An account of Albemarle County’s first work session on the FY2026 budget

The journey of Albemarle County Executive Jeffrey Richardson’s proposed budget for the fiscal year that begins on July 1 began on February 26 with its introduction. The whittling process began with the first work session as explained by Andy Bowman, Albemarle’s assistant chief financial officer. (view Bowman’s presentation)

“I always like to start every work session with the entire path ahead for where we are today through the adoption and appropriation of the budget in May,” Bowman said.

Supervisors ask questions throughout the process and give notes to staff for follow-up. This is referred to as “the list.” There has already been another work session on March 12 and March 17 and the Board of Supervisors will decide what tax rates to advertise at their meeting on March 19.

“The board will be asked to take action to propose a budget and set a maximum rate for advertisement,” Bowman said. “What that means is the board will advertise a tax rate. They can adopt that rate or less than they cannot do more than that for both the real property, personal property and any other rates they choose.”

Richardson’s budget recommends a four cent increase in the real estate property tax and an increase in the personal property tax back to $4.28 per $100 of assessed value. The food and beverage tax remains at six percent, the higher Albemarle can do under state law. The transient occupancy tax is nine percent.

There’s the general fund and then there’s the capital fund. The general fund totals $480.5 million with 67 percent of that coming from the real property tax rate. Other local taxes make up 18 percent. Bowman described other sources referring to their color in what he called a doughnut chart.

“State revenue is in the light blue at six percent of the budget and federal is in the yellow piece at 2 percent,” Bowman said. “Those two portions, often when I talk to people in the community they expect they are larger, but in the general fund they are relatively small pieces.”

In January, Supervisors learned that real estate assessments increased an average of 5.1 percent in 2025. Bowman said that results in a 12 percent increase in revenue over last year, or $29 million. That’s with increases in the rate and the assessments.

Virginia law requires localities to publish something called the “lowered tax rate” which is the one that would bring in the same amount of revenue as the current fiscal year. That number is $0.813 per $100 of assessed value.

Bowman said each penny on the tax rate brings in $3.1 million in revenue. However, there’s a formula that requires ten percent to go to debt service or cash for capital projects. Another 54 percent goes to Albemarle County Public Schools and 36 percent is available for local government use.

One factor to keep in mind is something called the Local Composite Index which the Virginia Department of Education uses to determine funding for public schools for each locality based on their relative incomes and ability to pay for education. This is updated every two years, and the last calculations reduced funding for both Albemarle County and Charlottesville.

“Albemarle County lost $10 million in the last local composite index reset,” said County Executive Jeffrey Richardson. “It’s a pot of money that the state has. It’s a finite amount of money. You’ve got X number of school systems, counties that are competing for that. You’re going to stack your county that has the most ability to pay with the expectation that they’re going to put the most local funding in your county that has the lowest per capita, they’re suggesting that’s where the state needs to help the most.”

Another factor is that the revenue sharing payment that Albemarle pays to Charlottesville each year is not taken into consideration in the state’s LCI formula. The payment this year has increased to $20 million.

One federally funded program to watch is the Federal Housing Assistance Fund which covers housing vouchers disbursed by Albemarle County.

“Over $5 million, which is 90 percent of that federal funding and special revenue funds. And should anything happen to that, which again, we have no indication, but that is where the biggest impact would be, not only for the county’s bottom line, but the amount of disruption that would cause into the community.”

Another item the county is watching are federal grants. Bowman said the county is currently managing about $17 million.

“We have no indication yet that any of that is in jeopardy,” Bowman said. “But we are staying in close contact with our grantors through our team in the Office of Grants and Agreements.”

One of those grants is a $2 million planning grant for the Three Notched Trail.

Another source of revenue in the budget is something called “Use of Fund Balance” which is funding left over at the end of fiscal year after an audit. Bowman said this amount is just under $98 million.

“By and large, most of that money is already obligated or spoken for for different reasons,” Bowman said. “Under the Board’s financial management policies. We have a reserve of 10% for unassigned fund balance. This is really to maintain cash flow and be there to avoid any emergency borrowing should the county experience a catastrophe.”

That ten percent ends up to $50.4 million in the current fiscal year. The financial policies put another $10.1 million in a “Budget Stabilization Reserve,” another $4.6 million for a reserve fund for schools, and $21.1 million the county is spending in the current fiscal year.

“So that leaves $11.7 million of one time money that could be used for one time uses,” Bowman said.

There were more details on this at the March 12 work session, but at this point we’re only one hour into a three hour work session.

Supervisor Mike Pruitt said he felt the fund balance is too high.

“I don’t think the role of government is to be a bank,” Pruitt said. “It is not to prepare for tomorrow. It is to realize the needs of citizens today. And I am always, I think, deeply hesitant about reserve funds and the size that they are and whether or not they are as lean as they could be.”

However Pruitt said he realized he was a lone voice on this topic on the Board.

This concluded a review of revenues. One item that made the list is a request for further research into potential revenue from solar siting agreements.

Next up – expenditures!

Before you go: This particular story is from the March 18, 2025 edition of Charlottesville Community Engagement. It is perhaps the most thorough story you’ll read from the March 10, 2025 Albemarle Board of Supervisors’ work session. In fact, it’s probably the only story written about that meeting. This is the sort of story you would expect from a company called Town Crier Productions.