Board of Supervisors Regular First Meeting   10/4/2023

Good afternoon, everyone, and welcome.

It's my pleasure to be physically present and call to order this regular October 4, 2023 meeting of the Albemarle County Board of Supervisors at 1 o'clock p.m.

in Lane Auditorium.

The supervisors who are present are Supervisor Ned Gallaway of the Rio District, Supervisor Ann Mallek of the White Hall District, Supervisor Bea LaPisto-Kirtley of the Rivanna District, Supervisor Diantha McKeel of the Jack Jouett District, Supervisor Jim Andrews of the Samuel Miller District, and myself, Supervisor Donna Price of the Scottsville District.

A quorum is present.

The County Executive, Mr. Richardson, is returning from travel and is not present today.

Deputy County Executive Trevor Henry is joining us here on the dais and is the acting County Executive.

We also have our County Attorney, Mr. Steve Rosenberg, and our Clerk, Ms.

Claudette Borgerson.

I'd also like to thank our Albemarle County police officers who are present today, Sergeant Joshua Wright and Officer Matthew Riley.

Thank you if you would now join us in a moment of silence.

All right board, that brings us to item number four, adoption of the final agenda.

I am not aware of any proposed changes to the agenda or the consent agenda.

Checking the dais, that appears to be correct.

All right, we have a motion from Supervisor Andrews and a second from Supervisor Malek.

Ms.

Mallek?

Yes.

Ms.

McKeel?

Yes.

Ms.

Mr. Andrews?

Yes.

Ms.

LaPisto-Kirtley?

At this time we can go to brief announcements by board members.

Yes, I do have several.

The first thing I want to remind folks about is that today at 2-20 there is an emergency alert

So it might be a good idea.

Well, actually, Supervisor McKeel, we talked about that.

I'm actually going to pause the meeting at 2.20.

And then we'll just continue.

That's good.

Just trying to keep us moving along.

Thursday evening of this week, the school system at Center One, and you know Center One is at the old Comdile Building.

I think most of us know it as the old Comdile Building.

The school system is having a multi-language technology night.

and it's intended for ESOL learners and families, English as a second language, families, to be able to get connected to digital resources from Albemarle County Public Schools.

So I just wanted to make that announcement, that is this Thursday, tomorrow, from four to six, at Center One, which is in the old comm dial building, and it's sponsored by Albemarle County Public Schools, it's a great resource.

The other item I wanted to or another item I wanted to mention is that Java Jefferson area board for the aging is planning a one-day only support for our community on making a will Which we know everyone should have so if you want to note down November the 8th

from 9 a.m.

until 3 p.m.

at Jabba's office on Hillsdale Drive, you can go by and they have someone from Williams Mullen Law Firm to help you write a will.

Another benefit for the community, which is great.

Let me just see here a minute.

I have a number of things here and I'm moving through them.

I noticed that something that came across my desk this week that I found very concerning was that 41 states out of our 50 have been identified as unattainable, unaffordable for families for childcare.

41 out of our 50 states.

In Virginia, the statistics show that the median income for married couples in Virginia is $126,000.

This is statewide, which means that a center-based child care for an infant would use 12% of the family's income.

For a single parent family, their median income is $36,000.

which means that center-based childcare for an infant would use 43% of family income, which is a very concerning statistic.

We all know how important childcare is and we hear a lot at our board level about the unaffordability of childcare even in our community.

So I'm just bringing this up as a reminder as we're talking to our legislators and the general folks in the General Assembly, it would be a good idea for us to remember childcare and the importance of childcare for our community.

Alright, thank you.

Thank you.

Get out your coffee because I have quite a few, but I'm going to put some off until the end of the meeting so as not to hog the whole day.

Important deadline, October 31st, for new participants to apply for the real estate tax relief for elderly and disabled.

Forms can be downloaded or requested by phone to be sent by mail.

Also, applications can be begun in a phone interview with finance staff and they will assist with completing, answering questions as you go and completing the application.

then verification forms and signatures can be done in the office to complete the process.

Please call the finance office at 296-5852 or 711 for hearing and speech impaired services.

So please share that with your friends and neighbors who might benefit from this very helpful program.

This weekend, October 7th and 8th, Crozet Arts and Crafts Festival and they'll also on Sunday be a Lumos celebration completing their installation of broadband in their region out there in Crozet.

The LEAP Virginia organization is announcing a time to prep your home for cold weather and their website LEP-VA.org has all sorts of good tips about ways to get yourself ready, weatherize your property, and

Be ready for cold weather if it ever comes.

North Fork Rivanna River TMDL implementation plan is underway with the Department of Environmental Quality and they're seeking input from landowners and residents who live along the North Fork River.

Anybody who needs to get connected to that process, please contact me and I will make that happen.

On September 27th, our local MPO met jointly with the Shenandoah, Augusta, Stanton Augusta, and Waynesboro MPO and there's lots of detail that I want to share at the end of the meeting about that.

But they are the only two MPOs in the Commonwealth who meet annually together and work on projects together and I'm very proud of that.

This past Thursday was the Rivanna River Basin Commission's eighth annual conference.

Speakers representing federal, state, and local agencies described their roles and the implementation process for regulation of PFAS, the chemical that is under study, and also to remediate its impacts on drinking water in all of our systems.

Upcoming at 11 a.m.

right in this room will be the ceremony for honoring Veterans Day.

So please consider putting that on your calendars and come and attend here.

It's a wonderful gathering of remembrance and tribute to our veterans here.

And now for the fun.

This past Friday was the two of the day 10th anniversary since the opening of the Crozet Library.

This is the new Crozet Library.

They had had three other installations since the 1960s, and often the books were moved by wagon.

So that's where the idea of the Book Brigade came, from the Women's Club to the Co-op and back to the Dupault.

And we had a celebratory Book Brigade moving several thousand books only, not the whole component, two days before.

the 30th of September in 2013.

But I have a couple of statistics I would love to share because when the library was being considered by the board, and I was in the usual suspects corner where Jody's sitting up there right now, there was a big argument about, well print is dead, so why are we bothering with building a library?

when libraries are things that bring people together and provide to every person of every level of resources what they need from computer training to access to jobs to everything.

So I just want to share some figures with everybody so you know that that idea is not true.

In just the Crozet Library in the last 10 years, 1,082,000 visitors, over 2.5 million books checked out,

The library collection now has gone from 35,000 items at the depot in the old tiny space of less than 1,000 square feet to 69,900 items today and they're growing all the time.

They've held over 3,100 events for all ages attended by almost 80,000 people in the 10 years.

9,400 community groups have used meeting spaces.

62,000 people have accessed the internet through library computers.

They're always in use whenever I'm in there.

And we went from two to 12 stations, which is spectacular.

And over 12,000 new library cards have been issued in that last 10 years.

And I did ask David Plunkett, who is the JMRL director, what he had for Northside Library, because I was secure.

And I'd already gotten questions from people in my neighborhood about that.

So here's the scoop on Northside Library in the last 10 years.

1.99 million visitors, but David says it's really over 2 million because the counter was broken for a few days.

4.7 million items checked out, an average of 431,000 per year.

So this is our biggest county library action.

Over 100,000 items currently on the shelves, 31,000 community meetings held,

4400 programs attended by 113,000 people, 150,000 people signing in to use library computers, and over 19,000 new cards created.

I'm very proud of our citizenry.

I think this shows that people at Albemarle are going out of their way to use the resources provided.

And thank you to everybody who's involved with Strengthen Air Library System.

And I will stop there.

Thank you.

Thank you very much.

I'm just going to focus on one of the things that I attended last week, which is the Rivanna River Basin Conference.

Very, very informative.

For those of you that love numbers like I do, I'm going to get a little wonky here.

They talked about other components in the water, but the main one that we're all familiar with, PFAS.

They talked about the maximum level with contaminant and drinking water.

So the maximum that they will accept now for PFAS is four parts per trillion.

So let me just break it down that one part per trillion is the same as one inch in 16 million miles, or one penny in $10 billion, or one second in 30,000 years.

That's one part per trillion.

They're suggesting four parts per trillion.

They'd like to get lower, but that would be under the MCLG guidelines, which are not enforceable.

So the only thing that's enforceable right now are the MCL.

Just to let you know that PFAS contaminants are a real concern, are a real problem.

And as much as we can keep it out of our waterways,

That's what we need to do, because this is something dangerous.

A couple quick past items, just to acknowledge and thank Supervisor Mallek for a great little talk at the Crozet celebration of the library.

And then mention that both Chair Price and I were at the, maybe others, at the Simpson Park event on Saturday, which is done across from the ANSI.

Very well done and very well attended, focus on all the services available to people in the community and a lot of education and I come away from that event every year learning more and really being glad that I took the time to go down there.

Mr. Henry was also there.

Anyway, I would be remiss without mentioning that Batesville is having their Apple Butter Festival this coming weekend, so both the 7th and 8th.

And then, again, back to thanking my colleagues here, the supervisors.

Supervisor McKeel provided us with this community climate outlook for Albemarle County, which was produced by the Mid-Atlantic Regional Integrated Sciences and Assessment out of Penn State, but it's in collaboration with William & Mary, Virginia Tech, and others, funded by the National Oceanic and Atmospheric Administration, NOAA.

I find it really

Thank you, Chair Price.

I would like to take a moment to acknowledge two Albemarle County residents who have been serving on my Rio 29 CAC.

Their terms came to an end at the end of September.

One is Peter Thompson, who is the current Executive Director of The Center, and he will be retiring I believe December, if not already.

But it's coming up, I know, that his service there.

But The Center, when it moved over off of Belvedere Drive, we all know Peter can be a bulldog in many ways when he's advocating for things, but he joined the CAC with transportation and transit on his mind, specifically for the residents that are served by The Center.

and the center when it moved over there really transitioned from senior center to more of a different type of community involvement.

So I've appreciated his time and his service on the CAC since he was there representing, since he was in the CAC.

So I'm hoping the new executive director will want to also perhaps join us on that CAC.

The other is Nancy Hunt.

Nancy Hunt has been on the CAC since its inception when they broke off into the Rio 29.

and Nancy comes from a background she's from up north but she served on planning commissions and other localities and Nancy's not afraid to speak the truth with some candor and frankness and she certainly was doing so I remember meeting her for the first time when I was running for this position

when I went and attended a CAC meeting and the supervisor at the time, supervisor Sheffield said, well, you need to meet Nancy.

And we met walking out of that meeting to the parking lot.

And it's been a great relationship ever since.

Her ability to, or her

Her seeing the importance to prioritize planning, smart planning, her ability to work on the RIO 29 small area plan and adherence to form and the form-based code and her support for that.

She just brings a lot of good experience and background to her service on the CAC.

But she also, as she said, I'm no spring chicken, so it's time for some other folks to step into these positions.

I expect she'll still be involved in other capacities, but I would certainly be remiss if I did not acknowledge my appreciation and gratitude for all the time she has put in.

to the Rio 29 CDC to help make the Rio district better from a planning standpoint and from an everyday standpoint holding us all to account to our current ordinances, etc.

Thank you.

I have a number of things.

I'll try to be quick.

Early voting is open.

I voted today.

Early voting through Saturday, November 4th.

The general election is on Tuesday, November the 7th.

I'm not checking little and the sky is not falling, but if you're not aware that the entire General Assembly is up this year after redistricting, then the importance of voting in this election has been lost on you.

And I want to encourage you and all your friends to get out and vote.

It's really important.

Not just the General Assembly, but we have countywide offices, county magisterial district offices, and it's really important that people do their civic duty and get out and vote.

The Virginia Film Festival is about to start at the end of the month, the 25th through the 29th.

I believe tickets go on sale starting on Friday.

We recently had a pretty significant Chamber Council event, Eggs and Issues, about legislative matters.

That was on the 27th.

I'm going to be the third supervisor to talk about the Rivanna River Basin Conference.

What I think was significant, really there are several things, two of which I want to mention.

The first is the work that Supervisor Ann Mallek, who chaired the entire event, put in to make it such a wonderful event.

and the other is that four of the six supervisors were able to attend.

We had by far the largest local elected delegation present for that conference and that speaks highly to the support that we give Supervisor Mallek, the work that you did and to protecting our environment.

Sunday at 11 o'clock, the 8th of October at St.

John's at 1569 Gordonsville Road.

There will be a historic marker that will be unveiled.

Supervisor LaPisto-Kirtley and I, I know we're planning on being there.

And in this room on the 17th of October at 6 o'clock will be an all CAC meeting.

It's the one opportunity each year that we have a chance to get everybody on these community advisory committees together.

So it's really important that everyone work towards that.

And then thank you again Supervisor Mallek for mentioning the Veterans Day event that will take place here.

Sensum Park was a great event.

Supervisor Andrews, thank you for mentioning that.

The library, these are things that make our community livable.

These are the things that make our quality of life sustainable and substantial and I really appreciate the work that everyone, Parks and Rec, the library system, everyone else to put this together.

It's a historic marker at St.

Oh, St.

John's.

Yeah, okay.

I got it now.

All right, and we just recently learned about that a couple of days ago.

Yeah, we just we just found out about it and the whole board will be getting information today or tomorrow about that.

One thing I did forget, and Mr. Andrews reminded me, that the White Hall Realtons will be doing their apple butter on Saturday the 28th.

It's great that these gatherings are beginning to happen again now that everybody's a little more confident to come out of their houses, so we look forward to a big crowd.

And in that regard, you may pick up on my voice a little bit.

I had both COVID and pneumonia two weeks ago.

Folks, we're going into cold weather.

Get your flu shots, get your pneumonia shots, get your COVID booster shots.

RSV is another one out there.

For those of us who are 65 or older, I'm in that category.

It's really important that we do this not just to protect ourselves,

but protect the people around us.

We can now move to item... Donna, can I just add because this is actually factual.

Well, between the shots and wearing masks in public settings, the first major year of the pandemic, we had no flu outbreak because everyone was protecting themselves and in doing so, protecting others.

Thank you.

We have two.

The first one is the proclamation recognizing Digital Inclusion Week.

And for anyone who is here for the proclamations, I do ask that you remain in the auditorium until we've completed both of them in order to provide respect to people for the second proclamation.

Thank you very much and it's an honor for me to make this presentation.

Anyone that uses a computer or an iPhone, you're welcome.

Whereas broadband services play an important role in civic and cultural participation, lifelong learning and access to essential services for Albemarle County communities and nationally, nearly half of all people who are

Digital Connected are people of color and less likely to have a broadband internet connection or a desktop or laptop at home.

And whereas digital equity ensures all individuals and communities have the information technology capacity needed for full participation in our society, democracy, and economy.

And whereas the COVID-19 pandemic highlighted how the digital divide impacts our residents

particularly our racially and ethnically diverse residents and communities.

And access to a reliable, affordable internet connection is a social determinant of health with higher COVID-19 mortality associated with a lack of internet connection.

And digital skills are a gateway for career advancement

and whereas the Department of Housing and Community Development's broadband office has been a national leader in funding and supporting broadband expansion

projects throughout the Virginia Telecommunications Initiative, placing Albemarle County in the position of achieving universal broadband access by 2025, and whereas Albemarle County is committed to closing the digital divide for its residents through the work of the Broadband Accessibility and Affordability Office, Albemarle Broadband Authority, Albemarle County Public Schools, and partner organizations

like the Jefferson Area Board for Aging, the Jefferson Madison Regional Library, the Blue Ridge Health District, Piedmont Housing Alliance, and other members of a coalition that includes representatives from the University of Virginia and the City of Charlottesville, all working to launch programs that address barriers to digital equity, including distributing Wi-Fi hotspots, providing digital skills, training, distribution,

distributing laptops and tablets and coordinating the development of a digital equity plan.

Now, therefore, be it proclaimed that we, the Albemarle County Board of Supervisors, do hereby recognize the week of October 2nd through 6th, 2023 as Digital Inclusion Week in Albemarle County and encourage residents to join in raising the awareness of advancing digital equity

Ms.

Mallek?

Yes.

Ms.

McKeel?

Yes.

Ms.

Ms.

Aye.

Thank you.

Good afternoon.

And how are you?

I am quite well.

Thank you all very much.

Thank you, Chair Price.

Thank you, Vice Chair LaPisto-Kirtley.

Thank you, Supervisors, for this recognition.

I want to point out, I hope it's not lost on anybody, that so many of the names of our coalition have already been mentioned during this meeting.

That's because these organizations have been tirelessly working towards these efforts of digital inclusion in their own ways for a long, long time.

I also want to highlight this Digital Inclusion Week is organized by the National Digital Inclusion Alliance and they chose as the theme Building Connected Communities and I can't imagine a more evident way of building a connected community than achieving universal broadband access across all 726 square miles of Albemarle County and I'd like to highlight the work behind that comes

for years before our office was formed from my director, Mike Culp.

So I'd just like to recognize him and the fact that we wouldn't be reaching this goal without all of his efforts over the years.

So thank you so much for this recognition.

Thank you.

And I'd like to give each of the supervisors an opportunity if they would like to speak.

You're exactly right, and we really appreciate the hard work.

In many ways, broadband access is the electrification, the modern effort that we spent years and years ago to electrify everyone in the country to provide electrification.

And this is the modern twist on that.

Everybody needs it.

And I want to just say personally, thank you for coming to my CAC.

and doing such a great job of explaining what we were doing in the county, in the urban area as well as the rural area.

Thank you.

Thank you.

Mike, would you please stand up so we can all cheer for both of you together?

And I want to thank both of you.

And Jason, you are the person who has taken on the role of fixer-upper person and the connector because somehow you have the magic in your office to be able to make things happen when

I can't and perhaps others have better success with the utility providers than I do, but it's really wonderful to have someone who can receive concerns from people.

I mean you just connected somebody or provided information this morning for someone in Greenwood who's seen all the connections.

happened around her, but she wasn't included in trying to figure out the answers to those kinds of things when everybody's so anxious to get that fiber to their house.

It is just a really great effort.

In thinking back, we had a study done for the county by some consultant back in the 2010 era, and the estimate was 30 million dollars to do all of what we are now trying to do.

Hindsight being what it is, we probably would have been well off to do it, but we didn't because the recession was in full boom and that extra burden was something that the majority did not want to take on.

So anyway, step at a time.

Thank you.

I think I've said everything in the proclamation but I did want to say I so enjoyed working with Mike and with Jason because they are there for the community and we've accomplished so much together especially in the rural areas that's where it's hard in the rural areas and you guys are just tirelessly working and I personally appreciate all the effort you've put into this to make all of this happen.

Thank you.

Yes, I add my gratitude to Mike and Jason in particular.

And since they've been thanked, I also want to make sure I mention that we have a couple of citizen representatives on the Albemarle Broadband Authority, Bucky Walsh and Waldo Jaquith, who have worked tirelessly on trying to spread internet throughout the county.

There is more to say on that, I guess, coming up and the amount of penetration is phenomenal, but also the efforts of the BAA to make sure that it's accessible to everybody.

Thank you.

I'd like to echo all the comments of the appreciation of the team, the staff, getting everything accomplished, especially Supervisor McKeel's appreciation of becoming the CAC.

I know that my CAC also appreciated that presentation that day.

You know, I think it's evident that in the rural areas and getting broadband access out there is important, but as it says in the proclamation and pandemic, also echoing what Supervisor McKeel has said in the past,

The folks that live in the urban ring, access is not just the geography of where you live.

So for the people that live in the urban ring where you would assume the infrastructure is there and in place does not necessarily guarantee that you have access to it.

So I'm very appreciative of all the efforts that you're doing to make sure that for other access issues that we can help overcome those so that everybody can get to it.

It's not just about entertainment and connecting.

It's also about opening up other opportunities, whether it's education or business prospects or whatnot.

Thank you.

Largely echoing the comments of my fellow supervisors, consumers look for three things, quality, service, and cost.

And while we as a county do not provide the service,

What people have done, Mr. Nefuentes, Mr. Culp, Mr. Walsh, Mr. Jakewith, on the broadband authority, we have two parts.

We have the Albemarle broadband authority, which helps bring broadband to locations.

And then we have the broadband affordability and accessibility office, which helps provide the service when that broadband isn't at the quality that we expect.

and we have programs that help those who are financially challenged to be able to afford to have broadband.

Following up on Supervisor McKeel, it wasn't until the 1920s that indoor plumbing became common in urban areas of America, not until the 1930s that the Rural Electrification Act took place.

but what our our broadband authority and broadband office have done over the last few years has either brought or has contracted to bring broadband to literally, well virtually there are a few places that might not make it, every place in the county and in our 726 square miles with mountains and hills and valleys and distances it's an incredible accomplishment that y'all have done but also there have been so many times over the last four years

that people have had problems with the delivery of the service once it's been installed.

And the actions that you two gentlemen take to escalate those concerns and get resolution has been as instrumental as the actions that everyone has taken to bring broadband into the area.

Well, we appreciate the board's support.

Thank you.

All right.

I mean, we have the proclamation if you'd like to come up and receive it.

We try to make it very difficult to find a way up here.

Board, we can now move to our second proclamation, Proclamation Recognizing October as Wine Month.

Proclamation Recognizing October as Wine Month.

Whereas from modest beginnings in colonial times, Virginia has become a nationwide leader in the wine industry, now sixth in the nation in wine grape production, with more than 10,000 tons harvested each year, 2021 and 2022, and more than 2 million visits to Virginia wineries annually.

and whereas wines from the Commonwealth, including those from Albemarle County, are winning state, national and international awards and recognition for their elegant qualities imparted by skilled vintners and Virginia's terroir, with Albemarle wineries being featured in the 2023 Governor's Cup case and receiving numerous gold medal wine awards.

and whereas many of Albemarle's 44 vineyards, most with wineries on site, are run by families as strong agricultural enterprises that can be passed on to future generations, providing economic benefit for winery owners and employees and for other Albemarle ventures supported by the patronage and purchasing power of winery visitors, including farming of heritage and heirloom crops, restaurant cuisine committed to selling local where possible, and tourism focused on sustaining the land and the local culture.

and whereas Albemarle County values our winery stewardship, keeping their land producing and protected for agricultural uses, preserving scenic vistas, historic sites, and other amenities which make Albemarle wineries ideal places of entertainment, culture, enjoyment, and social engagement that enrich Albemarle County's quality of life and culture of hospitality.

Now therefore be it proclaimed that we, the Albemarle County Board of Supervisors, do hereby recognize Albemarle County wineries and their contributions to the Virginia wine industry's success and encourage county residents and visitors to visit a winery or purchase local wines through local restaurants and shops during October 2023 Virginia Wine Month.

Signed this fourth day of October 2023 by Donna Price, Chair.

Second from Supervisor LaPisto-Kirtley.

Ms.

Ms.

McKeel?

Yes.

Ms.

Ms.

Aye.

Thank you, and Mr. Bernard, welcome.

Good afternoon, how are you?

Thank you, Madam Chair and members of the board.

This is business attire, so it is a respectful attire as a winemaker, but I bring thanks.

As the president of the Monticello Wine Trail, I also sit on the board of the Virginia Wineries Association, so I work very closely with Governor Youngkin.

And we know that farming as a cultural endeavor is fantastic, we get to do it, but we can't do it alone.

and that the support on the state and the federal and then obviously on the county level is incredibly important not only for the sustainability of our industry but the future growth thereof, right?

And we want to do it responsibly, you know, I'm from South Africa, I make my home in Virginia because me and a lot of other folks from other parts of the world realize the quality of the wines and the products being produced in this area and the fact that

The next 10, 15, 20 years, the ceiling is high.

So we're working very closely to make sure that we, number one, respect the land, we leave it in a better place than we found it, that we work with our neighbors, that we're good community partners.

We're on the cutting edge of research.

The wine enthusiast has just named Charlottesville and the Monticello AVA alongside France, Italy, Australia and South Africa as one of the five top regions in the world for visitation and for wine quality and if you think of those areas have been making wines for hundreds of years the fact that we've been doing it since the 1970s I think is a testament to not only the legislative sort of backing that we get but the community thereof

And that's an exciting time to do.

The other thing, it obviously brings in revenue dollars, it puts people in hotels, it fills restaurant seats.

So I think agriculture as an entity is fantastic.

So I do bring regrets because it is harvest season, so all my colleagues are stomping grapes and making wine, but they say thank you.

and we appreciate the recognition and we look forward to working with you closely over the next couple of years to promote this industry and propel it even further and forward.

Thank you and I know each of the supervisors will have some comments.

Just to say thank you and we enjoy drinking your products as well.

Thank you.

Well thank you and I was shocked in the preparation for this to learn that we were at 44 because it seems like just yesterday we were at 28 so a lot of new growth and having not tasted all of them in all the new places I have a lot of work to do but I always claim Barbersville as well because even though the winery may be in Orange County the grapes

I think we should add to our proclamation that all of us should attend every single winery and taste the wine.

I'm doing my best.

I don't know about you.

I think a lot of us are doing our best, actually.

But thank you very much, and I hope it wasn't lost on the audience to hear that wine enthusiasts, the magazine, were named one of five in the world, were a contender for one of five in the world.

to be the best wine growing region, so.

I just have to add my congratulations and appreciation for the Monticello Wine Trail for the representation here of this industry.

Yeah, 44.

Thank you.

Thank you also for for being with us today.

I appreciate your point especially about not just that the wineries are employing local folks but that it does contribute to the local economy.

You know when we talk about economic development a lot of times we can just focus in on the growth area or the development area but the fact that we can have agricultural land that is producing and participating in a rural economy here in Albemarle

just shows the range of where we're at and it helps us to achieve what we have stated in Project Enable.

So I appreciate you noting that and bringing that up today.

Thank you.

Following along with my fellow supervisors, when I was in college in Georgia, Georgia has 159 counties, second only to Texas with the largest number of counties in the

United States and I had a map of Georgia and everywhere I went I would take a different route.

I made 157 counties before I lost the map somehow and now I don't know which the two are but I do have my wine map and I am checking them off as I go to visit.

You know we have cideries, breweries, distilleries, even meaderies in Albemarle County but clearly the crown jewel of agritourism is our wineries.

The views, the wine, everything that goes along with it and so we really appreciate what y'all do to help enhance the quality of life both in terms of economic as well as just fun here in Albemarle County so thank you.

All right board, we're ready to move to item number seven from the public.

Matters on the agenda but not listed for public hearing or on matters previously considered by the board or matters that are pending before the board.

We do have some public hearings later this evening and so if you want to speak to a public hearing matter we would ask when we will have you wait until then but for non-public hearing matters.

All right.

We have both in person and one online.

So during this time, set aside for matters on the agenda but not listed for public hearing, individuals may address the board of supervisors concerning matters previously considered by the board or matters that are pending before the board other than items listed on the agenda for public hearing.

Individuals are allowed up to three minutes to speak per public hearing item.

A sign-up sheet is managed by the clerk's office.

Up to 10 persons may speak during this time.

Community members physically present for the meeting will speak first, and then those who are attending the meeting electronically will speak.

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And if you're participating by phone, press star 9 to let us know you want to speak.

Press star 6 from landline to unmute.

Thank you, Vice Chair Andrews.

Good afternoon.

And please make sure the microphone is towards your mouth.

Good afternoon.

My name is Michelle Wamsley of the Rio District.

I'm also the Chief Advancement Officer of Habitat for Humanity of Greater Charlottesville.

Richard Tremblay, our board chair, joins me here today to advocate for Hickory Street within the Scottsville District as a priority transportation project.

As all of you know, Southwood is a critical public-private partnership.

Habitat is grateful for the county's continuing support of the redevelopment.

Essential to the success of this effort is Hickory Street, which serves as a central spine to the park, the neighbourhood and the emerging community.

It is not only the most important transportation component but also utility corridor which carries both current functioning utilities like fibre optic cable and stressed utilities like asbestos coated water line and sewer.

It needs to be upgraded as part of dispersing traffic throughout the southern neighborhoods, taking pressure off of intersections on Old Lynchburg Road, and providing a secondary north-south artery.

It is a critical component of the alternative transportation network in the southern neighborhoods.

Included in its scope is a 10-foot wide multi-use path which will run from Old Lynchburg Road all the way to Oak Hill Drive.

As such, it will be the primary biking and walking route to the trailheads into Biscuit Run Park.

A CIP contribution and upgrade of Hickory will bring this failing private road into the public system, creating equity and access and opening up Biscuit Run Park to bikers, hikers, walkers, and other users of the park.

As of now, the only entrances into the park are from Route 20, meaning that Albemarle County residents from southern neighborhoods like Redfields and Mosby Mountain need to get into their cars and drive 10 miles to access a park that is quite literally a stone's throw from their home.

Unfortunately, Hickory Street was not built to last and every year Habitat invests tens of thousands of dollars to patch it.

Additionally, the road's maintenance is part of a three-party agreement among Habitat, the Covenant School, and the county, and Habitat has been spending extraordinary amounts to maintain it.

We are currently working with county staff to develop short, medium, and long-term plans to upgrade the road with many of the improvements possible ahead of further sections of redevelopment.

Good afternoon members of the board.

Neil Williamson with the Free Enterprise Forum.

First, I want to thank you for your recognition of Virginia Wine Month.

I do work in the Virginia wine industry.

Steven's been a friend for over 20 years.

He's rather modest.

He's been making wine in the Commonwealth for well over 20 years and is a resident of Crozet.

I wanted to talk a little bit about the report you're going to receive later today is an economic report from Virginia Tech.

It's a lengthy report.

It's very good.

It's appropriate that you receive this prior to going into budget session.

Last week we received information data from the Virginia Tourism Corporation.

We broke that down to Central Virginia and found that the 2022 tourism had a $1.6 billion impact in Central Virginia, representing over 11,000 Central Virginia jobs.

Albemarle had the lion's share, $763.34 million.

I've mentioned this because these are important facts and there was a time, and Ms.

Mallek will remember this, there was a time this board received a quarterly update of financial stuff.

like this data, like the sales tax data that now the chamber puts out that kind of gives you a feel for how things are going, what your tax collections are doing.

It was a 15-minute report provided by the county executive's office and we believe that people pay attention to things that are measured and we found that report to be very helpful just as we find the building report that's in your packet today for information to be exceedingly helpful.

I would ask that this board consider returning to

An economic dashboard, even if it's just a foreign information thing in your packet on a quarterly basis.

I think it would help you as you continue to move through your deliberations and it helps keep focused on the economic vitality of the county and helps us keep track of how we're doing out there.

Thank you for the opportunity to speak.

Good afternoon members of the board.

My name is Richard Tremblay.

I'm chairman of the Board of Directors for Greater Charlottesville Habitat for Humanity and first of all I'd like to thank you on behalf of our entire organization for your long-standing continued partnership with Habitat and the ongoing redevelopment of Southwood which is off to a great start with thirty

private homeowners, market rate homeowners, and by the end of this year close to 50 Habitat home buyers.

Your support is necessary and much appreciated.

The redevelopment and reconstruction of Hickory Street, of course, is the

Lifeblood of the Southwood redevelopment.

It's the main road through the project and critical to the entire project.

But it also will make it a public road, opening it up to the entire community, serving the park, the trails in the park, and also Covenant School, which is on that road.

So the prioritization of that transportation improvement is critical to the success of Southwood and to the benefit of

the whole southern part of the county and appreciate anything that can be done to elevate the priority.

It was a big elevation this year and that's greatly appreciated.

Thank you.

Good afternoon.

Good afternoon supervisors, staff, and members of the public.

I'm Peter Krebs from the Piedmont Environmental Council.

I'm here to watch and I'm very interested to see the discussions around the transportation priorities.

The list is long and the need is urgent and there will be a significant need for really major investment from the county.

We're going to have to pull from every imaginable source and also participate locally.

I'm not going to talk about any particular project.

There's a lot that's worthy there and many of you have heard about some of my favorites already.

Rather I wanted to talk a little bit about process and how it is that we come about determining priorities.

I'd like to encourage you to think not only outside the roadway, I'm always a big advocate for greenways and connections that use stream valleys or

Riverfrontage or other ways to move about, but also to think about other kinds of data, other ways of looking at data.

The report really had me thinking a lot about SmartScale and the methodology is a lot like SmartScale.

Now PC has been a big advocate for data, data transparency, all of that.

We talk about it sometimes when no one else does.

And we're big supporters of SmartScale in general.

We're not at all happy about the potential direction that SmartScale is going to go in or that it looks like it might go in.

I don't think that's a given.

Maybe it can be pulled back and we're doing our part for that but as the county thinks about its transportation priorities, keep in mind that

If the changes happen, SmartScale is only going to be effective for just a few projects.

The county has lots of different priorities that aren't reflected in that.

We just heard a lot about the Hickory Street project.

I'm not sure Hickory Street would score all that well in SmartScale even in

and its previous iteration, yet it's quite important.

So let's be sure to, yes, look at data, but also look at the sort of qualitative elements and also strong community voices as well.

So I look forward to hearing your discussions and thank you so much.

Okay, thank you.

My name is Joe Fore.

I'm a Crozet resident.

I'm here today to offer some comments about the draft transportation list that we've heard a little bit about.

Having served on the Crozet CAC for several years, my view is that the first tier of the draft priority list doesn't contain enough projects that support the needs of Crozet residents, and the projects that are listed on the first tier don't

reflect the community's prioritization as expressed in the Crozet Master Plan.

I certainly don't mean to suggest that any of the projects that are on the list should be abandoned or dropped, but rather that other Crozet projects need to also be elevated.

And I can give the board two specific examples.

The first is sidewalks.

So the Tabor High Street pedestrian improvements are listed as the very last project on the first tier list, number 56.

Now that is certainly, the pedestrian improvements to that area is a critical project given the increased car traffic that will accompany the expansion of Crozet Park's facilities and the development of downtown Crozet.

So that project, Tableau High Street pedestrian improvements should absolutely be higher.

But another critical sidewalk project is missing from the first tier list entirely.

And that is sidewalks along Park Road from Westlake to the Crozet Park.

The absence of sidewalks in that area has been a major reason for opposition to proposed developments like Oak Bluff and others as residents worry about how they can walk or bike to the park safely.

Moreover, it seems to make logistical sense to prioritize that project because as part of the expansion of the Crozet mobile home park, which lies right along Park Road, the developer has agreed to provide pedestrian paths.

So some of that groundwork will literally be laid in the coming months, which should make it easier for the county to complete that.

The second I just want to highlight is shared use paths.

Number 45 on the draft priority list is a shared use path along Three Notch Road from Park Ridge to Star Hill.

Now the Crozet Master Plan does contemplate a shared use path that runs along Three Notch Road from Highlands neighborhood in the east.

all the way to Star Hill in the west where it would connect with the Crozet downtown sidewalk network.

But that project was broken up into two segments.

The eastern one running from Highlands to Park Ridge was listed as phase one and it was specifically designated that way because the Highlands neighborhood and the neighborhoods on the east are an island.

They don't have any other way to access the pedestrian network in Crozet by walking or biking.

And so the thought was to intentionally have that be phase one so that people in those eastern neighborhoods could connect to Park Ridge Road and access the network.

So having the western phase two segment as listed in the draft priority list ahead of the phase one just doesn't seem to reflect the way that the Crozet community sees its priorities.

All right, thank you.

Thank you.

I believe that's our final speaker.

That's correct.

We can now move to item number eight, the consent agenda.

So moved.

All right, so we have a motion from Supervisor McKeel, a second from Supervisor Mallek.

Ms.

Mallek?

Yes.

Ms.

McKeel?

Yes.

Ms.

Ms.

LaPisto-Kirtley?

We can now move to item number nine, an action item, proposed updates to the Albemarle County Homebuyer Assistance Program guidelines.

Dr. Pethia, good afternoon.

I will remind you that right about 2.20, I'm going to interrupt you,

and we'll all take kind of a seventh inning stretch at a baseball game and wait for the emergency call on our phones.

Good afternoon.

Help is on the way.

There you are.

Again, Stacey Pethey, Assistant Director of Housing, and we are here today to discuss proposed updates to the Albemarle County Home Buyer Assistance Program guidelines.

These guidelines were updated somewhere in the past, I want to say around 2010, but I am not positive, so in any case it's been a while, and they should probably be brought up to date.

So really this focuses on home ownership for households earning 60 to 80 percent of area median income so it really follows that

into that affordable home ownership category on the housing needs spectrum that we've talked about many times when I'm here.

And some background on the program.

The Albemarle County, I have to think about the acronym, Home Buyer Assistance Program, or ATAP, which I will call it moving forward to make it easier, was really created around 2005.

It provides down payment and closing cost assistance loans to households currently at earning 60% of area median income.

The program is administered by Piedmont Housing Alliance and the board had added funding to the program on a number of occasions over the years but the last appropriation to the program itself was in fiscal year 2011.

it was really discontinued as a result of the pandemic and having to make budget cuts across the board for a while but as you'll learn moving forward the way the program is organized and the fund is organized it's really self-sustaining so there has been no need for additional funding to be appropriated to the program and AHAP has a current fund balance of approximately $900,000 at this point

Again, the program serves households with incomes at or below 60% AMI.

Pretty much recently, it's been focused around that 60% area median income mark.

It provides up to $19,100 in down payment and closing cost assistance to first time home buyers.

They are provided as deferred payment loans with 6% simple interest rates.

And the balance of the loans are due at time of sale.

One of the reasons we are here to ask about updating the guidelines is because it's become less effective over the years.

When the program started, housing costs were much lower than they are today.

They have increased substantially.

And as you can see, this is looking at this year, the area median income for this year is

set by HUD at $123,300 per household.

That's a significant jump from previous years.

What that means is a household of four, so that could be a family of four, however that family is organized.

That would be an annual income of $73,980.

Looking at the Virginia median sales price for 2023 in the second quarter, that was $388,825.

At a household income of about $74,000, they could have a maximum mortgage loan of approximately $191,984.

and that's assuming a 30-year fixed-rate mortgage, 6.5% interest rate, and a 3% down payment and closing costs.

So they would need an additional subsidy of almost $195,000 in order to purchase that home.

Looking specifically at Albemarle County, the same household, in the second quarter of 2023, the median sale price was $530,000.

Excuse me.

That would mean the family could have a maximum mortgage loan of about $164,000 and would need $364,000 in assistance to purchase that home.

Looking at the Charlottesville Area Association of Realtors most recent report for the second quarter, most of the homes in the area sold for $300,000 per unit or more.

So there's significant assistance needed to help moderate and low-income buyers purchase housing for the first time.

So looking at the proposed key changes to the program, staff is requesting that the board approve a reduction of the interest rate for the ATAP loans to 0%.

That interest rate has really been used in the past to help administer the program.

So we will make up for that loss in interest rates by adding a $1,500 administrative fee to the loan at the beginning.

That will just be added to the loan balance.

We are also asking to increase the qualifying household income to 80% of area median income.

also requesting to add a home buyer education requirement.

This would be the first time home buyer class generally provided by Virginia Housing.

And homebuyer education has shown to be beneficial to first-time homebuyers in helping them retain their housing for the long term.

We are also asking that we increase the maximum loan amount from $19,000 to $30,000 or 20% of the purchase price.

All of these changes are really made to help the program become one more effective for homeowners.

As you can see, $19,000 does not go far in our local area for purchasing a house.

but it's also to bring this program in line with other down payment assistance programs like the Federal Home Investment Partnership down payment assistance programs.

They are also provided as loans but they are zero percent deferred payment and what these changes will do is make it easier for home buyers to keep track of the loans they have.

Many low and moderate income households really

need to layer the different types of assistance they get in order to purchase a home.

So bringing them as close together in requirements and regulations as we can really helps simplify that process for home buyers and make sure that they don't get in trouble over the long term.

All right.

Thank you.

We will go through our order.

I don't really have any questions, Stacey.

You've answered questions and you've been very responsive and I appreciate that.

I will say that I'm really pleased to see this coming forward.

Everything we do needs to be looked at and updated at some point in its lifespan, so this is great.

And I just want to send a shout out to Piedmont Housing Alliance, and specifically to Sunshine Methane.

I don't see Sunshine here, but this organization has just served us so well over the years.

and Sunshine has been very responsive to us.

Every time I call Sunshine with a question, he answers immediately or calls me right back and I just wanted to take this opportunity to send a shout out to Piedmont Housing Alliance and to thank Sunshine.

I don't have any questions but I'm really pleased to see this and I'm especially pleased to see the education requirement because I think that helps everybody.

Thank you.

Yes, thank you.

Everything was put together so well in the packet and very well explained.

I'm also very grateful that the program is being proposed to be reinvigorated because it was working

quite well for quite a while until there all of a sudden became no list, no people to put in the homes which were set aside and that contributed to the downward spiral of our inability to deliver on the program that we had originally set up or that previous boards had set up 15, 20 years ago probably, 25 years ago.

So the class is incredibly important to learn how to manage because it's challenging for sure for everybody.

I appreciate the simplification of all the different programs because that's bewildering for sure and keeping track of things.

So what is the plan from the county's level to oversight on how this

Is this part of the merger with the land trust or is that a separate category altogether?

Separate, okay, so I won't ask that question right now then.

Correct.

So if the board approves the changes, and I shouldn't say if, we will enter into a new memorandum of agreement whether you approve these changes or not.

The last one was entered into in 2010, I think, so it's time.

and there will definitely be reporting requirements in that.

Typically, over the last couple of years, we have asked for quarterly reports from whoever we give grants to through the housing fund.

the inspector changes, there was something in there, I think it was this packet as opposed to the next one that gives me some concern if there isn't really detailed reporting because if there's an inspector who doesn't have a really good chapter of verse to look at, how will they know what they're supposed to be

Inspecting.

Yes, and that was one of the requests specifically to make it easier for home buyers to purchase the house.

Over the years, because we have sometimes, or they've had to wait for the same inspector to get there, it's been too long time and they've lost the house.

So these aren't county inspectors looking at county work.

This is private people.

Aha.

Okay.

Thank you very much.

You're welcome.

All right, thank you.

Thank you very much, Dr. Pethi.

I appreciate what you've done and where you've aligned what PHA wanted to do with what in your new MOU and it certainly does require a

a revisit after since 2010 and I do like you mentioned that but wherever possible I'll

Reinspections will be done by the same person.

So that addresses that concern.

I'm really happy to hear that this program was and continues to be self-sustaining.

I think that's extremely important for anyone who's listening to know how we're doing this, that it is self-sustaining.

And the repayment, well, removing of the 6% interest rate,

and you're going to 0%, but you're making that up with the $1500 additional fee for fees.

Thank you very much.

Yes, thank you, and thank you for the questions you've answered today, but also questions that have been sort of bantied about in preparation, and I understand that $900,000 is, has been called self-sustaining, but I also understand that it's not been well utilized because the program has not really been working the way it's intended, so this is intended to jumpstart it back.

Correct.

And I guess I, you know,

again confirming what was just said that the 1500 will help to sustain the fund but we don't know for sure until we get to use the fund how well it'll be actually self-sustaining.

So it's a good problem to have I suppose if it starts to be really well used then we have to worry about that.

If we could look at slide six again and this sort of goes to that.

This is the 60% AMI, and I recognize that the previous slide 5 had basically 50% subsidy needed to purchase, and here we're up to just under 70% needed to purchase.

But with switching to 80% AMI, do you happen to have the number for what mortgage loan amount would

Thank you, Supervisor Galloway.

I think it covered it.

So the 6% interest on a $19,000 loan would bring in about $1,100, $1,200 in interest total.

If it went up to $30,000, that would be about $1,800 total.

But what it does is make a flat fee, so instead of going up and down depending upon what that is.

The cost, the admin cost, adding whether it's a fee or an interest just adds to the impediment of helping people with cash flow.

So if we're really going to provide a service, I understand we're trying to cover the cost of this, but we are still adding back a fee or something on top of them that basically wipes out a portion, even though it's a smaller portion of what we're giving them in assistance.

So understanding what the administrative burden or the administrative costs are would be something I'd be really interested in to say is it really worth it to charge this additional fee to people that are already strapped to cover the cost of a down payment.

It could help in some small way.

$1,500 in the size of a $20,000 or $30,000 loan

It isn't that significant, but when you're really counting what the monthly payment calculates out to, it can be.

So, understood why we're doing it that way, understood that they're requesting it that way, but I think it's something that, if we put it in place, I'd be curious to see, well, what really are the costs?

What's the cost to the county?

And we're really passing that on to folks who need assistance.

Is that what we want to be doing?

I mean 191 in the scenario where you gave 191 was the cost.

What slide was that on?

Maximum mortgage loan 191 and we've heard from the

For Mr. Smith when he was here and he said a few times at different meetings that basically the sweet spot of trying to get a house built is falling between 210 and 220 and that's taking a lot of wrangling to get down to that number.

Right, so the program has, PHA has other sources of down payment assistance, so they are layered together.

Well, I will say over the last 18 years they have provided loans to 271 households and 200 of those households have repaid those loans I'm not sure what that I can't do the math in my head.

I apologize what that works out to per year but at $30,000 with the $900,000 that's currently in there that is 30 households

In the letter that came from, I believe, Sunshine, and I'm sorry if some of these were asked and answered in emails.

I did not have time to go through those emails.

The change in the credit score, I saw what the request was to change to 640.

It's early.

Oh, AT&T's been done?

Okay, good.

All right, and it worked?

Oh, I see.

So Dr. Patheo, we will allow you to finish.

It would not be the first time I got interrupted by a fire alarm once.

The Virginia Housing had increased their credit score from 620 to 640 when we started this conversation.

Since then, they've lowered it back down to 620.

And so we're trying to keep it the same as Virginia Housing.

Many homebuyers will use their first-time homebuyer mortgage products.

Gotcha.

All right.

Alright, thank you.

Could you go to slide number seven, please?

So, my only question here is the fourth bullet says, maximum amount not to exceed $30,000 or 20% of the purchase price, but in attachment D,

It indicates to me maximum assistance, this is on page 2 of attachment D, the second block down.

Eligible households may receive up to 15% of the lesser of the purchase price or appraised value up to a maximum of $30,000.

This assistance may be combined with other regional funds

and then it says the total assistance may not exceed 20% of the purchase price and I appreciate it's difficult to put on slides the full explanation found in the materials but

Can you clarify that?

You are correct.

Okay, thank you.

And then the only other real question that I have, so we currently have $900,000 available in the balance.

Separate from that, in addition to that, would be the money that has already been lent out.

So actually that shows that the county has substantially more than just $900,000.

invested in this program.

So that's good.

The only other question I really have is if I understand correctly, the $19,100 maximum comes all the way back from 2005, 18 years ago.

Is there a mechanism, a formula that we could add into what we're approving so that, I don't know, scaled or something so that it increases automatically perhaps based upon the changing values of the average real estate home in the county or based upon what HUD would say so that we don't find ourselves out of whack

and so many years pass before we go, you know, $19,100 has really not been adequate for a number of years.

And we know that with the workflow that the county already has,

adding this to an annual back before the board to me would be detrimental to the overall applicability and benefit of the program.

So let me leave that with this.

I will support this, but would ask that staff, when capable, Mr. Henry,

I guess I'll let you guys explore that because the mechanics of that sound a little... That's where we get to the merger question.

Chair Price clarified a point at the start, and I think that clarification was lost on a few of us.

Can you go over that again, please?

On slide 7, the fourth bullet says it would increase the maximum loan amount, and I would actually reverse the order, to 20% of the purchase price not to exceed $30,000.

But if you look at attachment D in our materials on page 2, the second

Roe going across.

Maximum assistance actually says that from this fund the maximum amount would be 15%, but that 15% can be combined with other funds so that the total

support assistance may not exceed 20% of the purchase price.

I absolutely agree now that I understand that this 20% should be 15% to be accurate with

That was in the original MOA that was done.

It doesn't earn a huge amount of interest, to be honest.

I'm sorry, our county bank accounts are making tons of interest on that.

But, Supervisor Mallek, before you go on, in terms of the 15%, not to exceed 20%, the layering, we're an additional 5%.

If I could kind of explain it in my thoughts, sort of as an analogist, do you have a primary health care insurance and you may have a secondary?

I will say Piedmont Housing Alliance manages all of those different types.

depending upon funding available, different down payment assistance programs.

And hence their administrative fee.

That's not a concern, but I was concerned about Supervisor Galloway's question that I hadn't thought about.

No, no, no.

It's added to the loan.

So instead of, instead of owing, say, $30,000 20 years later, it would be $31,500.

Well then, each of these sources charge a fee?

They do.

They are not allowed.

Correct.

Most of them come from the federal government.

So the Home Investment Partnership Program, they would not be able to.

Thank you.

Any other comments?

When you said the compensation would not be more than $30,000, is that our compensation or total compensation for that purchase?

So, Board, we are asked to take action on this.

All right, we have a motion from Supervisor McKeel.

We have a second from Supervisor Andrews.

Question, please.

Okay, so when do we get questions?

Maybe I'm the only one who has questions about the kinds of reporting and the interest-bearing and that kind of thing and how this is going to be handled.

I am happy to share a copy of a reporting template.

We create reporting templates for each specific program or project that we fund.

They generally include information about the beneficiaries served.

We ask for amount of funding that is provided to each household.

OK.

I mean, 4% at $900,000 is $36,000 in one year in interest.

So that's a whole lot of potential administrative source.

All right, we have a motion on the floor.

Ms.

Mallek?

Yes.

Ms.

McKeel?

Yes.

Ms.

Mr. Andrews?

Yes.

Ms.

Aye.

All right, thank you.

And let me take just a moment.

Dr. Pethia, Ms.

Demick, I see you here as the director of the Department of Human and Social Services.

Anyone else who has worked on this, how much we appreciate the expertise and the ability for you to help us understand these programs when they come before us, so thank you very much.

And also thank you for the answers to the questions that the board had subsequent to receiving our package to help us be better prepared for today.

All right, board, we can move to item number 10, the discussion item, economic outlook report.

Good afternoon, Mr. Bowman, the assistant chief financial officer for budget and interim assistant chief financial officer for policy and partnerships.

And I cannot say all of that in one breath.

One moment while I pull this up.

So thank you to the chair for the introduction.

Good afternoon to the board.

Staff is here today to present the economic outlook report.

For the past 15 months, our staff has been engaged with Virginia Tech, primarily Dr. Cheryl Bailey who is here and will handle the bulk of today's presentation to really take a look at a lot of our economic financials in both our community, the state and region, and the national landscape to understand how does this complement all the other day-to-day financial analysis that takes place in our Department of Finance and Budget and elsewhere in the organization.

Today's report is really one piece of the long-range financial and strategic planning that the board will be engaging in in the coming months.

Our team will be back on November 15 to kick off a series of five-year financial planning sessions, and this will be one piece in the context that fits into that overall long-term planning that the board undertakes annually.

So with that, it is my privilege to introduce Dr. Cheryl Bailey.

She's a visiting professor at Virginia Tech, but her experience spans approximately 30 years working both in academia but more frequently as a practitioner.

She has worked as a senior executive in the private sector as well as at local and state levels.

She has headed up the Virginia Resources Authority, been a member of the Virginia Governor's Cabinet,

as well as heading up the Virginia Municipal Bond Bank, among many other things that I could go on about.

So we are very fortunate to have her here today.

We appreciate the partnership and knowledge that she brings.

Thank you and good afternoon Dr. Bailey.

Welcome back.

It's a pleasure to see you on board.

Thank you so much Chairman Price and members of the board and Mr. Henry and Mr. Rosenberg.

It's a real distinct pleasure to be back with you and I also want to say kudos to the Department of Finance and Budget.

It has been thrilling to work with the staff and their insightful questions every time.

I met with

the team this morning, the finance and budget team and the piercing eyes.

I could see the computer processors going on behind each of their eyes and very, very insightful questions.

So it's a pleasure to work with the board and the team and I remember the questions you had for me last year.

So I had my Wheaties this morning.

So let's get started and go through the report.

And, you know, it's a mixed picture just like last year.

We're coming from this pandemic.

It's been a rollercoaster.

So it's a global, you know, hundred year event.

I'm going to share the bottom line with you up front.

You don't have to wait to the end.

Elaborate as we go along.

We're going to talk about the U.S.

economic trends and outlook.

That actually formulates a lot of what we're doing in terms of

We're all that detailed information and forecast.

And we use that for both Virginia and Albemarle.

We've actually analyzed it and also have surveyed research that shows that we do follow those national trends.

So that's a good benchmark to use as we look forward.

At different levels, Virginia and Albemarle County follows those trends, but at different levels.

Still, those trend lines are a good guide in terms of looking forward to the future.

And then I'll close with some

I'm closing in recommendations.

So where we are today.

So I picked this picture.

It reminds me of my granddaughter's calendar.

She has, you know, is today sunny, you know, partly cloudy or cloudy.

And so this is a partly cloudy picture.

We have some blue sky and we have some

White Clouds, and we have some dark clouds.

So it's a mixed, we have that.

Our U.S.

economy has shown remarkable resiliency, but also is showing signs of slowing.

So one of the key things is how do we detect the the inflection point, especially since we've had pandemic

a pandemic, an unusual pandemic, we've had new geopolitical risk and also we're in a whole new demographic world now with the baby boomers leaving the workforce so all those things are swirling so we have headwinds and uncertainty ahead in which we'll talk Albemarle counties has a solid economic base and performance and that provides that scope to plan and act defensively

And we at Virginia Tech, and I've been somewhat long in the tooth, we get calls all the time from communities.

And so then we send the word out to see of whom we can get there to help, especially this time of year as you're going through the audits and so forth and so on.

So I have the juxtaposition of both kinds of experiences in terms of working with communities across the state.

And Albemarle County is just at the top of the heap.

No one's saying we need help to close the books for this year, which happens more often than we would like.

But certainly the staffing issues that many organizations have,

the turnover as well as all the new regulations and accounting standards is putting stresses in a lot of organizations.

So Albemarle County with the piercing eyes of the finance and budget team and the piercing eyes of the board, it just puts me in a different category.

I'm a Virginia girl born and bred, so I say we're in high cotton.

So that also gives you a base

upon which you can act and plan defensively.

And instead of being totally on the defense, you can also move strategically and move ahead on your initiatives.

So let's look at the US.

Real GDP has been much more resilient.

When I was here a year ago, we had just had two consecutive quarters of decline in gross domestic product, which is the measure of economic well-being and growth in the United States and worldwide.

Now, in most every other country, that would have automatically been a recession, but that's not the case in the U.S., because we have the National Bureau of Economic Research that does the determination, and you need to have depth

diffusion and duration.

And so it just wasn't wide, deep, and long enough for it to be classified as a recession.

The throughput of all that, however, has been consumers, and I'll show you more of that.

Our GDP has four legs.

Consumer spending, business spending, government spending, and net trade.

So think of it like a table.

Consumer spending is 70% of our GDP.

So as goes the consumer, goes the US economy.

And through all of this, after the return, after the first downturn, and the period we were inside, but even then, even when we were still kind of playing it close to the vest,

Consumers were spending.

We were buying paper towels.

We were buying I'm still working on my paper towel thrush.

I'm almost down I said I have to pay attention cuz I'm gonna run out cuz I'm not used to buying it, right?

And so but I'm close I need to get close I probably need to start replenishing so we you know, the wipes are still there my son and his family they just come and

and used the inventory in the garage.

And so we all bought too much.

Also, they bought the furniture, the pelotons, the new dishwashers.

So there was a lot of buying, consumers started buying.

They continued to buy.

So the throughput, even through those two quarters of decline, was still a positive contribution from consumer spending.

And it actually kept it from being worse.

So we've had a significant amount of resiliency because of the consumer.

They have been the firewall through multiple disruptions.

And this most recent quarter, I'll say the whole first half, we grew at 2.1%, which is basically term growth, considered normal term growth in the US.

Our jobs, we have recovered the jobs.

We took a hit.

This is a 20 year

Review.

We typically do three to five years.

That's too short a time with the pandemic, with the three-year roller coaster with the pandemic.

So I like to have a perspective.

And also, we always think about the last recession.

So here, the gray bars are the recessions as determined by the National Bureau of Economic Research.

And we had this little skinny two-quarter recession with the pandemic.

in early 2020.

Then we go back, the very wide gray bar was the great financial crisis of 2007 to 2008, also known as the Great Recession.

But you can see by this chart that just how deep the job growth was,

the pandemic recession wasn't a great one but it was a doozy and so I like to say the great financial crisis because actually the wide gray bars was based on a financial market implosion it wasn't a normal recession if you will and then you go back to the early 2000s is where we had

a recession as well, more of the dot-com bust.

So the gray bars are, shows the recessions and so this gives us a perspective because after the, in the pandemic everyone says, oh is this going to be like the great financial crisis?

This shows that no it wasn't, it wasn't, it wasn't, right?

And then also for some of us we do remember back to early 2000s

And so was it like that?

No, not really.

Every recession has its own profile.

They're never alike.

It's like your children.

They're just all different, right?

And so they're each different, but we always think of this recession like the last recession.

But they have some pieces to it, but they have their own distinct profiles.

So we see here that we've recovered the growth.

We've recovered the jobs growth.

It's not necessarily the same jobs in the same places, but it's just the count of jobs.

So the count of jobs, we've recovered them.

We broke even in last summer in 2022.

And as of August, we were 2.7% above the February 2020 pre-pandemic level.

We kind of mark February 2020.

as the pre-pandemic level.

So we have good strong jobs growth also very much fueled by the lower labor force participation primarily now everyone's back in the everybody's back into the market by in the labor market active in the labor labor market civilian labor force by age group except the 55 and older.

The prime working age, 25 to 54, actually have now a labor force participation higher than the pre-pandemic.

But 55 and older are no longer, they have not returned.

And it's distinctly below.

And you'll see in the report that I do a calculation based on the 2020

population in that age group.

If we only look at 55 to 64, which would still be considered working age, we're short well over 600,000 workers in the labor force just by the 55 to 64.

If they had had the labor force participation rate as of February 20 versus now, the pre-pandemic level.

So they have not returned.

And so that's the aging workforce.

All recessions accelerate

existing trends.

So we had an aging workforce that got accelerated by the

pandemic.

We were beginning to do some remote work that got accelerated, automation that got accelerated.

So every recession is an accelerant and it accelerated the aging workforce.

There was some hope they'd come back, but not yet.

So that's a pool to consider.

And that's the pool we call on when we get these calls for help from other communities.

Job growth was red hot.

This goes from January 20 and I just want to also know that it's a color code here blue bars are everything blue is the U.S.

and when we get to Virginia and Albemarle, you see everything red and green.

Red is Virginia and green is Albemarle.

So blue is the U.S.

and this is the jobs growth.

So this is the monthly job growth.

You can see by the bars in 2020 and certainly in 2020 into early 2022, it was hot.

It was red hot.

This is the monthly job growth.

It was red hot.

The market is now loosening.

So you hear that it's loosening.

So we went from red hot to hot.

And now we're pretty strong.

It's slower, but it's still solid.

And what I saw from job openings yesterday, they went back up.

So we thought they were going down, but it's going to be a bumpy ride.

So the loosening is not as fast as we expected.

So it's still a tight labor market there.

And one other thing is that also employers are holding on to workers.

Even if they see some slowdown in their, or they foresee a slowdown, they're not using layoffs as much because it's been so hard to get workers and the turnoff.

So the unemployment, the news here is that unemployment has ticked up the last two months, but it's still historically low as compared to the pre-pandemic level as of August 2023.

And another message here is that there is more than one unemployment rate.

So the unemployment rate, U3, is the official unemployment rate.

The Bureau of Labor Statistics actually publishes

Six measures of labor underutilization every month.

U3 is the official unemployment rate.

And I tell this, it's Table A-15.

All you have to do is put Table A-15 in Google, I bet you'll call it up.

And so those are the six unemployment rates that they publish every month.

The broadest measure is U6.

And that is the measure that includes everyone that has looked for work for the last 12 months.

Official unemployment is everyone in the household survey, and they do this, this is also, this is the Bureau of Labor Statistics and Census, they've been working on this for decades, and this is how they do it.

It is the survey, household survey, in the middle of the month, so the August survey was done in the middle of August, and the key question is, did you act, were you actively employed?

Were you on layoff waiting for recall?

If you weren't actively employed or on layoff and waiting recall, then did you actively look for work in the last four weeks?

So the official unemployment rate, and if it's the last four weeks, you are considered unemployed and you are counted in the civilian labor force.

If it's longer than four weeks, you are not in the U3 measure and you are not in the civilian labor force.

So U3 is a four week look back, a very short window.

Some economists say that it is structurally undercounting.

I don't say that, I just say it's a four week look back.

whereas the U6 has a 12 month look back.

That's the marginally attached.

So if you've looked for, actively looked for work for the last 12 months, you're in U6.

And I think that opens up the framework of maybe some livelihood because you would not be in the statistics if you stopped looking for work before Labor Day.

in the August assistant, for instance.

And also, U6 includes those who are underemployed, part-time for economic reasons.

They report that I want a full-time job, I'm ready and willing to take a full-time job, but I have not been able to find one, and I've had to settle for a part-time schedule.

that's the underemployed.

And so that is the broadest measure of labor underutilization.

So that was at 7.1% in August, whereas the official unemployment rate was 3.8%.

And then the Federal Reserve has its own measure of Non-Employment Index.

So what the Fed watches, I like to watch.

And so they use Non-Employment Index and actually that's managed by our Federal Reserve Bank in Richmond.

Each

Reserve Bank has an assignment and so that's one of the assignments of the fifth district and their non-employment index including the part time for economic reasons was at 8.1% in August and so what they do is they do a weighted average of each of the micro

categories in the BLS survey in terms of the likelihood of being re-employed.

So they actually do a lot of statistical analysis there.

So the key thing is there are hidden workers and there's persistent unemployment.

So 3.8% is the official unemployment rate, but 7.1% of U6, 8.1% of non-employment, and they're all historically low, although they ticked up a little bit.

The reason I always bring this forward is because our social services department can tell us all about the working poor.

or the of those who are marginally attached and so I always want to flag that for local governments because it's also all governments because as the economy slows that's going to be our caseload and the golden rod is the U6 and the purple is the Non-employment Index and so they're still historically low, but those are the things that go up during that time.

Harvard Business School calls those those persons in the U6 and Non-employment Index as the hidden workers and

Looking at the consumer so we pay a lot of attention to the consumer in the US because as goes the consumer goes the US economy and so here the blue line is the real disposable income, which is the purchasing power of the consumer household and real is inflation adjusted so this is constant dollars and

and then the goldenrod bars are the real consumer spending and so real consumer spending is what actually goes into the gross domestic product calculations so let's look at below before the pandemic in 2019 it was kind of more even keel wasn't it then after that haven't we been through a roller coaster so if you feel like you've been on the roller coaster this chart after 2020 shows you that we've been on the roller coaster

And so this is just from 2019 to 2023, the latest data that we've had for real consumer spending and disposable income as it goes through July.

More data is coming out soon.

So we see that during the period before we open back up in early 2021 or before actually we had the vaccine deployment,

The disposable income has basically three big infusions with the government support.

And if you say, why did they do that?

Look at the goldenrod line, which was the real consumer spending, which was underwater, underwater, underwater.

And so that was to keep us from having economic collapse, because as goes the consumer, goes the

economy, goes to GDP.

So you'll see that those were all those times when those periods of really really poor consumer spending.

Then as we began to emerge from the first wave of the pandemic, this is all before Delta and Omicron, but then the consumer began, you can see the real

increase in the goldenrod bars and the consumer spending.

But also you see the real income bars as opposed to income going negative because of inflation.

This is inflation adjusted, so inflation is eroding that household purchasing power.

Regardless, consumers kept spending.

they kept spending and that's been the firewall they've kept spending and they shifted very strongly from goods to services, restaurants, leisure, hospitality, travel, in-person experiences.

We had been cocooning and we just

And we came out.

Didn't Diana Ross say, I'm coming out?

Well, that was the consumer.

It's the Diana Ross theme.

I'm coming out.

And so that's what they did in 2021 and have done so continually.

And you'll see that the golden rod bars have stayed positive above the line.

Now, with the inflation fight, then we see that the blue lines have come above the line, have been positive.

and but it's been able to slow here lately so we also see the inflation fight and how that is the inflation coming down has how that is improved household income but still it is beginning to moderate some so how did the consumers keep all the spending going with those low blue bars they did it by drawing down savings and also by increasing consumer loans the blue line is the savings you see the savings spiked three times with the government support

and then the consumers drew it down considerably till after that.

With the inflation coming down, their personal savings went back up a little bit but it's been coming down again and the goldenrod line is the consumer loans.

They've been going steadily up and so that's how they've kept the spending going and the economists have been talking about the summer revenge spending of 22

23, the question is, have the consumers worked it out of their systems yet?

So when is that going to begin to normalize some?

And with the increase in the requirement to repay student loans, that seems to also going to be another damper.

But the household balance sheets are still looking good.

They haven't gone too much into HAWC in terms of

their debt to income ratios are still generally in the level they were pre-pandemic but if it continues the way it is it's going to get above the pre-pandemic levels but we're not at the great financial crisis that's the key thing we're not in that zone it's more getting back to the pre-pandemic zone and if they continue to do that they're going to going to begin to have more tightness

So that reality is one of the reasons that consumer spending is not expected to be as robust as it has been.

It's expected to slow.

So in terms of inflation, the key point here is that we're down from the peaks.

We peaked in 2022.

However, it is stubbornly persistent.

Headline inflation, which is the blue line, has ticked up the last two months and so has the Fed's favorite, again what the Fed likes, I like, and that's the PCE, personal consumption expenditures inflation.

There they take account for the substitutions that we make

when we hit inflation, you know, the brand names versus the store brand, whereas CPI has a fixed market basket.

They both ticked up on the last two months, both inflation measures, and core PCI, which takes out the volatile food and energy, is very sticky.

And so that's in the four and a half percent range, and the Fed's target is two percent.

Long term target is 2%.

So it's stubbornly persistent and it's bumpy.

So we have a ways to go.

And as such, the Fed is projected to take interest rates higher for longer.

The message from the Federal Open Market Committee meeting two weeks ago, almost two weeks today,

Chairman Jay Powell was briefing on the action decision.

They held the right, they did not

changed the rate but their forecast, their quarterly forecast came out and so their forecast includes for the rates to be higher longer.

So they have one more rate increase in their forecast for this calendar year.

They're going to take it meeting by meeting.

So they're looking at all these data coming in meeting by meeting.

They have two more meetings this year and they're projected to keep it pretty much in that range until next year.

So they've raised it 11 times and we're now at five and they've raised it five and a quarter percent.

It's now in 5.25 to 5.5 percent.

Their target for the federal funds rate for all of 2024 is 5.1 percent.

So they're not planning to cut anytime soon.

And that was the key message from the meeting two weeks ago.

It's going to be higher longer because inflation is persistent, sticky, and is a bumpy ride.

But they're pulling two strings.

and so I like to say WoNelly, they're trying to cool down the economy.

On one they're doing WoNelly, they're pulling the string on increasing the interest rate.

So interest rate goes up, that's one string.

But the string that nobody sees, but it's also really important, is they're drawing down their balance sheet.

That's the goldenrod line.

You see, so what they did is they bought securities to the member banks and

they bought the securities, took them in at face value so even though the value of those securities may have been eroded by inflation or the interest rate they took them in at face value and they bought those securities and that was basically to

push liquidity out into the financial market.

They did not want, and you see that golden rod line went way up right after the pandemic.

They were flooding the market with liquidity to maintain financial market stability.

You also see a blip from March

May of this year when we had the bank crisis, some selected bank failures, and they started a new bank term lending program to again buy up some more securities.

So they bought those securities in.

They contained

that crisis with decisive action, very decisive action and regulatory review.

And then they proceeded to continue on the drawdown of their balance sheet.

So that is, so they're pulling on both reins to cool the economy, both consumer and business, to tame inflation.

It's a whoa nelly.

And so if you're in a wag and you only pull one line, that's not enough, right?

So you've got to pull both lines.

And so that's what's going on.

And they're now taking it month by month in the meetings on the federal funds rate.

But that balance sheet is still being drawn down.

So we're in a tight monetary situation.

So the question is, and this is the big question going forward, can the Fed thread the needle?

And I would say the needle head is even smaller now.

It's tame inflation, maintain financial stability because higher rates longer puts pressure on the banking sector.

because their costs go up and they have the cost of getting funds goes up with interest rates and then also they're pressured with regard to the value of their securities go down in the long-term securities they have so they're being squeezed so maintaining that financial stability that's an another factor and also avoiding recession the soft landing very a lot of balancing there a lot of balancing and can that be done

So we are projecting to have a slow session We're projected to muddle through We have a resilient but slowing economy and there is a risk of a recession in late 2023 to early 2024.

All signs are the third quarter which just ended on the weekend at the 30th of September It's going to be a strong quarter

However, the signs are the, because that started in July, August, and September.

But in September, some real slowing began to appear.

So the question is how is that going to impact the fourth quarter?

And a lot of prominent forecasts now have very, very, very slow growth quarters in the first two quarters, the first half of 2024.

Only a few maybe have some minuses there, but we're going to muddle through.

The projection is we can muddle through.

Very, very slow growth.

Overall for 2023, we're looking at 2.2% median forecast amongst the prominent, most recent forecast.

We have a very tight range of 2.1 to 2.3.

That's the projection for 2023, December 30th.

How are we going to end the year?

2024, the median is 1.3%.

That's below trend growth.

But the range is from 0.5 to 1.5.

It's a much wider range in terms of how are we going to muddle through 2024.

And we may have some down quarters.

We may have some down quarters.

We might be able to get by with small growth.

And if the computer, I'm sorry, if the consumer keeps on being resilient,

Regardless, then that might help us because they're 70%.

But there are many headwinds, uncertainty, and a lot of dynamics swirling around there.

So there's a lot of swirling winds.

So persistent inflation, which is and bumpy and sticky.

The interest rates higher, interest rates longer.

and tight credit conditions.

So as a result of that bank crisis in March, the regulations have really been tightened.

Investigations were done.

They now have some proposed new rules for banks so they can't have the poor risk management of those selected banks.

It was very, very poor risk management related to the tech.

and cryptocurrency industries, those selected.

But we saw that they also saw they could easily be contagious, so they've tightened up on that.

And so therefore the tightening credit and lending standards, that's already shown up in the summer report, and so it's tighter credit and lending standards across all platforms.

Then we have this tight labor market and the labor pressures.

That is actually helping to soften some things, but it's also putting pressure on inflation.

So that's real, that delicate balance.

We have consumer, the likelihood of cooling consumer and business demand.

The housing market has had a significant decrease in sales, but the prices have held up because of demand and supply.

It's all about demand and supply.

So, but just how are we going to still make it there if we have higher interest rates longer?

How is that going to show?

The government infrastructure spending that's having some impact and we're seeing that now in some manufacturing areas, but also supply challenges, the geopolitical risks, the

the shifting trade flows because we realized in the pandemic we couldn't get stuff so we're now having more fringe shoring and nearshoring and onshoring of production the supply and price shocks from the geopolitical risk because with the Russian Ukraine engagement we saw that

Energy and food were weaponized.

And so what's going to happen there?

And then slower global growth.

China is the second largest economy in the world.

It has opened up, but it's not growing like it was.

They are close second to the USA as number one economy in the world.

but China is not doing well and they drove growth for 20 years before the pandemic, before the great financial crisis.

They were the source of growth.

I would say they were a major engine of growth and so with them being less than half of what their previous growth rate is, that's just going to dial down and they have an aging workforce too.

So we have to have close monitoring, early warning and such that we can detect, adapt and adjust quickly in changing environments.

Looking at Albemarle, Albemarle has done well.

So you have your real GDP growth, your economic growth has done well and outperforms U.S.

and Virginia in most years, 2000 and 2021, 2021 being the latest data available at the county level.

Albemarle also outperforms the U.S.

and Virginia with a lower unemployment rate consistently since 2000 through August 2023.

This again, this is this wide look, long look to give us a perspective, not just the narrow look in the last three years.

Remember, blue is U.S., red is Virginia, Albemarle is green.

Also, when we look at Charlottesville MSA, that's the

That's the closest we can get to Albemarle, the MSA.

We see the hourly wages are below the U.S.

and Virginia.

They are increasing.

They follow the trend of U.S.

and Virginia.

It's below U.S.

and Virginia since 2013.

However, the Charlottesville MSA, and you see in the report, hourly wages are strong and ahead of all of your regionally.

When we look at the Stanton and

Stanton and Harrisonburg MSA's then the Charlottesville MSA hourly wages are strong only behind Richmond as the next closest MSA.

and I actually have a chart on that in the report.

When we look at the real per capita income, personal income, this is inflation adjusted per capita per person, Albemarle stands out in terms of is distinctly above the US and Virginia and that difference has widened in the last 10 years.

So you have high personal income.

Now, in terms of existing home sales, they've all gone down nationally, and in the US and Virginia, as well as in Albemarle County.

So particularly since spring of 2022, we've seen, and this is the growth in sales compared to the year before.

The data is not seasonally adjusted, so I always do a year before to take out the seasonal variation.

And so the sales volume is down.

However, the prices have kept growing and this is comparing U.S., Virginia, and the Charlottesville MSA.

This is the housing price index all transactions.

This is the housing price index the Fed uses for our regional snapshots and this includes all transaction purchases and

the evaluations and refinancings.

Green is Charlottesville MSA, red is Virginia, blue is U.S.

and so this is the growth from quarter to quarter on a year to be from a year ago a year year over year quarterly growth and it's still positive.

It peaked at

Spring of 2022, the growth rate was really, really, really, really high, you know, 20%.

But now we're still having positive growth.

It's just slow.

The rate of growth, the pace of growth has slowed, but it's still positive.

So it's still having price increases on a year-over-year look.

and also when we look at the median listing prices per square foot and we compare that to the U.S.

and Virginia, we see that Albemarle County's median listing prices per square foot are also trending up and they are above the U.S.

and Virginia and distinctly so.

That's notable in terms of the price per square foot.

So that's supply and demand.

There's pent-up demand and there's constrained inventory.

and also when you look at your business sector in Albemarle, it's going well.

Your gross receipts are up, have a general upward trend from 2017.

We always want to look before the pandemic.

And what's quite noteworthy is that this is year to date information as of September 14th, 2023, thanks to the finance and budget team.

and the year-to-date gross revenues total in 23 exceeds all of calendar year 22 as of September 14th.

So your gross receipts and this is all gross receipts for the categories not including flat fees and ABC licenses.

Your top four categories are the same as last year and this is using

Calendar year 2022, I'm sorry, this should be calendar year 2022, not fiscal year, my apologies for that.

So it's repair, personal, and business services, retail, contractor, contractors, and then finance, real estate, and professional services are the top four categories for your gross receipts.

This year, retail and repair, personal, and business services flipped in terms of being number one and two.

That corresponds to the in-person services, preferences, since consumers versus goods, which would be retail.

And then also that brings us to a summary in terms of the economy for Albemarle County.

You have a history of mostly solid economic and job growth.

Also you have high real per capita personal income, low unemployment,

strong hourly wages regionally and significant employment in relatively higher income occupations and industries.

And there are tables that go into detail in that in the report.

And you have strong local business activity.

and we follow the trends of the U.S.

and Virginia as the charts have shown.

So therefore the U.S.

and Virginia economic outlooks frame the Albemarle County's economic outlook.

So therefore it's prudent to plan, like for the U.S.

and Virginia, an economic slowing in late 23 or early 24 unless the consumers decide to do what they did last year.

And we're thinking their roadway is kind of tightening on that and it's getting short on that.

So, but definitely higher interest rates for longer.

The Fed is signal.

They plan one more potentially this year and they intend to hold it for a good portion of next year.

Continued inflation until the tight monetary policy gets a hold of and tames and breaks the back of that inflation.

Higher unemployment, the Fed has also indicated they are willing to tolerate some increase in unemployment in order to succeed in the inflation fight.

But they have a maximum employment mandate as well, so that's what makes that narrow needle for them to thread.

Also expect some cooling consumer and business demand, especially with the continued increased interest rates.

And we're seeing some loosening there in terms of what's happening in the job market has been a real source of that ability of consumers to feel good about spending.

and they spent even with their consumer confidence and consumer sentiment.

They were cranky as can be but they kept spending.

So consumer confidence and sentiment has been down, but they kept spending.

So we expect that to cool and some business demand to cool with the interest rates higher for longer.

Slower growth and real disposable income, we're seeing some of that, as the

as the labor market loosens and is not quite as tight.

Slow but competitive housing market.

So slow housing market, but it's projected to stay competitive with the demand and supply dynamics.

with the pent up demand versus the low supply and constrained inventory that is going to be competitive and that competitiveness is going to put pressure on prices.

And then also slower business activity, especially with those sectors that are sensitive to interest rates and also real consumer spending.

Those are going to be really sensitive.

So the timing of these impacts certainly will vary and different sectors will be impacted differently, especially those who are interest rate and consumer activity sensitive and also that means we closely monitor and look for those signals and so for changing circumstances to detect, adjust, and respond with agility.

These are my enduring, you saw these last year, these are my enduring recommendations to facilitate the continued

Financial resiliency and agility, which I can say Albemarle County fulfills.

Your financial foundation in terms of your strengths, weaknesses, and vulnerabilities, you're keeping an eye on that.

And I can see that in your published report.

I can see that analysis.

As he mentioned, I was the director of the Virginia Resources Authority at Municipal Bond Bank, which meant we underwrote the loans of localities when we brought them into our pool.

and I had to be clear on that because Moody's S&P and Fitch grilled me on it with our rationale for those loans.

And so I've looked at a lot of financial statements and budget statements and so forth and so on and I can see the analysis.

It comes through the paper and also in your strategic planning.

you're doing that you're looking at your strengths your weaknesses and vulnerabilities you also have your clearly defined and refined strategic goals and you continue that process you have a regular process of looking that and refining that the long-term financial planning you just heard about your schedule between now

and then going into the budget next year and you're maintaining that and so keep doing it.

Then the robust scenario planning and that gives us the shopping list of responses in the event of something that happens.

So that's our shopping list.

And then the early warning systems.

We want to keep that in our engaged staff.

Engaged staff is some of the best warning system you have.

Then adaptable decision making practices and then agility in action.

These are my enduring recommendations for continued financial resiliency and agility.

The pandemic taught us that.

It's just not resiliency, but also agility.

And so in closing, Albemarle has a solid economic base.

and you have a promote active management and governance that makes a difference.

The solid economic base provides scope with which you can plan and act defensively.

You have a history of prudent financial management.

as one of the few counties in the 9A club.

We want to make it clear that it's a triple, triple A. Many folks say we are triple A, and then you have to kind of gingerly see how many triple A's they have.

So triple, triple A, just to make it clear, it's the 9A club in less than one and a half percent of counties in America.

are in that category.

And so that is a critical asset because what it takes to have a triple AAA and maintain it is prudent financial management, what gives you strength, organizational strength going into the future.

You have the financial foundation and a community capacity.

for strategic emphasis and they have been developed.

And then this history of strategic and methodical analysis, review, and policymaking that cannot be undervalued either or overstated.

It is commendable and it will continue to advance your community toward its strategic objectives.

So with that, I close.

My contact information is there, as well as some backup slides that we just thought that you can look at in your leisure, but also there's a lot more in the report.

With that, Madam Chair, members of the board, I conclude my comments and thank you so much.

We will go through our order to see if there are any comments or questions.

A lot of great information.

And I really appreciate your taking a broader view and showing us the really broad, over the time frame, not just the last three or four years, but that longer view.

I don't think I have any specific questions for you.

I really appreciate the assurance that we, and especially our staff,

are leading us really well.

Donna, I would like to have some questions though.

I'd like to be able to ask Andy, Mr. Bowman, some questions.

So we'll have an opportunity to do that.

If you want to, you can join me at the podium and we'll just toggle back and forth.

Andy, I want to thank you for the position that Albemarle County is in right now, as demonstrated by this report.

I'm just curious, what was the one question that you wanted to ask Dr. Bailey when she came?

It was certainly more than one question.

I think what was helpful for me is now that we've been engaged with her and her team for a while, really to understand where were we a year ago, and while we still have uncertainty ahead, we haven't learned a lot in the meantime.

There have been changes in the economy, we've seen some of the results of that, and so really just kind of understanding the lay of land and how it has changed, what has impacted county revenues and what has not.

And is there anything, and I'm sorry to belabor this, I'm just curious about the financial, I guess, picking your brain and figuring out where you all think we are, but is there anything that struck you that we should alter a little bit or change or did you feel like or do you feel like that we're pretty much on the right path and that we're flexible enough?

I guess flexibility is what is in my brain.

Thinking back really the last three to four years in particular, we've always had a financial plan, but we've always needed to know in our back pocket what happens if things get a little bit better, what happens if things get a little bit worse.

And then using the framework of the board strategic plan and knowing those priorities, how can we move those forward?

And at the same time, this report's helpful.

And we ask our questions, well, how does this connect to the information we may get in the human services assessment?

How does it impact into caseloads that may take place in the Department of Social Services?

How does it impact with the others?

And so it really is an ongoing dialogue throughout the year to look at all of those things.

I just have one more question and thank you for letting me ask questions a little differently.

We're one organization, and we have two sides.

We have county government, and we have the school side.

And I'm very aware that, of course, schools get their money from us, essentially, aside from federal and state monies.

But are there takeaways that you think from this report that should be shared with the schools?

How do we work with schools on this kind of information?

Because they have their own budget.

They come to us, but they do have their own budget that they have to work through.

and they have been caught short at times.

But having said that, I'm just... It's certainly about every two weeks I have a regular meeting with my counterpart.

The board may be familiar with Ms.

Maya Akumazala.

I know that our interim CFO is regularly meeting with the school's chief operating officer.

There's collaboration among the county executive and superintendent to ensure that we're sharing information and stay informed.

I know this report, I've given not just the report but some of my highlights and takeaways.

I'll be working with the school staff as we prepare for the joint board session in December 6 as part of the five-year plan.

So it really is that regular dialogue of information sharing knowing that in the same way they may receive updated information from the state,

Yeah, thank you.

I really appreciate that.

And Andy, I really appreciate your work for the county and your work.

I was at a meeting with a partner in the community just this week and they were singing your praises.

but I know we have a whole team out there that you work with so thanking them as well and I really appreciate the report and the information.

Thank you very much.

I don't believe that.

I've been in Andy's role.

and I find that governing bodies know a lot more than they claim to know and certainly you're there on the front line with the community and your view to governance in the policy direction is extremely important.

Thank you very much and thank you for the report, this is great.

Thank you, thank you.

In terms of taking a broader view, my grandmother, the first thing that came to my mind is my grandmother said you've got to look beyond your nose.

Yeah, whole expression but very true.

That's my brother in my life, yes.

Thank you.

Thank you.

This was a big homework assignment and I have lots and lots of notes I will not ask you about because it would take the rest of the day.

My concerns, there were some things that you said that sort of jumped out at me like the high capital, the high per capita income in Albemarle, but we have also a need to remember a very large segment of people who are not.

And they may not be visible because they're way out at the end of a gravel road, some of them, but always have to keep that in mind when we're thinking about those kinds of hardships.

It does make me mad when the Fed is talking about how they have to increase unemployment to make their figures look better.

but the hardships for those families when that happens is something that they don't seem to care about and so this is always a tug-of-war thing.

I am grateful that now it seems and I think through the success of our sort of the last 10 years of economic development things we have a much more diverse economy now in Albemarle than we did in 08-09 when the housing tanked we were in turkey land.

and so it was a tremendous hit on the budgets and the revenues and everything else because we had put all our eggs in that housing growth basket and now I think while there's still a significant amount of housing stuff going on for sure

that there are a lot of other things going on too.

We're making more widgets and widgets I think last better than all those other sectors so I'm grateful about that.

But I appreciate the detail and it took a struggle for me to understand it all but it was definitely worth it because every year I understand a little bit more every time I try.

I'm just so thankful and grateful and feel very blessed that you were willing to read the report.

Thank you so much.

And so with the Fed, to hear them say it, and of course I listened to Jay Powell two weeks ago, you know, we're all waiting to see what he's going to say and just tune in.

The Fed's position is that to not tame inflation will hurt

Lower income households, worse over time.

And that they bear a brunt of that more so than higher households and households of higher income.

So it's, you know, take your medicine.

And they go back to the 70s when they did a little something to fight inflation, then they pulled off.

Inflation came back stronger.

more ferocious.

Then they did a little, they did some things, I won't say a little something, they did some things but then they pulled back again.

And then inflation came back even stronger still again.

And so that dance went through all the 70s and so for some of us we remember the late 70s going into 80s when Volker came in.

and had to increase the interest rate.

The federal funds rate went up to almost 20%.

They did a 2% cut, I mean a 2% rate in just one meeting, 200 basis points, a full 2%, boom, and just trying to tame inflation.

A long time and we had a deeper recession.

But then they used the data that we had economic growth, stronger economic growth, about 10 years after that.

So that's what they say is they don't want to happen this again.

They don't want to dance and play with inflation.

They really want to get a handle on it.

So it does not impact those outcomes.

and having been in a new house in 1973, I understand completely, we thought a 7% mortgage was the best thing we were ever going to see in our lives because nearly after that it went to 13 and 16 and that kind of thing.

I do remember very clearly, and I'm not arguing with what they're doing necessarily, but I think there's a lot of pain.

Absolutely.

And that's why I always have the full range of unemployment, and we just don't go by the headline.

So for, I can get U6 on an annual basis or much more I think annual quarterly basis and that's in the report.

So I have looked at that for what's available or for the metro area.

So I've done the research to find that and that's in the report.

But it's not as frequent as we get from the, for the U.S.

Thank you very much, Dr. Bailey.

I have really appreciated this learning even though economics was never really my strong suit, but that's okay.

I've learned a lot.

Through your report, there's one

Sentence that really stands out for me.

And if you'd let me read that from the report, I think it's important for people to hear.

And that's Albemarle's history of prudent financial management and its overall solid economic base.

provide a foundation and community capacity for strategic initiatives.

And I think this board and especially with our team, starting with Mr. Richardson and everybody, all the staff, everybody, the people that he has under him, all the departments, we have

I'm really impressed because we have a strong economic team that looks into the future that I don't personally see, but they see and they see what we can do.

It's just really nice, like the triple A, triple A, triple A. It is wonderful.

I'm so glad to hear that we are doing well in our strategic initiatives.

are working and hopefully other people can do as well as we have been doing so.

Thank you.

Those are two strengths.

So many people think that economic base or your economic landscape determines what happens.

The governance and management are key.

and those are rating factors and are reviewed.

And so those are two strengths, the prudent financial management, which is the board and the staff, as well as your strong economic base.

And I appreciate you bringing in the agility factor because I think that's something as a board we all appreciate is you don't know what's going to happen.

No one foresaw the pandemic and we were able to pivot and do our budget six months at a time.

and really pull back to make sure that we were going to be in a good place when we came out of the pandemic, which no one knew when we were going to come out of it.

So now we're out of it and doing very well.

So I just think we have some really brilliant minds that are working.

I wanted to ask one other question.

I would say looking at the school's revenues, as Supervisor McKeel mentioned, their primary funding source is the county government.

The state, which is largely formula-driven, is their largest.

I know they watch very closely what is changing there.

Certainly they have their own strategic plan, they have their own priorities.

All right, thank you.

Sentiments of gratitude for this and I appreciate the thought that goes into it.

I see Ms.

Dimick in the back and I recognize that some of the discussion of U3, U6 and Table A-15 is something I want to dive into a lot more maybe at a future point on the idea of hidden workers and underemployment and how that affects our need for social services and one of the things that I think we need to be

Agile and ready to deal with saw that in those numbers.

Jump to slide 23, but this also relates to table A-15.

If I may just jump back for a second.

And I've raised this question previously.

It's not so much a question as appreciation, but going forward, I really like that we do this, and I want to continue to do it, and I want to make it as relevant as possible.

So this has the top four categories, repair, personal, business services, retail, contractors, financial, real estate, professional services.

And I also notice in A-15 it's looking at percentages of the civilian workforce.

You're from Hampton Roads, you said.

So one of the things that we've seen recently is that this county is significantly impacted by defense-related spending.

and we've had our report on that and I just want at some point to start to keep those together a little bit more so that we look at what that impact is in this context.

Whether that's how much of a stabilizing impact does it have?

How much additional risk does it impose?

And I would think that

We've discussed it.

We have discussed that and so we have regular conversations during the course of the year and so we've had some staff conversation about that a couple of times actually.

a couple of times.

So you have your projections, you have that.

And so where is it going to show up?

It's going to take up some time.

But it's going to show up in your business activity.

It's going to show up in your employment.

It's going to show up in your annual payrolls, those types of things.

The occupations, you already have very strong, very stronger than the state in terms of the management, business, and science

occupations, much stronger presence there.

So you see why you're an attraction, because you have the workforce there.

And then also you have a workforce development pipeline to continue that.

So I could see where that would make it attractive for those technical careers.

You also have the professional services.

That's an area that will show up in terms of employment.

So it also depends on the nature of the organizations that

that will be brought in with the economic development.

If they are governmental in nature, they'll show up in public administration category.

So the direct military, I would not expect to pay grocery seats.

It would be the private sector businesses that would be paying the business license, if you will.

And so it depends on the nature of the, I would say the constellation of entities that end up

Thank you.

Thank you.

Well, I hate to stop the appreciative nature of you being here, Dr. Bailey, because I got to tell you, when I saw this was on the agenda, I was like, holy hell, I'm still not fully comprehending last year's report.

And here you are before it's whacking us over the head with this report.

We don't want it to be a whack.

But I mean, there was still a lot of reflection and questions

that remain unanswered from that year ago, but I am of course appreciative that the staff goes through this.

The wages versus 19, the personal income, yes.

Yes, that's right.

The wages are going up.

We're still lagging behind Virginia and the US, but we are growing.

And then that next slide, that 19.

It's per capita, right.

Would you just editorialize more on that?

Well, that's a good wait a minute.

I'm glad I had them back to back for that reason.

And so a lot of income is not based on

on based on a job, on wages and a job.

That's the primary.

So you'll find that with that

seems seemingly contradictory, I would say that it also shows up in the American Community Survey data that I have in the last section of the report in terms of your household income.

If you see that your median household income is way above your mean or average income, that is a sign of what we call a skewed distribution and perhaps even a bimodal distribution.

So you have high income families and you have income and families that are maybe more middle of the road or lower income.

So this actually shows, and we could go into further detail to parse it, it just shows that you have different parts of the community and all in the same community.

So here is related to total income, total personal income, much of which may not be a job.

Also we see that Albemarle has a higher, slightly higher incidence than the state of those households with retirement income.

Social Security is not enough difference.

It's about the same.

It's a little bit higher, but I don't think it's enough to be distinct, but it's distinct.

You can see the distinctness in terms of retirement income.

That's one thing we see in the American Community Survey.

So you, I mean obviously you look at this stuff, you analyze it all the time.

Well, I use the fancy term bimodal.

I would say they have two Albemarle counties.

The fancy statistical term is bimodal, you have two peaks here.

And that's not unlike many other communities.

And that's why I also bring up that U6 and that non-employment, the working poor, part-time for economic reasons, that's the working poor.

That's all for us to see that there are persons invisible in the typical statistics, and I try to bring that fabric

to the report and not just have just unemployment or personal per capita personal income is high.

That's why we have the tables in the back on a number of aspects of

of the household, household income by granular income brackets, et cetera, just to get a fuller flavor.

And so we have those who are dependent on those wages.

And as compared to the U.S.

and Virginia, however, they look strong compared to the average

hourly wage is strong in the Charlottesville MSA via Stanton and Harrisonburg MSA, not as strong as compared to Richmond or Virginia at large, but Virginia at large includes Northern Virginia, so, you know, so

Locally, they're strong, but also we have households that are not dependent on wages and that are doing quite well and so the community is not all just one and they're probably gradations in between the middle class will say well wait we're being squeezed out every which way so the fabric of the community is varied and rich and

And so this shows that some are doing very well to the point that they raise the statistics.

You can also see it with the median being, I think, $10,000 greater than the mean, the average.

That shows we've got a few households that are pulling that number way up.

Yeah, I'm still from last year trying to understand why we flipped.

We were above Virginia in the state and then we dipped down below.

In terms of that thing goes back in 2013.

Yes, something happened then.

I still don't.

That's what still like I don't understand like what happened, but that's different.

In the warning signs and this might be a two-parter for both.

Maybe it's directed at Andy.

I don't know who.

I remember last year after getting this report,

and then it just happened that Goldman Sachs put a report out that was talking about a soft landing.

They went against the consensus about what was maybe coming for the recession in 2023.

I don't know if, I didn't reread the report, I don't remember why they thought it was going to be different, aligns with what actually happened.

But, when you are doing your regular monthly, I guess this maybe falls under warning systems, are there some good

I just don't know the logistics of what... So there is a range of view.

Moody's was in the same position and I watch Moody's and Mark Zandi is the lead economist of

One of the top economists that actually Congress uses at Moody's Analytics.

He's a UPenn guy.

And so they also were pretty much dead on on the 2022 and 2023 as well.

So we look at a range of forecasts, not one, and look at that full range.

And so you'll see a range of forecasts in

the report and you'll see all the folks we're looking at and so we and so with regard to and the forecast begin to converge this time of year so if you see we have 0.5 to 1.5 next year and they're going to be continuously revised and I look at those revisions every month every quarter and look at the why

and so as more data comes in, they're just like the Bureau of Labor Statistics and the Bureau of Economic Analysis, they get revised.

I fully expect many revisions will take place based on the Fed's update two weeks ago.

So that hasn't been fully incorporated in yet, but come October

The October versions of those, the November versions, the December versions of those, they're going to be continually refined.

And so as we go along, the differences of opinion will begin to converge, but there's still some that just have totally different viewpoints and we watch them all.

Yeah, I just didn't know if on an ongoing regular, I assume these reports, I'm no expert on financial reports that come out.

So these obviously come out regularly.

I think really living through the experience has been a good analytical exercise, for lack of a better term, to go through and understand what are those revenues that are most sensitive to certain changes.

Now some of those, like our sales tax, our food and beverage tax, our transit occupancy tax, our recordation tax, all of those we get monthly data on.

And so when we get that data, we try and understand, you know, how is this not only compared to what it is, but when the state is reporting on similar indications, what is changing with the state?

What assumptions is the state making, and how is that varying from what it says?

So it's making sure that we're doing our own internal analysis, but also looking at how others are comparing, and there may be different opinions in understanding why that is.

And I think it's one, as Dr. Bailey indicates, the further we get in the year, the better we're able to tighten that up with that experience and learning that as we've been through the pandemic of the closure and the reopening, now that we tend to be in a new pattern, what does that pattern really look like and when have we reached that?

Do you hit a button when the warning signs get big where it sets off everybody's alarm in the county executive's office and budget and finances?

It's like, well, we talk about warning signs.

Well, all right, when the warning signs pop, like you guys, I assume, like, oh, we better meet about this and talk about it.

Yeah, I mean it's certainly a good example.

We may say, and I'll say recordation tax is an example.

We've been through a very unusual time where we had a normal, I'm going to throw approximate numbers out here, we may receive about 1.8 million to 2 million dollars in recordation tax annually.

All of a sudden we were receiving more than $3 million in that revenue annually as the people refinancing the housing market as we saw some of the data was very hot for a while and really understanding that is so high.

We knew that wouldn't last.

So now we're turning to a level more in that $1.8 million to $2 million range.

And so it feels like such a large decrease because it is from where we were two years ago.

but understanding historically it's not that unusual for where we've been but that's one still as we know that just you know that volume of sales is not what it was continuing to watch that not take it for granted that we're just returning to a pre-pandemic normal and so from that it's really understanding from everyone from the clerk of the circuit court who's involved in that collection of the revenue to a real estate office to others and really getting everyone's input talking to your community development folks what do you all see in a development activity

Hence what I'm remembering during our past budget, getting ready that it's not going to stay this hot and planning for year two and three is versus just turn around and we'd raise taxes because now we don't have the revenue coming in to do the things that we've done.

You just played it right out.

If I may add too, we have an operational rhythm between the county exec's office and finance and budget where we meet every other week throughout the year.

That intensifies during budget season, but in part that's an opportunity where we're always looking at, you know,

We have opportunities to look at issues like this as early warning or, hey, this is looking positive, and we start planning earlier than we might.

Well, Dr. Bailey, thank you.

The report that was given last year stuck, I mean, of many things that are given to us just kept resonating and still does for 12 months and I expect this will do it for the coming 12 months and watching it play out with the team.

I shared this report, I think, more than any other piece of information that I received as a supervisor last year with other committees and groups and putting the word out there, so probably doing the same here, but I would imagine I'll be asking questions of staff for the months to come.

Dr. Bailey, thank you.

I heard Supervisor McKeel comment, that's because we have a small percentage of extremely wealthy people, which is why slide 19 puts us up.

But slide 18 is also very important.

And as the board knows, I'm very wont to pull up these pithy little statements from before

that we've heard and try and work them in like there are lies, damn lies, and statistics.

When we look at statistics, as you pointed out, we have to realize are we talking the mean, the mode, or the median.

This overall economic report is very helpful for us as we look at what I would call the macroeconomics

of scheduling a budget, but then we have to look at things like the orange dot report which helps us on the more specific areas of what do we provide funding for for county services.

It would be really helpful if it was possible in a future report if you take sort of the bell curve of incomes in Albemarle County if there was a way to parse out

the few extremely wealthy people, and I don't know exactly where you draw that cutoff, that gives us I think a broader overall look at the economic family income for the county.

So I think that would help us a little bit because when you go back to slide 19, those few people who are extremely wealthy distort

the overall picture and if we focus on that, we lose the focus we need on the reality for the lives of the vast majority of our population here.

I am also reminded of that great little saying that we hear at the end of any advertisement for investment

you know that past performance is no guarantee of future results but at the same time we know that in the absence of something like a pandemic that there are trends that we can see so if we have an 11% one year and a 13% average real estate increase in value but we know that that's not going to continue indefinitely

and we'll start to see the adjustments as some of the other slides showed.

Housing sales are going down, interest rates are going up.

It's going to start to affect those.

So we can follow broader trends as it helps us towards where we need to go.