order the city to build the complex. I take great issue with judges having that authority but I do recognize that they have it. I do understand that there is a cost associated with not proceeding. However, when balanced against the current economic reality faced by the city--and residents, the court comes second to maintaining city services for residents and the economic well being of the City.

My hope is that the local judges will consider the current economic climate and what the potential economic/service impact moving forward on this project will have on the city. The court complex is needed and will be built. But it should move forward with the understanding that city/residents interests must also be considered.

Is the threat of legal action by local judges sufficient justification for moving the court complex forward?


Muttley said...

You are fighting a losing battle - the courthouse will happen, be realistic and quit tilting at windmills.

MATT KELLY said...

Muttley--The court complex will be build. The question is the timeline. We are in a recession, with limited reserves, reduced revenues, and increased costs, with all indications that the overall financial situation is going to get even worse. In this climate, building a $47 million+ court complex on the current timeline is being unrealistic.

I am being realistic in regards to the financial situation we face. However, I will concede your point that I do not accept the reality of a process that fails to take into consideration the fiscal well being of the City and its residents.

In the end, the challenge to that process may fail. But to just accept it without question is something I cannot understand. Which way to the windmills?

Kenny Johnson said...

I think you are doing a good job, Mr. Kelly.

What about the existing buildings? Even if the court complex is built, those buildings will still need to be maintained. Does the proposed budget consider this?

Why not take the less expensive method of adding the security to those buildings to appease the judges and get the city through the next few years? I thought the letter stated the courts were 'not adequate', not that new ones had to be built. Fixing the current buildings will have to happen at some point (the City isn't going to let a landmark courthouse deteriorate) so why not build the security features needed for considerably less money? The technology can be relocated to the new facilities if built quickly, otherwise the City would be updating the technology again anyway.

So yes, the courts will still be crowded and have issues, but we can build secure passages to the courts and beef up the holding facilities, prevent people from running out the front door, etc. for the time being.

A less desirable option; sell the existing building(s) and use those funds toward the court costs (with the sale finalizing after the courts move, of course).

As the City, be prepared with a plan of action in case the judges do act aggressively, but otherwise budget and plan for a near future court complex. The judges would surely recognize the City's efforts to meet their needs.

This means have the pieces in place to act if the judges demand construction, but keep planning on building when the funds are raised. I’d rather see $2 million spent on updating a historic building or renovating “Big Ugly” in order to carry the courts for a few more years then see $48+ million spent when the only way to fund it is on the struggling citizens' backs.