COMMENTARY: Town Is a Financial Success Story


April 28, 2014

Despite frequent alarms from a small but vocal group of town citizens in the last year or so, a systematic review of financial performance over the last decade shows that Cape Charles is financially healthy.  Visitors today see an up and coming coastal town blessed with historic charm and abundant natural features that attract nature lovers and sports enthusiasts.  While the changes in the physical attributes over the last decade are easy to see, less visible is the remarkable fiscal turn-around .

In 2004 when I first assumed the position of Treasurer, the town was practically on life support financially.  Few funds were available for hiring competent staff or performing basic maintenance.  Systems were antiquated and equipment was barely functional.  Our infrastructure was crumbling from years of neglect.

Recently, I revisited the town’s financial health, doing a comparative analysis of the annual financial audit reports that are conveniently on the town’s web page and 2013 financial statements. As anyone who cares to check the record will see the improvement in the fiscal health of Cape Charles is truly remarkable.  From 2004 to 2013, I found the following:

  • The town’s total general government average revenues from 2005 to 2013 are up a stunning 150%  over 2004;
  • Real estate tax rates adjusted for assessments have increased only 15% through 2014 while consumer prices have increased 26%;
  • A home assessed in 2004  at $150,000 with a tax bill of $705 is now assessed at $296,000 with a tax bill of $817;
  • 50% of the real estate tax revenue now comes from the value of physical improvements to properties not present in 2004 such as new structures or renovations like the Wilson building;
  • Tourist-related tax revenues (transient occupancy, meals, admissions) have increased 516%;
  • Total town net worth has increased from $6.8 million in 2004 to $25.6 million in 2012.  This is net value after subtracting all liabilities, including debt. Debt had increased from $1.8 million in 2004 to $9.1 million in 2012.

What this means is that we borrowed $7.3 million but got $26.1 million in assets, increasing our net worth by $18.8 million!


Cape Charles growth has restored the town to financial health.  Current government policies creating a business friendly and tourist attractive environment have been successful.  The town is more appealing, with more jobs and resources, while taxes have risen less than inflation and real estate market values.   We have developed our natural assets, thus creating an inviting venue.  At the same time, our homes and other property have significantly increased in value.

That same growth has increased the number of users on our utility systems by at least 406, mitigating the challenge of bringing waste water treatment to the standards required by the Chesapeake Bay Act.  While no one has been happy with the increased fees for sewer services, few are aware of what the increase could have been.  State and federal aid have paid for about 73% of that plant.  The loan that was still required to pay for the facility is at a 0% interest rate.  Had the town not grown in the last 10 years, the monthly service fees to each household for water, sewer, and trash would have been about $150 per month even after the state and federal aid.  Given that water and wastewater services must be self-supporting according to debt covenants, the only way we will see lower bills is with additional growth.  It is fiscally prudent for our officials to continue to provide a supportive environment for growth and development.

It is incumbent upon all of the citizens of Cape Charles to support and encourage those forward thinking officials who recognize and promote growth and development and who are committed to investing in our future.

Patricia Buckley was treasurer for the  Town of Cape Charles from 2004-2007.

Submissions to COMMENTARY are welcome on any subject relevant to Cape Charles. Opinions expressed are those of the writer and not necessarily of this publication.



10 Responses to “COMMENTARY: Town Is a Financial Success Story”

  1. George Southern on April 28th, 2014 12:44 am

    As one who has “sounded the alarm,” I wish to respond to the above rosy picture. The “stunning growth” recorded by Cape Charles 10 years ago was due (1) to the building frenzy in Bay Creek and (2) to the nationwide real estate bubble which fueled it. The town rode the bubble to the fullest, increasing spending in line with the income generated from higher property values. And although the bubble burst in 2008, real estate was not reassessed until 2013, when town property values fell 36 percent. A new law now requires property reassessments every two years instead of the previous five years, so expect another drop in 2015, because empty lots (which make up 90 percent of Bay Creek) are selling for less than half their 2013 assessed value. Meanwhile, having grown accustomed to high budgets, the town is now resorting to borrowing to feed its habit. When Ms. Buckley left her position as treasurer in 2007 the town debt was $3.2 million; now it is $10.8 million – a three-fold increase. But thanks to a “structured” (back-loaded) debt refinancing, the town is enjoying low payments for the first three years and so is not raising taxes this year. That will come later.

    To put it simply, Ms. Buckley left out the following:
    2012 Town Assessed Value: $640.5 million
    2013 Town Assessed Value: $410 million

  2. Deborah & Don Bender on April 28th, 2014 7:09 am

    The building lot behind our home was purchased during the “frenzy” for $120,000. After the recent reassessment it was down to $60,000. We just bought it for $6,000.

    The reality is the homes and properties are only worth what you can actually sell them for.

  3. Nancy Daniel Vest on April 28th, 2014 8:30 am

    During recent months there has been much criticism of the new waste water treatment plant. Many questions have been raised about why the plant was built. If I am reading this correctly, the Town built the new plant to meet “the standards required by the Chesapeake Bay Act.” So it seems as if the new plant was not a choice made by Town officials but a necessity to meet state requirements. While I do not like paying the new water bill, I cannot imagine how much it would be if state and federal aid had not covered 73% of the cost of the new facility.
    Some of the candidates running for Town Council are promising lower water bills. What Town services would need to be cut to make this happen?

  4. Heinz Sommer on April 29th, 2014 2:14 pm

    In reference to Mrs. Buckley’s assessment, that the town is in good financial health, please explain the following.

    You stated that the net worth of the town is $25.6 million, and the debt is $9.1 million. This means, that the total assets of the town are approximately $34.7 million.

    Asset evaluation is not an exact science; however, it is generally known that assets are worth what an able and willing buyer is paying (as taught in real estate courses).

    The established reality is: Our old school house was assessed at $930,000 and sold for $10 (plus other freebees).

    In extrapolating this ratio, our assets are worth approximately $370.

    I would not call this as “being in good financial health.”

  5. Wayne Creed on April 30th, 2014 10:45 am

    As the bills, fees, taxes and insurance policies come due, each year my wife and I tend to do an ad hoc cost benefit analysis; that is, do the benefits of living in Cape Charles justify the costs? There are many things we still love about Cape Charles, but instead of waiting around for the other shoe to drop (huge tax increases when the front loaded loan comes due in a couple of years), we thought it would at least be prudent to see what our current options are–so we visited our trusty real estate agent. Anyone else that has done this recently will have noticed (as Mr. Bender highlighted), that property values over the last eight years have plummeted. Which made this article even more curious (thank you Mr. Southern for cutting through the fluff and spin, and exposing this as nothing more than a statistical version of a feline hairball).

    Rather than a financial success story, I would tend to describe what Bannon-Sullivan-Natali has done as more of a financial flip-flop. The rule of thumb for so many years was that the assessed value (in healthy communities) would be 18-30% below the street value. In our case, the assessed value is much higher than what we could actually sell for, so we are actually paying a portion of our property taxes to a phantasm.

    The Nataili-Bannon policies of tax and spend, will soon come home to roost and exacerbate the issue. This is most evident in the waste water plant debacle. The town gets an A+ for being proactive, but a -D for implementation. In other words, we built it in the wrong place, and due to some misguided notion that we needed to have excess capacity for a private gated community (shouldn’t the excess capacity have been the responsibility of the developer?), we built it twice as powerful and spent twice as much as we needed (see our tax burden vs. Onancock’s plant, which is higher capacity, less cost). It should also be noted that, due to faulty planning, the Town was sued by Southport over the location of the plant (can’t remember, but I believe the legal fees were close to $80k). In the end, they settled, and eventually, using the negotiating skills they have honed over the last few years, gave the guy that sued them another $180,000 in reduced tap fees (what????). This, along with the frivolous nature of spending around the harbor (floating docks and bath houses for rich boaters, breakwaters, really?), has created a mountain of debt which we have no way of paying off (we’ll have to keep restructuring, and borrowing more).

    The narrative Ms. Buckley is constructing, that is so eagerly being glommed onto by Natali and Bannon, tries to create the impression that the lucky property owners and tax payers of Cape Charles are somehow glorious honey bees, buzzing around a wondrous hive filled with magnificent honey. In reality, we’re more like dung beetles; whether we’re rollers, tunnelers or pure Scarab dwellers, at this point, it’s just a matter of classification. Although, can someone remind me, why is Ms. Buckley not treasurer anymore?

  6. Don Riley on April 30th, 2014 4:25 pm

    I agree with everything Wayne Creed has said — perhaps the mayor can answer the question why Patricia A. Buckley left.

  7. William Dize on May 1st, 2014 7:54 am

    Mr. Creed,
    In 2006 the town held several workshops and input sessions at the Palace Theater that were very well attended by the citizens of Cape Charles and also local stake holders to create a Harbor area Conceptual Master Plan and Design Guidelines; ( after another public hearing this was adopted on August 4, 2006.

    Beginning in 2007 the town went out to bid for an engineering firm to design the Harbor Conceptual Master Plan which was adopted in 2008. Again there were several public sessions with council and a public hearing before it was adopted. In this plan were stage build outs and their approximate cost. Phase 1 is what you see with the floating slips, bath house, and the Shanty. Phase 1-A is the Breakwaters — it was highly recommended that we install 2 of the proposed 5 before we construct the slips. Phase 2 consists of removing the rip rap by the boat ramps and building a new fuel facility and Harbor Master office in that location so it is in the center of the Harbor. Phase 3 consists of replacing the fixed piers with floating piers at the inner harbor. The fixed piers are 14 years old and have a life expectancy of 20 years (treated piles instead of creosote).

    Phase 1 has been completed, and the town’s transient related taxes have gone way up (which helps keep your taxes lower) In addition the Harbor Fund pays a portion of the 4th of July Fireworks and a portion of the Town Managers and Treasures salary and benefits.

    The Virginia Port Authority’s “Aid to Local Ports Program” has contributed 1/2 to the Breakwaters ($500,000) and the Harbor Fund has been paying the debt on the rest. The Boating Infrastructure Grant paid 75% of 43% of the total cost of the Slips and Bath House. The Aid to Local Ports program paid around 75% of what was left and the Harbor Fund is paying the Debt Service on the rest.

    So with all of that said, I don’t see frivolous spending at the Harbor. If you would like to come over and talk sometime I would be more than glad to sit down with you and listen to your concerns or ideas.

  8. Wayne Creed on May 1st, 2014 9:10 am

    Thanks Smitty, but remember, my opinion is just my opinion (which 99% disagree with, so don’t worry about me). My argument is not with management, operation or implementation, just plain old priority, the role of the harbor, and where we put forth our efforts, which we can all agree or disagree on. The issue for many local, non-transient, in-town folks, is that of the 11 million dollar debt we are now shouldering, and you can probably answer better than me, I believe nearly half is dedicated to the harbor (with much more to come, Port Authority or not).

    Just be sure, I hope you know that my opinion of town priority was not meant as a criticism of your work. To the contrary, I have been sailing this bay since I was 10 (and I’m old now), and you are one of the best harbor masters I have come across (and I have met a lot). Going forth as we are destined to do, as a taxpayer, I consider you and your crew one of our best assets. My one regret is that I no longer own my beloved Morgan 34 to dock in your harbor.

  9. Nancy Daniel Vest on May 1st, 2014 4:14 pm

    Mr. Creed — I am having some trouble understanding your comments. You state that “property values over the last eight years have plummeted.” Isn’t this true of homes all over our country? I am finding it hard to blame the “Natali-Bannon policies” for the bursting of the nationwide housing bubble.
    You mention that your home’s “assessed value is much higher than what we could actually sell for.” Isn’t this true of tax assessments everywhere? Aren’t real estate assessments made by Northampton County and not the Town of Cape Charles? If so and you “are actually paying a portion of property taxes to a phantasm,” isn’t that phantasm being controlled by the County and not the Town?
    You speak of the “the frivolous nature of spending around the harbor.” Haven’t these improvements brought people to our town to eat in local restaurants and shop in our local stores? No matter what your opinion is of the Tall Ships Festival or the Clam Slam, they seem to have put Cape Charles on the map.
    This “mountain of debt” from Harbor improvements that you are concerned about is, according to Mr. Dize, being paid for by the Harbor Fund. Doesn’t the Harbor Fund come from the people that actually use the facilities? If so, then it is not being paid for by the taxpayers.
    The April 14 issue of the Cape Charles Gazette states: “Over the past several years, the Town of Cape Charles, with funding assistance from the Virginia Port Authority Aid to Local Ports Program and the U.S. Fish and Wildlife Boating Infrastructure Grant, has continued to strive to make our commercial waterfront one that the citizens can be proud of and all boaters can appreciate.” Shouldn’t we be thanking our Town leaders for getting these grants and improving our Harbor? It seems to me that our Harbor Master deserves a great deal of credit for being proactive and for being such a positive advocate for the Town of Cape Charles.

  10. William Dize on May 2nd, 2014 12:26 am

    Mr. Creed,
    Thank you for your recognition, and I know your comments were not directed at anyone in particular, and as a taxpayer I fully agree with your right to voice your opinion. As far as town debt goes, I can’t answer for sure the exact amount at this time, but I believe the harbor debt is in the range of $3,215,000. This includes interest. I would like to add as a resident of Onancock from 1995 to 2013 the two towns cannot be compared on many but not all levels!