Charlottesville Planning Commission gives more direction on capital improvement program

On December 10, 2024, the Charlottesville Planning Commission will hold a public hearing on a $185.7 million capital improvement program for the next five years. On November 26, the appointed body gave initial feedback after getting a briefing from budget staff. (agenda packet)

For those who may be in need of a definition for what a capital plan is, here’s budget director Krisy Hammill.

“A capital budget is a multi year plan [and] we do it for five years,” Hammill said. “It forecasts the spending of both the revenues that will pay for that spending as well as the projects that we intend to undertake over the next five years. It should build on the priorities of the comprehensive plan.”

The CIP also covers maintenance projects as well. Departments have been submitting requests this fall and the Planning Commission’s role is to check the document against the Comprehensive Plan.

Before hearing more details about the CIP, Chair Hosea Mitchell pleaded with his colleagues to avoid micromanaging the budget.

“We don’t try to move exact dollar amounts around,” Mitchell said. “We just make recommendations about additional programs that we want to make sure get attention or programs that we think should be deleted so that other programs can get attention.”

The Planning Commission gave broad direction for the CIP in September that included a request for more spending on sidewalks and other transportation infrastructure. There were also questions about City Manager Sam Sanders’ strategy to increase resources for homelessness services and the status to upgrade Walker Upper Elementary into a pre-K center.

Funding for the CIP comes from multiple sources including a transfer of three percent of the city’s general fund as well as transfer from the year-end surplus into a contingency fund. A major source of funding is through the sale of bonds that the city pays back through debt service. Charlottesville’s AAA bond rating helps keep interest payments lower.

“We are one of 87 cities nationwide that maintain the double AAA from both Moody’s and S&P,” Hammill said. “And there are only 10 cities in the state of Virginia that have this distinction.”

Charlottesville City Schools can seek their own grant funds that are transferred into the project such as a $17.5 million payment from the Commonwealth of Virginia for the Buford Middle School expansion and renovation project. (Charlottesville awarded over $17.5 M in state funds for Buford renovation, May 23, 2023)

To keep that AAA-bond rating, the city has a policy in place to keep the debt service payment below ten percent of the general fund budget. In years past, the city’s spending plan was close to exceeding that amount but the growth of the city budget has made that less of a problem with this draft CIP.

“Right now our projections are even with this plan where we’re in the seven little bit over 7 percent range,” Hammill said. “Part of that is a function because we have had assessment increases, our revenues have done really well. And so as our general fund has grown, 9 percent or 10 percent of that general fund has grown, so our capacity has grown.”

To put that in perspective, the general fund budget in FY2020 was built on $188,863,920 in revenues. There were two more years of incremental growth before revenues increased by around $20 million from FY22 to FY23. The budget for FY24 went up another 7.3 percent to $228,433,246 in revenues. The current fiscal year anticipates revenues of $251,948,630. Much of the increase is due to a dramatic spike in property assessments since 2020.

Hammill said the debt service payment has risen each year from $12 million to about $24 million.

The draft capital plan assumes spending of $186 million over the next five years with about $131 million will be paid for through the sale of bonds. The rest will be paid for with cash.

Hammill gave an overview of the categories for where the money will go in FY26 which anticipates $31,412,635.

“Education comes in first, affordable housing comes in second and transportation and access comes in third,” Hammill said.

There are not too many differences from the current five-year plan so for some background take a look at my November 2024 story from when the Charlottesville Planning Commission had the equivalent meeting for this year.

Some items to point out in the CIP. Unless otherwise noted, links go to the official project description in the CIP book.

• The five-year plan calls for a total of $30 million to convert Walker School into a Pre-K Center with the first $4 million anticipated in FY27
• A million a year through FY29 is proposed for “climate action initiatives”
• Just under $9.7 million is anticipated for renovations of the Jefferson-Madison Regional Library’s Central branch in FY29
• One change is about $2.8 million to replace fire apparatus and another $1.47 million to replace EMS apparatus. These have increased due to higher costs. (learn more)
• Another piece of new funding is about $4.7 million spread out over five years in the “new sidewalk” category
• One item already known is the $15 million for the redevelopment of Westhaven with $5 million a year through FY28. I wrote about that last October. (learn more)
• An item under discussion is the amount to spend on the transition to become compliant with the Americans with Disabilities Act. The draft CIP plan currently anticipates $2 million a year. (learn more)

“The one big notable addition here is the ADA transition plan,” Hammill said. “That is the first time you’ll see that in the CIP. This is a number that we know is going to be an expensive endeavor. This is what we think we can afford at this time.”

City Manager Sam Sanders said the city is often challenged by members of the public who point out the deficiencies in the sidewalk system. He said work continues on creation of a transition plan and the amount suggested in the fund will help pay for improvements.

“We have a plan that’s dated 2013, we’ll get a new plan and then we will begin immediate implementation,” Sanders said. “The thought behind this is that we’re expecting a huge number associated with that plan.”

Sanders suggested that money to invest in addressing compliance issues could save the city in the future if anyone ever decides to sue. He also added he will suggest using some of the year-end surplus from FY24 to pay for immediate improvements at areas identified as being high-risk for pedestrians. Sanders held back on providing a number.

“We have a few sources that we can consider pulling that from, but I haven’t set a target yet because I’m actually preferring to get the list back and then determine if we have enough to cover what portion of that list,” Sanders said.

Over the last several years, Council has stepped in to assist with housing situations such as the $8.7 million forgivable loan to allow Habitat for Humanity of Greater Charlottesville and Piedmont Housing Alliance to buy the Carlton Mobile Home Park or the $5 million given to the Charlottesville Redevelopment and Housing Authority to cover half the cost of purchasing the 74-unit Dogwood Housing portfolio.

“We have been able to do a lot or multiple kinds of these arrangements over the last couple of years because we’ve had federal one-time money, we’ve had year-end surpluses, and the federal money is drying up and we won’t have those one-time sources,” Hammill said.

The Affordable Housing Plan adopted by City Council in March 2021 called for the investment of $10 million a year in affordable housing projects. Hammill said the FY26 capital improvement plan includes $12.7 million in that category, but that’s not the total amount the city is spending.

“This does not include the tax assistance programs and other things that are also funded in the operational budget,” Hammill said. “In addition, the City Manager has been leading discussions with council and on community interventions, which will include some homelessness and other potential uses of [American Rescue Plan Act funds]

One of those interventions would be to invest in a low-barrier shelter to be housed at a property the Salvation Army owns on Cherry Avenue that is currently used as a thrift store. One Commissioner said one question he received was whether the agency would let in people who lesbian, gay, bisexual, transgender, or queer.

While it has not yet been determined who would actually run the low-barrier shelter, Deputy City Manager Ashley Marshall said this branch of the Salvation Army is more progressive than others.

“This Salvation Army has always had space, even in their high barrier shelter, specifically for our LGBTQIA neighbors, who may, for example, be transitioning so they can have a private, comfortable space. I do know that’s unusual for a Salvation Army,” Marshall said.

Marshall said the city has a 100 percent rating from the Municipality Equity Index from the Human Rights Campaign.

“I’m not going to let that number slip away,” Marshall said. “I worked really hard for that.”

Members of the Planning Commission had additional feedback at the end of the presentation.

“I really appreciate all the affordable housing, homelessness, money being spent there,” said Betsy Roettger, a former member of the CRHA Board of Commissioners.

Danny Yoder, the newest member of the Planning Commission, said he wanted the city public works department to have the capacity to build projects quickly.

“You know, we saw this on, you know, Elliott Avenue and in other places and I’ve seen city crews building sidewalks,” Yoder said. “It’s great. I think members of the public see that the city is, is getting something done that positively affects their lives.”

At least two Commissioners mentioned that there is a possibility that one apartment complex that provides low-income housing may soon lose their subsidy. They had been alerted by Emily Dreyfus of the Legal Aid Justice Center in a November 25 email.

“One thing that does worry me a little bit, gives me a little bit of heartburn, is in fact Hearthwood,” said Mitchell said. “It looms large and I just want us to be certain that we’re thinking about that because we don’t want to revisit the mobile home crisis that we faced a few months back.”

Hearthwood Apartments on Michie Drive was built in 1972 and renovated in 2012 according to a market study conducted in 2022 for the CRHA’s Sixth Street Phase One project. According to this market study and eight others available on Virginia Housing, the mechanism that restricts rents is through the sale of bonds.

According to a U.S. Department of Housing and Urban Development database on low-income housing tax credits, Hearthwood received credits in 1996 for both new construction and rehabilitation.

Mitchell said 200 residents might lose an affordable place to live when the subsidy expires in 2026, but provided no additional information. More information as it comes in.

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