Learn more$50M affordable housing bond request called crucial to anti-racist effortsCouncil addresses tax grant program, reviews capital programs
The (very preliminary) numbers are in.
The Charlottesville City Council on Thursday received a presentation on the Capital Improvement Program budget for fiscal year 2020.
Currently, the city has $85.2 million of general obligation bonds that are being paid through taxes. In its current state, the city will approach its policy of not exceeding a 9 percent ratio of debt service to general fund revenue. If the ratio exceeds 10 percent, it starts to affect the city’s standing with credit rating agencies, Assistant City Manager Leslie Beauregard said.
An item that loomed large over the proposals was a $50 million bond request for affordable housing. In August, the Charlottesville Low-Income Housing Coalition presented the number as a starting point to reverse the effects of past policies that led to the destruction of African-American neighborhoods in the name of urban renewal. The money would go toward redeveloping the Charlottesville Redevelopment and Housing Authority’s units while the city mulls a long-term housing strategy, CLIHC said.
If a $50 million bond is floated, for example, it would result in an 8-cent real estate tax rate increase, the necessity to find new sources of revenue, or the need for reductions in other expenditures, city staff said.“Borrowing $50 million … there aren’t any scenarios where we can do that within our debt limits right now and our cash limits, and so it has to be a combination of factors if we’re talking big money,” interim City Manager Mike Murphy said.
Although those discussions need to be made, Mayor Nikuyah Walker said, the city first needs a better handle on priorities and how much it would cost first.
“I wouldn’t want to cause alarm to the community, thinking we’re going to start cutting where we may not need to cut,” Walker said.
Additionally, there are unfunded projects that cost about $108.8 million, some of which include deferred maintenance. Those items include replacing the Dairy Road bridge over the U.S. 250 Bypass, replacing the Onesty Family Aquatic Center play structure and a backlog of heating and cooling projects in city buildings and schools.
“Over time, we probably will pay for not funding these,” Beauregard said.
Councilor Heather Hill asked for more details on the list of deferred maintenance to aid in prioritizing which ones to fund. Beauregard said that would happen as departments finalize their requests.
Another possibility to fund some maintenance projects sooner rather than later and address the affordable housing proposal would be to reprioritize some funded projects in the CIP for the current fiscal year or to take a fresh look at some previously authorized bonds that have not yet been issued.
Councilors agreed, noting that a possible $20 million bond, without considering any other changes to the CIP, would exceed the 9 percent target but would be within the 10 percent cap.
“When we do have that housing meeting, one thing I’m very interested in is figuring out what strategies we can use to do the $50 million for public housing redevelopment,” Councilor Wes Bellamy said.
A meeting with housing representatives and the City Council likely will come before late November, officials said.
The process begins in earnest Sept. 24 when department requests are due to the city’s budget office. The Planning Commission is slated to begin considering the CIP in December, and it is scheduled to go to the council in March as a part of the proposed budget for fiscal year 2020.
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