There’s less than a week until the fiscal new year for Virginia and its local governments. On Tuesday, Charlottesville City Council got an update from interim City Manager Michael C. Rogers on what can be expected in terms of “one-time money” in the form of a financial report. (read the report)
“And we see that there’s a projected $14 million surplus for revenue,” Rogers said.
That’s higher than the $13 million projected in April.
However, Rogers said that number could change as the city’s expenditures have also been down due to various reasons including COVID.
“We have a lot of vacancies in our budget, the market has had an impact on our ability to hire as rapidly as we need to,” Rogers said. “While 92 percent of the budget year has passed, we’ve only spent about 85 percent of our budget expenditures. That’s going to release in a surplus.”
However, Rogers said the actual surplus will not be known until later in the year after the city’s books are closed and reconciled.
One of the reasons why there will be a surplus is due to tax rates increases and assessment rises for personal property and real estate.
Earlier this year, Council voted to increase the real estate tax rate to $0.96 per $100 of assessed value. That penny increase applied to the entire calendar year of 2022.
Council also opted to keep the personal property rate at $4.20 per $100 of assessed value, also contributing to the surplus. That was over the recommendation of Commissioner of Revenue Todd Divers who suggested reducing it due to a sharp increase in the value of used vehicles.
The city also will not bring in as much revenue from Parks and Recreation as originally believed.
“During the budget process we budgeted for the idea that we thought we would be fully operational but as you know we’re not and so therefore we are not going to make those marks,” said Krisy Hammill, the city’s senior budget performance analyst.
The city has also closed on its latest sale of municipal bonds which are used to finance capital projects. The cost of doing so will increase as interest rates go up.
“We closed with about $28 million at a rate at about 3.07 percent, which is about double of what we got last year but it is indicative of the market and still a very good rate,” Hammill said.
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