Albemarle Supervisors presented with $551.5 million budget for FY24
The process of adopting a budget is underway in Albemarle County with the release this week of County Executive Jeffrey Richardson’s nearly $551.5 million budget for fiscal year 2024. A public hearing will be held on March 1 before a series of work sessions where the six Supervisors will go through the budget line by line. (view the draft budget document)
“This budget is balanced on the same tax rates as the current year,” Richardson told the Albemarle Board of Supervisors at their meeting on February 22.
That includes the personal property tax rate which will remain at the lowered rate of $3.42 per $100 of assessed value. The real property tax rate will remain at $0.854 per $100 of assessed value. The average real property assessment was up 13.46 percent, generating an additional $27,262,905.
The equalized tax rate is $0.753. That’s the tax rate to that would keep the budget flat. State code requires this figure to be presented to the public.
The title of this budget is “Activating The Strategic Plan to Strengthen Our Foundation.”
Supervisors adopted their latest strategic plan last October, as I wrote about at the time.
The Strategic Plan differs from the Comprehensive Plan in that it is a method of organizing the priorities for Albemarle County staff. The six general strategic planning areas are:
- Safety & Well-Being
- Resilient, Equitable, and Engaged Community
- Infrastructure & Placemaking
- Quality of Life
- Education & Learning
- Workforce and Customer Service
This budget is also informed by an economic outlook delivered to Supervisors on October 5, 2022 by Dr. Sheryl Bailey, a visiting economist at Virginia Tech. (read that report)
“This Board gave her over an hour of your time and she talked to us about the national economy, the state economy, and a forward focus on what do we need to be lookin for,” Richardson said. “One major takeaway is that Albemarle County’s economy generally follows the state and national trends, and it’s prudent for Albemarle County to anticipate economic cooling in the year to two year period ahead.”
Dr. Bailey is still consulting with budget staff on the macroeconomic drivers. One of the biggest drivers is increasing inflation.
“While it has gone down month over month for the first time in a year, it still remains at 6.5 percent over the last 12 months,” Richardson said. “That’s an issue for us. It’s an issue for the private sector. It’s an issue for Albemarle County government, and it’s an issue for our partner agencies.”
Those partner agencies include the Rivanna Solid Waste Authority, Charlottesville Area Transit, Jaunt, the Emergency Communications Center, the Jefferson-Madison Regional Library, and the Charlottesville Albemarle Convention and Visitors Bureau. He said the formulas and agreements that provide the revenue to those organizations require an additional $3 million for those groups.
Richardson said the cost of projects in the capital improvement program are anticipated to cost an additional $38 million.
“Our capital needs have not gone away in the past year and the percentage increase in costs outpaces our revenues so in this budget, I will increase the transfer to the capital program over and above formula by $16.7 million,” Richardson said. “That’s one-time funding going to the capital program to cover the increase costs without having to slow down our progress or scale back projects in order to meet our strategic priorities.”
Overall, the proposed budget for FY24 is smaller than the one proposed for FY23. That’s in part because federal funding generated by the CARES Act and the American Rescue Plan Act has now expired, and because there will be less revenue from the sale of bonds.
But where does all the money go?
“Fifty-seven percent of our money goes to public schools,” Richardson said. “Fifty [percent] to operations, four [percent] to school capital, and three [percent] to school debt.”
Richardson said the recommended FY24 budget fully funds Superintendent Matthew Haas’ request and adds an additional $14.6 million in new revenue to the schools due to a formula. The five year capital plan anticipates $194 million for capital projects including two elementary schools and High School Center 2, as well as an expansion at Mountain View Elementary School.
Richardson said the recommended budget will pay for the full cost to upfit the former J.C. Penney Building at Fashion Square Mall to serve as fleet maintenance for the police department and fire rescue department.
“In addition to that we’ve got added in the budget three new police officers and one support position,” Richardson said. “I’ve also added in the budget a third round of SAFER grant requests to the federal government.”
Richardson said this will continue the trend of hiring more paid fire and rescue personnel and this request is for 35 positions. The county will find out in the summer if the grant is awarded to cover start-up costs. (previous coverage)
The budget funds a new baling facility for the Rivanna Solid Waste Authority to make paper recycling more efficient and cost-effective. The operational costs for the new Southern Convenience Center that will open later this year are fully funded.
“Next year under Quality of Life we are planning to open Biscuit Run, we are planning to open a park, the Rivanna Village park in eastern Albemarle,” Richardson said. “We are going to do internal planning for an urban pocket park. We’ve not determined where that will be but it will be in the urban ring.”
There’s $3.9 million that will go to the county’s housing fund. There’s also funding for economic development efforts to help further implement the Project Enable strategic plan.
“This is an area that can have an effect on our overall tax base,” Richardson said. “Commercial activity can reduce the reliance on the real property tax.”
A four percent increase in salaries for county employees is also built into the budget. Additionally, a compensation study is being reviewed and there is additional funding to cover the cost of implementation. This will be the subject of a work session on March 29.
Budgets can be very confusing and a key thing for people to know is that the county’s financial management policies include a practice of requiring a fund balance of 10 percent of the operating budget at the end of a fiscal year. In recent years, a second policy to set aside an additional percentage for a “budget stabilization reserve has been increased from one percent to two percent.
“We keep that in the event that we need it for unexpected reasons,” said Nelsie Birch, the county’s finance director. “So we never intend to spend the rainy day fund which is that ten percent. That two percent, the reason we wanted to increase it last year was because we knew that this economic uncertainty was going to happen. And so it isn’t a surplus like an ongoing surplus. It’s a protected reserve to help us now have to go back and cancel programming and cancel things that you all have said you want to do in our budget.”
For instance, Birch said the county drew down $7 million from the fund balance in FY2022 to balance the budget. These policies are part of what keeps agencies rating Albemarle’s bond as AAA, which means lower interest rates on debt service.
Now, some next dates. In addition to the March 1 public hearing in the evening session, there will be a series of work sessions beginning on March 8. On March 15, Supervisors will vote on the tax rates to advertise for adoption. The March 22 work session will include a discussion on transit. Adoption is set for May 3.
Supervisors largely reserved questions for the work sessions. Supervisor Donna Price had this observation.
“This appears to really be the first year that we actually will have a regular budget process because in 2020 in February as we sat here, within two weeks we went from a presentation much like this to a pandemic,” Price said.
More on the budget as things go through. Any questions?
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