The Charlottesville City Planning Commission has made its recommendations for how to amend the draft capital budget for the next five years. That came at the end of a public hearing Tuesday that featured a discussion with City Council. Elected officials will make the final decision next spring as they adopt a budget that will be prepared under the supervision of a yet-to-be-named interim city manager. (draft FY23-FY27 CIP presentation to Planning Commission) (adopted FY22 budget)
The Commission got a look at the information at a work session on November 23, and heard it a second time from Senior Budget Analyst Krissy Hammill in advance of the public hearing. To recap, the capital budget is close to capacity due to the increase of spending in recent years, including a $75 million placeholder for the reconfiguration of middle schools. Council has also authorized a reorientation of priorities to find more money for the schools project. (previous story)
“There were some large projects that were previously authorized to use bonds for that we unfunded essentially to be able to move them to get us to a place where we could increase the $25 million for the school project,” Hammill said. “That was the West Main Street project which was originally in the CIP at $18.25 million and the 7th Street Parking Garage which we unfunded about $5 million of that project.”
Hammill said to pay for the projects, the city will need additional revenue and will not be able to add any more capital projects for many years unless they are paid for in cash. The city has had a AAA bond rating from Standards and Poor since 1964 and from Moody’s since 1973.
“Essentially the AAA bond rating gives the city the opportunity to borrow money at the lowest cost available so that means that more dollars are going to the projects and less dollars are going towards interest,” Hammill said.
Hammill said the city is in good financial shape, but funding future investments will be a struggle. At the work session, Hammill invited ideas for further reallocations from other projects. She also said that the Infrastructure Investment and Jobs Act will likely not be a salvation for the city.
“Many of us in finance have sort of been waiting in the wings to find out what would be available and it’s actually not a one size fits all and it doesn’t deliver on a lot of what we already have in our CIP,” Hammill said. “So it not going to help us address our financing problems largely.”
Another issue is that many of the funding sources will require local matches. She pointed out one opportunity for Charlottesville Area Transit to raise up to $37 million, but the city would have to provide a $2 million match.
“That’s not in our curent CIP,” Hammill said.
Revisising the Strategic Investment Area
The two bodies discussed many aspects of the capital budget, including whether or not several general interest line items should be given additional funds in the next year’s budget. Councilor Lloyd Snook questioned one of them related to a 2013 small area plan known as the Strategic Investment Area.
“One example would be that we’re suggesting another $200,000 for this coming year and three years beyond that for the [Strategic Investment Area] immediate area implementation,” Snook said. “And that balance in that account is over a million and has been as far as I can tell over a million dollars for quite a while.”
Alex Ikefuna, the interim director of the Office of Community Solutions and former director of Neighborhood Development Services, said that balance has been used to pay for a $228,000 study of a form-based code for the area. Nolan Stout reported in the February 4, 2020 Daily Progress on the current Council’s decision to put that plan on hold indefinitely.
Ikefuna pointed to one example of how the funding in the account will be used.
“We have a Pollocks Branch pedestrian bridge which is currently being finalized for construction,” Ikefuna said. “There are several other project within the SIA that consume that balance.”
One of them is a project to upgrade the streetscape on Elliot Avenue in an area where dozens of new homes have been built in the Burnet Commons area. The public housing site at South First Street is also expanding in residential density.
Ikefuna also said the SIA fund could also be used for additional costs that may be incurred at Piedmont Housing Alliance’s redevelopment of Friendship Court.
“Part of the Friendship Court project includes infrastructure improvement because they have to break up that neighborhood and then integrate that into the city’s grid,” Ikefuna said. “And they may have a cost overrun.”
Council approved $5.5 million for the project in October 2020. (read my story)
The current year’s capital budget allocated $2 million in cash for the line item of “Friendship Court Infrastructure Improvements” as well as $394,841 for Phase 1 and $750,000 for Phase 2. The draft five-year capital plan anticipates spending $2.5 million on Phase 2 in FY23, and a total of $3.25 million for phase 3 and $4.5 million for Phase 4.
Ikefuna also said there’s a project called the Elliott Avenue Streetscape for which a design is almost complete. Snook said Council is not given information about what any of these plans are.
“I assume somebody has a plan but it’s not been revealed to us,” Snook said. “I look at the next item. Small area plans. We’re putting in another $100,000 in and the balance of the project is $496,000.”
Outgoing City Councilor Heather Hill had one suggestion for where that funding could go. In July 2020, Council chose to proceed with a Smart Scale project over the opposition of some nearby residents and businesses. (July 22, 2020 story on Information Charlottesville)
“The Grady / Preston / 10th intersection area related to one of the VDOT projects for Smart Scale funding was identified at that time as something we would want to have more planning around because there was a lot of resistance that there wasn’t a lot of community engagement when that proposed plan was coming to fruition,” Hill said.
According to the application for that project, the preliminary engineering phase will not begin until December 2025. There is no design for the Smart Scale project, which was funded on a set of parameters.
“Preston Avenue will be realigned to create a consolidated intersection at Preston Avenue / Grady Avenue / 10th Street,” reads the application. “New sidewalks will be constructed throughout the project limits.”
Hoping for a sales tax referendum
Several commissioners expressed concern about the enormity of the school reconfiguration project. The draft plan shows $2.5 million in FY23 and $72.5 million in FY24. Hammill has previously said the money needs to be in place when a contractor is hired for new construction and renovation of Buford Middle School.
The school project has not yet come directly before the Planning Commission.
“The amount of that project is the entirety of the five-year [capital] FY2017 budget,” Stolzenberg said. “It’s this elephant in the room but it does seem like Council and the School Board have approved the project.”
The idea of a dedicated one-cent sales tax increase has been floated to be dedicated funding for the project, but the General Assembly will have to approve a bill allowing Charlottesville voters decide on whether to impose it.
“I really, really hope that if we go through with it that the sales tax comes through and frees us from this burden,” Stolzenberg said.
Later in the meeting, Commissioners discussed several potential recommendations. One was whether to recommend increasing the amount for affordable housing. Here’s what’s in the proposed CIP.
- $3 million for the Charlottesville Redevelopment and Housing Authority in FY23, and $9 million in the out years
- A base of $925,000 a year into the Charlottesville Affordable Housing Fund
- $900,000 a year to the CRHA to administer additional housing vouchers
- $2.5 million for the second phase of Friendship Court
In March, Council adopted an affordable housing plan that set an ambitious spending target for each year, as noted by Stolzenberg.
“It’s recommendations are pretty clear,” Stolzenberg said. “Ten million a year. $2 million are tax relief. A million to administration. So it’s really $7 million in direct subsidy and that’s all on page 49 of the plan for reference.”
Here’s what the PC’s recommendations are:
- Reduce funding for the 7th Street parking structure funding to the minimum amount necessary to satisfy Charlottesville’s commitment to provide parking for Albemarle County per a 2018 agreement related to the joint General District Court that will be under construction.
- Find more more funds for the line items of tree planting, new sidewalks, and bicycle infrastructure, and hazardous tree removal.
- Reduce funds going to the line item for economic development strategic initiatives, small area plans, and Strategic Investment Area implementation
- Fully fund the Stribling Avenue sidewalk project that Southern Development has agreed to pay upfront for as part of a rezoning that Council will consider in early 2022.
- Explore ways to add enhancements to the Drewary Brown Bridge to honor the Bridge Builders, potentially using a portion of funds for the West Main Streetscape.
- Increase budget for Charlottesville Affordable Housing Fund and find ways to fund housing requests that were requested but not included in the draft budget, possibly directing any budget surpluses for this purpose.
On Monday, City Council will hold first of two readings on a proposal to reallocate the $5.5 million surplus from FY21 to employee compensation and bonuses. They’ll also consider the transfer of $6.7 million in cash from a COVID reserve fund into the Capital Improvement Plan Contingency Fund. (staff report)
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