2013-05-01 / Front Page

Battle over cash proffers still heated


By Michael Buettner

Beirne Beirne Despite a set of recommendations from a citizen committee to modify the county’s cash proffer system, the debate about the issue appears set to continue unabated for some time to come.

The five-member Infrastructure Financing Committee appointed earlier this year to study cash proffers as a source of funding for capital projects presented its findings to the Board of Supervisors last week.

Those recommendations were already a source of controversy after two members of the committee issued statements disagreeing with some of the majority’s conclusions. Meanwhile, business groups have been lining up to press the board to reject the committee’s report, and some continue to urge the board to eliminate cash proffers altogether.

Paul Grasewicz, a former planning director for Powhatan County who was one of the three members who voted in favor of the committee recommendations, said the proposed modification of the proffer policy “was a reasonable compromise.”

Elswick Elswick The basic idea, he said, was to have “developers pay the cost of capital facilities that wouldn’t be needed if the development wasn’t there.” But members also recognized that things have changed since the original policy was created in 1989, Grasewicz said. As a result, the proposed changes “reduce the amount but [we] still expect some kind of fair-share contribution.”

The committee’s majority report recommends reducing the maximum cash proffer from its current level of nearly $19,000 to $11,873. The reduction would come entirely from the amount currently included to cover the cost of road improvements related to new housing developments.

The committee’s majority argued that changes in state funding for road construction will mean that the county will pay less in the future for such projects, and they believed that the proffer amount should reflect that change.

They noted that the recommended amount would put Chesterfield’s maximum proffer below those in some nearby counties, including Powhatan, Goochland and Prince George.

But the two dissenting members felt that the majority’s recommendations failed to address important concerns that have been raised about proffers.

Dave Anderson, an executive vice president for a Fredericksburg land development corporation, acknowledged that “the infrastructure costs are very real … when you bring in a residential development.”

But while Chesterfield’s proffer policy worked well at a point in the past when the county was growing rapidly, it has gotten “out of kilter,” largely because it doesn’t recognize differences from one part of the county to another or between one development proposal and another.

Terri Cofer Beirne, a local attorney and chair of the county’s Economic Development Authority, said she “came at it with no preconceived notions about proffers. We all thought development should pay for itself.”

However, she said, “I think they’ve outlived their usefulness.”

A fair number of people in the local business community appear to agree with that assessment.

In recent weeks, the Chesterfield Chamber of Commerce and the Chesterfield Business Council (CBC) of the Greater Richmond Chamber of Commerce have written letters to the Board of Supervisors asking board members to reject the committee recommendations.

Meanwhile, a group representing companies in construction, development, real estate sales, banking, insurance and other housing-related industries has formed to push for elimination of cash proffers.

The group, which calls itself Citizens Against Proffer Taxes, has hired Capital Results, a public relations and government affairs firm with offices in Richmond and Raleigh, N.C., to help it lobby the board to eliminate proffers entirely.

Neither the Chesterfield Chamber nor the Chesterfield Business Council is advocating total elimination of proffers.

Instead, the CBC is proposing to hire regional economics consulting firm Chmura Economics and Analytics to perform a detailed study of “the economic and fiscal effects of cash proffers in Chesterfield County,” according to the letter signed by CBC Chair Debi Girvin that was sent to members of the Board of Supervisors.

The CBC “respectfully asks you to delay any decision on changes to the cash proffer system” until more detailed study can be performed, Girvin wrote.

The Chesterfield Chamber’s request to board members was simply that they “not accept the recommendation recently made by the cash proffer committee,” according to the letter signed by chamber Chairman Brennen Keene, an attorney with McGuire Woods.

In an interview, Keene said the chamber does support “addressing specific questions about the cash proffer system and requesting critical review before making any policy decisions.”

“We think these questions needed to be answered and don’t think the committee addressed them clearly enough,” he said.

In particular, Keene said, “One of the things we think makes the cash proffer discussion complicated and tends to distort the discussion is the issue of revenue. When you start talking about the impact of the revenue from cash proffers, it tends to make people want to talk about the revenue” and not the possible problems with the system itself.

Like the CBC, Keene said the chamber would like the board to “look critically at how you measure the impact of development, then see whether cash proffers really address the impact.”

Keene said he was “not sure the committee was directed to address these questions in quite that way.”

Matoaca District Supervisor Steve Elswick echoed that thought at last week’s board meeting. He thanked the committee members for their work, then added that “Maybe we could have given you better instructions.”

The board is scheduled to vote on setting the maximum cash proffer for next year at its meeting on May 22.

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