In recent years, Charlottesville City Council has increased spending on a variety of social and housing programs partially augmented by federal funds intended for relief during and after the pandemic. Spending has also been enabled due to rising property assessments and across the board tax rate increases.
Now the flow of federal American Rescue Plan Act funds has stopped and the city has noticed the first signs of slowing revenue growth in the financial report for the first quarter of the current fiscal year.
There are still three and a half months left until City Manager Sam Sanders has to present a budget to City Council but he’s opting this year to get their input early in the process such as a work session on September 16.
To continue the advance work, Sanders presented the first of three budget briefings to the City Council on November 18. He said by law he must present a balanced budget.
“As hard as it may be and feel right now, the goal is just to make sure that we give some consideration of what the various things are that are contributing to what makes it difficult and or not so difficult,” Sanders said. (read the November 18, 2024 presentation)
For these budget briefings, Sanders is connecting potential new initiatives with a strategic plan framework that Council adopted in September 2023.
“This first session tonight, this evening is on organizational excellence and equity, taking two of your strategic outcome areas and framing them for this section,” Sanders said.
Compensation for employees comes under organizational excellence and there will be around a $5 million increase due to collective bargaining. Sanders said there will be another cost increase related to improving various city operations including the management of collective bargaining. There are currently three recognized unions with a fourth in negotiations at the moment.
“The three existing contracts being police, fire and transit,” Sanders said. “And the new contract is made up of a combination of parks and rec, public works and utilities.”
There are now two full-time employees who work on collective bargaining.
Councilor Lloyd Snook said the public should know that these cost increases would likely take place anyway given the city’s need to retain its personnel.
“This is involving getting to competitive ranges [for] all of our salaries, which we had not done in decades, literally,” Snook said. “The idea is that we will get our people being paid what is a competitive wage to keep them from going someplace else. The important thing is we’re investing in our people. We’re not investing in a union, we’re investing in our people.”
Sanders said the city will also face increases in various existing contracts and will enter into some new ones. One of these would help the city put together and maintain an inventory of short-term rentals in the city.
“Our Commissioner of Revenue and [Neighborhood Development Services] Director and Zoning Administrator have been working on this for the past few months and have agreed that now is the right time for us to bring a software program in,” Sanders said.
This would be the first step toward the city seeking payments from those that offer short-term rentals and are doing so without permission.
The city is also testing out a program called Neighborly which will attempt to allow them to get a handle on grants for housing and other relationships. Sanders said the city also needs software to help provide analysis in a changing housing market.
“Housing analysis is a request that’s also been made for us to be able to look at how we can work with developers who are expressing various concerns about the zoning ordinance and needing to figure out what is feasible and what is not,” Sanders said. “It gives us a chance to analyze what is the right investment for us to make into a project that is being brought to us.”
Sanders said another investment to be made is a joint assessment of homelessness services to be conducted with Albemarle County. Another would be whatever investments are needed to create a regional transit authority.
“So what I would hope to be able to do is to figure out a way to afford all of the things that are under this new service contract area because this is the work,” Sanders said. “This is what you all have prioritized in your strategic outcomes.”
Turning to new initiatives under the Equity heading in the strategic plan framework, Sanders reminded Councilors of the “community interventions” he introduced at their October 21 work session.
- Charlottesville City Manager Sanders announces upcoming “community interventions” including $5 million for the Salvation Army, October 23, 2024
- Sanders briefs Council on other community interventions such as purchase of portable restrooms, November 1, 2024
At the November 18 work session, Sanders said the city would commit to $200,000 a year to pay the Salvation Army for lost revenue if they convert a thrift store on Cherry Avenue into a low-barrier shelter. He also said the city would commit $250,000 to the Blue Ridge Area Coalition for the Homeless to allow them to hire more staff.
“That would be an annual grant that would be made to them and that is outside of the competitive nature of some of our grant work,” Sanders said.
Sanders said the city would also commit a half-million a year to an organization to run the low-barrier shelter. That all adds up to about $1 million a year. This does not include whatever funds will come from the American Rescue Plan Act and the expected FY24 surplus that Council will see in December.
Sanders said the city will use $215,000 from the remaining ARP funds to add to the contribution to the city’s Pathways Fund to cover a shortfall in the current fiscal year.
“The Pathways Fund is our annual operating fund of providing direct support to individuals that are having some sort of difficulty in maintaining their household finances,” Sanders said.
Sanders also wants to know if Council would want to increase the annual contribution for the Pathways Fund above the $1 million allocation each year.
Another new initiative is $60,000 a year for an emergency hotel program.
Compliance with the Americans with Disabilities Act is also under the Equity header. The city has been working on an ADA transition plan.
“I have asked our budget director to add a $2 million line item in the CIP for each of the next five years to demonstrate our commitment to a culture of compliance around ADA,” Sanders said. “I would hope that that means that people would see that we are really prioritizing this matter because we have not done this before.”
Sanders anticipated adding $2 million to the capital improvement program to implement the ADA transition plan.
Council’s next budget briefing will be on December 2 with a look at housing.
The Planning Commission will get a look at the draft capital improvement program at a work session on on November 26 and will have a public hearing on December 10. There’s a community budget forum on December 12. Council will have a joint session with the Charlottesville School Board on December 19.
“This is a conversation for schools to help us understand what their particular drivers may be early,” Sanders said.
Sanders said the city is anticipating there will be a high ask from the school system because of their own collective bargaining.
The city manager won’t present his budget until March 4.
Mayor Juandiego Wade asked Sanders what would keep him up at night between now and then.
“It is my desire that I can bring to you a balanced budget that does not rely on a tax increase,” Sanders said. “That’s what I’d like to be able to do. I am not confident that I’ll be able to do that.”
Sanders said he is aware that many property owners are beginning to struggle with higher property taxes caused by several years of high assessment increases. Council has also raised the real property tax rate in two consecutive budget cycles.
“As usual, it’s going to be a very challenging budget process, but that’s why they elected us and paying us the big bucks,” said Mayor Wade. “So we’re looking forward to that discussion.”
For more stories on the budget development process in Charlottesville, take a look at the archive on Information Charlottesville.
Before you go: The time to write and research of this article is covered by paid subscribers to Charlottesville Community Engagement. In fact, this particular installment is from the November 21, 2024 edition of the newsletter. To ensure this research can be sustained, please consider becoming a paid subscriber or contributing monthly through Patreon.
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