Albemarle County Supervisors are in the throes of going through a $551.5 million budget and have held three budget work sessions including one that wrapped up today.
The total budget is $551.5 million as we learn from Andy Bowman, the chief of the county’s Office of Management and Budget.
“This is a decrease from last year of $35 million, or six percent,” Bowman said.
Bowman explained that this is in part because of a reduction in federal funding now that the pandemic-era relief programs are in the past. Bowman also explained a one-time transfer of $7.5 million from revenues from FY23 to the capital improvement program.
“This is one of the strategies staff has taken to provide the one-time funding into the CIP above the normal formula amount so that we are able to balance a CIP that does not delay or descope projects despite the challenge of massively increasing project costs and increased borrowing costs as well.”
Bowman said real estate assessments were stronger than expected, but personal property assessments are weaker than expected.
“In calendar year 2023, we know that we have an increase of 13.46 percent in our [real estate] reassessment,” Bowman said. “In calendar year 2024, and I will say that anyone who reads whether it be a housing data economist or whatever it may be, no one projects that rate of growth for housing that has taken place is going to repeat.”
At the moment, staff is assuming a two percent increase for 2024 for real estate property assessments based on surveillance of economic indicators.
Bowman also went through the requirement in Virginia code to advertise a lowered rate and effective rate for FY24.
“What is the tax rate that would be required to generate the same amount of revenue to essentially offset the increased from reassessments,” Bowman said. “For calendar year 23, that number is 75.3 cents per $100 of assessed value.”
If the Board wanted to lower that rate, they would have to have done so today. Each penny on the tax rate generates about $2.7 million.
“The budget I will say is balanced at 85.4,” said Chief Financial Officer Nelsie Birch. “So if we go to 75.3 just as an example, there would have to be the off-setting expenditure or revenue increase to cover.”
This year, the budget also includes an additional $240,000 for a tax relief program for the elderly and disabled. That’s for a total of $1.72 million for FY24. Visit the county’s website if you’re interested in learning more about the program.
The personal property tax rate is being kept lower than it has been in FY22 due to the higher than assessments. Unless changed by Supervisors, the rate will remain at $3.42 per $100 of assessed value. That’s the same rate as FY23 but Bowman estimated the revenue will bring in $3.3 million less than in FY23.
“A hypothetical to kind of put some of this together is that if the Board was interest in generating as much revenue as the 2023 adopted budget and every penny is about $100,000, you would need about 34 cents to get back to the FY23 budget at the rate of $3.76,” Bowman said.
Bowman said that change is not staff’s recommendation. Staff is not recommending any increase in the rate for food and beverages nor transient lodging.
The end of federal funding through the American Rescue Plan Act means that Albemarle has to begin paying for programs that were used to help some in the community during the pandemic.
“We had a program for rent relief that we paid for out of ARPA,” Birch said. “We are now moving local funding into supporting for the very first time this need that we’ve not had to fund out of the local general fund.”
Another big change happening is an increased investment in transit due in part to rising costs as well as the microtransit project slated to take place later this year. The contribution to Charlottesville Area Transit increases 30 percent to $1.3 million and the contribution to Jaunt increases by about a million to over $3.3 million.
“We’ve had a considerable increase in our contribution to Jaunt and the complexity of transit is only getting more complex and we do not have a subject matter expert on staff who can navigate successful between CAT and Jaunt and how we can ensure we are properly leveraging the right dollars to help protect the county’s coffers,” Birch said.
Birch said staff wants to hire a consultant to help advise on a way going forward. Albemarle County has no vote in the way Charlottesville Area Transit is funded. There’s also an ongoing study of governance structures worth noting.
“One of the possibilities being investigated by the [Thomas Jefferson Planning District Commission] and the Regional Transit Partnership is the possible thought of going to an authority,” said, Supervisor Diantha McKeel.
McKeel has been a member of the Regional Transit Partnership since it was formed in the fall of 2017. She wanted to know if that consultant would be advising on that option.
Birch said the consultant will seek ways to maximize funding under the current structure, where Albemarle does not have a significant ownership stake in any of the transit systems.
“And then also using a consultant to help us navigate from today to tomorrow and where could we go and how would that look and helping us through that transition,” Birch said.
There is also funding in the recommended budget to match federal grants to hire additional fire and rescue personnel. As with many places across Virginia, local governments continue to pick up more of the work. Deputy Chief David Puckett explained there is a long lead time to train and recruit people and so they look a few years into the future.
Albemarle has previously applied for and received two Staffing For Adequate Fire and Emergency Response (SAFER) grants.
“We decided to recommend to the county executive’s office that we pursue a third SAFER grant for a total of 30 firefighters,” Puckett said.
Some of the additional firefighters would staff a second fire engine to serve southern Albemarle which has long response times. The other would be for additional staff to be dedicated to ladder trucks with a new truck to be based at the Monticello Fire Station, also known as Station 11.
“We think this is essential to add as the development area particularly continues to urbanize and develop,” Puckett said.
SAFER grants pick up the salary and benefits for three years. Puckett said the county will hear back from the federal government in the fall.
On Monday there was a work session on the school budget as well as the capital improvement program. As I finalize this newsletter, Supervisors are on their third work session. (see end notes)
Questions raised by Supervisors in between meetings are all publicly available. Take a look on the county’s budget page. As of this writing, there are 14 answers to 14 questions.
There will be another work session on March 22 and the one on March 29 there will be a work session on employee retention and funding under the category of “workforce stabilization.”
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