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					                          REVENUES




Approved FY 2005 Budget      37
Spotsylvania, Virginia
                                                      Property Tax Revenue Trend

             80,000,000

             70,000,000

             60,000,000

             50,000,000
   Dollars




             40,000,000

             30,000,000

             20,000,000

             10,000,000

                    -
                              FY 01 Actuals            FY 02 Actuals         FY 03 Actuals           FY 04 Amended   FY 05 Approved
                                                                                 Fiscal Year
Note: Top part of Personal Property bar is State revenue
received from Personal Property Tax Relief Act.
                                                           Real Property Taxes        Personal Property Taxes




                        Approved FY 2005 Budget                           38
                        Spotsylvania, Virginia
                             General Fund Revenues
General Property Taxes              FY 2005 Budget - $93,999,676

Real property taxes are assessed on all land and buildings located within Spotsylvania County.
The FY 05 revenue projection, which includes a billing period in tax year 2004 and in tax year
2005, is based on a 2004 assessed taxable value of $8,170,953,889 and a 2005 projected assessed
taxable value of $8,538,646,814. The 2004 values are net of tax relief and deferred taxes of
$234 million. It reflects a 25 percent increase over the 2003 assessed value and is comprised of
5.2 percent growth and 19.8 percent from the reassessment completed December 31, 2003. The
2005 taxable value reflects a 4.5 percent increase over the previous year’s assessed value due to
growth. Holdings of Public Service Corporations are assessed by the State; all other properties
are assessed locally.

A decrease in the real property tax rate from $1.01 to $0.86 was approved for calendar 2004.
Due to the reassessment, the County was required by the State Code of Virginia to determine the
“equalized tax rate” which would provide the same revenues as the prior year levies. For 2004,
the equalized tax rate was $0.86. Using this rate, real property taxes are budgeted at
$74,784,557, including public service corporation payments, comprising 45.7 percent of the
General Fund operating revenue stream.

Personal property tax encompasses all tangible property owned in the County, including
automobiles, trucks, recreational vehicles and boats, business office furniture and equipment, and
mobile homes. (While mobile homes are valued as personal property, state law requires that the
rate for taxation not exceed that for real property, which was approved at $0.86 per $100.) In
FY 05, at the current tax rate of $5.00 per $100 at fifty percent of assessed value, personal
property taxes are budgeted at $15,670,300, including public service corporation payments and
mobile home taxes, and comprise about 9.6 percent of the County’s operating revenue stream.
The budget reflects a $1,321,466, or 9.2 percent, increase from the FY 04 budget. Offsetting
revenue is provided by the Commonwealth of Virginia and is shown in the State Revenue section
of the budget as Personal Property Tax Relief Act (PPTRA). During the 2001 General
Assembly, the State percentage was frozen at 70% and remains so for FY 05. The FY 05
approved budget is based on the historical breakdown of Personal Property and PPTRA
collections. A 7.5 percent growth rate in personal property assessments is assumed for FY 05
based on a 3-year historical average.

Heavy equipment and machinery and tools are taxed at the rates of $2.00 per $100 at 50 percent
of assessed value and $2.50 per $100 at 50 percent of assessed value, respectively. These
categories are budgeted at $1,294,819 in FY 05 and reflect historical assessed value trends.




Approved FY 2005 Budget                        39
Spotsylvania, Virginia
                     EQUALIZED TAX RATE CALCULATION
2003 real property tax levy                                             $65,860,573
101% of 2003 levy per State Code §58.1-3321                             $66,519,179
2004 total taxable assessed value                                     $8,404,756,100
Less Estimated assessed value tax relief properties                     $38,454,000
Less Estimated assessed value deferred properties                      $195,348,211
2004 taxable assessed value net of est assessed
values for tax relief and deferred properties                    A    $8,170,953,889
5.2% of assessed value due to new construction                         $424,889,602
Net 2004 taxable assessed value without new
construction                                                          $7,746,064,287
Equalized tax rate
101% of 2003 tax levy / Net 2004 assessed value                               $0.86

      CALCULATION OF FY 05 REAL PROPERTY TAX REVENUES
2004 net taxable assessed value                        A from above   $8,170,953,889

2005 net taxable assessed value
(4.5% over 2004 assessed values)                                 B    $8,538,646,814

FY 05 revenues (Dec 04 collections)
at $.86, 98% collection rate                A x $.86 x 98% / 2 =C       $34,432,400
FY 05 revenues (June 05 collections)
at $.86, 98% collection rate                B x $.86 x 98% / 2 =D       $35,981,857

Estimated FY 05 real property
tax revenues                                                 C+D        $70,414,257
Estimated FY 05 building supplement
tax revenue                                                                 150,000
Estimated decrease due to tax relief
exemption changes                                                           (76,000)

FY 05 Real property tax revenues
in Recommended Budget                                            E      $70,488,257

Yield for one penny of Real Estate tax
including Real Property and Public
Service Corporation Real Property                                          $840,000



Approved FY 2005 Budget                           40
Spotsylvania, Virginia
                                                                          General Fund Revenues


Other Local Taxes                     FY 2005 Budget - $33,939,960

Categories within Other Local Taxes include locally based tax revenues such as local sales tax
($12,038,000), meals taxes ($4,600,000), utility taxes ($5,366,800), business license taxes
($3,000,000), and motor vehicle decals ($2,625,000). During FY 04, the Board of Supervisors
held public hearings to consider increasing rates for both motor vehicle decals and E-911 tax.
The motor vehicle decal rate increased from $20 to $25 each and the E-911 tax increased from
$1.50 per month to $2.25 per month. Local sales tax of $12.0 million reflects a 13.6 percent
increase over the FY 04 budget and a 21 percent increase over FY 03 collections. This increase
is due to the addition of, Gander Mountain and Bed Bath & Beyond in FY 05 and an overall
increase in sales over the past year. A complete listing of all local taxes, and their budgeted
amounts, can be found in the General Revenue Detail section of the budget document.


Other Local Revenue                   FY 2005 Budget - $6,441,164

Categories within Other Local Revenue include permits and fees, regulatory licenses and charges
for government services as appropriate, and miscellaneous revenues. County Court Fines
($650,000), interest earnings ($650,000), Excess Fees of Clerks ($850,000), and W/S
Administrative Fees ($1,126,689) comprise almost 51 percent of the revenue within Other Local
Revenue. User fees are periodically reviewed to analyze the relationship of the cost of providing
the service to the revenues generated by the service, the goal being that fees cover 100 percent of
the cost. The investment activities include a daily analysis of current and up-coming cash flow
requirements with any available funds being placed in an interest bearing account. The FY 05
projected earnings are based on FY 03 and FY 04 levels of activity, the reduction in interest rates
nationwide, and the County’s commitment to maintaining an adequate fund balance.

A complete listing of local revenues, and their budgeted amounts, can be found in the General
Revenue Detail section of the budget document.




Approved FY 2005 Budget                         41
Spotsylvania, Virginia
                                                                                                              General Fund Revenues




                                                                    Revenue Trend
          16,000,000

          14,000,000

          12,000,000

          10,000,000
Dollars




           8,000,000

           6,000,000

           4,000,000

           2,000,000

                   0
                                 FY 02 Actuals                     FY 03 Actuals                  FY 04 Amended             FY 05 Approved
                                                                                    Fiscal Year

               Motor Vehicle Licenses         Business License Taxes          Meals Taxes    Utility Taxes   Sales Tax   State Revenue

             Note: State revenue does not include Personal Property Tax Relief.




                    Approved FY 2005 Budget                                        42
                    Spotsylvania, Virginia
                                                                          General Fund Revenues



State Revenues                           FY 2005 Budget - $29,070,049

State revenues fall within four main categories: Non-Categorical, Shared Expenses, Social
Services and Other Categorical Reimbursements. Non-Categorical revenues include state
revenues that are generated within the boundaries of the locality and are not associated with a
specific program or service, such as ABC Profits. Budget estimates for these revenues are
primarily based on historical and year-to-date receipts. Personal Property Tax Relief Act
(PPTRA) revenues are budgeted under this category and are projected at $14.7 million. Shared
Expenses are for programs that are jointly funded by the State and the locality, such as
constitutional offices. Budget estimates for these revenues are based on State projections and
include reductions approved by the General Assembly in FY 03.

Social Services revenues are state monies and federal monies that pass through the state to the
locality for social services programs, such as Public Assistance Programs, Adoption Subsidies,
Foster Care Services and Comprehensive Services Act (CSA). The different programs
administered by the Social Services Department have different levels of funding or “local match”
requirements. A local match is the locality's required share of funding for a program. For
example, a program may have an approved state budget of $100,000 with an 80/20 match. This
means the state would fund 80 percent, or $80,000, of the program and the locality would be
required to fund 20 percent, or $20,000, of the program. Local match requirements for the
different social service programs range from zero percent to 50 percent of program costs.

FY 05 budgeted estimates are based on expenditure trends for the programs and the application
of the appropriate allocation formulas, and anticipated case loads in mandated sum sufficient
programs. A sum sufficient program is one in which the state is required to fund 100 percent of
its share of eligible cases regardless of the original funding allocation. A non-sum sufficient
program can be suspended once the state allocation and any required local match have been fully
expended.

Other Categorical revenues are state revenues that are for a specific activity, such as the Victim
Witness grant in the Commonwealth Attorney’s Office. Budget estimates for these revenues
reflect anticipated and actual grant awards, historical receipts or population estimates, depending
upon the source of the grant. A complete listing of state revenues, and their budgeted amounts,
can be found in the General Revenue Detail section of the budget document.




Approved FY 2005 Budget                         43
Spotsylvania, Virginia
                                                                                General Fund Revenues




                       FY 2005 General Fund Revenue Sources

           Intergovernmental
                  18%




                                                                                          Real Property Taxes
Other Local Revenue                             Other                                            45%
        4%                                      56%




                                                                                            Personal Property Taxes
                                                                                                     10%
        Other Local Taxes
                                                                                            Other Property Taxes
               21%
                                                                                                    1%
                                                                                            Penalties/Interest
                                                                                                   1%




                      Intergovernmental Revenues by Category

                                                        2%
                            29%




                                                                                  55%
                            14%


           Other Categorical Reimbursements                      Non-Categorical Reimbursements

           Comp Board Funding                                    Social Services Revenue


          Note: Federal Revenues account for less than one percent of Intergovernmental Revenues.




Approved FY 2005 Budget                            44
Spotsylvania, Virginia
                                                                                           General Fund Revenues



          Use of (Addition to) Fund Balance                     FY 2005 Budget $3,144,106

          The County's General Fund Balance is an accumulation over time of excess revenues over
          expenditures. The fund balance is made up of designated and undesignated monies. Designated
          monies are for anticipated funding requirements, such as construction. Undesignated monies are
          available to be expended as directed by the Board of Supervisors. The fiscal policies adopted by
          the Board stipulate that the undesignated fund balance, at the close of the fiscal year, be
          equivalent to eight to ten percent of operating revenues for that year.

          For FY 05, we designated those items that are non-recurring on an annual basis, such as
          equipment purchases, to be funded with a portion of the accumulated fund balance. The Board
          also approved the use of 50 percent of the School operating carryover ($2.1 million) from FY 03
          as a funding source for the School’s FY 05 operational budget. Therefore, approved
          expenditures exceed budgeted revenues by approximately $3,144,106, the total of those one-time
          items ($1,044,106) and 50 percent of the School’s carryover ($2,100,000). At June 30, 2004, the
          undesignated fund balance is projected to be $34,274,804. At the end of FY 05, the
          undesignated fund balance is projected to be $31,130,698 or 11.3 percent of operating revenues,
          which is above the County’s 8 to 10% guideline by approximately $3.7 million.



                                            Undesignated Fund Balance
          40,000,000                                                                                               16%

          35,000,000                                                                                               14%

          30,000,000                                                                                               12%




                                                                                                                         As % of Oper. Revenues
          25,000,000                                                                                               10%
Dollars




          20,000,000                                                                                               8%

          15,000,000                                                                                               6%

          10,000,000                                                                                               4%

           5,000,000                                                                                               2%

                  0                                                                                                0%
                       FY 1999    FY 2000     FY 2001         FY 2002      FY 2003   FY 2004 est.   FY 2005 est.

                                               Dollar Value             Percentage Value




          Approved FY 2005 Budget                             45
          Spotsylvania, Virginia
                      Capital Projects Fund Revenues

Local Revenues                              FY 2005 Budget - $1,200,392

Local Revenues include funding from Interest Earnings ($95,892), proffers ($1,100,000) and
Special Assessments for Hunters Lodge ($4,500).


Debt Proceeds                               FY 2005 Budget - $7,335,248

Included are a combination of bond and lease proceeds to fund fire and rescue, public safety and
general capital needs.


Use of (Addition to) Fund Balance           FY 2005 Budget $6,700,000

The Capital Projects Fund Balance is an accumulation over time of excess revenues over
expenditures. The fund balance is made up of designated and undesignated monies. Designated
monies are for anticipated funding requirements. Undesignated monies are available to be
expended as directed by the Board of Supervisors for capital projects.

For FY 05, recommended expenditures exceed budgeted revenues by $6.7 million. In FY 04,
$10 million of voter approved fire/rescue bonds were sold. Approximately $3.3 million will be
spent through June 30, 2004. The remaining $6.7 Million will become part of the June 30, 2004
Capital Projects Fund Balance and will be used to fund FY 05 Fire/Rescue projects. At June 30,
2004, the undesignated fund balance is projected to be $7,091,787. At the end of FY 05, the
undesignated fund balance is projected to be $391,787.




Approved FY 2005 Budget                        46
Spotsylvania, Virginia
                      School Operating Fund Revenues
All School revenue estimates are per the School Superintendent’s Approved FY 05 budget.

Local Revenues Generated by
                                     FY 2005 Budget - $1,248,755
School Board

The bulk of these monies are generated charges for tuition for adult education and from other
localities, rental fees, insurance adjustments, and payments from other agencies.


State Revenues                       FY 2005 Budget - $91,556,857

State Revenues include several different categories of state funding for the Schools, the primary
one being Basic School Aid. Basic School Aid is based on student enrollment and is subject to
adjustment once actual enrollment figures are available at the beginning of the school year.
Other significant categories are State Sales Tax, State Share of Payroll and Special Education.


Federal Revenues                     FY 2005 Budget - $6,996,280

Federal Revenues include federal monies for special education programs serving specific
populations (such as those children with emotional, behavioral or physical disabilities) within the
school age population residing in Spotsylvania, and Adult Education.




                    School Food Service Fund Revenues
Locally Generated Revenues           FY 2005 Budget - $5,437,574

The bulk of these monies are generated from the sale of student lunches.

State Revenues                       FY 2005 Budget - $105,299


Federal Revenues                     FY 2005 Budget - $1,766,119

The State and Federal governments provide some financial assistance to meet State and Federal
requirements for providing nutritionally sound student lunches.




Approved FY 2005 Budget                         47
Spotsylvania, Virginia
                School Capital Projects Fund Revenues

Debt Proceeds                           FY 2005 Budget - $34,790,834

Debt proceeds fund the capital improvement activities of the School system. Possible sources of
financing are Virginia Public School Authority (VPSA) and general obligation bonds, lease
revenue bonds issued through the County’s IDA and literary loan money from the state.



                                   SCHOOL FUNDS
                           MAJOR REVENUE SOURCE HISTORY

                                                 State & Federal            Local
                                                   Revenues               Transfer *
                            FY 92                    29,583,166            31,129,951
                            FY 93                    33,305,204            34,720,328
                            FY 94                    35,011,321            35,130,592
                            FY 95                    39,531,464            35,099,177
                            FY 96                    41,811,263            43,611,555
                            FY 97                    46,467,961            46,898,126
                            FY 98                    50,486,218            53,776,990
                            FY 99                    57,272,444            58,312,672
                            FY 00                    63,403,869            64,606,032
                            FY 01                    71,074,510            71,158,036
                            FY 02                    75,617,167            75,987,259
                            FY 03                    85,235,565            78,096,316
                       FY 04 Amended                 92,340,928            88,198,270
                       FY 05 Approved               100,424,555            95,248,577

                    * Does not include transfers of federal funds carried over from prior
                   years.




Approved FY 2005 Budget                               48
Spotsylvania, Virginia