March 19, 2024: City Council discusses expenditure and spending increases at first budget work session, pondering potential three-cent real property tax rate increase
Plus: CRHA will hold a closed session on personnel tomorrow before a strategic planning retreat
This is a community in transition as the 21st century continues with many ambitious plans being implemented by several large players in our region. Charlottesville Community Engagement is produced by a one-person operation fueled by a sincere curiosity of what happens when major changes are made in how government functions. I’m Sean Tubbs, someone who’s been reporting on many of these topics in this community for nearly two decades, still reeling in the years. This is the edition for March 19, 2024.
On today’s show:
Charlottesville City Council goes through changes in revenues and spending in City Manager Sam Sanders’ FY25 budget
The city’s finance director briefs Council on the use of American Rescue Plan Act funds with an eye toward shifting unspent funds to other projects
A look at price drops in a shifting real estate market
The Board of Commissioners of the Charlottesville Redevelopment and Housing Authority will meet at 5:30 p.m. tomorrow for a retreat that begins with a closed session on personnel issues
The podcast edition will feature audio from a C-Ville Weekly story in which CRHA Executive Director John Sales briefs Council on what’s happened since the city and the CRHA purchased dozens of affordable housing units across Charlottesville
Note: The podcast version will likely be sent out later under a separate email. There is a technical error that I need to sort out but I don’t want to delay the print version.
First shout out: ReLeaf Cville
In today’s first subscriber supported public service announcement: ReLeaf Cville exists to reverse a worrying trend. Since 2004, Charlottesville’s Tree Canopy has declined from 50 percent to 38 percent. Two-thirds of the city’s neighborhoods are below 40 percent. ReLeaf Cville aims to change that through a series of tree plantings, preservation efforts, and education campaigns.
ReLeaf is a public / private partnership between the city tree Commission, the Nature Conservancy, City of Promise, Charlottesville Area Tree Stewards, and the Van Yahres Tree Company. Their efforts are funded through donations so consider making yours today!
Council briefed on revenues and expenditure changes at first FY25 budget work session
By the time I write this, there have been public hearings in Charlottesville on the tax rate increase. That was held on March 18, 2024, thirteen days after City Manager Sam Sanders introduced a $251.53 million budget for fiscal year 2024 which begins on July 1.
The first of two public hearings on the budget itself will be held at 6 p.m. in CitySpace on Thursday, March 21, as part of a community budget forum. This segment is designed to get caught up with one of two work sessions that have been held.
Council got a reintroduction at a work session held on March 7, 2024 with a look at changes in revenues and changes in expenditures from the current fiscal year to the next one. (presentation)
Charlottesville’s general fund budget has grown from $142,443,480 in FY2010 to $228,433,247 in FY24. The proposed budget anticipates that increasing by just over $24 million in FY25 to $251,526,900.
“You’ll see from the chart that over the last few years, the annual increase has been larger than normal,” said Krisy Hammill, the city’s budget director. “Of course, for FY25, we know we do have some tax increases in here. In 2023 we had a tax increase as well which contributed to some of that.”
Hamill said recent years have also seen large increases in real property assessments as well as good returns on the meals and lodging taxes. She pointed to a decline from FY2010 and FY2011 to demonstrate the risks of municipal budgeting. FY11’s budget was nearly $1.7 million less the previous year.
“This is also to illustrate the idea that while typically the budget does grow every year, there are always chances that it’s not at the same level and that it could also reduce as well,” Hammill said.
Nearly 71 percent of the general fund budget comes from local taxes. The amount expected to be brought in under the real estate tax under Sanders’ recommended budget is $108,438,706, a $9 million increase over the current year. That’s in part because of the two cent increase Sanders is recommending.
However, the mandated advertisement of the tax rate for the March 18, 2024 public hearing was for a three cent-hike.
“We can always go down but you cannot exceed whatever it is that you advertised,” Hammill said.
Revenue from the meals tax would increase $4.1 million to around $19.75 million in FY25, in part because of an anticipated rate increase from 6.5 percent of a meals’ bill to 7.5 percent. The transient occupancy would bring in an additional $1.2 million.
One uncertainty at the moment is the lack of an approved state budget. Stay tuned.
One projected decline is in the amount that comes from fees paid for the city’s recreational programs. The adopted budget anticipates just over $1.5 million and the projection for FY25 shows that dropping by around $320,000.
“Recreation income continues to be something that is redefining itself after COVID as they’re working through their programs and their master plans,” Hammill said.
Turning to expenditures, as of March 7, 2024 the budget reflects a $7 million payment to city schools, $2 million shy of a $9 million request. Some other personnel highlights:
$851,037 covers two-thirds of the costs to pay 15 firefighters hired in previous years using a federal grant
$122,935 for a new assistant city attorney
Three new full-time Charlottesville Area Transit employees have been added to help reopen the Downtown Transit Station for a total of $185,787
There’s a new transit planner position and budgeted at $124,593 and a new transit procurement buyer budgeted at $121,472
$211,575 for two new firefighters to be part of the ANCHOR team
$338,712 for two new police officers to be part of the ANCHOR team
There’s another $170,500 for someone to be administration for the ANCHOR team with some of that funding going to pay for clinicians for a “local partner” who was not identified at the work session
The ANCHOR team is the city’s public safety response group that will field service calls with parties involved in a mental health crisis. Council had not yet been briefed.
Much of the additional spending in FY25 is related to implementing a compensation and classification study intended to retain city employees. That includes an additional $6,277,500 to be spent in additional salaries and benefits. That does not include the impacts from collective bargaining which adds an additional $3 million to the city’s spending.
Vice Mayor Brian Pinkston offered this support for the additional costs related to personnel.
“This is what I would say is an investment in a much better organization,” Pinkston said.
The March 14, 2024 work session dealt entirely with funding for nonprofits and other agencies that comes through the Vibrant Community process. Hammill had a quick preview on March 7.
“Council had a lot of discussion last year about if there was a way to increase the pot of money for the competitive process,” Hammill said. “There were also some talks about certain agencies that were just considered to provide fundamental services that we didn’t feel like should be competitive and so we put that into play this year.”
More on that next time.
The city will pay an additional $686,215 in FY25 for refuse collection.
“We’ve seen huge increases from our contractor for curbside pick-up and also tipping fees,” Hammill said. “One of those we had to absorb mid-year out of the year-end surplus that you just passed for the current year and this is an anticipated increase that is going to happen in FY25.”
Staff had not yet recommended any changes into the fees paid by city residents.
At the end of the March 7 work session, Councilors returned to the idea of the potential for a three-cent increase on the real estate tax. Pinkston supported the flexibility of being able to have extra revenue.
“We’re advertising three at this point and really only committed to two but we have that option of a million to allocate,” Pinkston said.
Sanders explained why staff opted to advertise three cents.
“It was to allow you all some movement around if you were to make a change to the lodging tax or the meals tax you would have the ability to offset that with the real estate tax,” Sanders said.
Sanders some Councilors have expressed concern that the meals tax may hurt Charlottesville residents.
The first work session took place before the deadline to advertise in the newspaper of record. Councilor Michael Payne said he would support a four cent increase.
“The meals tax is our most regressive tax and I think it also has a larger marginal impact on some of those smaller businesses and real estate tax is not a great tax by any means but it’s the most progressive tax we have the option to use,” Payne said.
A final decision on the tax rate will be made over the course of the next few budget work sessions with further ones on March 28 and April 4 as well as the March 21 public hearing.
Other factors include whether Governor Youngkin will sign legislation allowing localities to hold a referendum on increasing the sales tax for school construction. There’s also the potential for more requests for spending, as well as potentially reconsidering the city’s continued involvement with the Charlottesville Albemarle Convention and Visitors Bureau. Currently a portion of the city’s transient lodging tax goes to the agency to carry out state-mandated for tourism promotion.
Payne requested to be a sent a copy of the memorandum of agreement.
“That’s one of these agreements where an increase can be baked in from an agreement that was agreed on years ago in terms of a certain increase in lodging tax revenue going to them and the question I have is how much of our tourism is driven by the fact that there are wineries and Monticello and all these areas and is that what’s driving tourism?” Payne asked.
Mayor Juandiego Wade, a member of the CACVB’s Board of Directors, defended the role the agency plays and said their work to attract more Black tourists has paid off.
“When they had some extra money from the COVID, they were able to do some really robust advertising, particularly to the community of color, and that’s how they were able to win a lot of those awards,” Wade said. “I found out at one of our recent meetings that one of the reason this region got the wine region of the world is because of our efforts to each out to communities of color.”
Payne said he just wants to investigate future revenue options to support additional city spending in future years.
“Any stone we can unturn and if there’s something we haven’t thought about in ten years, we owe it to the community to think about,” Payne said.
For more information on the city’s budget, visit the city’s website.
Second shout out: Piedmont Master Gardeners seek items for Green Elephant sale
In today’s second subscriber supported public service announcement: If you are cleaning out your garage, basement or garden shed as spring approaches, the Piedmont Master Gardeners will gladly take any yard and garden equipment you no longer need.
PMG is now accepting donations of new and used tools, hoses, decorative items, outdoor furniture—virtually anything used to create, maintain and enjoy a garden. These “Green Elephants” will be offered for sale to the public during PMG’s Spring Plant Sale. Donated items may be dropped off at 402 Albemarle Square between 10 a.m. and noon on Tuesdays and Saturdays through the end of April. PMG is not able to accept plastic pots or opened chemicals. To arrange a pickup or for more information, contact the Piedmont Master Gardeners at greenelephant@piedmontmastergardeners.org.
Council briefed on usage of second set of federal COVID funds
It’s been less than a year since the federal government ended the COVID-19 emergency last May, but that announcement had no effect on the usage by localities of funds that came through the American Rescue Plan Act.
At their meeting on March 7, City Council got an update on how these funds have been used.
“Just as a reminder, the city received two tranches of funds in June 2021 and June 2022 totaling $19.6 million,” said Chris Cullinan, the city’s finance director.
The city put the spending into one of two categories. One was $10 million intended to replace revenues lost as a result of the shutdown of the economy in the early days of the pandemic to slow the spread of the novel coronavirus. The rest is just called ARPA projects.
“There are some slight spending requirements for each of those, and we can talk about those if you like, but all of the ARPA funds have been appropriated by Council,” Cullinan said. “$18 million has been allocated for 64 individual projects over the last number of years.”
One of those projects is the nearly $4.2 million cost to purchase property on Avon Street from the Charlottesville Redevelopment and Housing Authority. Cullinan said the city used the replacement pool, which had fewer restrictions than the other pool.
Cullinan said about $1.6 million remains in unallocated accounts which City Manager Sam Sanders could be used for other purposes.
“The money has been legally appropriated,” Cullinan said. “However, it’s not designated for a specific use like the other funds which again are spread out over 64 different projects.”
Cullinan’s report did not list those 64 projects but he shared that some money had been allocated for projects but there was money left over.
“The city at one point had a requirement that you be vaccinated in order to do work for the city or you had to get tested,” Cullinan said. “So we allocated half a million and employees got tested on a weekly basis. We spent roughly half of that over the course of about a year.”
Another allocation that was never used was a set aside for COVID testing kits. Remember, there was a time when such tests were scarce.
American Rescue Plan Act funds must be obligated by the end of the calendar year and spent by the end of 26. Obligation is a technical term that means the money is committed and will be spent, such as a purchase order.
Cullinan said he would return to Council with a recommendation later this year. He also said it was unlikely the city or any other local government would see this amount of federal cash in the future.
Price drop? Two months in 2024, which way is the market going?
In order to successfully produce this newsletter and write a weekly column for C-Ville Weekly, I have grown antennas in many directions. One of them is being on the email distribution list for Realtor.com.
Since the year began I’ve noticed a lot more emails with the headline “PRICE DROP” and to try something different today, I thought I’d share them with the audience.
On February 18, 2024, the asking price for a 1,209 square foot unit in the Charlottesville Towers at 511 North First North dropped $24,000 to $340,000. (view listing)
On February 21, 2024, the asking price for a four bedroom house at 2618 Lawrence Road stopped $25,000 to $524,900. The Albemarle County in Logan Village has an assessment of $385,200. (view listing)
On February 27, 2024, the asking price for a four bedroom house at 971 Belvedere Road dropped $35,000 to $850,000. The 2024 assessment is $528,600. (view listing)
On February 29, 2024, the asking price for a 134,600 square foot lot on Preddy Creek Road in Albemarle County dropped $5,000 to $119,999. (view listing)
On March 2, 2024, the asking price for 113 Altamont Circle dropped $100,000 to $1,499,000. (view listing)
On March 4, 2024, the asking price for 1874 Wayside Place dropped $50,000 to $1.1 million. (view listing)
On March 5, 2024, the asking price for 315 Caroline Avenue dropped $26,000 to $399,000. (view listing)
On March 6, 2024, the asking price for 3542 Thomas Jefferson Parkway dropped $14,000 to $375,000. (view listing)
On March 7, 2024, the asking price for 1092 Olympia Drive dropped $15,000 to $555,000. (view listing)
On March 9, 2024, the asking price for 1344 Sycamore Court dropped $5,100 to $344,900. (view listing)
On March 13, 2024, the asking price for 1011 Blenheim Avenue dropped $40,000 to $520,000. (view listing)
On March 16, 2024, the asking price for 3460 Thicket Run Place dropped $6,000 to $669,000. (view listing)
On March 17, 2024, the asking price for 1354 Cottontail Way dropped $50,000 to $1,295,000. (view listing)
What does it all mean? Stay tuned and I’ll provide more data as I can.
CHRA to hold closed session tomorrow before annual retreat
This morning, the Charlottesville Redevelopment and Housing Authority sent out an email to stakeholders for a 6 p.m. retreat to be held at Crescent Halls.
This afternoon, the CRHA sent out a second email announcing the start time was moved up to 5:30 p.m. (agenda)
The meeting will begin with a closed session to discuss personnel. When that concludes, there will be a strategic planning retreat with eight items including a discussion of a communications plan and a discussion on legal representation. There will also be a discussion of critical opportunities and areas of concern.
Earlier this month, CRHA Executive Director John Sales briefed City Council on the performance so far of the Dogwood Housing portfolio that the city co-owns with the CRHA.
“The portfolio was developed to preserve naturally occurring affordable housing units that were at risk of being lost due to natural real estate transactions,” Sales said.
To read the rest of that story, go read the story on C-Ville Weekly. Podcast listeners will eventually be able to hear a version in today’s edition, which is delayed to a recording error related to a change made in the software I use. Rats, I say. Rats.
Reading material:
BOV Committee Approves Darden Student Housing Schematics, Matt Kelly, March 1, 2024
Charlottesville residents join lawmakers in asking Gov. Youngkin to sign flurry of tenants rights bills, Erin O’Hare, Charlottesville Tomorrow, March 19, 2024
#649 is over and out
When I woke up this morning, I did not think I would put out a newsletter. I even posted on Substack Notes that there was a 75 percent chance of taking a day off from deadline so I could rest up a little. However, I also said that sometimes, 25 percent is a bigger number.
At some point I decided there was no time like today to get out two stories from a work session that happened 12 days ago. I don’t believe that any other media outlet covered that or the one from March 14. This is a community in transition where both a daily newspaper and an organization I used to work for has abandoned the role of keeping an eye on things.
It’s just me doing this work. If you think it’s worth me doing and you have not contributed yet, perhaps this is your day. Someone yesterday kicked in a $200 subscription here on Substack, and Ting will match that amount. Behind the scenes, I am growing an editorial operation that I hope will become the watchdog that is needed as political norms continue to go out of style.
Thanks for reading and listening and I appreciate the support of the hundreds of people who think this kind of journalism is worth producing.
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