Debating the Wrong Stuff

Richmond mayoral candidates: debating the wrong stuff.

Richmond mayoral candidates yesterday

by James A. Bacon

A brief exchange in a debate between Richmond mayoral candidates yesterday revealed a striking blind spot among contenders that does not augur well for the city’s long-term fiscal integrity.

Former Del. Joseph D. Morrissey enlivened the discussion by criticizing Levar Stoney, former Secretary of the Commonwealth under Governor Terry McAuliffe, for the governor’s support of the controversial Stone Brewing Co. deal. In that deal the city enticed the West Coast brewing company to locate a brewery and restaurant in Richmond by means of $33 million in Economic Development Authority financing and $2 million in subsidies. The city should have put the money into its aging and decrepit schools, Morrissey said.

Stoney defended the deal, saying that it brought jobs and economic revitalization to the city’s impoverished Fulton Hill neighborhood. He in turn criticized Morrissey for not doing more as delegate for increasing school funding from the state.

City Council President Michelle Mosby noted that the bonds, backed by lease payments from the brewery, really didn’t take money from the schools at all.

In all the conversation, as described by the Richmond Times-Dispatch, no one questioned the idea that a lack of money is what ails the Richmond school system. The pitiful educational achievement of Richmond school children, low even when adjusted for the number of pupils from socioeconomically disadvantaged backgrounds, has many deep-rooted causes. I’ll focus on the issue that has gained the most attention to make my point.

Other than a few new school buildings, Richmond city schools are notorious for their poor condition. An 2014 article in Style Weekly started this way: “The ceilings at Thompson Middle School started oozing in the fall. Watery, foul-smelling drops of diluted tar fell into classrooms and hallways. The long, wet winter only made things worse. The ooze continues to creep. The staff does what it’s always done when the building starts showing its age: It copes. Custodians work late. Teachers rearrange desks. Buckets are put into place.”

The physical condition of the schools is a scandal. How can children be expected to learn in such an environment? Many have pointed to the age of the schools as the problem, suggesting that the answer is to spend tens of millions of dollars to tear down the worst ones and build new ones in their place.

The average age of Richmond school buildings dates back to 1955. That sounds old, but age is not the problem. My son just graduated from Douglas S. Freeman High School in Henrico County which opened in 1954. The architectural style is, to be charitable, institutional. Freeman just may be the dullest looking school building I have ever laid eyes on. But the interior appears to be in a state of good repair. The grounds are clean, the floors are waxed, and utilities function properly. Age isn’t the cause of Richmond’s decrepit schools. Maintenance, or lack of it, is the problem.

Some might respond that Henrico is an affluent school district that can afford to maintain its buildings while Richmond is poor and cannot. Well, according to Department of Education data, Richmond spent $13,087 per pupil while neighboring Henrico spent $9,250 for operations in the 2014-2015 school year.

OK, then, maybe Richmond has more poor kids with special needs who incur higher instructional costs at the expense of buildings and maintenance. Well, no, that’s not right either. Richmond expenditures for “operations and maintenance” were $1,185 that same year, considerably more than the $971 per pupil spent by Henrico.

Here’s the problem: Richmond spreads its operations & maintenance dollars over more schools (adjusted for enrollment) than does Henrico. The Richmond public schools website lists 42 elementary, middle and high schools and specialty facilities. Henrico, with twice the enrollment, lists only 69 schools. Despite having a lower operations & maintenance budget per pupil, Henrico spent more money per facility: $729,000 in 2014-2015 compared to $676,000 per facility in Richmond.

I presume that “operations & maintenance” includes the cost of heating, cooling, and lighting. Insofar as spending on utilities, which are necessary to maintain a learning environment, must come off the top of the budget, Richmond schools are left with even less for maintaining roofs, preventing leaks, repairing utility systems, and making routine repairs.

Thus, the root of the problem is that the Richmond School Board cannot muster the political will to consolidate its schools as rapidly as it should. (The board did vote last year to merge Thomas and Elkhardt middle schools.) Thus, the school district is not spending enough to properly maintain its facilities and, as a consequence, its oldest schools are falling apart.

Bacon’s bottom line: Instead of debating how to find more money for Richmond schools, perhaps mayoral candidates should be debating whether the school board could do a better job of spending the money it already has.

Update: Reader Larry Gross points out that major structural repairs to school buildings would be considered capital expenditures, not included in the “operations & maintenance” fund. Fair enough. Have Richmond schools allocated as much to this category as Henrico to keep up with depreciation? I don’t know. I doubt many of the mayoral candidates do either. But this is the kind of analysis we need before people talk about pumping more money into the school system.

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40 responses to “Debating the Wrong Stuff

  1. you need to make sure that you’re distinguishing between operational and capital budgets…

    capital budgets are what pay for the buildings…- , roofs, HVAC, etc , even school buses and computers… etc. in our county – any big ticket durable items are capital expense. in the capital budget and funded from bonds.

    • I understand the difference between capital spending and operational spending. I’m talking about operational spending — routine building maintenance.

      • you have to differentiate between normal everyday maintenance and major repairs – which are usually considered capital expenditures.

        look in the budgets Jim – look under the capital expenditures and see what they are spent on ..

        In our county – buses, roofs, HVACs, etc are capital expenditures not routine maintenance.

        Routine maintenance are things that you know how much it’s going to cost on a weekly, monthly, annual basis…something you can plan on.

        big ticket items are typically not programmed in operational funding.

        go read the budgets.

        • Fair enough. Capital expenditures ought to be part of the analysis. But no one is talking about that either.

          • yes you are if you are talking about comparing student costs because typically that’s only operational – not the infrastructure.

            and if you talking about a city using it’s bonding authority and debt capacity -for various purpose besides schools and other city-specific infrastructure – …

            if you have a credit capacity to borrow – then it does affect what you afford to borrow – so if you use that capacity for one thing – you may not have remaining debt capacity for other things.

            it’s one of the conundrums you run into in counties with high growth and/or lots of existing debt already obligated to other projects.

            older, deteriorating buildings and infrastructure -water, sewer, METRO – etc… cannot be addressed if your debt capacity is already devoted to other things… and/or you don’t have a guaranteed source of funds to repay that debt – it won’t be loaned.

            Richmond probably has a huge backlog of older buildings and not a whole lot of debt capacity to fix them … and so – the real issue might well be – devoting your debt capacity for economic development projects – at the cost of starving your ability to borrow for other things…

            the key thing is debt capacity and the ability to repay – which I strongly suspect Henrico is very well off and Richmond not.

  2. Jim has it right as usual. Whether the expenses in question are considered capital or current, you still have to close and consolidate schools, which no one is talking about, and when they do, the constituents come storming into the meetings. That’s when it takes some political courage to do the right thing. That’s one of the reasons why governments do things so badly, Larr. If it was the board members’ money, you can bet your boots those schools would be consolidated or closed.

    • CrazyJD – LOTS of govt DOES RIGHT! That’s the truth! Henrico does right!

      what you hear about are the ones that are not.

      Jim is confusing capital and operational budgets – and the deeper issue which is how much debt do you have, how much remaining capacity do you have and how much stuff do you need to build, repair or replace?

      There are GOOD fiscally conservatives boards guy. There are as I recall at least 7 in Va that are AAA.

      Do you know what it takes to get an AAA ?

      One of the things it takes is a RELIABLE source of revenues… that’s the truth. In other words – tax revenues… and the rating agencies also prefer diverse taxes – and sources – as well as fiscally responsible policies – LIKE not using your debt capacity to finance discretionary economic development projects when you have outstanding unmet municipal and school needs.

      Crazy – you confuse people who have an 800 FICO with a 600 FICO.

      I say people – because people are who – also – make up government and some of them are 800 FICO-responsible and some are not.

      it’s not a “all govt sucks” circumstance except in the minds of those who can’t get beyond their own ideological myths.

      • >>Jim is confusing capital and operational budgets

        Not necessarily. You don’t appear to be aware of the tax court decisions that initially went both ways on whether replacing a roof was capital or current. I can’t comment on what GAAP says because I’m not an accountant. And of course you failed to realize that it really doesn’t matter. It’s a cost. You have to come up with it. If you close the school, you don’t. You skate by that obvious idea.

        re: people are governments. Larr, you have stumbled inexorably into the truth, and indeed the problem. If you have bad people (read, incompetent, malicious, corrupt or whatever), you necessarily get a bad result with government. Not so in the private sector, where the structure matters more than the people in the structure. Bad people will get a bad result, BUT NOT FOR LONG!! Why? Because money will find its way to another solution to whatever the problem is. It’s this fundamental truth that you continue to miss.

        Is Henrico government good? Sure, there are competent people and they do a pretty good job. Years ago, I worked for Bert Johnson, Arlington County Manager. Bert was competent, he picked competent people, though he had some clinkers that he couldn’t get rid of because it was government (Contrast the private sector where if the guy isn’t doing it, Bert could have fired him).

        If you want me to concede that some governments are better than others, no problem. But it’s not because governments work. Given the same level of employee players, the private sector will beat government performance every time.

  3. @Crazy – whether something is operational or capital is fairly simple.. if it’s a known recurring cost then it’s considered operational and incorporated into the operational budget.

    If it’s a non-recurring cost – and it’s big ticket then it has to be planned for in the context of other non-recurring costs , existing debt, debt capacity – and priorities usually along the lines of what must be replaced verses what can be deferred.

    You can’t just replace a school or even a school roof in one year without some serious impacts in the normal annual budget. that’s what actually determines whether something is in the capital budget or in the operational budget – on a practical basis.

    you just can’t be bumping the tax rate 10 cents or cutting 10 cents worth of other services – without consequences.

    and yes – I may well agree that Richmond might need to consolidate schools … but I’d need to see more about their attendance trends because you can’t just move lots of kids into an existing school without costs incurred there also.

    re: does govt “work” especially compared to private sector.

    ” concede SOME govt is better than others but… item for item that govt does – it’s always doe better by the private sector?

    let’s see – how about fire and police? wanna just contract that out ?

    just let the private sector decide how much fire and police service to provide per whatever they deem to be cost-effective and supportable from fees or did you want them to be able to assess a tax on all?

    public water/sewer? no govt standards – just let the private sector decide what the quality standards should be for drinking water.. putting sewage in rivers…

    wanna turn the interstates over to private sector with no national standards just whatever each private sector road company wants?

    • >>If it’s a non-recurring cost – and it’s big ticket then it has to be planned for in the context of other non-recurring costs , existing debt, debt capacity – and priorities usually along the lines of what must be replaced verses what can be deferred.>>

      WTF did you just say???

      Again, you have failed to miss the point. Don’t lecture me on what is or is not a recurring cost when it doesn’t matter in the situation at hand. Those costs have to be paid…unless you consolidate the school and ELIMINATE the cost. \

      >>wanna turn the interstates over to private sector with no national standards just whatever each private sector road company wants?>>

      This is just stupid. You can have national standards that are met by the private sector. Half the stuff sold in this country must meet some government standard or other. And yes, my friend Mitch Daniels successfully sold the Interstate tollway in Indiana to be run by the private sector. Made a bunch of money for the state doing it, balanced the Indiana budget after years of deficit, and now his successor Mike Pence is continuing to run surpluses and reduce the reach of government, all to great success.

    • I’m with CJD on this one, Larry, it’s anything but simple distinguishing between capital and O&M costs, even for “big ticket” items, and lots of budget games are played over this.

      As for public vs private, that’s a rant for another day, another post. Seems to me, CJD was talking about how they contrast in handling personnel issues, not, how they contrast in appropriateness for performing certain jobs, especially public service jobs. Nobody’s proposing to privatize the Richmond City Schools in order to fix the ceiling at Thompson Middle School. We’re talking a pattern of poor maintenance of schools, here, by one government jurisdiction compared to another.

  4. @crazy, acbar.

    you may not like it – but the reality is that operational costs are costs that have to be paid almost on a weekly basis – and costs that are not recurring – ARE deferrable – and are deferred… and what gets taken care and what gets deferred is determined by what you have left over in the budget from operational.

    it works this way for private industry and even us individually.

    there’s not much mystery here unless someone chooses to make it so.

    I will agree – how much is deferred is, in fact , an unfunded liability – and trying to find out the scope and scale of that for any given jurisdiction can be a bit of a hunt ….

    But you guys know this. You KNOW, for instance, that even VDOT has to decide what they can do and what they have to defer… it’s ALWAYS about money versus priorities – and yes some jurisdictions are more transparent and more fiscally responsible than others.

    but to claim this proves that govt is fundamentally flawed… good grief!

    • >>you may not like it – but the reality is that operational costs are costs that have to be paid almost on a weekly basis – and costs that are not recurring – ARE deferrable – and are deferred… and what gets taken care and what gets deferred is determined by what you have left over in the budget from operational.>>\

      You keep talking about this b.s. You don’t address the concept why these distinctions don’t matter in this situation, any more than you answered the question about Dragas’s personal motives. I’m beginning to think you have ADHD.

  5. re: ” This is just stupid. You can have national standards that are met by the private sector. Half the stuff sold in this country must meet some government standard or other. And yes, my friend Mitch Daniels successfully sold the Interstate tollway in Indiana to be run by the private sector. Made a bunch of money for the state doing it, balanced the Indiana budget after years of deficit, and now his successor Mike Pence is continuing to run surpluses and reduce the reach of government, all to great success.”

    Crazy – do you agree that set standards have a lot to do with costs?

    I’m all for contracting out per defined specs – standards.

    you may be aware that VDOT does not build roads – they contract them out.

    Schools do not publish their own text books or build their own computers or rebuild their own roofs.

    so how exactly does the private sector “do it better” unless it is in the specification of those standards?

    the mantra that the private sector always does it “better” than govt is more mindless blather than specifics.. and that’s what I’m alluding to.

    be specific. do you still want the govt to be the one setting the standards?

    you want schools to be done by the private sector because they’ll be more efficient and cheaper?

    who sets the standards?

    do you think the private sector can do schools cheaper if they have to follow the standards set by government?

    or do you really believe that “better” comes from NOT from changing standards?

    this is the conundrum I see when listening to those who say the private sector is always more efficient.

    • >>Schools do not publish their own text books or build their own computers or rebuild their own roofs.

      so how exactly does the private sector “do it better” unless it is in the specification of those standards?>>

      Larry, your comments tend to show you probably have never operated in the public sector, or in private sector business for that matter. Take the building of the computer or the roof. If I am the owner/operator of the private school, it’s my money that goes into the roof or the computer. If I’m the public school operator, it’s NOT my money, it’s somebody else’s, namely the public. As the owner of the private school, I tend to be more careful with how the roof gets done so I don’t have to do it again, I’m more careful with the money I shell out for the computer to get it as cheaply as possible. IT”S MY MONEY!!!. That alone is probably the biggest factor in why the private sector does it better. If there’s a standard to meet, I have more incentive to meet that standard efficiently than the public school. Larry, I was on a public school board. This is something I saw with my own eyes and ears. The public sector sucks at this stuff. IT’S NOT THEIR MONEY!

      So do I think the private sector can do schools cheaper if they have to follow the standards set by government? You betcha. There’s absolutely no doubt in my mind whatsoever.

  6. You said it yourself, and I agree, “You can’t just replace a school or even a school roof in one year without some serious impacts in the normal annual budget. that’s what actually determines whether something is in the capital budget or in the operational budget – on a practical basis.” The practical consequence SHOULD drive the decision. But often our fine bureaucrats find ways to play their little games and we end up with stats for different school districts that can’t be compared directly because of how differently they classify certain maintenance, for example. That’s all I was saying. And as the former treasurer for a couple of volunteer organizations I would never call those decisions “simple.”

    • Acbar – are you actually supporting govt-mandated standards on budget reporting?

      I guess we’ll all aware of GAAP and it’s role in this… which is interesting because GAAP is not govt … but govt can – and does require GAPP standards in accounting now – to include what was not included before – Postemployment Benefit Plans – liabilities –

      which I totally support.

      what we don’t seem to do – yet – is require any kind of accounting on unfunded capital needs… which might be in the eye of the beholder – i.e. how “leaky” does a roof have to be before it is an unfunded liability?

  7. I suspect that all concerned are still debating the wrong subject here.

    Why cannot the capital city of the Commonwealth of Virginia maintain its public school buildings so that they do not collapse around its kids?

    Obviously the problems in Richmond Virginia runs far deeper and far wider than a debate over accounting terms! Or even a debate over how the ‘City Fathers of Richmond’ allocate “resources per those definitions in the City Budget!

    No, these sorts of problems run far deeper. To arrive at the point described in the article, one requires a deeply dysfunctional culture, deep habits of gross neglect, and corruption of ethics. A collapse of simple competence. A collapse of Governance. A collapse of society and its leadership, a gross dysfunction on the most base level.

    Can’t anybody down there repair and maintain the bricks, mortar, rooftops and plumbing of the common everyday buildings that house your own children? Does now anyone in an entire city even know where to look and what to ask to fix this problem? Or know who to ask and hold accountable.

    What an embarrassment! Have we all been struck blind and dumb! Reduced to act like the three monkeys that headlined a recent article – Hear no Evil. See no Evil. Speak no Evil.

    It’s frightening, what is happening to this country. It’s why we got Trump! At least he could fix this particular problem. This is no joke.

    Remember that old refrain from the 1930s’ before Weimar fell. Well, at least he will make the trains run on time. And get a roof over our kid’s head.

  8. re: ” Why cannot the capital city of the Commonwealth of Virginia maintain its public school buildings so that they do not collapse around its kids?”

    that’s not the issue – all due respect.

    that’s a little like asking why VDOT has not fixed all it’s substandard bridges… right?

    Maybe it’s actually a little like asking why Walmart has leaky roofs that require buckets when it rains or asphalt that has grass growing up in it… etc…

    it’s always about priorities verses available funding.

    we should never be at a place where we have 100% fixed everything and have money left over.. if we are actually running a lean budget, right?

    do you REALLY want the gas tax increased to the point where all bridges in VA are totally 100% sufficient?

    do you KNOW how much that would actually cost BEFORE you answer?

    • >>we should never be at a place where we have 100% fixed everything and have money left over.. if we are actually running a lean budget, right?>>

      Whaaaa?

  9. >>do you REALLY want the gas tax increased to the point where all bridges in VA are totally 100% sufficient? >>

    No Larry, I want the process to be efficient. I want someone overseeing the process who has skin in the game.

    >>re: ” Why cannot the capital city of the Commonwealth of Virginia maintain its public school buildings so that they do not collapse around its kids?”

    that’s not the issue – all due respect.>>

    Actually, it is the issue, all due respect. It’s an issue of culture and competence.

  10. No Larry, it is about waste, incompetence, fraud, laziness, and corruption that now has been built so deep into our public and private institutions and organizations (their culture, their governance, their ethics, their leadership) that the entire system now controlled by those out of control special interests working for themselves and than the public good overwhelm and defeat the best of those relatively few individuals within and outside the system who step up the plate and fight nobly to get even the most basic things done right.

    This is the norm in most countries and societies. America is simply falling now backward into the norm. We have a ringside seat to the rapid collapse of a society, most all of it self inflicted.

    • so – all govt – everywhere is a failure?

      and we’re gonna get Donald Trump to fix it?

      I see govt as a mixed bag of successes and failures… myself.

      everytime I get a red light at a working traffic signal – I attribute that to govt that does work.

      everytime I see school buses carrying kids to school – I see something working.

      everytime I see a storm pond going in next to a new store -I see that as something positive to further protect the bay.

      I could go on and on – with thousands of examples of what does work and I can also add some that are fails… but I don’t see civilization as we know it going to hell in a handbasket, no.

  11. re: ” It’s frightening, what is happening to this country. It’s why we got Trump! At least he could fix this particular problem. This is no joke.”

    Trump is going to fix this problem?

    holy bat crap!

    can you please educate me on how he will do this?

    thanks.

    • Hey Larry,

      Ever going to answer the question about Dragas’s personal motive or interest?

      I didn’t think so. You really don’t have much to say, except to be an irritant to real discussion.

      • crazy – I will answer if I know what you’re talking about.

        • Already told you twice. You ignored it? It’s from the Dragas- U. Va thread. You impugned the motives of Dragas. You were called on it and someone asked you what possible personal interest Dragas had in the matter. You didn’t answer it then, so I thought I’d see if you’d make something up now

          • no Crazy – you need to quote the passage you are talking about.

            I do not get email notification of new entries.. and it’s hard to go back and find what you are referring to… quote the passage and I will respond.

    • You know my opinion on Donald Trump. It has not changed.

      But on one particular matter, I believe what Trump says. I believe his story of the public project in Central Park – a skating rink as I recall – that New York City couldn’t get finished after something like 10 years of delays and gross cost overruns. Trump says he took it over and finished it within a few months under the then budget.

      I believe that story because likely there a very big reason for him to do what he did to show the government what he could do, like he is now doing with DC’s old Post office on Penn. Ave. between White House and Congress.

      I also believe it because most every government construction contract of any size is full of fat and corruption in most big cities, and a lot of other places. Now far too often on jobs like the Silver line to Dulles where the thing from START TO FINISH was grossly over designed and engineered.

      Why?

      Simply because those involved knew that much of money came out of the Federal Highways gas tax fund, so it was considered even freer money than most public money, and also because they built that line the way they did because they never wanted the right of way used for any purpose other than mass rail transit. This alone doubled the cost of job from the start even if it had otherwise been done on time and budget.

      In DC the schools, their repair and rebuilding, are yet another example of public work used as big fat cash cows that are milked for years at double and triple the costs they would otherwise cost.

      These habits should be criminal. Instead they are common practices, but nothing more than theft of public monies.

  12. I guess I’m trying to understand if the govt does not build “stuff” but puts it out for bid to the private sector – how that would get changed to some other method…no matter who might be POTUS.

    what would change and what would that change be?

    • “how that would get changed to some other method…no matter who might be POTUS.”

      Answer: COMPETENCE AND CHARACTER.

      • well that answer is in line with Mr. Trumps “answers” as to HOW he do something better!!

        “Trust me – I’ll do this the best way there is – you don’t need to know how ”

        😉

  13. FYI
    School buses are NOT Capital expenditures but are Operational expenditures and are funded via the SOQ Operational funding formula. They are funded based upon a 15 year replacement.
    Somebody want to fact check me? Contact VDOE

  14. http://www.spotsylvania.k12.va.us/cms/lib09/VA01918722/Centricity/Domain/253/CIP%20Approved%20Plan%202016%202020.pdf

    Spotsylvania county capital improvement plan
    fiscal years 2016-2020

    page 8 Capital Transportation Projects (buses and equipment) $20,780,449

    VDOE SOQ funding includes pro-rata per pupil transportation but that money goes to the capital funding – buses in Spotsylvania are financed for 7 years if not mistaken.

    on some things – there may be a locality-specific approach the division between operational and capital and perhaps in Lynchburg they fund buses out of operational – I don’t know maybe HCJ does and can provide that.

    What I notice in Spotsy is that bigger ticket durable items – as opposed to salaries and O&M – tend to get put in the capital facilities fund.

    I’d expect that same approach to be used in counties of Spotsy’s size and larger but would stand corrected if that is not the practice in other localities – since I really only know what is local .

    LYNCHBURG CITY SCHOOLS – FY 2013-14 BUDGET
    The school board’s separate Five-Year Capital Improvement Plan reflects the school board’s capital improvement objectives for the next
    five years, starting with FY 2012-2013 and ending in FY 2016-2017.
    • Funding of capital maintenance and equipment replacement needs, including roofs, school buses, instructional equipment and
    furniture, major facility repairs, and maintenance equipment with year-end fund balances

  15. That is why LCS was called out by VDOE and the City Manager.

    Schools love to confuse those that don’t understand budgets. Especially those that cut the checks

    I suggest all non-believers to contact VDOE and not your local schools.

  16. You can also find this info in the JLARC studies on funding the SOQs but I would call the VDOE budget office for verification.

  17. HCJ -it’s quite likely that the SOQ money for transportation – goes for OPERATIONAL – annual expenses like fuel, tires, repairs, etc but not new buses.

    it’s up to the localities as to how they will categorize and fund their capital needs and I’ve shown you two already that both categorize their replacement buses as capital facilities .

    Spotsylvania allocates money explicitly to fund buses in 5 year tranches , and Lynchburg appears to allocate what they have left over from each operational year which is more Ad Hoc and may not mesh with actual needs but the real point is they both do not want large big ticket items showing up unexpectedly in their operational budgets. they address those needs separately in capital budgets so as to not have wide swings year to year in their operational budgets.

    this is budgeting 101 which for anyone who has watched county finance meeting broadcasts – learns early on especially if their bond advisors also give a presentation on their current debt, debt capacity, bond rating and prospects for the next year rating – which directly and materially affects their borrowing costs – in a big way.

    spotsylvania has saved millions of dollar as their bond rating got better and they refinanced the older debt.

    that debt they are now paying – went to buy new roofs and new buses – which they would not have – had they not borrowed the money.

    If Richmond does what Lynchburg appears to do – on an annual basis – that is – allocate what is left over operationally and not explicitly fund capital facilities – then it could well lead to a backlog of unmet needs – unfunded liabilities.

    budgeting capital facilities separate from operational is considered a more fiscally responsible practice and most larger counties in Va do just that.

    older and smaller ones – may not and there are consequences because you’ll end up with a whole bunch of schools in desperate condition and no easy way to fix that problem.

    of course if you never had enough money in your tax revenues to fund capital facilities – and could not or would not raise taxes or cut other expenses to do that – then you end up with what is essentially unfunded liabilities – consequences.

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