Supervisors tackle $3.1M budget deficit as school needs loom

Shenandoah County administrators are piecing together a tight fiscal year 2027 budget, navigating a $3.1 million general fund deficit compounded by inflation, skyrocketing health insurance costs and an impending wave of school infrastructure needs.

County administrators presented the proposed budget for fiscal year 2027 to the Board of Supervisors on Tuesday. The plan anticipates roughly $119.1 million in revenue against $122.3 million in spending. To balance the books, officials plan to pull $2.5 million from the county's reserve savings.

While the immediate budget gap is relatively narrow, county leadership is already bracing for the financial impact of upcoming capital projects, particularly within Shenandoah County Public Schools.

Supervisor Mark Dotson warned his colleagues that the eventual cost to update school facilities will be "substantial," urging the board to look for savings by questioning everything currently considered "status quo."

Dotson warned his colleagues that the eventual cost to update school facilities will force the county to fundamentally rethink its spending.

"The dramatic nature of the times we're in, where we have shortfalls in these facilities, will require us to look at everything that is considered status quo," Dotson said. "We're in an era where we will have to really ask a lot of hard questions."

The public school system is facing severe space constraints driven by aging buildings and an influx of regional housing development. There are currently 1,223 approved residential lots in the county across single-family homes, townhouses and apartments.

This localized growth is squeezing existing facilities. Currently, Sandy Hook Elementary is operating at 96 percent capacity, W.W. Robinson Elementary is at 90 percent , and Ashby-Lee Elementary is at nearly 90 percent.

To address the elementary capacity crisis, the school division is weighing two preliminary paths. One option is constructing a new 90,000-square-foot elementary school while doing basic renovations to existing schools, which carries a preliminary budget estimate of $70.3 million. The alternative is building additions and expanding Sandy Hook, W.W. Robinson, and Ashby-Lee, which carries a preliminary budget estimate of $47.8 million. Simultaneously, the county may need to address Triplett Tech. Options to renovate, expand, or completely replace the facility currently range from $38.6 million to $42.6 million.

Beyond future construction projects, the new budget is currently strained by the rising cost of retaining county employees.

The budget sets aside roughly $1.86 million for employee recruitment and retention, which includes a 3 percent cost-of-living increase for staff. However, the largest hit to the county's wallet is an estimated 22 percent spike in health insurance rates, which is projected to cost taxpayers just over $1 million.

That 22 percent increase is unwelcome and unfortunately, County Administrator Evan Vass said, the county predicted it.

"The county plan in its budget said, what's the worst-case scenario possibly look like? We'll build in 22 percent as the worst-case scenario, and we'll submit a request for proposals for insurance carriers," Vass said. He noted that the county recently received new proposals and hopes negotiations will bring the final number down.

To help offset these rising costs without cutting county services, administrators are changing how they budget for public safety.

Historically, Shenandoah County has budgeted 100 percent of its employee costs, assuming every position is filled every day of the year. For the upcoming year, the county applied a "conservative" 8 percent "vacancy rate" to the Sheriff's Office, Fire and Rescue, and the 911 dispatch center to account for normal staff turnover. This paper adjustment frees up about $1.1 million in the budget. Vass mentioned that historically vacancy rates land higher than 8 percent yearly across all departments.

"Important to note, this doesn't take positions away," Vass told the board. "If there are 80 authorized positions in a particular public safety department, there's still 80 authorized positions. We're going to assume that there's a certain number of people that just aren't employed, and so we recognize the savings over a million dollars as a result of that."

Other notable budget hits include a $1.1 million increase in existing loan payments for county equipment and vehicles. The county also must absorb a $457,000 bill to cover the local match required by a federal grant that previously paid to hire 27 firefighters and paramedics.

Residents in specific sanitary districts will also see an increase in their utility bills. The budget proposes a 5 percent increase in water and sewer rates. For the Stoney Creek Sanitary District, the base bi-monthly bill will increase to $51.92 for water and $67.89 for sewer. In the Toms Brook-Maurertown Sanitary District, the base monthly bill will increase to $33.29 for water and $30.61 for sewer.

The Board of Supervisors will continue to review the proposed budget during public work sessions scheduled in the Board Room on March 3, March 10, March 16, and March 17.