Charlottesville’s new City Council will immediately face tough choices next year as they reconcile their existing strategic goals against a budget with projected expenditures outpacing revenues.
Although city staff projected a $2.1-million gap between revenue and expenditures for the fiscal year that begins July 1, city budget director Leslie Beauregard said those numbers are preliminary.
“This is the time of year where things happen really fast and things are constantly changing,” Beauregard said. “We’ll be working in the months of January and February so we can get you a balanced budget in March.”
Thursday’s two-hour meeting was the first pass at comparing the council’s wish list to economic reality. No final decisions were made at the work session.
Beauregard said she expected a $1.5-million increase in revenues due to a very slight rise property values as well as revenue from new construction.
However, city staff projects that funds from other sources, including payments from state government and Albemarle County, will decrease.
There will be about $600,000 less in one-time revenue and less money coming from licenses, permits, and revenue from the city’s recreational facilities.
“We aren’t seeing the daily admission revenue at the Carver Recreational Center that we had expected,” said parks and recreation director Brian Daly. “We have adjusted our revenue budgets downward.”
Beauregard said the shortfall comes before some of the council’s new priorities are put into the budget. These include creation of a downtown workforce development center, addition of a full-time urban design planner, and additional funds to pay for a replacement for the Belmont Bridge.
The city is evaluating feedback from a November meeting that asked the public what amenities they would like to see in a replacement of the bridge.
“The final cost will depend on what the definition of ‘enhanced’ is,” said Jim Tolbert, director of the city’s department of neighborhood development services.
“One of the things they’ve recommended is shortening the bridge, which is going to help us get the construction cost down,” he added.
Another potential priority would see creation of a deputy director and two other new positions at the Charlottesville Redevelopment and Housing Authority. That was one of the recommendations given to the council at its meeting earlier this week.
Councilor Kathy Galvin did not support that priority and suggested that the request be scrutinized further.
“It does concern me that we would fund positions without any assessment of their budget,” Galvin said. She suggested dusting off a plan to create a development company to raise revenues for the position through redeveloping the existing sites.
However, other councilors said they supported some assistance for CRHA until such a company could be created.
“Because we’re not expecting returns from [the Charlottesville Development Company] for at least five years, I don’t think we should do that instead of looking at what they needs of the housing authority,” Councilor Kristin Szakos said.
Another priority with unknown costs is the West Main streetscape, which is being formed through a $340,000 planning study by the firm Rhodeside & Harwell.
“There’s the investment in whatever we end up doing with the streetscape which would be a capital cost initially,” Tolbert said. “What types of services do we envision having to provide with a new West Main Street?”
Another question to be answered is whether Council wants to do more small area plans such as the West Main study.
Councilor Dede Smith said the council should wait before conducting another plan, given that Rhodeside’s work is ongoing and the Strategic Investment Area plan recently wrapped up.
Galvin said small area plans will help the city grow its housing stock and create jobs. She asked money be included in the capital budget to do one more in the coming year.
However, Smith pointed out that there is no identified source of funding to pay for any capital improvements that are recommended in the studies.
“We shouldn’t be doing studies if we don’t reasonably have the money to make these improvements,” Smith said.
Council reached consensus to continue the real estate property tax at $0.95 per $100 of assessed value. However, they also discussed ways to raise additional revenues.
Each additional penny on the city’s tax rate would bring a projected $546,531 in revenue. In comparison, a penny increase in the meal’s tax would bring in an additional $2 million.
Galvin said she would like to find alternate forms of revenues, such as parking meters on West Main Street.
Jim Tolbert, the city’s director of neighborhood development services, said a 2008 study commissioned by the city said adding parking meters throughout the city generate between $600,000 and $700,000 a year in revenues.
Jones said adding meters would be met with resistance.
“There’s nothing we do that isn’t met with resistance,” Galvin noted.