PRINCE EDWARD – If a proposed County's water system isn't generating enough operational funds in its first few years and the county could need to dip into its general fund, it may not necessarily mean a tax increase.

County Administrator Wade Bartlett pointed to several factors in a recent interview with The Herald.

In five years, he cited, the County's annual debt payment decreases almost $600,000; in two additional years, it decreases another $252,000; and a year after that, falls another $223,000.

“So in eight years, the County's debt payments, annual debt payments, decrease almost $1.1 million,”

Bartlett said.

He also noted, “Now why is eight years important? That's because it'll take two to three years before any water system is completed and you start having to pay permanent debt on whatever you have borrowed.”

The decrease in debt service, Bartlett said, may be more than enough to cover any shortfalls in the revenues of the water system.

“So yes, while…if the water revenues are not enough to cover any debt service, more than likely it would…have to come from general tax revenues, even though not all revenues are tax revenues, the vast majority are,” Bartlett said. “But that doesn't necessarily mean there would be a tax increase.”

Still, that is not the only factor.

“…When you're trying to predict the future five years from now or even a year from now, there's just a lot of different things,” Bartlett said.

Another factor about the future tax rate, he pointed out, is the growth in County's tax base. That, he cited, increases almost every year.

The County's tax base increases almost every year, Bartlett cited. In fiscal year 2001, the County's assessed value of all property taxes-which includes real estate, personal property, machinery and tools, merchant's capital-was about $810 million. At the end of 2010, he added, it's almost $1.8 billion.

There has been a lot of growth, Bartlett pointed out, or a 218 percent increase in assessed values or far more than the growth of inflation.

“And what that increasing tax base allows the county to do is actually decrease the real estate rates,” he said.

In 2001, the real estate tax rate was 59 cents per $100 of assessed value; today, it's 42 cents. In addition, the county administrator cites, local sales tax has increased almost $600,000.

Increases are because the community is growing, Bartlett cited. Longwood is growing and is going to continue to grow, he said.

“And we're seeing a lot of influx of new residents, especially retirees because we're a good low-cost place to live,” Bartlett commented. “I expect this growth will continue.”

The governor in his state of the state address, he also pointed to, reasserted his pledge to have 100,000 more college degrees issued in (over the next 15 years) and proposed a new $50 million investment in higher education, part of which was to be used for financial aid to increase the number of students that could afford college.

“…No doubt, Longwood and Hampden-Sydney are gonna see some of that increase in enrollment,” Bartlett said. “So…that's gonna fuel even more growth in our region increasing our tax base. Plus, we're hopeful that the development of a new drought resistant water supply and a larger distribution system that will spread into the county is gonna attract new investment…industrial, commercial and residential. So those new investments will accelerate the increase in the tax base and tax revenues.”

Farmville District (701) Supervisor Jim Wilck, with Crowder Construction and Draper Aden officials present at a special meeting last year, asked how far out before a proposed water system was expected to become profitable (where income met expenses) and was told by a Draper Aden speaker it probably won't be in the first five or ten years, though she said they have not run the numbers based on the final construction cost estimate and had not done detailed projections out 20 and 30 years.

“…I'm reluctant to guess five years into the future 'cause there could be other revenue streams that don't even exist today,” Bartlett told The Herald. “You just don't know what's gonna happen in five years. And then you're assuming…you're not making enough revenues. You don't know. If you have the water available and you are able to attract industrial and commercial users, you may have enough; you just don't know. But is there a risk? Yeah, there's a risk that you wouldn't, but I think our history of continuing growth in our tax base is…well documented and I feel that it will continue.”