There are 168 days until Charlottesville City Council will vote on a budget for fiscal year 2024, which begins on July 1, 2023 Between now and then a lot of things will happen, including discussions of a capital improvement program, final direction on the expansions and renovations at Buford Middle School, and a fresh round of real property assessments for over 15,000 parcels in Charlottesville.
Soon after Council adopted the FY23 budget and the first real property tax rate increase in at least 30 years, the five members expressed a desire to get involved with the process earlier in the year. That’s why a budget work session was held on October 17. (work session materials)
“We paid attention to that in the schedule this year and this is the first effort for us to lay out for you what the budget process will be and to discuss some of the challenges and opportunities that we will have in FY24,” said Michael C. Rogers, the interim city manager.
One key date is February 15. That’s the date that public notice for increases in tax rates are due.
“So if we want to talk about any changes in any of the real estate tax rates, we need to do that and we’ll talk about that before February 15,” said Krisy Hammill, the city’s director of budget and performance measurement.
Charlottesville City Council will officially review the budget for the first time on March 6. Between now and then, a lot of things will happen including a review of the Capital Improvement Program budget by the Planning Commission. Submissions from departments were due October 7, and Hammill said there were significant increases in the financial amounts requested.
A lot of things are happening in the budget for the current fiscal year. Council has agreed to use one-time funding from the American Rescue Plan Act to hire more personnel including $1.1 million to create three battalion chiefs in the Charlottesville Fire Department, $176,000 for the Human Rights Office to hire an investigator, and nearly $700,000 to increase salaries for school bus drivers and Charlottesville Area Transit drivers.
The next budget will have to be built off of those additional salaries without the likelihood of new cash from the federal government. The city is also responsible to pay for new firefighters that had been hired using a federal grant.
“So all of these together total about $3.5 million that the expenditure budget will be increased as we start this process,” Hammill said.
Hammill projects tax revenues to grow between two percent and four percent, and she expects a $4 million surplus by the end of the current fiscal year. However, she said there are a lot of unknowns that could come up over the next three quarters.
“It’s unknown at this point how meals, sales, and lodging, whether they will continue to perform strongly or whether we’ll begin to see some impacts as things with the national economy change,” Hammill said.
There’s also concern that higher interest rates may have an effect on the upward climb of property assessments.
Other factors for Council to consider are the effect of collective bargaining on salaries, the future of Charlottesville Area Transit, and an increasing need to maintain sidewalks and build new ones.
Interim City Manager Michael C. Rogers said the FY22 budget may in $14.3 million of additional revenue for the city to spend, and a final number will be presented to Council in December. As of now, the FY23 budget is projected to result in around $4 million. He said conditions will be different in FY24. (this paragraph was updated after publication)
“This next budget will be much tighter and the decisions that Council will have to make will be much harder,” Rogers said.
Hammill said the process will be similar to how it always is.
“Just like for any other city, there are always way more needs than we have funding and I think that it’s important that we’re able to keep communication lines open and that Council is able to keep us informed of what your priorities are and where you’d like your focus to be,” Hammill said.
City Councilor Brian Pinkston said he wanted his colleagues to go into the budget understanding that further tax increases may be necessary to cover all of the desired spending.
“From my perspective at least I want us to go into this knowing that its possible we may have to raise the real estate tax,” Pinkston said. “I hope not.”
Last year, Council advertised a potential tax rate increase of ten cents, but Rogers’ recommended budget did not use it. Council opted to go for a one cent increase.
“We’re going to try to balance the budget with the revenue that we know and then Council will have some choices to make,” Rogers said.
One of the biggest factors will be the final direction the renovation and expansion of Buford Middle School. The School Board had a briefing on that in September and saw estimates higher due to inflation.
City Councilor Michael Payne said he has been critical of using American Rescue Plan Act funds in broad categories and hoped further allocation could be more strategic.
“This budget cycle is going to be a list of 20 things that are all very important and legitimate but how are we going to prioritize what makes it to the top this budget cycle?”
Payne said he believes it’s important to continue funding affordable housing projects built by the Charlottesville Redevelopment and Housing Authority and the Piedmont Housing Alliance. The Affordable Housing Plan adopted by Council in March 2021 calls on Council to spend $10 million a year in this area, including hiring of staff to monitor whether projects actually remain affordable.
“I think there would be some pretty enormous consequences if we’re not able to fund those projects and they basically have to stop half way,” Payne said.
Charlottesville Mayor Lloyd Snook’s priority is shoring up the city’s work force.
“I’ve been telling folks for the last six months that this coming budget is going to be dominated more than anything else by attention to staff salaries and personnel issues,” Snook said. “If that means what we need to rebuild the staff and to hire the 70 positions that we are now down… that it’s not going to happen with less money.”
City Councilor Sena Magill said she supported spending more money on staff salaries.
“I’m willing to raise taxes on this,” Magill said. “Affordable housing? We’re not going to get deeply affordable housing unless we are making an investment in public funds.”
Open jobs include:
- Labor Relations Manager ($100K to $131K)
- Senior Budget and Management Analyst ($60.6K – $90.8K)
- Landscape / Natural Resources Manager ($61.3K – $90.7K)
- Project Manager – Public Works ($60.6K – $87.8K)
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