Mar 17 • 28M

March 17, 2022: Charlottesville Council to advertise half-percent increase in meals tax; At least three members are willing on some amount of real property tax increase

Plus: UVA President Jim Ryan talks community building at Charlottesville Regional Chamber of Commerce event

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Sean Tubbs
Regular updates of what's happening in local and regional government in and around Charlottesville, Virginia from an award-winning journalist with nearly thirty years of experience.
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Is today the day where we drive out the snakes, or is the the one where one can be pinched for a lack of verdant clothing? Perhaps neither is true, and it’s simply March 17, St. Patrick’s Day, and good wishes for whatever that means for you. It is true this is Charlottesville Community Engagement and I’m fairly certain I’m Sean Tubbs, the producer and host of this and all of the other editions of the show. 

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On today’s program:

  • UVA President Jim Ryan speaks to business leaders in the final segment of our look at the Chamber of Commerce’s State of the Community Forum 

  • Charlottesville City Council holds its first budget work session and agrees to advertise a half-percentage point increase in the meals tax rate

  • Albemarle County gets a new planning director who will come here from another Virginia locality 

  • A federal appeals court sends a lawsuit seeking a 2022 House of Delegates election back to a lower court 

First shout-out goes to the Rivanna Conservation Alliance

In today’s first Patreon-fueled shout-out, the Rivanna Conservation Alliance wants wildlife and nature photographers to enter their first-ever photography contest! They want high-resolution photos related to the Rivanna watershed and the winning entries will be displayed at the 2022 Riverfest Celebration on May 1. The two categories are 16 and under, and those over the age of 17. You can send in two entries, and the work may be used to supplement Rivanna Conservation Alliance publications. For more information, visit rivannariver.org.

Fourth Circuit Court of Appeals sends 2022 House election case back to lower court

A federal appeals court has sent a Richmond attorney’s lawsuit seeking a House of Delegates race in 2022 back to a lower court so that the question of his legal ability to bring the suit can be answered. 

“Upon careful consideration of the submissions of the parties and the oral argument conducted on March 8, 2022, we are satisfied to remand this case back to the district court for it to determine – in the first instance – whether [Paul] Goldman possesses Article III standing to sue,” reads the unpublished opinion issued by the Fourth Circuit Court on Tuesday. 

Goldman told ABC8 News that he believes there will still be time for the issue to be sorted in time for a legislative race to be held this year.

See also:

New Albemarle Planning Director starts work in April

A planning official from the Shenandoah Valley of Virginia will be the next planning director in Albemarle County. Candace Perkins has recently served as assistant director of planning and development in Frederick County to the northwest of Albemarle. 

“The Director of Planning is a key leadership role within the Community Development Department, serving as the liaison to the Planning Commission and providing management and leadership for our Planning Division, which manages Albemarle County's Comprehensive Planning program and coordinates the development review process in cooperation with the Zoning and Engineering divisions,” reads a press release for the announcement. 

The previous occupant of the position has moved up to be Deputy Director of the Community Development Department. Charles Rapp has only been with Albemarle County since March 9. 2020. His boss, Jodie Filardo, has only been in Albemarle since September 9, 2019. Previous occupants of all three jobs had been with the county for decades before retirement. 

According to the release, Perkins has over twenty years in local government. She’ll begin work as the department continues its work on the first phase of the Comprehensive Plan review. Perkins’ first day is April 11, 2022. 

UVA President Ryan addresses Chamber of Commerce at State of the Community

It has now been a month since the Charlottesville Regional Chamber of Commerce held its first ever State of the Community to allow officials from Albemarle County and Charlottesville to present themselves to members of the business community. 

Ryan attended UVA’s School of Law and served on its faculty in 1998. He returned to Charlottesville as UVA President in 2018 after serving as Dean of the Harvard Graduate School of Education. 

“Since he returned to returned to UVA in 2018 to serve as President, Jim has continued to emphasize the important of educational opportunity, especially for underrepresented students and first generation college students,” said Collette Sheehy, the senior vice president for operations and state government relations. 

Sheehy said one of Ryan’s central goals is to strengthen the relationship between the University, Albemarle and Charlottesville. He appeared at the Irving Theater in the CODE building via Zoom. 

“The relationship between UVA, Charlottesville, and Albemarle County is incredibly important, and although strong I thought there areas for improvement,” Ryan said. “And part of this is about being a University that is Great and Good and I think part of being a great university is taking seriously the obligations of an anchor institution in our community.”

President Jim Ryan (right) addresses business leaders via Zoom and took questions from Senior Vice President Colette Sheehy (center) (Credit: Charlottesville Regional Chamber of Commerce)

Let’s take stock of some population numbers.

In the fall of 1991, the University of Virginia had an on-Grounds student enrollment of around 18,000, a figure that includes both graduate and undergraduate students. Thirty years later, the total on-Grounds enrollment increased to over 26,000. (UVA enrollment statistics)

In 1990, the U.S. Census Bureau counted 68,040 people in Albemarle and 40,341 in Charlottesville. Albemarle’s population has increased to 112,935 as measured in the 2020 Census, and Charlottesville’s official count increased to 46,553 that year. The Weldon Cooper Center at UVA believes that last figure is higher due to an undercount of college towns. Their 2021 estimate puts Charlottesville at 51,079. 

So that’s the total size of the community. When he got here, Ryan put together a working group of community leaders, staff, faculty, and students. He asked them to report back on what the biggest issues are facing the community. 

“One, jobs and wages,” Ryan said. “The second is affordable housing. Third is access to public health. And fourth, youth education.”

Since then, UVA raised its minimum wage to $15 an hour, including a requirement for contractors to do so. That working group became the President’s Council on UVA Community Partnerships

The pandemic put much of the process on hold but the working groups are back. There’s a recent report from the Pipelines and Pathways group which is intended to make jobs at UVA more accessible to people in the community. There’s a Local Economy group seeking ways to improve connections with area businesses. 

“Some of it is just about making that local businesses know about the opportunities to engage in business with UVA so that’s looking at everything from how we select vendors to how we advertise what we’re looking for and what requirements we have,” Ryan said. “But some of it is just making sure that local businesses understand the process and understand that we are very much interested in working with them.”

UVA has also pledged to build between a thousand and 1,500 affordable housing units over the next decade on properties owned by the University or the University of Virginia Foundation. Three sites have been selected and they are the North Fork Discovery Park in Albemarle County, property on Wertland Street in Charlottesville, and the Piedmont housing site off of Fontaine Avenue. 

“We have an obligation to contribute but it’s also in the interest of UVA just as its in the interest of Charlottesville and Albemarle County,” Ryan said. “If you want to attract and retain a talented workforce, you need to make sure that there are places where people can live affordably.”

Under this arrangement, UVA will supply the plan and a private developer will build the housing. Ryan said he would also like to see second-year students living on Grounds and there are plans to proceed, but it will take more construction.

“Right now we have housing for upper-class students but we don’t have enough housing to house all of the second years,” Ryan said. 

UVA’s economic impact

In 2016, University hired a firm to review its economic impact on Virgina and found that there had been $5.9 billion generated by activities across the Commonwealth and 51,653 jobs. President Ryan said it had been some time since that report but the numbers are believed to be holding up. (read the report)

“Visitors coming to UVA and students spend nearly $200 million annually and that in turn supports roughly 2,000 jobs locally,” Ryan said. “It’s not an insignificant contribution to the local economy. It’s obviously not the only thing and we’re not the only game in town but we are a pretty big economic actor in town.” 

From the 2016 report produced by Tripp Umbach (read the report)

The answer to this next question is worth hearing in full.

City Councilor Michael Payne has argued that the University of Virginia should directly pay the city of Charlottesville a form of taxes. Here he is at a budget work session in early February before Interim City Manager Michael C. Rogers introduced his budget. 

“It’s longer term but it seems like a discussion we should engage the University on,” Payne said. “I know that’s something that the University of Michigan, Yale, Harvard, and many other institutions have done.”

Here’s the question:

“Will UVA consider payment in lieu of taxes to the city or the county?” Sheehy asked. 

“We’ll consider it,” Ryan said. “This came up just the other day. I think there are likely restrictions on our ability to do this because we are a state agency. So there are all sorts of restrictions on what we can with state funds. Because we are a state agency, when we receive money from Richmond it’s money that they are delegating to us and whether we can turn around and delegate that or allocate that to a locality seems unlikely to me.” 

Another change made during the Ryan administration has been the elimination of a public body known as the Planning and Coordination Council in favor of a closed-door body called the Land Use and Environmental Planning Committee. That group next meets on Friday. (agenda)

Watch the entire State of the Community event on the Charlottesville Regional Chamber of Commerce’s website.

Second shout-out goes to an event happening at Morven

In today’s second subscriber supported shout-out, the Morven Summer Institute at Morven Farm wants you to know about a seminar coming up on March 29. How are UVA students, faculty, and community partners collaborating to tell the stories of Morven? Researcher Scot French has spent over ten years studying Morven’s history and will provide glimpses into a course he’ll be teaching this summer on Recovering the Stories of Morven’s Enslaved and Descendant Communities.  The March 29 event is a chance for the public to get a preview of the four week course. The presentation will be available for viewing online, but there are some in-person positions! If you’re interested, visit morven.virginia.edu to fill out an interest form. 

Council holds first work session on FY23 budget

There are a lot of numbers involved in this next story so grab a pencil or open up a spreadsheet to follow along. 

There’s less than a month left before the Charlottesville City Council will adopt a budget for FY2023 and four days away before the first public hearing. The five elected officials began their detailed review of the budget. 

“We’re presenting a balanced  budget of $216,171,432,” said interim City Manager Michael C. Rogers. “This represents a 12.46 percent increase over 2022.”

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Technically, Rogers’ budget does include the ten cent increase in the property tax rate that Council agreed to advertise, but does not indicate how it should be spent. 

“In this budget we have presented unallocated those revenues so there is flexibility for you to decide how much of an increase will be required based upon your programmatic decisions,” Rogers said. 

That means the expenditures in the budget as introduced by Rogers are built on the current rate of 95 cents per $100 of assessed value. But Council’s review was built on the assumption that the rate will be increased to $1.05 per $100. 

The budget includes $9.2 million in unallocated funds derived from the 10 cent increase in the property tax rate. See page 34 of the PDF for the budget.

Budget staff estimate that would bring in $97,770,160, an increase of $17,492,718 over the revised budget for the current fiscal year. That would be due to both the proposed tax increase as well as an increase of over ten percent in property assessments. 

Krisy Hamilll, the senior budget management analyst, told Council that staff already believes tax collections in the current year will be $3 million over what was expected. The surplus for FY22 would be as much as $5 million higher because the tax increase is for the calendar year, not the fiscal year. And that’s not the only potential for revenues to come in higher than budgeted. 

“We continue to see increases and improvements in sales taxes and meals and lodging along those same lines,” Hammill said. “And it’s very likely as we continue through the month of March, we will have another month of those projects and we probably will be coming back to you with some amendments for the FY23 budget as well.”

Hammill said the additional money that would come from the tax increase have been left unallocated because there are still many scenarios for funding the construction costs to renovate Buford Middle School as part of an overall school reconfiguration. 

“There is still question about the construction and the funding options for that project,” Hammill said. “Additionally we know that the construction dollars themselves are not needed until [fiscal year] 2024.”

As you heard in the last segment, Councilor Michael Payne has called on the city to require the University of Virginia to pay a Payment in Lieu of Taxes, or PILOT. 

Currently Charlottesville utilities pay such a charge, budgeted at $6.27 million in FY23. These are included in city utility bills.

“It’s a payment as if the utilities were a private utility provider within the city,” said finance director Chris Cullinan. “It emulates the tax burden that they if they were a private corporation what they would owe the city. It’s an expense of the utilities, included in the utility rates, and it’s remitted to the city each year from the water, sewer, and natural gas utilities.” 

Now, onto expenditures. There is an across the board eight percent increase in salaries for city employees, building off of a two percent cost of living increase that went into effect on July 1, 2021 as well as an additional six percent increase granted to Council in late December that was paid for the surplus from fiscal year 2021. There’s another 3 percent cost of living adjustment scheduled for July 1, 2022. That’s a total of $5.2 million for salary increases for city employees. 

There are also seven new proposed employees, including a Freedom of Information Act coordinator for the city attorney’s officer, a new transportation planner, and a new building inspector. 

A slide from Hammill’s March 10, 2022 presentation

The budget also reflects changes to tax relief programs. 

“We’ve added nearly a million dollars in new funding for the tax, rent, and grant relief,” Hammill said. “We will be merging all the tax relief programs into one program. We will also be increasing the income threshold from $55,000 to $60,000.”

If the tax rate increase goes forward at the full rate of ten cents, Hammill said there will need to be an additional $500,000 spend on the program to cover the costs. 

How to pay for a $75 million renovation of Buford Middle School?

The biggest question about that tax increase relates to the funding of $75 million for school reconfiguration. The current draft budget recommends $2.5 million toward the project in FY23 and $72.5 million in FY24. Hammill said there are funding sources the School Board are suggesting.

“They also have additional [American Rescue Plan Act] federal dollars that they have offered up as a potential use to buy down some of the school-related projects in the [Capital Improvement Program] and that totals to about $7.5 million.”

That would leave Council needing to identify $65 million in revenue. A bill to allow Charlottesville to hold a referendum on a school-related one percent increase in the sales failed to make it out of a divided General Assembly. 

See also:

“We’re sort of at a crossroads about next steps,” Hammill said. “I know that we started with a $50 million project, we got up to a $75 million project. I know there have been multiple construction options that have been presented with varying dollar amounts and additional questions. And so we need to figure out what next steps are so we can get to a decision factor for that amount.”

Charlottesville currently pays about $11.6 million in debt service on existing bonds for existing projects, according to Rogers. 

“We’ve looked at including the $75 million and bonding that, and that would have the effect of increasing debt service to $22 million [annually] over the course of the project,” Rogers said. 

The Council last year agreed to reallocate $18.25 million that had been allocated to the first two phases of West Main Street to the school reconfiguration project as well as $5 million from the parking garage. 

“And those were already built into our projections so that’s how we got from $50 million to $75 million,” Hammill said. “We still have the issue of how we’re going to pay for $50 million.” 

Councilors weigh in 

Councilor Brian Pinkston said he would like to see scenarios based on rate increases lower than ten cents. 

“My initial sort of assessment of the city as I have been getting to know it is that it still feels like its underfunded operationally and in terms of capital projects, based off what people in the community have made clear what they want,” Pinkston said. “Now, obviously it’s one thing to say we need these things and it’s another to fund it.”

Pinkston said a reduced scope for the reconfiguration could be found, such as delaying construction of an auditorium at Buford. He thought the project should be reduced to at least $65 million, including the school system’s ARPA money. 

In his day job, Pinkston is a project manager for facilities at the University of Virginia. 

Vice Mayor Juandiego Wage said he wanted the City Council to be able to pay as much toward the project as possible, and that the School Board’s option should be the one that moves forward. Wade spent 16 years on the School Board before becoming a Councilor.

“Brian has a unique insight because its his day job but I think we leave it to the School Board to determine which alternative to use,” Wade said. 

City Councilor Sena Magill said she was personally lobbying for more funds at the federal level to avoid bonding the project which would mean local taxpayers would pay for most of the tab.

“I’ve actually got appointments with people in D.C. next week to talk about how to try to get Build Back Better money for this project,” Magill said. “I am using every single connection I can build, find, or not burn to find money for this project.”

The Build Back Better Act is an infrastructure spending bill that passed the U.S House of Representatives on a 220 to 213 vote, but is not likely to pass the Senate. 

Councilor Michael Payne said he was struggling with the numbers and the message from city budget staff that the debt service for the school would mean no new capital projects for several years. 

“Our draft budget, where it is, if you’re talking about a ten cent real estate tax increase and freezing our budget for several years, taking all politics aside, is that good public policy?” Payne asked. “To me it seems like it is just not.” 

Payne said the city needs to be able to have the flexibility to further increase wages, fund firefighter positions that are currently covered by a federal grant, funding for further subsidized housing to be built by the Piedmont Housing Alliance project, and more.

Payne also suggested continuing to pursue a PILOT with the University of Virginia, implementing a plastic bag tax, and lobbying the General Assembly again for the sales tax referendum  

Mayor Lloyd Snook suggested for this year leaving some tax rates the same. 

“Why don’t we simply leave personal property tax rates where they are,” Snook said. “Let’s leave real estate estate taxes where they are, leave personal property tax rates where they are. I as a general proposition am not a fan of trying to change the tax rate based on whether the underlying values have gone up or down by a commensurate amount.” 

Snook also suggested increasing the meals tax by an additional half of a percentage point. 

“Those two sources would give us $3 million,  roughly,” Snook said. 

Pinkston agreed with leaving the personal property tax rate the same, as well as the half-percent increase on the meals tax. 

This paragraph was amended on March 19, 2022 to clarify Wade’s position on the meals tax

Payne said he would be open to both. Wade said he would support keeping the personal property tax rate the same, but was flexible on changing the meals tax. 

Commissioner of Revenue Todd Divers said leaving the rate at $4.20 of assessed value would likely yield $2 million this year in additional revenue due to the sharp increase in the value of used vehicles. 

“I can tell you some of these bills are going to curl people’s hair and so you need to be ready for that,” Divers said. 

Council directed staff to advertise the half-percent increase in the meals tax. Snook said he wants to hear from the public about how to proceed. 

“Get that advertisement in and get the public hearing on it held and let’s hear from the public and let them weigh in,” Snook said. “If they’ve got thoughts that they would rather see their personal property tax go up rather than real estate taxes. Obviously some of these are issues that they’ve elected to deal with.” 

Councilor Magill made clear she wants property owners to pay more this year in order to build up the capacity to pay for debt service.  

“I am interested in raising our [real estate] property tax one or two cents this year,” Magill said. 

Pinkston was in agreement. 

“My sort of sense is two cents this year, two cents next and sort of spread it out,” Pinkston said. 

The next work session is tonight and will be on funding for outside agencies. There will be another work session on the Capital Improvement Program on March 31. There is a public hearing on the real property tax rate on March 21 followed by one on April 4 on the meals tax increase and the budget. 

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