Finz: Is Now the Time to be Building New Public Facilities?

By Sam Finz

If you are like me, you must be wondering whether things will ever get back to normal. Will people get back to work? Will office buildings and commercial centers open again? Will the roads be filled with cars and truck and buses? Will schools open and will children and young adults get back to the classrooms? Will there be a whole new population of people who will now work at home?  

Will the county government’s land use and development landscape change or will it take years to recover from the pandemic, leaving office buildings vacant, commercial centers empty, and retail outlets and stores abandoned? Will it ever be “business as usual” with the hustle bustle of everyday activities, once part of the thriving Loudoun County economy? And, if the recovery takes years, what impact will this have on the provision of county services, and at what expense? Will housing prices fall as families experience the inability to afford higher priced housing, the result of lower family income and the depletion of family savings? Will property values fall, and will real estate assessments be lowered? Will county services be cut or in some cases eliminated entirely? Will property taxes and fees rise to offset the loss of county revenue?

If it is true that many county residents are out of work, that salaries and wages have been reduced for some workers, that families are having difficulty paying their mortgages and property taxes and in some cases affording food to feed their families, what is going to become of the real estate market in this county? Will building come to a halt; will new developments cease to exist? Will vacancies increase? And what will happen to those empty buildings?

None of us can predict the future with 100% accuracy, not even top economists. Notwithstanding the inability to predict the future with absolute certainty, I say now is the time to re-evaluate the county’s land use and development priorities. Now is the time to assess the economic reality of the impact of the COVID pandemic, and now is the time to reflect upon those realities in planning for the future. 

Recognizing the state of the local economy and the changes that will likely occur during and after the COVID pandemic, now is the time to consider whether public facilities provided by the county at the taxpayer’s expense are adequate to meet the needs of the existing population, and not the population of the future. Now may not be the time to fund and build new facilities or purchase new equipment. Now is the time to act, before new developments are started, before new and additional commercial centers are built, and before new and additional office buildings are located. Do we have adequate public facilities in place to serve our existing population? 

Metro revenues are down considerably. Metro is already altering transit services, a sign of lower demand. If that trend of lower ridership continues, will the offices and commercial developments planned around Metro stations be needed? Certainly not needed in the short run; but maybe needed in the long run as the economy stabilizes? 

There is a planning concept that has been around for a long time referred to as adequate public facilities. As a legislative matter, an adequate public facilities ordinance is a method to tie public infrastructure to growth and development. Adequate public facilities include schools, water and sewer facilities, roads, and other capital facilities the government is typically responsible to provide.

I fully appreciate that adequate public facility legislation has its opponents. Legislating growth can be troubling to free enterprise advocates. But assessing the current infrastructure, analyzing needs, and identifying practical solutions, instead of just building more during a pandemic, should be far less threatening to the opponents of legislation, and far more realistic under the circumstances.

Because of the uncertainty in our economy, and the uncertainty as to what the future holds for Loudoun County in terms of revenue, I implore the county to consider the adequacy and availability of existing public facilities before borrowing and initiating new capital projects. Rather, I would like to see the county make use of existing public facilities, and if necessary, expand, refurbish, and renovate existing facilities at a far lower cost. Now is not the time to seek bonding authorization for issuing bonds and expending millions of dollars on new capital facilities to serve a future population, nor is it the time to be incentivizing new development. 

Undoubtedly, the county will argue that not building capital facilities will discourage new development and reduce future tax revenue, putting pressure on elected officials to raise county taxes and fees. If that is the case, I say that commensurate with pulling back on building new capital facilities, the county should make cutbacks in unnecessary services to compensate for the potential loss of revenue. The fact is that delaying new capital facilities and infrastructure expenditures will lower debt service payments and reduce expenditures even further. 

By comparison, the private sector is cutting costs to face the effects of the COVID pandemic, bearing the inherent cost of economic survival. Maybe the county should do the same. 

Sam Finz is a long-term resident of Loudoun County. He has served as a former county, city and town manager in several jurisdictions and as the former deputy county executive for planning and development in Fairfax County. 

One thought on “Finz: Is Now the Time to be Building New Public Facilities?

  • 2020-11-06 at 11:56 am

    As far as I’m aware, the use of adequate public facility ordinances (at least in the way other states use them to control growth) is not authorized in the Commonwealth of Virginia. Denying new development due to lack of facilities is not permitted in Virginia.

    It should also be pointed out that renovation costs- especially of old public/commercial buildings- are generally as expensive, and frequently more expensive, then new construction.

    If anything, the County should be building more right now, not less. The County issued $75 million dollars worth of general obligation bonds last month (October 2020) at an annual interest rate of 0.44% (and was paid a $12.5 million dollar premium as well- which brings the true cost of the bond down even further). That’s less than a half percent interest. Given that inflation will almost certainly average much higher then 0.44% per year over the life of the bond, that means that the value of a dollar will grow at a faster rate than the interest cost. The effect being that the County will likely actually pay less in inflation adjusted dollars than they actually borrowed. This is the cheapest money the County is ever going to get.

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