Board of Supervisors Regular Second Meeting   10/15/2025

Good afternoon.

I'm pleased to call to order this meeting of the Albemarle County Board of Supervisors on the 15th of October, 1 p.m.

in Lane Auditorium.

I'd like to note at the dais we have Supervisor Ann Mallek of the White Hall District, Supervisor Ned Galloway of the Rio District, Supervisor Diantha McKeel of the Jack Jouett District, Supervisor Bea LaPisto-Kirtley of the Rivanna District, Supervisor Mike Pruitt of the Scottsville District, and myself, Jim Andrews, representing the Samuel Miller District.

The quorum is present.

We're also joined by our County Executive, Mr. Jeff Richardson, County Attorney, Mr. Andy Herrick, our Clerk, Ms.

Claudette Borgerson.

Also, let me please welcome Albemarle County Police Officer's President, Lieutenant Angela Jamieson and Officer Lauren Daly.

Board, as usual, our first item is to adopt the final agenda.

I've heard no recommended, requested changes to that final agenda, so I'm looking for a motion to adopt the final agenda.

So moved.

Second.

We have a motion from Supervisor Mallek, second from Supervisor McKeel.

Ms.

Mallek?

Yes.

Ms.

McKeel?

Yes.

Mr. Pruitt?

Aye.

Mr. Andrews?

Yes.

Mr. Galloway?

Yes.

Ms.

LaPisto-Kirtley?

Board, of course, the first item is then announcements by board members.

I'm going to make a couple quick comments.

And one is that my understanding is that the county executive, Mr. Richardson, will be talking about AstraZeneca perhaps a little bit at 6 o'clock.

Yes, sir.

And so any comments, we'll get a chance to make comments about that event at that time.

And there was a big event on Friday.

And we have a special guest in the audience.

intend to come back around twice.

So when it comes to me, we'll get that part of this started.

But for now, we'll go through our order for today.

Yes, I'd just like to take this opportunity to remind everyone that early voting is ongoing.

So the last day to do your registration or update your voter registration, so if you've moved, is going to be on the 24th of this month.

That does not mean you cannot still update your registration.

It just means you'll be voting by a provisional ballot.

The easiest way to do this is always just go into early voting.

You can do everything same day.

right there in person.

Just have some basic identifying documents with you.

You're easy to go.

Early voting continues until the first.

As a reminder for folks in the audience, early voting is conducted at the 5th Street Office Building, same place where the police and social services are.

And the actual election will be the Tuesday following.

All right, that's the fourth.

Thank you.

Supervisor McKeel?

Sure.

Just one quick item.

We sent out a press release yesterday, meaning Albemarle County sent out a press release yesterday, that Fire and Rescue, Albemarle Fire and Rescue is launching

a platform to assist our community in emergencies.

And because of the growing number of calls for service for fire and rescue incidences, the fire and rescue group are trying to figure out a way to help us help them in helping us.

The new tool allows residents and business owners to share essential details about their home and properties

that could make a life-saving difference in emergencies.

And so what this is called is Community Connect.

And it's a free, secure platform designed to help responders when they arrive at your home to be fully prepared.

And in order to find out more about it and to sign up for it,

You can go to Community Connect, and it'll give you the information you need.

They're looking for information like, do you have someone on oxygen?

Do you have someone with a disability that lives at your home?

You can just imagine the information that you could share with Fire and Rescue that would help them in an emergency when they're arriving at your house.

So Community Connect, and that's all I have.

Thank you.

Thank you very much.

I will take all the time that's been left by others because it's a busy time.

This Sunday, August, wow, October 19th at 11 a.m.

Piedmont Baptist Church on Half Mile Branch in Crozet will be celebrating their 155th anniversary and this is an amazing congregation.

A number of years ago the church caught fire.

A Crozet volunteer fire person was driving by at eleven o'clock and managed to call

Time to prepare

your front porch or fence or business storefront for Operation Greenlight 2025.

You can dress your house with green lights to recognize the service of our veteran, pardon me, veteran and active duty neighbors.

Remind them to seek services at the VA even if their claims were denied previously.

New rules for PACT Act eligibility were enacted in 2024.

And the VA clinic locally and at Maguire is in full operation.

America's counties have a long and proud history of serving our nation's veterans, and this legacy continues today as we work with all of our federal, state, and local partners.

So let's show support for veterans by lighting our buildings green from November 4th to 11th, or all year round as I do.

By shining that green light, county governments and our residents will let veterans know that they are seen, appreciated, and supported.

It is apple butter season.

In addition, outside the Samuel Miller district, Mount Moriah is busy on October 18th and has a fall festival then.

And then on the 25th of October, it's as if the whole world is coming to our area because there are so many things going on.

The owners of the Bluebird and Company Bookstore in Crozet are in their third year now of the Crozet Book Festival and are partnering this year with the Crozet Library.

There are school events and events also Saturday, October 25th, at the Mud House at Barbara Taneckle, the Yellow Mug, and the large

author events at the library.

There are 33 writers coming for the weekend.

Many will be going to schools on that Friday.

Sounds like a wonderful fun time.

The White Hall Ruritans, who maintain and care for the historic White Hall community building in the village of White Hall, is having their apple butter on October 25th, cooking from midnight to noon, and buying from noon to four.

So I hope that people will come.

It sells out quickly, so plan ahead.

Also on October 25th,

is the health fair, the Get Better Crozet Health Fair at Crozet Park from 10.30 to 4.30.

Many, many partner agencies.

This is in its second year.

And public safety as well as private business agencies and lots of children's activities.

So put that on your traveling around Crozet, Western Albemarle route.

Someone else may mention this, but October 25 is also National Drug Take Back Day.

and ACPD in partnership with Sentara Wegmans and the DEA have four drop-off locations this year.

And they are, getting there, the Wegmans Grocery on 5th Street, Sentara Martha Jefferson at Martha Jefferson Drive, also Sentara Crozet Family Medicine on Park Ridge Drive, and the Forest Lakes Family Medicine on Prophet Road.

Last, two things in November, the race at Mid Springs.

It's an adventure race, a four-hour and an eight-hour orienteering and mountain biking race up through the mountains.

And the beginning of the eight-hour race begins at 8 AM, and the four-hour family race begins at 10 AM on foot and mountain biking control points.

And racers will navigate the rugged terrain using only a map and a compass.

crosley.racing slash home base.

and this is where to get information and this supports the Crozet Cares closet, which is another thrift share.

And lastly, November 8th and 9th is the 31st annual studio tour founded right here in Albemarle.

There are 31 artisans, I'm sorry, 47 artisans at 24 studios throughout Albemarle County, the city, Greene, Madison, and Nelson.

and so there are lots of things coming up to do on your weekends.

Thank you.

Thank you.

Supervisor LaPisto-Kirtley?

Yes, I have just a few announcements.

At our EDA meeting last night,

We had a presentation by GO Virginia, which is Growth and Opportunity, Virginia.

We've received $600,000 from them to the EDA for what's being done in Rivanna Futures, especially in the AstraZeneca area.

And we also met, it was a joint meeting, our second time having a joint meeting with the Charlottesville

EDA.

So that was very productive.

A lot of consensus regarding working together.

What can Albemarle and Charlottesville do working together for economic development?

So that was productive.

The other thing is Thursday, October 23, at 4 to 7, Claudius Crozet Park.

And Friday, October 24, at Darden Town Park,

is our annual Trunk or Treat.

This is where the police and fire get together, have a wonderful, this is an exciting event, a wonderful event.

If you haven't been to it, it's really exciting.

If you've got children or adults, you want to go there, I've been there.

I took our family last year from France

The kids loved it.

They get to climb around police, the SWAT car, the fire engine.

The kids love it.

And lastly, on October 6, we had what's called a steel topping out.

And this was for the Manning Center.

Why do I bring this up?

Since it's in Charlottesville, I bring it up because it closely aligns with our innovation corridor and what we're doing in the area of bioscience.

Thank you.

And a couple of quick ones just to note that I don't think anybody's mentioned.

There's an all CAC meeting here in this room on October 30th at 68 p.m.

and that's going to reveal a number of excellent reports, community well-being profile, orange dot report, MAP 2 health report.

But most importantly, I'm going to take an opportunity to bring us together again and give everyone a chance to comment again.

On Friday, several of us joined

room full of staff to honor the retirement of Chief Dan Eggleston.

And not all of us were able to share or be here at the time, but this is a man whose impact on the community is huge.

and deserves community-wide public recognition.

He's announced his retirement effect at the end of October after more than 40 years in the fire service including 23 years leading Albemarle County's fire rescue ACFR.

Under his leadership ACFR grew from I believe a staff of like nine to what it is today a modern unified career volunteer combination department and believe me those of us reading the report know that

Combining career and volunteer departments is not an easy task.

During his time, he's overseen the construction of four new fire stations to reduce response times, hired over 200

career firefighters while continuing strong partnerships with the volunteers, secured more than 10 million in FEMA grants, SAFER grants to enhance staffing, training and equipment, launched nationally recognized health and wellness programs to protect firefighters, modernized our fleet, expanded and advanced training programs.

He's also been the voice of the fire service nationally and internationally.

Chief Eccleston served as the president and board chair for the International Association of Fire Chiefs.

He testified before Congress on critical public safety issues.

He's built international partnerships sharing best practices with fire organizations in Europe, South America, and the Middle East.

Honored by the Netherlands Fire Officers Association for its contributions to global fire leadership.

Chief Eccleston's careers included service during pivotal events, Hurricane Floyd, post-9-11 operations in New York City, August 12, 2017, civil disturbance in Charlottesville,

Albemarle area.

I understand just in the past year he's had a couple of opportunities to talk to the governor when crises have come close to home here.

So he's a man who has a major, major impact.

And I want to make sure we publicly congratulate you for your service.

Thank you.

And I do want to ask if the board might mind to add on to that.

I know not everybody was able to be here.

Yes.

So first off, I want to personally apologize.

I was capping out my vacation when you were celebrating your retirement ceremony and was not able to be there in person, and I regret that.

I think we first met when I was running for office, and I sat down with you and some other members of public safety leadership and was instantly

Instantly struck by how stupid lucky this county was and I was coming into leadership in this county Because I immediately clocked.

Oh, this is a man who could be like working 10 hours a week making bank as a consultant anywhere in the country if he wanted to be and he has chosen to to lead this fire system a complicated sophisticated complex system that you helped build from scratch the

The steadying hand you've had and the incredible work you've done in really navigating some complex growth issues in this county, some complex human political issues in this county, I think has left an incredible and indelible mark on this county.

It's something that has been very important to my district.

Your leadership has been tremendously important to my district.

And I will always be grateful for that.

Thank you.

Supervisor McKeel?

Dan.

And to many of us in this community, you are Dan.

You are our Fire Chief.

but your warmth and your ability to connect to people is just outstanding and we really appreciate your service and your ability to work with many different types of people and your ability to manage the volunteers and the paid staff over the years and get us to where we are right now has been mentioned multiple times.

On Friday, we had a room full of people

many current staff but lots of folks that came back from the community that had worked with you over the years that just wanted to say thank you.

Thank you very much and I was very pleased to be able to be here and get after him one more time.

But thank you.

I think after decades of volunteers working together at Wits End from 1910 on until today, the birthing of our formally designed combined system and its evolution into the successful 10 volunteers and five pay stations that we have today, that's a powerful legacy that probably stands alone anywhere in the fire history here.

I'm glad to hear that you are staying in Crozet and you will continue to visit now and then but fair winds and following seas as the Navy guys say because you deserve every second of fun outdoors on a beautiful day like today.

Dan, I hold you in such high regard and so much respect.

You choked up just because of an event back in May and what care your department has and it's because of your leadership.

Appreciate that.

Okay, pull it together.

In attending NACO, you learned to hang out with Dan because you know NACO is the National Association of Counties and he's got a reputation at the national level.

And you hang out with him, so I hope some of that regard and respect rubs off on you.

So you have been such an ambassador for this county beyond just the work that you do and your expertise and your career and your history.

So the fact that you have done that for our county, I know has raised our esteem, not just because of the service you've done here, but the work that you and what you've contributed outside of the county as well.

These are always bittersweet moments, I know, but I know hearing your last motorcycle trip and what that was about, that I'm really just happy and smiling for what I know your experiences will be as you enjoy the next chapter.

It has been my honor to be able to work with you, I think all of us, because you are an incredible person, an incredible leader.

You're innovative, forward thinking, and that shows through all the things that you've done for this department.

Me speaking personally, what you did for Stony Point Volunteer Fire Station, on the verge of being eliminated, help bring that back, being innovative by putting in

three career staff during the day, and then an ambulance.

Stony Point never had an ambulance.

I think they use that ambulance more than anything else.

So that is really, really appreciated.

You're a problem solver.

You listen.

That's what I truly, truly respect about you.

And you do come up with all these different creative ideas.

That's really exciting.

And you've been such a

Such a monumental force in this county.

And we are going to miss you, but I know you're going to continue to be involved in the newly created Fire Rescue Foundation.

And that's going to be really something that can help a lot of our firefighters.

We're going to miss you, but I know you're not going away.

Otherwise, I think this board would vote not to let you.

Can we do that?

Andy?

No.

OK.

But thank you very much.

And so I just say that personally, whenever you had to come forward to talk to the board, it's always filled me with a great deal of confidence.

And I invite you, if you have any interest, to come forward one last time.

I love that picture, by the way, Addie.

Diane Eggleston, Fire Rescue Chief.

I guess I can say that one more time here, but yeah, I just want to take a moment to thank you all.

This position as a fire chief here in Albemarle County is the highlight of my fire service career that goes back to 1977.

It's hard to say that out loud, but I want to thank the board.

I want to thank our county executive and his team, the

department heads and our outstanding team of career and volunteer members.

You know, recently somebody said, gosh, you know, every time I attend your meetings, it's like this.

And I said, well, you know, this creates some good policy sometimes.

It doesn't necessarily all have to be harmony.

Sometimes that conversation and friction leads to something good.

So it can't be too hard, but not too soft.

I'm sure you all are well aware that your legislators

But I just want to tell you that one last time that I truly believe in our collective vision.

The vision that you all have worked really hard to try to put together to make this the best county we can ever hope to have.

And I see it playing out in our community.

I'm out there in the field working with our folks and I see it.

I see it driving home.

I see it in my own community in Crozet.

Albemarle County is my home and it'll always be my home.

And my intent is to stay connected and continue to contribute in any way I can to help you all bring this vision to reality.

So I just want to thank you one last time for the opportunity and your trust and guidance over the years.

I've thoroughly enjoyed working with you all.

This has been great.

I'm a local government nerd, so this is like right up my alley.

And I really appreciate it very much.

So thank you, board and Mr. Richardson, for your guidance and your trust in me to do this job.

So this brings us to public comment on matters previously considered or currently pending before the board other than scheduled public hearings and we have a sign up.

We have one person who signed up in person and no one online.

So during the time set aside for public comment on matters previously considered or currently pending before the board, other than scheduled public hearings, individuals may address the Board of Supervisors.

Individuals are allowed one opportunity of up to three minutes to speak at each board meeting.

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

Timekeeping is conducted through a timer and a light system at the podium.

The green light will go on when you begin speaking, which begins your allotted time.

The yellow light indicates you have one minute to finish speaking.

The red light indicates your time has expired and you will be asked to end your comments.

In order to give all speakers equal treatment and courtesy, the board requests that speakers adhere to the following guidelines.

When addressing the board, state your name and if you live in Albemarle County, your magisterial district.

address comments directly to the board as a whole.

Any written statements or other supporting material may be given to the clerk.

If representing a group or organization, you may ask others present to raise their hands in recognition.

Speakers may not share any unused time.

Back and forth debate is not permitted and do not speak out of turn.

All comments are live streamed, recorded, and published on the Albemarle County website.

My name is Sophie Massey and I live in the Samuel Miller district.

I'm here today to speak in support of Albemarle adopting a biosolids ordinance.

I grew up in Rappahannock County, which has had a biosolids ordinance for decades.

I feel very fortunate to have grown up in a place where biosolids have never been spread.

Sadly, that is not the case for my children.

In the last year, I've learned that biosolids are routinely spread on thousands of acres in Albemarle.

Biosolids are treated sewage sludge, marketed as cheap fertilizer for farm and timberland.

There are all sorts of problems with biosolids, chief among them the preponderance of PFAS, so-called forever chemicals, because they do not break down in nature.

PFAS are linked to multiple cancers and infertility.

One source of the biosolids spread here is the Blue Plains wastewater treatment plant in DC.

Imagine what goes into a major metropolitan sewage system, then expand your imagination to include landfill leachate, the goo from landfills, because that also goes in there.

This sludge is tested for heavy metals and treated for pathogens, but it is not treated for PFAS.

I live in the Toadier Creek watershed, a designated drinking water protection area for the town of Scottsville.

Farms around me receive biosolids.

I don't worry about my friends in Scottsville because they are the beneficiaries of robust water filtration from being on municipal water.

But I do worry about people on private wells.

I worry so much that I had my own well tested and the test came back with higher than EPA-recommended levels of PFAS.

I have the wherewithal to put in a whole house PFAS filter so my family is now protected.

But I knew how to test

what to look for and I could afford to remedy the problem.

Most of my neighbors don't even know to be looking for these contaminants.

And yet I still have to live with the knowledge that my young children spent the first years of their lives drinking contaminated water and I nursed my youngest while I was drinking contaminated water.

I don't think my well is the only one contaminated.

I think a biosolids ordinance like Rappahannock's would go a long way towards protecting rural drinking water.

So please consider the adoption of a biosolids ordinance.

because rural folks deserve clean water too.

Thank you.

That's it.

Thank you.

Board, our next item is the Economic Outlook Report.

Consent agenda.

Turned too soon.

Thank you.

I forgot the consent agenda.

I move we approve the consent agenda.

We have a motion from Supervisor McKeel, second from Supervisor Mallek.

Ms.

Mallek?

Yes.

Ms.

McKeel?

Yes.

Mr. Pruitt?

Aye.

Mr. Andrews?

Yes.

Ms.

LaPisto-Kirtley?

Thank you.

And now I turn it over to Mr. Bowman and Dr. Bailey.

Thank you.

Good afternoon to the chair and the board.

My name is Andy Bowman, assistant chief financial officer.

My comments will be very brief today, because I'm here to introduce our speaker.

And I know the board has a very full agenda today, and also just to frame what today's topic is.

Today is really the first of three items where we'll be talking about long-range financial planning with the board this fall.

I will be back with staff on November 19th to talk about the board's five-year financial plan, how we take the strategic plan of the board and line that with our long-term revenue and expenditure projections.

On December 3rd, there is a joint work session around the school division's capital needs, but today is really taking a look at what's going on not only locally, but in the state, the nation, and the world in our economic outlook report.

This is the fourth year that the county has contracted with Virginia Tech, working with Dr. Bailey to prepare this report.

And this report provides a lot of value because it takes the work that our analysts and others in our department do to analyze our local revenues and what we see and relate that to as we look up and look around us, how does that change and what's going on in these very unusual times that we've lived in for the past few years.

So with that, I will introduce Dr. Bailey.

She has nearly 30 years of experience at the local and the state and the public and private sector providing senior leadership and she's been at the forefront of policy initiatives at all public levels.

She has served in the gubernatorial cabinet as a state authority director and directing Virginia's largest municipal bond bank.

She served on the Board of Directors for the Municipal Securities Rulemaking Board with approval by the Security and Exchange Commission.

She's been a visiting economist with the Board of Governors for the Federal Reserve.

She's presented policy briefings on Capitol Hill.

And with all of her contributions as a practitioner, she also has extensive academic credentials, having earned her bachelor's degree, summa cum laude, in economics from Norfolk State, and master's and doctorate degrees from Harvard University.

She's been on the faculty of Harvard, Virginia Commonwealth University, Hampton, William & Mary, and Virginia Tech.

I think I got them all.

Thank you.

Thank you so much for having me back.

And I want to thank Andy for that very generous introduction.

And it is my honor and privilege to work with your esteemed staff here and to be back.

I'll say Mr. Chairman, members of the board, Mr. Richardson, Mr. Herrick, Madam Clerk, other staff, members of the dais, and staff that are here, thank you so much.

And it's my honor to be here and to share with you some more that's going on here lately.

Seems like these are times of change.

When I met with the staff earlier this morning, I'm from Hampton Roads.

I'm Virginia born and bred, but from Hampton Roads and we have a lot of military metaphors there.

You probably have a touch of those two of DOD presence here.

but we have every military command and the Supreme Alak command of NATO so it's just it's in the air and so the term the military term military has used VUCA it's an acronym volatile uncertain

complex, ambiguous.

And we're now living in a VUCA world.

Business adopted it, and I think in government, since we're at the point of the spear, especially local government, we can certainly embrace VUCA because we're coming up with solutions in this VUCA world.

So it's a time of disruption, the likelihood of disruptions is increasing.

I've been saying that for ten years and I'm getting to live it a little bit more

often than I'd like.

So we are back at a time of significant change.

Earlier this year it almost felt like we were in the COVID time trying to figure out what was going on economically with forecasts being constantly updated and

Webinars from Moody's, S&P, and Fitch coming out weekly.

And Fitch also has a division, BMI, so they have, Fitch has webinars, and it's BMI subsidiary has webinars.

And so, same thing with Moody's.

Moody's Analytics, Moody's Credit Agency, so we're just all trying to keep up with things as well as the conference board.

And so, and many others that I keep up with.

And so, we're all in figuring out what's going on, and the good news is that the economy is resilient.

It is slowing.

It is definitely slower, but we do have a resilient economy, but there's still more to happen.

And so I gave you the punchline even before I told you I was going to give you the punchline.

And so we're going to talk about the bottom line for U.S., Virginia, and Albemarle County, then I'll get a quick review of the U.S.

trends and outlook, then also

focus and zoom in on Albemarle County relative to Virginia.

Some things are happening here that are different than the national level and some closing comments.

And there's some additional detail in the appendix for you, some additional detail there for your reference.

So again, bottom line up front, we have a slower U.S.

economy.

It is definitely slowed down with modest growth but not a recession.

and our resilience is showing up where we are now, but some of the impacts are delayed, so we still, there's a lot of uncertainty there.

I work very hard to get these pictures, and so we have some sun, but we have a lot of clouds.

A lot of uncertainty.

So a lot of uncertainty, and so I've said, using Sesame Street, U is the letter of this year.

Uncertain.

You're hearing uncertainty every day.

And this is a lot going on.

The Virginia's economy has cooled faster than the nation's in the first half of 2025.

So that's our current immediate environment.

I'll talk more about that.

But Albemarle County has a solid economic base.

And I'll review that.

And you still do.

And that, along with your proactive and prudent management

gives the county and leadership a lot of scope within which to plan and to act proactively.

You have much more scope there than many other communities that we work with or that call us for help.

So that does not mean we are immune to the current realities, but it does give a lot more on your tool belt.

So in terms of US trends, the economy grew overall between the first and second quarter, less than half as fast as our annual rate in 2024.

We've came into 2025 with very solid, actually robust growth, above trend, long-term trend, 2.8% last year, 2.9% in 2023.

very robust recovery and we were heading and we had a solid job market.

But things changed and we have a lot of policy changes in the whole world order of the global economy.

It's in flux.

In the first quarter we dropped minus 0.6 percent.

Two primary reasons.

Two, I would say, well there are a number of reasons but I'll give headline reasons.

Headline reason is consumers pull back.

Consumers, so gross domestic product, this is domestic product.

That's how we measure our output, our productivity.

And real in this presentation is inflation-adjusted.

Real is a lot shorter word to put on a slide than inflation adjusted.

So we use real.

And that means inflation adjusted.

You also see constant dollars is another term for that.

We fix it in a certain time period.

And most of these dollars are in 2017 dollars for the federal statistics.

So something else, blue is for the US, red is for Virginia, green is Albemarle County, and light green is Charlottesville, MSA.

So those are the colors codes that we use.

And I hope that we've been consistent because sometimes the green light green, we worked real hard to get that.

Also the shaded areas in the graphs delete or denote, delineate recessions.

And those are determined by the National Bureau of Economic Research, and they're not necessarily two successive quarters of negative growth.

That's for the rest of the world, but here we use the three Ds, depth, duration, and dispersion.

like how wide, how deep, and how long.

So dispersion, depth, duration, so that's wide, deep, and how long.

So we use the three D's to determine that.

We don't do it.

The NBER does it.

In fact, NBER used to own the GDP statistics before World War II.

The government federalized it in order to prepare for World War II to get arms on our economy.

So that's all backdrop.

That also says we don't have a lot of data beyond before that.

So what some of the area that era we in now with tariffs goes before our federal statistics in terms of being covered in the way they are.

Because many of the statistics were proprietary before that and were not managed by the federal government.

So we are in some uncharted territory in terms of what the impacts will be because we don't have data

consistent data for the times from the tariffs we have now.

Let's go back to Smoot-Hawley at the beginning of the 30s.

We don't have consistent data there.

So it's a lot of uncertainty, a lot of uncertainty, uncharted territory.

We've lived it before.

We don't have data to tell us how it went.

So what happened in the first quarter

Consumers pull back.

Consumers are one of four legs of GDP, Gross Domestic Product.

Consumers are the most important piece.

They are nearly 70% of GDP.

We are a consumption economy.

Second

in terms of contribution.

Second largest is business private domestic investment, not spending investment.

This is equipment, structures, the productive capacity, intellectual property, software, those things.

That's business domestic investment.

Third is government.

I had one of the nurses at my

You know, I'm always chatting about economy or whatever.

And one of my nurses said, well, you know, the government is making the economy go.

I'm like, no, it isn't.

We are, you know, the government is third.

They're number three in terms of contribution to GDP.

The fourth leg is net exports.

That's our exports minus our imports.

So imports are a negative deduction to GDP.

So two main things happened in first quarter.

Consumers pulled back and businesses really increased inventories and imports to front run the upcoming import tariffs, the taxes.

So they loaded up on inventory.

We are still benefiting from that built-up inventory now.

So some of the full tariff effects have not come about.

And that also bolstered our economic activity this year in that attempt to front-run those tariffs.

One thing that consumers did buy was cars in March, again, to front-run the impending tariffs of April.

first quarter.

And with the huge imports coming in and the buildup of inventories, although that's a positive contribution, but the imports were a negative deduction.

So between the consumers pulling back and all those imports coming in, which is a deduction on GDP, it went down.

So when you look at the second quarter compared to the first quarter, it looks good.

Because we don't have, you have less imports

So you have less of a deduction, so automatically you go up, right?

And so we had, that got revised up though because consumers did do a bit more spending.

And we see that, that grew 3.8% in the second quarter.

Some of that is mathematical with the imports up and then down.

But that is giving us some, that's actually bolstering all of that buying in the first quarter.

It's going to bolster us this year.

So some of the impacts of the tariffs haven't hit yet.

Moreover, those tariffs have been delayed.

Now looking at jobs, our job recovery was very solid coming into 25.

We have significantly slowed down since August.

I'm sorry, since January.

But as of August, we had recovered and exceeded by 4.8%, almost 5% of the jobs we lost in the pandemic.

The pandemic, again, I show this chart so we don't forget.

because our long-term memories can get really rosy.

And so we see here the previous two recessions, we see the real estate bust of the early 2000s, we see the great financial crisis, and we see the pandemic.

We dropped faster

and deeper in the pandemic because consumers stayed home, 70% of your economy, right?

And so that had a big difference.

We have recovered those jobs and exceeded it by 4.8% by August.

If we had kept growing like we had been in 23 and 24, we would have gotten farther along.

However, job growth essentially stalled in April of this year.

So

As of from January to August of this year, on average, the monthly average contribution job growth was 75,000.

That compares to 168,000 a month average of 2024.

And over 160,000 again in 2023.

So that's a big change in the job market.

Even though the job market was normalizing from the red hot of 2021 and 2022, our

Job growth pace has slowed significantly.

So when we do look from January to August, we have 75,000 average a month.

When we look from just May to August, we're looking at 26,000 a month.

So we've added very few jobs since April, and one month we had a significant reduction.

So we now are in a low-hire job market.

or labor market and also low fire.

The layoffs have not really kicked in that were expected.

So low hire, low fire is what we're now calling the labor market.

But that means if you lose your job, it's going to be really hard to find a job.

and you can see from the chart on the far right hand side the job market for the data we have.

We do not have September.

That data was not released with the shutdown.

So all this data is what we have through the shutdown.

We have not gotten any data since October 1st.

So we don't have September data from the federal government.

I have included data from other sources that are available from September.

In terms of unemployment rate, that's kind of in a holding pattern too.

And the curious kind of balance is what Federal Reserve Chairman Jerome Powell calls it.

The media calls it weird, but his actual words were curious kind of balance.

That's what he called it in August.

So the unemployment rate has moved up slightly.

and that is the blue line here, the blue line here, which is the official unemployment rate, which is U3.

I've labeled it as U3 to accentuate that the BLS on most months, not this month, issues six measures of labor underutilization.

U3 is the official unemployment rate, but there are three more that go on.

And U3 is a four-week look back from the middle of the month to the middle of the month.

and if you have not actively looked for work in those four weeks and you're not working and you're not on vacation and you're not on a temporary layoff waiting for recall, then you are outside the civilian labor force and you are outside the numbers.

It is a very narrow snapshot.

So with U6, which is the broadest measure, which also corresponds to the

Feds measure.

So U6 extends the window to the previous 12 months.

Have you actively looked for work?

You know, if you hit the holiday wrong, you could be out of the number, you know, if it's the wrong holiday.

If it's a month, if it hits on maybe Christmas or whatever, and you're out of the labor force, just out and just not involved in the labor market.

in the U3 four weeks.

So 12 months, have you actively looked for work?

And also U6 includes what we call the underemployed.

And this is the household survey.

This is the survey of individuals.

And this survey is conducted in conjunction with census.

So BLS and census conduct this together.

And if you say, I'm part-time, but I really want a full-time job, I want a full-time job, I'm ready and willing to take a full-time job now.

but I've had to settle for part-time schedule for economic reasons, then we are in U6.

And so that's the underemployed.

I always include this chart when I'm working with governments because our social service knows U6 and the broader measures.

That's their customer.

That's their customer role.

This is the working

working underutilized labor, working underutilized labor.

So they're in the labor force.

They actively want to be in the labor force, but they can't connect.

That's the Fuchsia line here, U6.

And then the Federal Reserve has its own measure of unemployment.

The Federal Reserve has a dual mandate

Price stability and maximum employment.

And it uses specialized measures for both parts of that mandate.

So it has its own measure of unemployment called the Non-Employment Index.

Actually, our Richmond 5th District Fed maintains this index for the whole system because two of the founders

creators were Richmond Fed economists, are and were.

One is retired since then.

And so this measure uses the BLS micro data, but it does a finer analysis looking at each subset for the likelihood of being re-employed.

And so it also includes part-time for economic reasons.

Short answer is the broader measures are close to 8%.

and the official unemployment rate is 4.3%, which is ticked up from about 4.1, 4.2.

But the curious balance is because you have this low job creation.

Why isn't the unemployment rate up?

There's a low demand for labor.

The supply has gone down.

The labor supply has gone down in tandem with the labor demand.

And that's why the unemployment rate is not reflecting what we're seeing in the job market.

And all of that is because of federal policy.

federal policy changes.

And so that's this curious kind of balance.

So the unemployment rate, the unofficial unemployment rate, is not the barometer it used to be because of this labor demand and supply moving together.

And so I want to share that.

That's why we say the unemployment rate is still historically low.

Yeah, well, we're not creating any jobs.

So also the consumer is still spending, but the consumer is reacting.

The consumer behavior has been called volatile in some of the fed surveys of businesses.

The businesses say they are volatile behavior.

But you see that this is the month-over-month expenditure rate and you can see some behavior changes on consumers and their spending, particularly in the goods area in anticipation of tariffs.

Remember they bought cars in March.

Spending went up.

Spending here is the orange bars, the real.

This is inflation adjusted.

Blue is the personal disposable income.

If we see the orange bars to the right, they're spending outside of their monthly income.

And they're using credit and savings to do that.

Yes.

And so, but we see that the consumers pull back, then they hit the gas,

in anticipation of tariffs.

In March, they pulled back again.

And then in the summer, back-to-school purchases picked up early because the tariff extensions were expiring in August.

But consumers continued to spend in August.

We don't have September data, so we are looking to see what the consumer is doing next.

But this summer spending brought us out of the doldrums.

The question is, can it continue with the labor market stalling and cooling?

and we're just waiting for the data to come of that.

So you'll see that the orange bars have gone up more than the blue bars in most months.

And so that's the consumer spending, real consumer spending versus the change, monthly change in the disposal income.

And this chart tells us how.

We have low savings, they're drawing down their savings, and the debt, their total consumer credit balances have gone up.

What's not in these numbers is the buy now, pay later balances, which are not reported to the credit agencies, but the credit agencies are concerned about it and they're planning to add that information.

I read an article last week that one young woman over the last 10 years after keeping up with, she grew up in New Jersey in a very wealthy area, her mom and dad were working, sent her to private schools, but she was around wealth constantly, she went to New York, and long story short, she got married, hid it from her husband, and long story short, she had $50,000 of pay now, buy now, pay later debt a year ago.

Accumulated, she had maxed out on everything.

and so a lot of young people are doing that.

Some articles are showing that some families are doing it for groceries.

So we don't, this is hidden debt.

Student loans have now been reported and they have added to the balances because they started being reported fourth quarter, first quarter this year.

So we're seeing debt show up and there's more I expect to see once the buy now pay later balances are added to the institutional reports.

Inflation is trending up.

We were heading toward the, last year I told you we were heading toward the two percent long-term target of the Fed, not anymore.

So we continued to trend down early part of the year but it turned the corner late spring summer and is now ticking up.

It is ticking up and so CPI, headline inflation, is the high 2.8, 2.9 percent.

CORE is higher than that.

That is concern.

CORE is less food and energy.

It is higher than headline.

That's not typical.

It's been that way for the last few years.

So we have some sticky inflation in services, primarily healthcare, and in housing.

and shelter.

And that includes the imputed cost for home ownership as well.

So we have some sticky areas in terms of services, particularly health care, and shelter.

Now the Fed, with its dual mandate, price stability and maximum employment, has a finer measure.

And it uses PCE inflation.

It's also called GDP deflator.

It's also called PCE Index.

PCE is Personal Consumption Expenditures.

And this measure, unlike the CPI, does not have a fixed market basket.

It takes in consideration the substitutions we make when we encounter prices.

I'm always comparing brand, price, to one of my favorite stories.

I won't mention it.

My granddaughter knew it before she could read.

I'm not going to mention it, but I'm always, in the grocery store I'm comparing, what's the price here, what's the price here, what's the price here?

Because they have this, pick it up in two hours, I'm like, by the time I finish shopping it'll be ready for me, if it's not perishable.

And so I'm always making those prices, making those adjustments.

Trash bags, aluminum foil,

Paper towels, whatever.

I'm always making an adjustment.

And we all do that, hopefully.

I hope we just don't buy, and I hope we're all comparing prices.

And so we compare prices, we change our market basket, and the PCE inflation number takes that into consideration.

It is now laying right over CPI, so it's the high, it's pushing up against 3%, and core is right at 3% and above.

So we are not heading toward the long-term target.

Despite that, however.

Despite inflation taking up, the Fed took a risk management move and they reduced the federal funds rate last month after they resumed their rate easing cycle.

They had put it on hold early in the year because some inflation bumpiness and then all of the fiscal policy changes and the uncertainty.

So even though the inflation is pushing up, with the labor market cooling the way it is, it's pushing the Fed to take some action.

So the Fed is now coming into a stagflation environment.

Inflationary pressures and also slowing economy.

And so that is putting opposite forces on the Fed as it tries to steer into that.

We were on that soft landing and now it has to really change its instruments.

as instrument readings.

And so they reduced the federal funds rate in September.

The projection from their also updated projections, they would have two more.

They would have another probably another two cuts this year.

We don't know.

We don't have the data now.

We don't know.

And so that's the blue line.

The federal funds rate was reduced.

The orange line is the Fed's balance sheet.

The Fed significantly increased its balance sheet.

It bought securities from its member banks, treasury securities, agency backed securities, in order to maintain liquidity and the financial market functioning.

We had a significant disruption with the pandemic and they did not want the

financial market to freeze, implode like it did in the great financial crisis.

So they've, and you see they've done it more than once.

They really flooded the market with liquidity to keep the financial market functioning.

And we have had that financial market stability.

That's one thing we've had not to worry about.

So they are continuing on a regular schedule.

rolling off that balance sheet when renewals come up, they are not renewing them all.

They're letting some of them slough off.

They did slow down the pace in March.

But it's not discussed at every meeting.

It's only discussed when they decide to change the automatic plan.

That's still going on.

So they're pulling back on all that extra liquidity floating around in the market.

I won't say floating around, but supporting the market.

So they're gradually pulling that back, not too fast, not too

not too fast, not too slow, just right, the Goldilocks approach to that.

So the Fed is really threading a needle.

I need to tighten this needle head to avoid recession with all we have going on, to tame inflation, and to maintain financial stability.

So although we're close to the soft landing, now economists are talking about the soft landing of the future.

We're still working on that.

So far so good.

In terms of the outlook for the U.S., we're looking at slower, but still we have a slower but resilient economy with continued high levels of uncertainty.

It's like the fog I encountered here this morning.

It's actually worse.

Earlier the fog was pull over, pull over and wait for some of this, some light to come to help burn off the fog.

and that's a lot of what consumers and businesses have been doing.

They've just been kind of on a holding pattern, waiting for some clarity to come.

The expectations for 2026 are mixed.

I was just listening in between the meeting with the staff this morning, the wonderful staff of Finance and Budget Division, and here

the conference board had this monthly update and I was listening and downloading information and it's mixed expectations and the National Association of Business Economics updated their, you know, released their update on Monday and so forth and so on last week.

So for 2026 there are differing opinions.

Some are expecting the delay

delayed impacts of tariffs to begin to materialize into this year into early next year.

And that projection is we'll have lower growth next year.

Others are thinking we will be able to absorb that and begin to pick up and grow.

For this year, the median forecast is 1.8 percent.

It's a tight band from 1.8 to 2 percent range.

No, 1.6.

But the 1.8 got, the 1.6 got updated to 1.8 this morning, just a few hours, a couple hours ago.

So it's a tight range in terms of expectations for 2025.

The Fed is at 1.6 for this year.

So not a wide range for 2025.

2026, it's a wide range.

It's a whole point difference from 1.3 to 2.3.

And that is just different expectations about the impact of tariffs and how they're going to come through.

The conference board had a huge unpacking of that this morning and they're of the opinion that we'll go from 1.8 to 1.5 next year.

That some of the impacts are yet to be materialized because two things, one, the significant delays and the imposition of those tariffs and two, all of the advanced buying that we had this year.

So some of that is still yet to be worked its way through.

There are many risks to the forecast.

This is the uncertainty.

This area is larger.

Yes, the letters are smaller because there's more in there this year.

Trade and fiscal policy changes.

We just got some new tariffs announced in the next week.

Some new ones just went into effect on Tuesday.

So a lot of unpredictability there, uncertainty.

Our cooling labor market, the inflationary pressures and sticky core,

and those pressures, the pressures on disposable personal income because of the cooling market, consumer and business demand cooling, the fed pressure going in two different opposing

ways, challenges to the Fed's independence, what's the market going to look at that, tight credit conditions still and lending standards, commercial real estate, how that's working through, the housing market, how that's going to unfold, the shifting supply,

Channels.

Manufacturers are looking all over the globe for where they can find or replace manufacturers.

When they hit tariffs this way, they go there.

I understand a lot of it is actually moving to Central America to be within the North American corridor or in this side.

Geopolitical lists continued, although we have had some recent peace announcements, which are much appreciated.

And then the slower growth overall globally.

This growth for 2025 into 2026 is slower than it was last year.

So those are all the swirling winds that are out there that we face.

So staying vigilant, keeping up with all the changes, and being ready to adapt, adjust, and remain agile is important in these times.

Now let's zero in on the county and Virginia.

So going into since 2021,

We have GDP annually is reported for Albemarle plus Charlottesville City.

And it's actually reported that way with a plus sign.

That's how the Bureau of Economic Analysis reports it.

And that GDP growth, real gross domestic product, has exceeded the state and nation through the data we have.

The latest data we have is from 2023.

We'll get 2024 data in December.

It's delayed a year for the metro areas, local counties and metros.

So strong base there, strong backdrop of growth.

In terms of average job growth, it has slowed in Virginia and in the Charlottesville MSA.

We have the Charlottesville MSA in the monthly job growth.

We have it more on an annual basis for the county.

So for monitoring, we look at the MSA.

And it has slowed.

It is definitely job growth has slowed in the first eight months of this year from the 2024 annual rates.

It has slowed significantly at the state from over 6,000 jobs average a month to 1,000 a month.

That's the state perspective.

And I think from about 300 a month

in the MSA to about 100 a month is the monthly average is what we're having now in terms of how we were last year and you see there's a lot of bumpiness and we lost jobs both in the state and in the MSA this year on some months.

in terms of I made sure to pull this chart, and I've gone through this, for us we see that the profile of the job loss is not what we expect.

Every economic season is different.

No slowdown is like the last one.

They're like your children.

They're all unique.

And so even though we are related, they're just different, right?

And so we see here that Virginia's job growth is very slow.

In fact, we were negative two months ago.

net over the year.

So we've done better in the July-August numbers, helped a lot in terms of what this looks like.

And we were going at 2.4% annual growth, solid growth in 2024-2023.

We were catching up with the nation, but now you see that we've grown not even 0.2% since the end of last year.

The profile is heavily hitting

college educated professions.

Long-term unemployed America is college educated.

College grads, but college educated.

And professional and business services is the number one industry category for the job growth.

I mean, some job loss is second to the federal government.

and also Professional and Business Services is the number one industry category for the long-term unemployed in Virginia, as reported by the VEC and Virginia Works.

So this profile is different and you see that most of the government job loss is federal between January and August.

So the state and local

job changes

The extent to which the state and local job growth is compensating for the federal job growth has slowed the last few months.

This is January to August.

This is eight months average.

So the profile is different.

And one of the key things I want to mention is Albemarle has a higher percentage of its residents in the management, professional, and business services sector.

in terms of that sector being a leading sector for impact then we want to be very alert for Albemarle.

It has shown up in the Charlottesville MSA data.

I don't show it because the MSA data is not as strong as the Virginia data.

And the industry breakdown just doesn't tick and tie because it's too preliminary.

We have to wait for that data to cure a little bit more for it to be solid.

I mean, for me, it at least has to add up, right?

And so I go with the summary data for the MSA as opposed to the breakdown of the industry.

I tried to prepare that.

that chart, but those industry breakdowns are too preliminary.

And the BLS tells you it's listed, it has a P next to those columns, so you know for two months it's preliminary.

So we have to wait for that data to be updated, and it will over three months it gets updated.

They update it every month for three months.

And that's a part of their process.

And so we are seeing that professional and business services and financial activities are an area where job loss is identified for the Charlottesville MSA as well.

So it's not showing up in the state, but it is showing up here in terms of financial activities being as one of those areas of where we want to pay attention.

One of the mitigating factors here is that you have biomed health, you have a lot of employment in health care.

Health care has been an area, health care and social assistance has been an area of growth for jobs.

and you have a high percentage of your population of your residents in that and also your military, your federal government work is very heavily DOD and DOD got additional funding in the reconciliation bill, public law 119-21 back in July.

So those are some mitigating factors.

A lot for us to keep a close eye on.

I wanted to bring you that data so we can

Sharpen, get our magnifying glass there, keep that sharp.

In terms of unemployment rate, the county is consistently below Virginia and the U.S., although the distance between the county and Virginia has narrowed.

It used to be big and now it's narrower, but it's still there.

In terms of wages, the wages have been, for the metro region, the MSA, Charlottesville MSA has been below the state and nation since 2013.

And it's been real bumpy the last year or so.

In terms of real per capita personal income, this is

and aggregate number.

This is total income, personal income, inflation-adjusted income in the jurisdiction divided by number of heads.

But it's a way to look at, it's a measure that you can, it's a measure you can compare.

And Albemarle County has had a higher

real per capita personal income above the US and Virginia as far back as the data goes that's available in FRED since 2008.

And of course we know there's a lot of distributional change within that but that does give you an economic base here.

That's a level of spending you can have here that's short that base.

In terms of home sales growth, that's mostly declined since 2022.

In terms of the sales, the number of sales, I get this from Virginia Association of Realtors and this is the latest data they have through August.

However, home prices, I'm very happy to report this year, home prices are keeping, that growth is keeping pace with 2024.

Last year I flagged

the slowdown in the pace of growth in home prices last year.

But this year, the pace through the first two quarters is almost right to the decimal, maybe third decimal point on pace to the annual rate in 2024.

So it's holding us on, but it's slower, the pace is slower in the U.S.

and Virginia in the first eight months of 2025.

So the Charlottesville MSA is holding us on.

This is the House Price Index, all transactions.

This is one of the broadest measures of home values.

It includes new, existing, and refinancing values.

And this is the measure that the Fed use.

The Fed likes it, I like it.

And this is the only measure they use for home prices.

It comes out quarterly.

And so, so far so good in the first half of the year.

We'll have to see when we get some more data.

We don't know.

No data is being released except CPI next week, only CPI, so the Social Security benefits can be set.

And then also in terms of median listing price per square foot, in terms of Albemarle County, it is above US and Virginia through September since 2016, but it's been up and down since 2024.

This gives us a read about the current market.

It's bumpy there and kind of going sideways, but it's not going down overall.

It's not a downward trend.

But the steady upward trend has been moderated.

But it's holding us on and it's still above Virginia in the U.S.

So Albemarle has a very solid economy.

You have solid economic and job growth.

You have higher per capita personal income.

That does give you that economic base.

Lower unemployment, strong hourly wages regionally, and I demonstrate that in the specific detail slides in the back, even though you're both below the state of the nation.

You're above.

You hold up very well in terms of hourly wages regionally.

Significant employment and relatively higher income

occupations industries, which is a blessing and also a challenge, since those industries are the ones that are being impacted heavily by the current changes in the economy.

So we want to watch that, but you have some mitigating factors in terms of

I think

It is prudent, my recommendation is prudent for Albemarle County to use the U.S.

and Virginia as a benchmark.

We have found that to hold up in our previous research with some different levels, albeit at different levels with a general trend.

So you may not be at the same level, but the trend is relevant.

And so in that regard, it is prudent to expect a slow economy with muted growth in 2025.

That's

I would say a prudent expectation, and then modest growth in 2026.

The outlook is 2027.

As what we can see now, we think we may get back to trend growth, normal trend growth, close to 2%, but there's a lot of uncertainties.

We have a lot of uncertainty.

And in this recommendation, greater weight is given to Virginia's slower growth outlook, given its high exposure to federal cuts.

in terms of federal civilian employment, in terms of federal contract employment, and in terms of actual federal prime contracts.

We are top one or two in all of those dimensions in the nation.

and then also we're going to have this many things are in flux, a lot of uncertainty, the cooling job market and expectation of anemic to modest growth.

I say modest because the county has done and the region has done slightly better than Virginia but we have to wait so still a lot of data we have to see for the rest of the year into early next year because so many of the

Separations at the federal government did not take an effect until September.

And we don't have that data, or December.

So there's a lot of unknown there.

The inflationary pressures, we want to continue to expect that.

Expect inflation to continue toward that 3%.

next year and did not actually see much improvement until the end of next year into 2027.

And that sticky, some stickiness there.

We expect the consumer and business demand to continue to be cool, especially the cooling job market.

The cooling job market is going to put pressure on those real disposable personal incomes.

Let's hope that the credit doesn't go out of whack too much there for the consumer, because that will have an impact down the road.

The housing market, we're expecting it to benefit from the expected lower mortgage rates with continued rate cuts with the Fed.

It's going to continue to normalize, but it's still going to be competitive.

So we've got some push-pull there.

Housing starts and building permits

have been slow, but with the rate adjustments and anticipated rate adjustments the housing market is feeling.

The home builders and the realtors are feeling good about the future with the rate reductions.

In terms of business activity, we expect that to be modest.

they are facing inflationary pressure, they're facing supply issues, they're facing cooling, consumer spending, and our small businesses in particular, our small businesses do not have the margins to deal with all of the supply, many of them only have one supplier, they don't have the wherewithal to shop all over the world for the replacement supplier, and so they are concerned about passing on the price increases, they don't know how they're gonna

continue to absorb it.

So our small businesses we want to stay very much attuned to.

And I want to say that the county's strategic economic development initiatives are bearing fruit and your prudent planning and methodical execution.

And so they are expected to bring economic vitality, economic diversity,

Grandma said, don't put all your eggs in one basket or even two baskets.

And my grandma said, child, you know you've got to learn how to do more than one thing.

And so we've got to be good at more than one thing.

And also, it's going to help augment your job growth.

So that's all very good news and bearing fruit.

And so the timing of all this will vary.

It's not going to be the same for every business.

And those sensitive interests and consumers will be impacted more than others.

So we have to stay vigilant in watching out.

Enduring recommendations.

So I was asked, what's the recommendation for the board?

And I would say, stick to the basics.

I've been saying this.

These have been my enduring recommendations for like 10 years.

I only added a couple since the pandemic.

And these are my recommendations for financial resiliency and agility.

in terms of knowing your financial foundation, you do that.

You have a schedule to do that in the fall.

Being clear on your strategic goals, you do that because you attend to your strategic goals, you manage them, and you report them, and you watch your progress.

In terms of long-term financial planning, that is part of your regular process.

That's not something you do every now and then.

That's annual basis.

The robust scenario planning, financial planning gives you that.

you see those bottlenecks ahead and you get a shopping list of options.

Early warning system and engaged staff, the three they go together.

We also want to have adaptive decision-making so when that new information comes in we can adapt and we have agility in action and I think Rivanna Futures and your AstraZeneca is a demonstration of your strong discipline

in terms of management and governance in that regard.

So you're bearing fruit, and so stay the course.

With that, your solid economic growth base and your proactive management will make a difference.

It has made a difference.

It is bearing fruit.

And so stick with that as my recommendation, because it puts you in good stead.

The solid economic base gives you scope within which to plan and to act proactively.

The history of prudent financial management cannot be

over emphasize.

Albemarle is one of only about 1% of counties in the nation with a triple, triple A rating from all three rating agencies.

That is a critical asset and that also means there's a whole culture of behavior and planning that will also help us steer through this time.

So this gives you financial, a foundation and capacity

Many communities don't have the capacity, so this actually produces that community capacity for strategic initiatives and it's very strong.

And your methodical, systematic planning and analysis, management and governance.

will continue to advance the community toward its strategic objectives.

So you just not only survive, but you thrive through the FUCA world.

So drive on and lock arms like we've been doing, and we're just going to ride this one on out.

But again, with our eyes peeled in all directions.

Thank you so much.

I appreciate the time, and I very much appreciate the opportunity to work with you.

Thank you.

And if you'll remain for a moment,

More than a few questions.

So I guess I would just say, if we could keep answers as direct as possible, because I also am mindful of the time.

We talked about the almost bubble of business to business sales in anticipation of the tariff shock and how that's insulated us so far.

So one of the resilient pieces had been the consumer spending to that.

So the business total investment is slowed, but one thing that is really keeping us going is the AI investments.

So the AI investments are giving us a buffer as well as the continued consumer spending.

Those are the short answers in terms of buffers.

Every business is going to have to calculate through

The diversity of the impacts is very, very broad and we do not have a solid, broad measure of how each of them is going to be impacted.

But AI, consumer, thus far.

You said that

there is an issue that we have a reduced supply in the labor market.

And I just want to make sure I'm correctly understanding what you mean.

Is that total able-bodied people who are in the labor market?

Or is that specifically speaking to kind of what you were talking about at the beginning of the tightness of the market generally, right?

Labor force participation is down.

When I've talked with my peers at the TJPDC, the Regional Planning District Commission, something I recently asked was, hey, we're seeing decreased home construction activity, at least anecdotally, looking at the zoning modification amendments that we have.

And I asked this, is everyone else seeing that?

And the answer is no, because it's primarily driven by just

cost to build, and you can get better dividends in some of our cheaper neighbors right now.

But obviously, there's still sometimes an appetite to build inexpensive Albemarle County.

I imagine that's driven by the capital stack, the cost of capital.

And this is probably too weeds-y of a question.

But in high-cost communities like ours, are there any kind of prevailing estimates or prevailing thoughts as to what

What fed discount rate do we need?

Demand is a very key factor there.

The suppliers will respond to the demand.

So as long as there's demand for Albemarle, and it has to be at a certain price point, then the builders will build.

But it's just not the supply side, it's also the demand side.

And if there's demand,

Good business people will find a way to meet that demand.

That's what business people do.

So the question is that demand factor.

And so we do see that it is slower in Albemarle versus your neighbors.

That doesn't mean there's zero demand here.

Something that

I have anxiety.

I feel like a lot of amateurs and navel gazers and people who write think pieces have anxiety over is the idea that we're in not just a single industry bubble, but a multi-industry bubble driven by a really long period of low-cap cost of capital that we see across all these apps and services.

Netflix doesn't turn profit.

Facebook doesn't turn profit.

All these different things.

And that there is a possibility of kind of a system-wide collapse as

as people are suddenly put in a position where they have to actually turn profit.

That being said, I've not had the opportunity to push an actual economist on whether or not that's a serious threat or something that is being seriously considered by any of our Fed systems.

I don't see it too hot.

So, this actually was an article yesterday on this by some prominent economist and so let me just put a couple of things.

AI investment has drawn a lot of investors and it's heavily impacting the stock markets because like seven industries, tech industries, are driving the stock market movement.

and so there's heavy investment in that.

There is concern, there's a wide discussion of when these investments in the technology are going to actually come forth, produce identifiable productivity benefits and earnings returns.

Business is pushing heavy for technology because it knows it is

facing a shrinking labor supply because of demographics.

The largest cohort, the largest segment of the baby boomers will all be 65 by 2030.

So we have aging America and we're going to have more people 65 and older than 18 by about 2033 or sooner.

So they're really pushing into technology because typically population growth, labor force growth was a source of growth.

So there's a heavy investment there.

Are they getting ahead of their skis?

Maybe.

We'll have to see.

It has to be in the transfer to real productivity and real earnings.

And if they do get ahead of their skis, then there will be a rebalancing.

So there is concern there about how much the technology is dominating how we feel about how things are going, but it's also where business is putting in investments for the future.

So we don't know yet.

I don't think there's a prevailing perspective, and I certainly cannot speak for the Fed.

I want to ask a few more questions that are maybe more locality specific.

And you mentioned demographics.

Something I've heard a little bit of hand wringing about is that there also might be some kind of higher ed cliff.

We know about the administration's threats to higher ed and how that's having concerning effects.

there is the demographic piece.

My age cohort is the last big age cohort.

And most of us have collected all our degrees at this point.

So enrollments are going to be down.

And on top of that, there's, as we've just learned and discussed, chilling of the actual dividend that you get from a college education, which is driving people away from college education.

We are a community that's heavily driven by higher education economically.

Well, the good news is we're only talking about the educational enrollment cliff now, here.

When I took retirement the first time, I was municipal advisor to higher ed, and I work with higher ed institutions all over the country, heavily in the Midwest.

Big 10, some Big 10 universities.

The enrollment cliff hit the Midwest ahead of here.

So, the enrollment cliff is actually hitting K-12.

It's hitting K-12 before it comes to

Higher Ed.

And many of our school divisions have experienced that.

It's coming through.

And it's just demographics of the community.

So it's an enrollment cliff that's there.

That's there.

It's just the numbers.

We have a birth rate.

The birth rate is not the replacement rate.

And so there, what it means that there is some rebalancing in the higher ed

sector, it has been going on for 10 years.

It's hitting us here more, but it's hit other parts of the country earlier because their 18-year-olds dropped off a few years ago.

And one thing that I would say here, in that repositioning, and this is what the rating agencies say to Moody's, S&P, and Fitch with regard to the higher ed sector, and I keep up with those reviews each year,

I was born and raised on a college campus.

I can't help it.

And so what we find is that the flagships are having strong demand.

So when you're looking at value of education, the flagships get strong demand.

UVA has had, tech has had record applications every year for about five years in a row.

and so we break every record every year.

So the flagships, I would say being the community of a flagship is not, I'll just say what that trend is.

The smaller institutions are, and the smaller private institutions are the ones that are feeling those challenges first.

And Moody's, S&P, and Fitch all say that.

So it's different if it's for public,

or a private school, because the public private school only has endowment.

It does not have state, E&G, education and general fund support.

And so in that rebalancing, whenever you have a shrink of, even during recessions, don't you get bids from the big contractors that didn't bid on your certain kind of work before, and the smaller contractors scream they're pushing us out?

Can you help me understand what the data story behind the construction labor force growth that we've seen in Virginia?

Oh, duh.

Yeah, that makes sense.

Thank you so much.

I think I'm mostly out of questions.

I would just say we looked at slide 20 and 21.

You heard me say this last year.

I'm going to say it again.

I think correcting that mismatch in our per capita wage and our per capita income, which clearly points to the fact that people in this country is wealthy because people in it are wealthy and our incomes are heavily driven by dividends off of wealth.

And we are in fact depressed on wages compared to our peers in the state and the country.

I see that as deeply alarming.

I see that as

Frankly, in my perspective, the primary thing that our economic development strategy should be aiming to correct.

And I know we talk about other goals of the economic development strategy, but I see that as the most critical thing we should be talking about.

We talked about the hidden bump of the buy now, pay later schemes that have emerged.

There's excess debt that is not captured in measures.

I just want to just highlight how deeply insidious this is, because not only is it

a greater amount of the overall debt that consumers carry, which has already increased.

But it is also displacing traditional financial products.

It's displacing traditional financial products that has superior underwriting, have better safety protocols.

Four years ago, I had a really catastrophic home issue on one of the homes I owned.

I had to replace a sewage pipe.

It cost a lot of money.

And of course, they offered me a buy now, pay later scheme.

There is a known financial product for this, right?

I could have taken a home equity loan, a home repair loan, which has a lot more protections on it, and it has, you know, has insurance on it, all these things.

You can even buy a DoorDash burrito.

We had someone come and speak to this board about that not that long ago.

And finally, this is a question, but I'm not sure I need an answer for it because it's thorny, and it's actually not for you.

It's for Andy.

I don't want this to come off as pointed, but we're talking about weathering financial strains.

And the next big brief we're going to get is going to talk about all the new things we need to pay for.

This is an incredibly robust report that we receive annually.

I obviously enjoy the content of it and digging into it a lot.

I'm not sure I use all of the content of it in my decision making.

ask whether or not in our budget development we use every part of it.

And this is just a question on whether or not we think this is adequately scoped moving forward or could be slightly descoped.

And just, frankly, framing that as a broad thing I hope we are thinking about as a county moving forward.

So I would say the short answer is that is something that we review on a regular basis.

There is some work with the team that we descoped in this year's process, but that is something we'll continue to look at.

I want to just give a shout out once again to our county executive, our financial team, and our staff because they make us look good because we're continuing to follow their recommendations.

and they're leading us in the right direction and I just want to send a shout out and say thank you because I couldn't do this as a board member on my own so I really appreciate their strong work for us and your report just shows that over and over again.

Having said that, I do have a question.

We talk about lack, I heard you say over and over again, lack of data.

And I understand lack of data can be a timing issue.

I mean, I get that when you come to us and what we're waiting on.

But my real question is that I am seeing a reduction of data coming to us from our normally trusted sources of data.

And that's concerning to me.

So the concern about the budget and staffing pressures for our federal statistics is not new.

It's been happening for some years.

The National Association of Business Economics has taken stands on that through the years.

So it's being gradually been defunded over some time, and staffing has been removed.

It's been accelerated this year, but it didn't start this year.

And certainly, given the previous gradual reductions and the accelerated reductions this year, it does bring it into question.

Chairman Powell was asked this question this summer, actually, and the concerns of some additional adjustments that were being made because of some actions earlier this year.

And his response was, we're getting the data we need thus far.

And it's extremely important to the Fed's work and to the business sector's work.

and to government's work.

He emphasized the importance of it.

So those statements have been made and the National Association of Business Economics has gone out there and taken stands through the years, as recently as their annual conference this past weekend.

So, so far so good.

We'll have to wait and see what's coming forth.

One thing I can say is during the pandemic,

when things were changing faster than the federal statistics could reflect it, because it was a week by week, day by day thing, we did develop some high frequency data analysis capabilities in the field of economics.

So in terms of consumer behavior, let me get this out, anonymized purchase data, did we buy at home, did we buy away from home,

Do we have it shipped on that?

Mobility data.

So a lot of economic activity is about mobility and leisure and travel.

Are we at home or are we away from home?

Of course, my cell phone told me where home was before I told it where it was because it had been monitoring me.

So I just said, yes, save that.

That is correct.

And it told me where work was before I told it where work was.

It just said, this is work.

It identified our Richmond campus as work.

It's sometimes smarter than it needs to be.

Or smarter than, well that's not as smart as it claims to be.

But it's, all that data is there and it's being anatomized.

And Raj Chaddy has done a lot of that.

at Harvard Business School in terms of analyzing that.

ADP puts out employment data before the BLS does every month, about a few days.

But it's incomplete.

I'm not going to say that ADP identified that we lost jobs in September because it was incomplete.

and we always want to get the federal data because it's a broader measure and includes more businesses that just have ADP.

So we have these other pockets.

My concern is that they're incomplete and they may become proprietary.

And that's the second time you've mentioned becoming more proprietary.

Right.

Yes.

That was very helpful.

Thank you.

Thank you.

And the only other comment, and I don't want to take us down into another rabbit hole, but the university has a very positive influence and does a lot in this community, but it's a double-edged sword.

And in my experience for 28 years, it has been one of the reasons why we have to press salaries in this area.

And you're smiling at me.

I've heard that for many years.

Harvard and MIT were

really mentioned that in Cambridge.

Can you imagine you got Harvard on one end and MIT on the other?

Two big employers and that's it, so yeah.

But I really appreciate the information and thank you for the data.

I appreciate it.

And I want to echo my highest esteem and thanks to your wonderful staff and they are

Data Hoggs, and Deep Thinkers.

Well, I just always feel like when we get credit for our triple, triple, triple A, it's not Diantha McKeel who sat at this board for 12 years or 28 years.

And they do think about it very deeply.

Thank you.

And always mind exploding, and I appreciate it.

So a couple of clarifications.

And staff is also wonderful about their patience, and you are as well because there are huge comprehension gaps that we have to wade our way through that you all seem to get easily.

You had mentioned the low-hire job market and the 26,000 corrected hires for August.

They're not showing in the data yet beyond what's already there.

We do see 11,500 jobs.

Now those are jobs.

Those are not people, those are jobs.

So the people impact will take longer to show up in the jobs.

That's just the jobs that were domiciled in Virginia because some of our residents were working in the district in Maryland.

So that's not there yet.

It's going to take a while for that to show up.

Also, many of those reductions in forced rifts were delayed until September 30th or December 31st.

We don't know how many.

The projection was 150,000 now.

The latest number from OMB was 300,000 overall.

I don't know if that was before the shutdown.

We don't know.

I have

a fellow intern, state intern that I teach for a class and they say, we don't know.

It's not published.

So we don't know.

Like the old folks said, we'll understand it better by and by.

And so that gives us a lot of uncertainty.

So September 30th data we will not see until the October report which normally will come in November.

There's a question now whether the October report will actually be done.

That's what I read yesterday.

from Wells Fargo Economics.

It's unclear whether we will get, when the shutdown is over, if they will go back and pick up October and do a monthly report or just resume in November.

So we don't, so the data availability, the schedule has been disrupted.

So it could be November before we see anything.

And so we'll just say oh if it's November date is going to be issued in December.

We don't know.

So the September 30th end date has not shown up yet.

And we don't know when we'll see it because we don't know the release.

The December 31st ones we won't see until 2026.

So there's a lot of

Opagness, opacity as to what's going on and it's not clear.

Well, it's a great way to have data not ever be found because nobody asked.

And I'm a little concerned by your report that Powell said you get the data you need, or the Fed is getting the data they need.

That was June.

That was a June.

No, I'm sorry.

That was July.

That was a July statement.

The construction jobs.

That is coming up.

The Federal Reserve does a monthly survey of manufacturing, monthly survey of services, and also there's a full-scan beige book

before each Fed meeting.

And the Federal Reserve Banks are indicating that their surveys with businesses are showing that the availability for labor in the construction sector is getting tight.

Tight.

Especially for certain trades.

Certain trades are very much manned by foreign-born.

I didn't say illegal, just foreign-born.

Drywall.

Plasterers.

Many of those are foreign-born, but they can be legal.

They're illegal.

They're just born outside of the US.

I'm not saying undocumented, just foreign-born.

So we are dependent there.

And then another aspect in the construction areas, a lot of trades are age.

The average age is 50-something years old.

So we got a demographic thing going on there, too.

So the

Thank you.

Thank you.

Dr. Bailey, it's a pleasure to see you as always.

This is a report that I often look forward to each year, have come to look forward to each year.

Thank you so much.

And it creates a lot of fodder for commentary.

I'll try to avoid that commentary just in the interest of time, but I will make this.

I remember last year I was asking, well, how do you predict things?

And I was thinking of things like bridge collapses in Baltimore and hurricanes and how that factors into scenario planning.

but peppered throughout this report of the changing federal dynamic.

And it's not even quarterly.

It's monthly and weekly and daily.

And it can be triggered by waking up and a certain individual being unhappy with a photo of himself on a cover of a magazine.

That could trigger economic policy.

How do you advise, or what advice, or how do you guys?

I mean, it's tough enough to do the prognosticating and the strategizing and the scenario planning when you have some level of predictability.

But it's a little disconcerting.

And I think of staff who has to do this day in and day out and think about that.

But how, I mean this goes even beyond that question I asked last year of how do you contend with this?

Stay vigilant.

So that's the first thing.

And it is a drill to keep up with everything.

It is.

and it does make one weary, but we got to stay in the game.

We have to stick with it.

And also, my enduring recommendations for financial resiliency and agility predate this.

And when I have been doing trainings on financial resiliency, I have been talking about expecting the unexpected.

We're very good at what we know.

We're very good at what we don't know.

But we are very discomforted by what we don't know we don't know.

And we don't plan for it.

So I've been saying for nearly ten years, plan for what you don't know.

And don't know you don't know.

So what you do, when you know what you don't know, that's a consultation.

But when we don't know what we don't know, that's an area of planning that we are uncomfortable with as humans.

But when you're in a vocal world, volatile, uncertain, complex, ambiguous, which I've been talking about for at least

seven years, then we know there's a certain element of that.

If it's not, my former assistant-in-law, God rest her soul, dearly departed, says if it's not one thing, it's two.

It used to be if it's not one thing, it's the other.

She said if it's not one thing, it's two.

So we expect if it's not one thing, it's two.

So one of it is adjusting expectations.

But also in our planning, make room for what we don't know we don't know.

And so when we make room for what we don't know we don't know, then when we have this variability, this unpredictability, this uncertainty, it has less disruption to our psyche.

We said, oh, there you go, you go in that category.

Oh, you go in that category.

Now maybe we may be getting more of that than we care for, but that also means we don't spend every new revenue we get.

We don't budget every reserve, you know, we don't act as though we know everything we don't know.

And so with that, and I say that because that's what we said at Chesterfield, we did.

Before the great financial crisis, every new revenue that came in got budgeted.

So when that turn came, it was really, really impacted the revenues and the budget and the staffing.

And it was a major adjustment that had to be made.

Chesterfield made it, but it was a major adjustment had been made because during all that growth period, we had budgeted every new revenue.

So when we have made room for what we don't know, we don't know.

The key issue is we get more of that than we had planned.

But we had made some room for that.

And so we just have to stay in that.

It's vigilant.

It's tough.

But we have the team and the network and the relationships to

I would say navigate our way through it, but it's not going to be without this challenge.

I'll just say, and they're scanning all the time.

In our conversations, they're scanning all the time.

So they have a radar scanning.

They're doing a lot of scanning.

Which is the skill that you have to have.

The inventory stock up.

Do you see as the tariff situation

I mean, we get the threat.

April was the deadline.

Then some got delayed.

Are they redoing inventory buildups after that initial inventory buildup that will just further delay the actual impact of the tariffs?

Imports are way down from the first part of this year.

I won't say there's no.

It's way down.

So I just saw a chart this morning.

I can show it to you on my phone.

Supply, supply and pricing.

They also have unpacking of the pricing and that presentation to this morning, which I was listening to in Jacob and Andy's office and watching online, also identifies that the, this is the conference board, the conference board briefed that the exporters are not paying the import taxes, they're showing up in domestic prices.

The exporters are not adjusting their prices.

Their prices are pretty much the same and it's showing up and they have a conference board today and it's going to be posted online.

They say it's going to post online within the next day or two have also impacted all the industries that are being significantly impacted.

In your recommendation type of section, it seemed like this was a more general for governments, not specific to Albemarle County.

I mean, I get the lesson.

But it talked about making sure you untangle one-time funding from your reoccurring expenses.

I feel like we've always done a good job.

I'm going to say it every time I speak.

And then the last question I guess I'll ask, also in the recommendations, this one seems a little bit more like we have our hands around it, but you talk about

You know, when it comes to strategy development and scenario planning around grant funding that we receive or dollars we receive from the federal government to really plan out and strategize that.

I've always felt confident that we've done that and do that.

I suspect we do, but I've always been worried about after the first year.

Like, if we lost federal funding for something now, a grant or if it's direct funding, whatever the source is, well, I know we have the capacity to deal with it in year one.

But it's not like they're going to turn around and get back to us in year two.

Your staff shares with me the results of their analysis, so I know they have done it because they've shared with me the analysis.

And overall, what we're finding at GFOA and ICMA is that the direct impact from federal and also it's also a lot of national sources, other national sources outside of the governmental profession is that local government is not as directly impacted

In terms of direct federal grants, there are, but we are more impacted from the indirect from the state.

The state is having significant potential impacts.

And so where does the state go for those non-general funds?

Everybody goes running to the general fund.

Well the general fund is only about

a third to 40% of the overall state budget.

So there's not room at the end for everybody to go there.

And so that's going to start crowding out those things that typically would be a source of funding for local government.

So I would not be as concerned about the direct impacts as the indirect impacts.

And I know VACO is on top of this because I talk with them monthly in our Virginia Finance Network.

They are a standing partner in there.

and I know they're thinking about it.

And so there's a lot of watching of the now, the legislative committees, particularly the House Appropriations and Senate Finance and Appropriations, close committee meetings in preparation for the spring, I'm sorry, for January.

There was potentially room in September

Special session to deal with the impact of changing federal policy is now going to be handled all in the upcoming general assembly session.

So the VACO, your legislative representatives, and your local intergovernmental relations director are going to be key there to keep on top of what's going on.

I look forward to it.

Thank you Dr. Bailey for being with us.

Once again we always look forward to your reports.

In some areas I'm really kind of worried about

where we're going, I hear from you that it sounds like we are doing the right things.

Our county, our county management are doing the right things here.

We have the proactive management.

We have adaptable decision making.

At least I believe that.

We have a solid economy.

But there are a lot of question marks that will be coming up.

The construction, for example, housing and construction.

Now if you listen to the construction the contractors and also the Fed is saying this now in terms of

Housing availability and affordability.

They talk a lot about the local regulations and requirements, but we can do a whole lot in streamlining processes.

So streamlining processes helps a whole lot.

But if you hear the contracting community, they say that our requirements add cost.

And I think I have

couch that phrase in terms of its source, right?

It's something now the Federal Reserve is also identifying in some of its housing affordability areas.

And, you know, the land cost plus the cost

of supplies.

I think a bigger issue right now is going to be the tariff taxes on lumber and cabinets and those supplies.

So the costs are going up significantly.

You know, gypsum and a lot of lumber is imported.

We don't make enough here in the U.S.

of that type.

and it would take several years for manufacturing to gear up.

Five to ten years for manufacturing plants is what I heard this morning, what was emphasizing.

More technical, longer.

And so I think the supply access is concerned.

It's also showing up in contracting equipment.

That's what I'm seeing.

I keep up with the National Association of Home Builders, the ABC, the Associated Building Contractors, and the AGC, the Associated General Contractors to see what's going on there because housing is so important to local government.

and they're concerned about cost, metal, aluminum is showing up in their equipment.

So their cost factors are going up across the board.

But the demand is there because we've under built housing for over 10 years, for over a decade.

So the demand is there but in terms of the price point.

So a lot of those factors are structural and outset the local government's control, global.

economy structure.

opaque and no one can understand.

If they can have a clear process and help things move through and not have bottlenecks, that means a lot to the business community.

And also being in dialogue with them, having someone that they can call and untangle, because every builder is not an experienced builder.

to the ones that have been added for several years as a family business or in this local area.

So being process friendly, I'm not saying change in regulations, but process friendly and streamlined can mean a lot.

And I think that's going to inhibit our ability to have the affordable housing that we want to have.

And so we need to really think about that so that we can have the affordable housing that we want.

But with prices going up, that's something we can't control.

So we're going to have to get creative.

which I don't mind at all.

And you mentioned also about planning for what we don't know.

That's scary, frankly, because we don't know what's coming.

But I think it's important for us to be able to, and this is what I think I hear you saying in your

your solutions, so to speak, or what you're saying, is it for us to be able to pivot, to be able to pivot and go this way or that way, depending on what happens with the feds, with the state, to be able to deliver our services to our community.

Well, could I just have one, just one addendum?

In areas that are already developed, I've done this a lot in my local government career, land assembly can be something the government can do because working with several parcels and owners is time is money for a developer.

So if you want to have redevelopment and then also thinking about any provisions, we did this in Chesterfield in terms of any

consideration of going from commercial property to mixed use.

We had provisions for credits if you did upgrades to existing residential property in the

older developed areas, but we didn't have consideration in our regulations for going from commercial to mixed use or that conversion.

So we actually got some of those adjustments done quickly so a developer could actually get their financing from the Virginia Department of Housing and it turned a Route 1 corridor area around.

So we can think about ways there.

Land assembly and just conversion of property from uses

is something that we can help prepare the area to be ready for development, similar to what you've done in Rivanna Futures.

We can do that in the areas that we want to redevelop as well.

And you'll be happy to know that those are some of the things that we are doing.

I know, yes.

So it's not insignificant.

It's very significant, and many communities don't do it.

Thank you.

I really appreciate you being here.

Thank you.

Thank you.

And again, I think the fact that you're working with staff gives me a lot of comfort.

I've learned a lot of great questions from my colleagues.

So I'll leave it at that, because we're already a little bit behind here for three minutes.

But is there any other?

Next up is a work session.

This is a public safety staffing studies report led by Christy Shifflett, Chief Operating Officer.

Hello, good afternoon.

Chair Andrews, members of the board, thank you.

We are really looking forward to providing this information today and so I'm going to get us started on the agenda.

There we go.

So we're going to talk a little bit about where we've been, talk about the studies and the assessment.

And we're going to spend most of our time today on the data and findings from the consulting company.

And then we'll talk about next steps and open up to questions and answers.

And I have all of my esteemed team here behind me that can answer all of the questions that you may have.

So I'm going to start out with really what the performance and strategic planning team does in the county.

And part of our role is managing assessments that we focus on with this culture of improvement that the board has supported.

We started with our strategic plan.

looking at performance metrics and things like that.

Part of that effort is also about continuously doing assessments on our departments, looking at how we work, making sure we have improved accountability

Great decision making and we have increased transparency, but we also look for improved community outcomes.

And so we do these assessments and I have this chart here today to show you.

We've been doing this work, not that the county didn't do it before, but really intentionally starting in 2017.

We take those findings and those informations and we create

Long term roadmaps.

Many recommendations come in with these assessments, but it doesn't mean we implement every single one.

It means that it is things for us to consider, to study, and to determine.

So why we do this is that we want to take moments in time and say, let's look at the best practices, let's look at our federal mandates and state mandates.

Those things are constantly changing in our world and sometimes we go 10 or 15 years and it's like, wait a second, we need to take a moment.

We need to look and compare ourselves across other localities in the state, but also sometimes we might look outside the state.

We will look at workload measurements of our staff.

Sometimes you cut corners, you make concessions, and after a while you realize, wow, we've made too many of these.

We need to reassess, we need to realign and work differently.

And then also this organizational design.

So with this study, the consultant received our org structures.

They looked at the way our FTEs are aligned.

They look at reporting structures.

So this is really a focus on local government departments and how we function not only in that department, but across the organization and with each other.

And so what happened in 2025 and 2024 is that both our chief of fire rescue and our chief of police both mentioned that they wanted to do a deep dive into their departments and into their functions and they had different reasons for that.

One was the police department needed to do an assessment because one had not been done and they really wanted to make sure that we were doing everything as efficiently and effective as possible with changing our changing county and our changing demographics and our changing calls for service.

For the fire department, you know, we have a combination system.

We're very proud of that.

But we also wanted to make sure that we were looking at how the cause for service had changed, our coverage, and our ability to respond.

And so with that we decided to pull these two together and have the study done for public safety.

and look at those two things not in conflict.

And so we hired the Emergency Services Consulting International and you'll see that called ESCI through the report.

And I have our project manager here with us today, Mr. Rob Graf.

He's going to go through this data with you and share the findings of the report.

We wanted this independent data-driven assessment done.

He collected a lot of data.

His team collected a lot of data from our cause for service.

They looked at our GIS data.

They looked at the way the demographics and the physical landscapes of our county are laid out.

They looked at how remote or urban we were and they used that information to come up with some of the recommendations.

We knew that they would be complex and they would be complicated and so we asked them to take those recommendations and put those in tiers.

And so you'll see in the report that there are short and mid and long term recommendations

Again, we fully expected this to take five to seven years for the county to accomplish and it doesn't necessarily mean we will work on every single one of them.

That is something that will work with our board and have each year a decision about what we can accomplish.

And so lastly, the reports were written with the purpose of aligning the findings with the county's goal for predictable service and accountability.

Welcome, Mr. Graff.

Thank you so much for having me again.

My name is Robert Graff and I'm with the ESCI and we

I want to first start by saying your team is amazing.

The words that you gave for the chief at the beginning of the session today, I hope when I retire, they'll say half of those things about me and the work that I've done in public safety.

So we started out, as Christy said, we were asked to take a voluntary, objective look at the processes that you use for both your police and fire departments.

with a lens that we were looking to achieve a predictable level of service so that when your citizen calls 911 or you as a policymaker or the fire department or the police department that they could predict the level of service that they were going to receive on the other end when they called 911.

And so we start with a comprehensive system analysis of KPIs or

key performance indicators, industry best practices, a comparative analysis amongst whether it be the Center for Public Safety Excellence which deals with a lot of accreditations and stuff in the fire service or CALEA which is the same type of organization through the police department and those give us those real benchmarks that we can use to determine what the agency is doing and how well they're meeting those performance metrics.

And so we started, we came into town and we spent a few days here and we met with both the police chief and the fire chief and our first goal was to get their input on what they identified with their priorities.

In the police department, the chief identified that staffing was a priority, officer wellness was a priority, leadership development was a priority, and his organizational culture was a priority.

And through our processes, we validated that yes, staffing is one of the top priorities and it's an immediate tier one response.

And also wellness, leadership, and culture were addressed throughout the other additional tiers.

Tiers one, two, and three to achieve that wellness for his officers.

From there, we met with the fire chief.

These projects happened simultaneously.

So we had one team that dealt with the police department and then another team that dealt with the fire department.

So as we were meeting with the police, we were also meeting with the fire chief.

And again, his number one priority was staffing.

Second was training and development, financial health.

Community Relations and Technology and making sure that they could stay abreast with the changes in technology.

And again, we validated that staffing was indeed one of the top priorities and was a central tier one issue.

And again, following up on that, training, finance, community and technology are integrated into those other tiers that we'll talk about here in just a few minutes.

When you look at them both together, both chiefs had staffing listed as priority.

It was one of their most urgent needs.

Training, wellness, and leadership were key investments to them.

And then the financial stability and community trust and organizational culture.

And through that, we did indeed validate that those were, number one, a tier one issue for both was the staffing.

We identified that there were gaps in quantifiable supervision, workload assignment, and support for the agencies.

and then we provided a roadmap to give you a phased plan.

Sitting over here today I listened to you guys do a lot of planning and so this is going to give you a good phased approach because as we all know public safety is it takes a while to implement new things because public safety is expensive and so we've provided you a good phased plan and an approach so that you can dial in that predictable level of service through a tiered process.

So let's start with some of the headline findings.

I'll start with the police department first.

Public generated calls have increased, and a handful of those calls dictate a majority of their work.

The police department often manages three to five simultaneous incidents at one time, and that's considered a call concurrency.

Rural areas experience longer travel times.

Cross zone pulling of deputies and the travel time it takes to get across zones was an issue.

Scheduling versus demand, the overlap of peak hours and hot spots and pulling across zones makes it hard for deputies to cover the entire county with as large of an area as they have to cover.

Supervisory span of control, consistent middle management presence is needed for when handling multi-scene coordination and risk management.

and then civilian capacity is limited in some areas which pulls sworn officers into administrative roles or non-enforcement tasks and there's some areas for efficiency and effectiveness there.

When you look at the headline findings in the fire rescue side of the house, EMS transports drive the workload.

Dynamic staffing has been normalized and that's due to staffing shortages and when you reduce staffing on one apparatus to keep another apparatus in service,

ALS coverage sometimes can be inconsistent.

It doesn't happen very often, but when it does happen, it takes away from that predictable level of service.

Volunteer response capacity continues to decline, and that's not just in your

your jurisdiction, it's across the country.

Volunteerism is down and you guys have a very robust combination fire department which has a lot of volunteers and in some areas are doing great work and other areas there's room for improvement.

And I think having a way to monitor that because it takes so long to convert when necessary that you need to have those metrics in place so that you can watch those instruments as they change.

Having only one battalion chief per shift at time limits the span of control across the county.

And then again, operational leaders are burdened sometimes with procurement HR and logistics, which takes away from their administrative or operational abilities and roles.

Now they both share some challenges as well.

Service demand for both has grown.

It's growing faster than the staffing can keep up in both of those agencies.

Reliance on overtime and daily reassignments to maintain coverage for consistency across the jurisdiction.

Police frequently manage multiple simultaneous calls straining the patrol.

The fire department as well runs a lot of simultaneous calls at the same time.

And then volunteer participation is declining which reduces flexibility.

Limited administrative and civilian support, again, pulling those sworn staff into non-core tasks.

And then attrition and timelines for training new employees creates gaps that are hard to fill.

When you have a succession planning that needs to take place for retirements or for turnover, that ability to get somebody in the seat to replace them takes time.

So what's the path going forward look like?

First, stabilizing operations.

And I use the word stabilizing more as it talks about the gaps in the workforce.

Not that the operation is unstable, but the ability to put new officers and new firefighters into the system takes a significant amount of time.

And so having ways to predict those needs and account for those needs ahead of time and be prepared for that will help you in the long run.

Develop your leadership, invest in officer development, succession planning and wellness to prepare your future leaders.

As people retire, they take the knowledge that they've gained with them, and so it takes time to pass that on to the next person.

Enhance your support systems, expand HR, logistics and administrative capacities to relieve those operational staff where possible.

and then promote sustainability through implemented phased data-driven staffing and resource strategies that keep pace with your growth.

And so what we did is we created two roadmaps, one for the police department, one for the fire department.

The police department has four tiered recommendations.

The fire department has five.

Tier one for the police department, core stability, which would be enhance your capacity and service equity.

Tier 2 is going to be a strategic leadership training and workforce development.

Tier 3 is organizational coordination and internal support systems.

And each one of these tiers has a list of recommendations underneath it.

And each one has a short, mid, and long term section to it.

And so it's a lot.

There's a lot of stuff in there that you can capitalize on.

But they're broken down by short, medium, and long term.

And then last, number four, tier four, long-term sustainability and strategic planning.

All of this is going to be tied up to how do you get from point A to point B in the most cost-effective and efficient manner, all while trying to give your citizen the predictable level of service that they're looking for.

In the fire department, again, tier one is core stability, delivering predictable countywide service when they call 911.

Tier two is a strategic leadership, emergency management, and volunteer integration.

Tier three, workforce development and succession planning.

Tier four, system efficiency and public interface.

And then tier five, policy modernization and process optimization.

As you start to implement these phases and these approaches, you're going to want to have some measures and ways that you can manage your success.

and we've listed a ton of ways that you can measure your success and these are just some of them.

In the police department you can measure your 90th percentile for total response time by priority and you'll see in the report there's recommendations on assigning priorities and realigning sectors and then managing the time it takes for officers to get from each of those calls and their calls for service.

You can manage proactive timeshares and set targets.

Leadership can set targets for what they want their officers focused on and you can use those as metrics.

Concurrency coverage, that's the percentage of time that staff is covering more than one incident or more than three to five incidents at one time and when you're pulling officers across zone.

And if you track those things you can see how often it's happening and then implement ways to keep that from happening.

the time on task in the top call types.

A big one is going to be staffing health, vacancies, attrition, mandatory overtime, training hours, sick leave, using all of those metrics to determine the health of your staffing ability.

investigative flow, assignment of timelines and follow-up cycle times, and then community outcomes, citizen-initiated backlogs, making sure that when the citizen calls, how long does it take to get to them, how long does it take to answer, because not everything's an emergency, but how long does it take to get to the crux of their need, and then how many voluntary contacts they're having throughout the year.

In the fire department again, 90th percentile turn out and travel times by zone.

One of the things that we talked about in both reports is you have a rural part of the county and you have an urban part of the county.

And then you have the area in between.

And each of those

just by the nature sometimes require different resources.

And so what in the fire department, one of the things that is very common is, is establishing an urban, a suburban, and a rural, and even a remote demand zone based on population.

And then each one of those demand zones has its own metrics.

and so that you're getting a fire department apparatus or fire truck in this amount of time in an urban zone, which may be different than the time that you're going to get in a rural zone because of the resources it requires.

Taking that same methodology and applying it to the police department as well will allow you to create a big target that you're trying to hit

towards that predictable level of service.

And so you can say, when you live in this area and these resources are allocated, you should get this metric that goes along with it.

And it allows you to gauge your performance and dial in where your areas of need are.

percentage of units that are consistently staffed at the ALS level.

If ALS is the metric that we're going to use, how often does that happen?

And if it dips below that, why?

And be able to track that and then work towards ensuring that it's a consistent, predictable level of service.

Dynamic staffing frequencies because of daily reassignments and having to move staff around for minimum staffing.

Sometimes you have trucks that have to go out of service or they have to get moved around.

So tracking that will give you the ability to determine whether your staffing needs are meeting the needs of the community.

volunteer contributions, calls that are staffed, the response rates, and establishing those metrics that I'm talking about.

They're not for just, they're for the entire organization, not just for a career station.

And we looked at this through the lens that a predictable level of service doesn't look at whether you're a career firefighter or a volunteer firefighter.

It's all the same.

When someone's calling 911, they want somebody who shows up, they're trained correctly, they have the right equipment, and they get there in the right amount of time.

It doesn't matter what

whether they're paid or volunteer.

And so your metrics that we recommend and that we are talking about, all are geared at one system and that system-wide performance based on those metrics.

Again, in the fire department as well, staffing health, what do your vacancies look like, what does the attrition rate look like, mandatory overtime and sick leave, all of that can be measured over periods.

In the report, when you read it, we look at all of that, and then from here on, you can continue to measure that and manage your workforce.

Training benchmarks, how much training per hour per FTE?

What's the compliance with ISO and the National Fire Protection Association?

And how are those standards being met?

Those are ways that you can measure the training for your agency.

And then what is the administrative workload?

Throughout the report you're going to see workload analysis and ensuring that the administrative workloads are, for lack of a better term, process mapped to ensure that the right people are doing the right jobs and the right tasks in the right amount of time.

And so what are some of the risks that are, if you defer,

If you don't do anything and everything just stays, there's a chance that you could not keep up with growth and you end up with persistent response variability.

You can't predict what level of service you're going to get when you call 911.

You could have an erosion of proactive time and community engagement in the police department.

You could have slower investigations or case cycle times.

That's what the data is showing now.

And so with zero change, you could see that that continues and perhaps maybe even gets worse.

And then higher long-term costs to catch up.

Your staffing costs aren't going to get any better as the aging workforce.

Several times today they talk about aging workforce.

That's not just the community, it's the workforce itself also.

As deputies retire, as fire department personnel retire, replacing them takes time and sometimes as much as 18 months.

And so 18 months of overtime can really cost you if you're not ahead of the game.

From the fire department side, dynamic staffing reduces service predictability, so that's a risk.

Inequities in pre-hospital care, volunteer capacity could further decline if not given the proper support and not metrics built to be able to gauge their performance so that we can see if either career or volunteer, if something's starting to slip and we can see it, we can address it faster.

and your fire department does a great job.

They have a lot of metrics already in place and they measure on a regular basis and a lot of the stuff that we found in our report, they're already tracking and they're doing a really good job with that.

Supervisory span remains insufficient.

They're in major multi-incident scenes or multi-unit responses.

Sometimes taking more than one officer and only having one battalion chief on shift, it's a large county for one person to cover.

And then rising over time and attrition elevate your long-term costs.

And with that, do I turn it back to you or just answer questions?

OK, so we really wanted to make sure that you had time as you've looked at the reports to ask questions.

So really, this is just to share with the public that the report is available online.

It was in the board's packet, as well as we have a web page that is posted that will have frequently asked questions on it, because it is dense and it is a lot of data.

So we want to make sure that it's easy for everyone

to stick with.

Also wanted to let you know it was mentioned about the administrative work.

I wanted to share that we have already placed an HR staff person in dedicated to fire and police and so she's here today actually in our audience but that work has already begun as well as some early findings that were found in the police department about lieutenant position and so that was already

We're going to continue to work on this.

We have to do the workload analysis that was discussed to look at internally how are we working, who's doing what, is there a way that we can

improve upon that work and see if anything can be done in order to move staff to hit these most critical needs.

And then the last thing I'll just share is, you know, there is no action for the board today.

This is really to provide this report and information and give you the opportunity to ask questions and both of our chiefs are here as well.

but the next steps will be the five-year financial planning and looking at what everything looks like as well as looking at the FY 27 budget recommendations and so there's nothing to do today other than to understand and then we'll discuss this in the coming months as much as you would like as we move forward on the long-range planning.

Thank you.

Thank you.

I want to begin by just noting, so I, myself and Supervisor LaPisto-Kirtley, both dug into this in some amount of depth, literally yesterday.

So I have relatively few questions that I think are going to be appropriate now because frankly I got a lot of them out because we already had the packet at this point.

So I have one question that I forgot to ask yesterday and maybe just two comments.

First, I just want to recognize that you have a key recommendation that I think

Maybe more low-hanging fruit because it doesn't necessarily involve new hires that this report makes felt especially timely, which is you discuss the importance of recategorizing how we designate priority areas rather than the stark rural-urban binary, having a more layered, if Neil was still here he would have eaten it up, a more lasagna style, you know,

set of categories.

And I know both Supervisor Mallek and I, when we received our SPEAR report, expressed concern that there are parts of our districts that are remote enough that it is, we think, probably literally impossible to get to them inside the time frames that are demanded for certain high priority fires.

So I think that just reflects a need and a concern that this board was already starting to become attuned to.

not being professional firefighters or volunteer firefighters, but still recognizing that.

So I appreciate that.

And the other, this is more of a political statement.

But I just want to raise, because I know we have folks in the audience, this report

reflects some certain concerns in how our volunteer and professional force mesh and certain inconsistencies in performance standards.

And it calls those out, because you're identifying known problems in the system.

I think a lot of our work on the board as representatives of the community and as interlocutors, people who

to carry concerns between bodies and between government is to make sure that

It is easy to look at the way this is reflected in the report and see that it is calling out our volunteers as being some kind of problem to be solved.

I think a lot of our role in county leadership is going to be to make sure that that is not the message that we're carrying out.

Our role is to make sure that our volunteers are seen as assets to be enabled, people who contribute a tremendous amount of

of energy to this county, a tremendous amount of, you know, a place to store culture, a place to store history, and also, frankly, an incredible resource that we leverage that I'm sure the taxpayers are very grateful for, and our roles to make sure that they're succeeding.

We're not trying to solve volunteers, we're trying to further empower them.

The one question I had that I forgot to ask yesterday

We've heard from both police and fire this almost like a drumbeat.

We have increased call complexity.

And we are in urbanizing county.

We have more calls for service than we used to from urban areas.

And that's part of that story.

But I'm curious how much of this is a local story, the changing face of Albemarle County, and how much of this is like a macro culture story?

Are people having

weirder problems that they want public safety to solve these days.

And I would say that it is across the country.

And when you look at a jurisdiction that has a large rural area and that is growing fast and pushing from an urban area into a rural area, you get a lot of mingling and meshing of problems that you didn't have before.

And so then you end up with a workforce that's solving those problems that they're just not used to seeing.

And they happen on a more frequent basis.

And then they happen at the same time as another eight.

And by complicated, it could be two things you're used to handling all the time, but they're happening at the same time now instead of just one at a time.

And so those are some of the complications I believe that they're probably experiencing here, just like they are as people move.

and move into areas that are less populated, it's creating that problem across the country.

Thank you.

Supervisor McKeel.

Yes.

Thank you very much for the presentation.

I appreciate the high level.

to get us started.

And I guess in looking at this, there is a lot to look through and to absorb.

And I realize we had our packet.

We got our packet not just today.

But having said that, one quick question I have is, are we going to have an opportunity as a board to come back together to ask questions about this and talk about this?

Or will it really, and I guess this is a question for

or will it be really more about budgetary issues?

I would say that that is the pleasure of the board.

If the more you would like to, as you do with any report, if we need to talk through different things more, and also I would share with, even when we have budget conversations, we usually talk

and present the narrative and the story behind maybe the request or the challenge.

And I'm just curious because in an effort to stay on time, we always have questions that we don't have the ability to ask.

You can send them to me, and I'll manage with my team.

And my co-workers here, how we respond.

That's great, yes.

And I just have a quick question, or maybe it's more a comment.

And this is for Fire and Rescue, which uses the word over and over again, dynamic staffing.

And could we have a little bit of an explanation on what dynamic staffing is?

Because I think the public in looking at this is going to be confused, because I think of dynamic as being a really positive, great, great, great.

Yeah, thank you.

Dan Eggleston, Fire Rescue Chief, again.

That's a great question and it's a term that I've never been favored of because it perhaps could be slightly misleading.

But it really is a result that we have on a daily basis, we have seats to fill in Fire Rescue.

If we're challenged in terms of the available staffing for that day, what we do is we reduce the coverage at certain rural stations, which means we go from three to two, which means a fire truck goes out of business.

And in some cases and it's in the report that we may have to not have Advanced life support or paramedic level service at that station for that day because there's not enough to go around So that's that has is one of the top tier issues that we need to address because we don't like reducing service in In any area at all and in some some days we have to reduce it across the board

So that is what dynamic staffing is about.

I agree.

And I don't know how we get at that definition, but I'm agreeing with you, it's not a great term.

Sometimes the term brownout is used.

It's not common in the fire service, but some departments that are suffering staffing challenges, which is one of those issues that we see across the country,

So that's interesting.

Interesting, okay.

Thank you very much.

And I just have one question about police and I will say just a little note that the fire staffing portion is about three times the size of the police report.

So let me just ask a quick question.

One of the challenges, because I represent a great deal of the older urban neighborhoods in Albemarle County,

that are changing as we have urbanized, those neighborhoods have changed.

And I'm hoping that, and I think I heard that in fact

That dynamic is being addressed in this study with possibly the use of not sworn officers, but different types of civil officers that are hired in a different manner.

Can you help me with that, one of you all?

Because I didn't see it, but I could have overlooked it.

But John, it's a critical, I deal with that all the time in these neighborhoods.

I'm sorry.

No, please.

Sean Reeves, Chief of Police of the Albemarle County Police Department, and I believe what you're referring to is something comparable to the city of Charlottesville's CSO traffic officers.

That is one area that we are certainly going to explore as far as the non-sworn officers that can alleviate that burden from sworn staff as they respond to calls for service.

Correct.

It's about prioritizing.

Right now, as the report reflects, it's about staffing.

And I view them as quality of life concerns that are coming to the older neighborhoods in the urban ring as we urbanize or have urbanized.

And they take a lot of time.

Okay, thank you very much.

Thank you.

Oh, yes.

I just wanted to mention, to add on to you, we're seeing the same thing.

Aging in place is a big challenge for us

It often strains our EMS resources as well.

And social issues in general, any kind of shift in social issues will feel it.

That's why I was paying attention to Dr. Bailey's presentation because when the economy goes down, public safety is going to feel it.

We're the canary in the coal mine when it comes to that.

But I would say that Chief Palicia has worked really hard to put together a strategy to try to get at those social issues to prevent

someone from calling 911 when they need help to try to get that help to them ahead of time.

Thank you, Dan, because we've talked about that as a board or individually before with our aging population and folks in homes often by themselves or all the retirement communities that we have in this community.