Lexington, VA – June 26, 2014 - On June 23, 2014, the Rockbridge County Board of Supervisors unanimously approved a one percent increase in the occupancy tax dedicated primarily to the Virginia Horse Center Foundation’s (VHCF) primary debt service obligations. The annual surplus, if any, will be directed to safety-related capital improvements. The increase in the occupancy tax and the agreement governing the terms is for a two year period.
The City of Lexington passed a similar measure in early June.
A portion of the current occupancy tax has long been dedicated to the VHCF’s debt service, but the portion has consistently fallen short of the total amount needed. VHCF management has supplemented the debt service with funds from operations and Foundation donations – funds which have been diminished in the past five years during the lingering economic slowdown.
The new one percent increase insures the VHCF will be able to meet the debt service on time and frees up other much needed working capital and donations.
Chairman of the Board of Supervisors John Higgins thanked newly appointed VHCF president Ernie Oare, board of director’s member and Treasurer Tom Clarke and interim Executive Director Glenn Petty for their contribution to the local economy and the transparency utilized in the new relationship between the parties.
Regarding the unanimous vote, Supervisor A.W. “Buster” Lewis said the Board’s action, “will ensure that the Virginia Horse Center is able to be maintained as a premier equine facility not only in the Commonwealth, but also regionally, nationally and even internationally.”
“Through this act, the County has protected its taxpayers from increased local taxation for the provision of services if the economic impact of the Horse Center were to vanish and by increasing a pass-through tax paid for by visitors to our community who are coming in increasing numbers to enjoy our amenities,” Lewis noted.
The occupancy tax and debt service stabilization are cornerstones of the VHCF revised business plan put into place when Ernie Oare became president in late March. Oare and the Board of Directors (including new member Clarke, who has worked to reopen and redevelop the Natural Bridge Hotel and Park), have focused the past few months on transparency, improved financial reporting and community outreach. “This is an incredibly important first step to revitalizing the Virginia Horse Center and returning it to a place of pride in the community,”Oare said.
Oare noted that his contribution to the effort was mainly as general manager of the world class team of experienced professionals which includes Executive Committee members Gardy Bloemers, Tom Clarke, Buddy Derrick, Ken Wheeler along with interim Executive Director Glenn Petty, and consultants John Nicholson and Charlottesville CPA Sandra Thomas. “I’d go into any battle any time with this group and feel confident about coming out on the other end,” said Oare.
“We still have a long way to go, but Rockbridge County has played a key role in helping us launch this transformation. The community concerns were legitimate and those concerns are being addressed on a daily basis,” he concluded.
The VHCF pay over $600,000 annually on debt service for the USDA loan that provided the needed financing when the Commonwealth of Virginia withdrew its financial support and the Horse Center was privatized. The share of the occupancy tax dedicated to VHCF’s debt service contributed as much as $480,000 to that debt service in the recent past, but the VHCF management has supplemented the rest with operating funds and contributions. Over the past five years of lingering economic conditions that revenue has declined.
“The County and City governments guaranteeing our primary debt service payment is a great investment in the VHCF. Stabilizing the debt service allows us to concentrate on our primary mission of providing economic growth for the community, the region and the equine industry statewide. We are all focused on fixing the bigger issues we are facing, including years of deferred maintenance and capital improvements,” said Petty.
“At 29 years old, the Horse Center isn’t young anymore. It has great bones and great potential, but many components of the physical plant needs some sort of upgrade. The most important features – the footing in the stalls and in the rings and arenas – are in great shape and always repaired and maintained. But we realize everything else needs some expensive TLC – and we’re anxious to get started,” he concluded.