Charlottesville on track for $21 million surplus for FY23

The financial practices of Charlottesville’s government are in good order for the fiscal year that ended on June 30, according to a state mandated review.  City Council got a briefing on Monday night. 

“The Code of Virginia requires that localities have their accounts and records audited annually as of June 30 by an independent certified accountant in accordance with the specifications specified by the Auditor of Public Accounts,” said Chris Cullinan, the city’s finance director. 

Michael Lupton is a CPA with Robinson, Farmer, Cox and Associates and he’s been working with the city’s numbers for three years. 

“I am pleased to report the following,” Lupton said. “One, no significant deficiencies or difficulties in dealing with management. Two, no disagreements with management on financial accounting, reporting, or auditing matter. Three and to our knowledge there have been no second opinions that were seeked by management. And finally, there are no other audit findings or issues to report at this time.”

The next step will be an appropriation of the year-end surplus, some of which will be set aside to attain policies required to keep the city’s AAA bond rating. There’s still a sizeable amount left over. 

“FY23 did end with positive results totaling $21.7 million beyond what’s restricted and beyond our fund balance policy,” Cullinan said. 

The number for FY23 is much higher than had been forecast during the fiscal year. The amount projected in January was $5 million. In April, the amount was estimated at $10.4 million. 

“Revenues continued to perform above and beyond expectations despite record high interest rates, despite inflation,” Cullinan said. “Real estate taxes, the economically sensitive taxes which is sales, meals, those sorts of things continued to perform not only above budget but above the trend line.”

Charlottesville City Council also voted in April 2022 to increase the real property tax rate to $0.96 per $100 of assessed value, an increase of a penny.

Cullinan said the city’s projected surplus is also higher due to a number of vacancies. City Manager Sam Sanders said there are still 113 vacancies, including eight open positions in the police department. 

Cullinan will return with more details in January. He and Sanders will also return to Council with a list of unused funds from the American Rescue Plan Act and other COVID-relief funds. 

The surplus for FY22 was $22,917,915.01.

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