Charlottesville and Albemarle are finalizing their budgets for the fiscal year that ends on June 30, 2020.  Both localities are proposing larger budgets and tax increases but for different reasons. Charlottesville’s proposed operational and capital budget of $223.9 million represents a 10% increase over the current budget. Albemarle’s proposed budget weighs in at $456.8 million, an increase of 5.7%.

The city and county expect to finalize their budgets this month.

Affordable housing

After two years of consistent advocacy behind the dais and in the audience at City Council meetings, affordable housing has dominated much of the budget discussion in the city.

The amount planned for affordable housing capital programs in the February draft of the budget was $10.3 million. The total could have risen to $11.3 million, but the council on Monday moved the real estate tax rate forward unchanged.

The proposal had mixed support, and the city legally could have raised the real estate tax rate by up to 2 cents per $100 of assessed value because it advertised a rate of 97 cents per $100 of assessed value. The current rate is 95 cents.

The Charlottesville Low-Income Housing Coalition has advocated for raising real estate taxes while increasing aid for low-income homeowners and renters that would be affected.

“A tax increase today is an investment in the future of affordable housing and a commitment to equity in Charlottesville that will be long-lasting,” said Walt Heinecke, of CLIHC during the last city budget work session on Wednesday.

The two largest housing redevelopment projects in the city, public housing and Piedmont Housing Alliance’s Friendship Court, absorb $8.5 million together. Remaining funds would be split between the city’s rental assistance program, housing rehabilitation, and the Charlottesville Affordable Housing Fund.

City staff had initially planned to zero out contributions to the CAHF, given the city’s commitments to the redevelopment projects. However, the most recent proposal sets the CAHF contribution at $1 million with the real estate tax increase and a $800,000 without, which would come with a cost to the city’s rental assistance program.

The city has also discussed increasing tax relief for low-income homeowners. The average rise in residential assessments in the city this year was 8.1%.

City councilors have debated other ways of raising revenues to support their priorities.

The councilors seem united in their support for raising the lodging tax rate from 7% to 8%. Interim City Manager Mike Murphy also has proposed raising the meals tax from 5% to 6%.

Several business owners objected to the meals and lodging tax proposals at the March 4 meeting when Murphy unveiled the proposal, and Councilor Mike Signer was the lone vote Monday night against increasing the meals tax rate.

Eric Terry, president of the Virginia Restaurant, Lodging & Travel Association, said that the increases would harm new hotel investments in the area and that the meals tax would disproportionately affect low-income residents, who spend more of their income on food outside the home.

“The reason for that is they’re working families. They have children going to soccer practice or they have activities, and so they’re grabbing a meal quickly outside the home,” Terry said.

Murphy responded to those concerns by saying that the meals tax represents a lower burden for low-income families than a real estate tax increase and that 35% of the revenue generated by the meals tax is likely to be paid by non-city residents.

“We think that this is only going to impact them by $1.25 a month. That’s drastically different than if they’re homeowners and we just reassessed them. That’s drastically different that whether they’re renters and their landlord decides to bump up the rent.”

Funding affordable housing projects has not consumed the county’s budget discussions as it has the city’s. However, the Interfaith Movement Promoting Action by Congregations Together has asked the county to create a permanent housing fund, similar to the CAHF.

At the most recent Board of Supervisors meeting, IMPACT members asked the county to set aside $1.5 million in a housing fund. The demand is part of IMPACT’s ongoing campaign to push the county to address the housing needs of seniors.

“IMPACT has heard the Board of Supervisors say they are waiting for the housing assessment results and strategies to address the need,” said Janie Pudhorodsky, co-president of IMPACT.

Affordable housing is not one of the supervisors’ nine strategic priorities, but the county has set aside $700,000 in end-of-year funds for housing projects.

As of the county’s last budget work session, which took place on March 4, the board had not increased the amount set aside for affordable housing. Board members have been holding town halls with their constituents to get feedback on the budget since then.

Last year, the county supported a Piedmont Housing Alliance project with up to $325,000 from the housing fund. The county has also focused staff time and housing fund resources on Habitat for Humanity’s redevelopment of the Southwood Mobile Home Park.

Albemarle housing planner Stacy Pethia — formerly Charlottesville’s housing coordinator — is scheduled to present a summary of the regional housing assessment to the Board of Supervisors on Wednesday. The board is scheduled to discuss next steps for revising their housing policy at that time.

Education

Both the city and county school boards have approved their budget proposals.

According to its Feb. 21 meeting, the Charlottesville School Board’s proposed budget for fiscal year 2020 include a 5.53% increase to the general fund, a 0.97% increase to the special revenues fund and a 4.75% increase overall.

The board unanimously voted on $88,055,130 as the total number for fiscal year 2020.

Non-discretionary expenses and contracts in the proposed budget include a health insurance increase of 8%. Grant-funded programs like AVID, Extending the Bridges of Literacy and WALK support will be maintained with the current budget proposal.

Other non-discretionary expenses involved pay raises to eligible teachers and staff along with moving pay scales impacted by Living Wage for custodial, instructional assistants and nutritional staff.

Some items were reduced or cut from the recommendation based on preliminary funding estimates that were provided by city officials. The estimates indicated the need to reduce the school budget funding request by $500,000.

Among the items struck were the additions of an AVID, math and ISTEM teacher.

“To have to take anything away from this is truly unfortunate because of the focus on inequities in our community,” School Board member Jennifer McKeever said during the meeting. “The math specialists, the ISTEM teacher and the AVID program all support the children who need it the most. I appreciate the hard decisions that the staff have had to make, so thank you for that.”

“I look forward to continued advocacy on these positions, and kind of trying to define what equity looks like in our community for the next year plus through this budget,” she added.

Meanwhile, Albemarle’s combined input from various actions, such as a School Board retreat, survey and superintendent listening tour to present its budget proposal.

Top issues that were identified for funding priority included competitive salaries to retain teachers, increasing student health and wellness services, including security measures within the buildings and increasing career readiness opportunities, like internships for high school students.

Revenues for the next fiscal year are projected at $195.3 million

Albemarle schools spokesman Phil Giaramita says that some of the numbers have changed because of refinements that Superintendent Matthew Haas has made. He attributed another reason to the fact that the revenue numbers, which were estimates back in February are a little firmer now.

The board proposed changes involved a decrease in Voluntary Early Retirement Incentive Program, which would save about $86,000 Among some increases were health and dental insurance.

Both teacher and classified salary increases account for about $2 million and $1.3 million, respectively.

Staffing increases due to enrollment growth account, increased special educational staffing and the Western Albemarle High School addition operational impacts total at nearly $2 million.

Advancing strategic objective goals for the Advancing Horizon 2020 strategic plan totals to nearly $3 million.

Parks and transportation

A joint project is one of the largest in the parks budgets for both Charlottesville and Albemarle. About $2.9 million has been allocated for work in Darden Towe Park, which is administered by both localities. Charlottesville’s share of the project is about $929,000.

Capital projects for the 113-acre park along the Rivanna River near Free Bridge include athletic field improvements and lighting. Lighting fields at Darden Towe have been under discussion for several years.

In the city, the overall budget for parks and recreation, excluding a separate line item for Meadowcreek Golf Course, is $11.5 million, which is up from $11 million in the current fiscal year. Albemarle, which categorizes its parks budget differently than Charlottesville, has a planned increase to $3.3 million from $3.1 million.

Albemarle’s budget features $30,000 for a master plan for Charlotte Y. Humphris Park in its urban ring. The 25-acre facility on Whitewood Road is largely wooded with about 1.5 miles of trails, a gazebo and no parking. There also is a gap in the sidewalk and a bike lane on Greenbrier Drive between the park and Commonwealth Drive.

Additionally, the county has allocated $2 million to launch work on Biscuit Run Park. The money comes from a capital improvement program allocation for a trail park at the Hedgerow property near the intersection of U.S. 29 and Interstate 64. This change was made after the Atlantic Coast Pipeline project stalled. The state’s agreement with a group of energy companies that includes Dominion Energy included an allocation of $5 million for Biscuit Run once the Federal Energy Regulatory Commission gave the $7 billion natural gas pipeline a final notice to proceed. That has not yet occurred, as legal objections have halted the work.

In one of his final acts as governor, Terry McAuliffe announced a 99-year lease of Biscuit Run, the site of a subdivision that then became the site of a state park, to Albemarle at no cost. The move was made with a goal of getting the park open as quickly as possible. Along with being Albemarle’s largest park, the 1,200-acre Biscuit Run is central to connecting various multiuse trails in the city and the county.

A project administered by the Thomas Jefferson Planning District Commission would create a trail hub linking trails from and adjacent to Biscuit Run to the city at 5th Street Station. Charlottesville’s capital improvement plan budget also includes $250,000 for parkland and trails acquisition and development.

Along with bike and pedestrian projects, Charlottesville has allocated about $2.5 million for funding for Charlottesville Area Transit, up from about $2.4 million in fiscal year 2019. As the methodology for funding has changed and it will continue the same level of service, Albemarle’s contribution to CAT is set to decrease by $135,000 in the next fiscal year to about $1.04 million.

CAT ridership has been in decline for multiple years, decreasing from 2.4 million rides in fiscal year 2013 to 2 million in fiscal year 2018.

Albemarle will use JAUNT to increase connectivity between Charlottesville and Crozet with a budgeted $79 million for the Crozet Connector, which is set to launch in August. The service is expected to operate from 6 a.m. to 7 p.m.

What’s next

Charlottesville set its meals and lodging tax rates at Monday’s meeting and held the first readings on its budget and the real estate. The Council is set to meet briefly on April 8 to finalize the real estate tax rate and approve both it and the budget.

On April 16, the Board of Supervisors is scheduled to adopt a budget and tax rate for the next fiscal year. The revenue the schools receive from the county will be finalized by then.

On April 18, the county School Board is expected to hold a budget session to balance its budget. It will meet again on April 25 to formally adopt the 2019-2020 school year budget.