Board of Supervisors County Executive's Presentation to the Board - Recommended Budget   2/22/2023

It's not the most anticipated, one of the most anticipated meetings of the year.

So I'll call to order this February 22nd, 2023 meeting of the Albemarle County Board of Supervisors at 1205 p.m.

in room 241 of the county office building.

Supervisors who are present today are Supervisor Ann Mallek of the White Hall District, Supervisor Jim Andrews of the Samuel Miller District, Supervisor Diantha McKeel of the Jack Jouett District, Supervisor Bea LaPisto-Kirtley of the Rivanna District, myself, Supervisor Donna Price of the Scottsville District.

Supervisor Ned Gallaway of the Rio district is not currently with us.

We do expect that he will be able to join us later today, but he will be joining us remotely as he is currently

out of the area.

I would also like to mention that our County Executive, Mr. Jeff Richardson, County Attorney, Mr. Steve Rosenberg, our Clerk, Ms.

Claudette Borgerson, and our Senior Deputy Clerk, Mr. Travis Morris are also present.

But at the table we also have joining us Mr. Doug Walker, Deputy County Executive, and Mr. Trevor Henry, Deputy County Executive, as well as Nelsie Birch, our Chief Financial

No need to thank me, Mr. Richards.

Let me also thank our officers from the Albemarle County Police Department who are present today, Officer McCash and Officer Delang.

At this, it is my pleasure to turn the meeting over to Mr. Jeff Richardson, our County Executive for the presentation of the County Executive's FY 2023-2024 recommended budget.

Good afternoon, Chair Price.

Good afternoon, members of the Board.

Thank you very much for being here this afternoon.

Thank you for your attention, your energy, your support, your collaboration with the staff.

Before I get started, I think I would really miss an opportunity if I didn't ask our Chief Financial Officer, Nelsie Burch, to go one step beyond the front line and please introduce or have your team introduce themselves because behind us we have tremendous support for the last six months to get us to where we are today.

So, Ms.

Oh, please.

I mean, Andy has been promoted, so he should probably do it.

But as you all know, Andy Bowman leads the Office of Management and Budget.

And this is the team of individuals behind me who spend countless hours working through all of the data and the numbers that are in front of you.

So to the right here is Ryan Davidson.

He's the deputy chief of the Office of Management and Budget.

We have Laura Van Zandt, who is a senior budget analyst, Tia Mitchell, another senior budget analyst, and Kim Gardner, who is our head of our grants unit.

As all of you know, we have really beefed that up over the last few years, and Kim leads that effort for us.

I will add that we have, listening at home, Thomas Unsworth, who is a budget and management analyst.

and Vicki Melanti who is our grants accountant who works very closely in the grants unit with Kim.

We also have a listening Robert Wilson who works in our revenue administration division but is our county's revenue analyst who's been on the job for four months and is becoming actively more recognized in the back.

I see Rosalind and Maya are here.

We partnered with the school, Rosalind Schmidt, Chief Operating Officer and Maya Kumbazawa, the school budget and planning director.

and I think back to this, our director of performance and strategic planning who we have been really on a journey since late August in planning this literally through the process so thank you for that and for those in the audience who I did not recognize knowing that I've said 80% of you contributions don't matter.

Thank you very much.

Your financing budget team, thank you.

Andy, thanks for taking the additional time to recognize people who are here that have contributed and we have missed folks who've made meaningful contributions to where we are today.

As you can tell, we're pretty excited about where we are and we certainly want to take the time that we have today and use it to the best advantage of the county and help you as we start this process moving forward, okay?

steps okay so at the beginning I'm going to take a few minutes and I'm going to talk about the planning and the work that we did to get us to where we are today and it's with the board's work that we now have fiscal year 24 through 28 strategic plans

our strategic priorities for the next five years.

We'll talk for a second about that and why that's important.

We're gonna get into what we call the nitty-gritty FY24 drivers and that's revenues, expenditures, trends.

We'll talk a little bit about that.

That's section two.

Section three gets into the content of the fiscal year recommendation for the county executive's recommended budget.

We'll put that before the board today balanced and today really is the kickoff.

It's the start of the next couple of months and the board will be literally rolling

So section one the strategic plan and this board knows that we worked hard beginning last summer to

on the development of our fiscal year 24 through 28 strategic plan.

After several years of focused efforts to support our community through COVID-19, the pandemic, the board held its first strategic planning session in August of 2022.

In fact, board, it was August the 24th.

It was the first day of public schools in Albemarle County, and this board walked away with us

outside speakers and with inside, including our department heads, our inside leaders talking about what are the big areas that we want to tackle going forward beginning in fiscal year 24.

We knew that as the pandemic was beginning to settle, we knew that we were shifting from lockdown to from looking down to the current challenge of looking up and looking out for the community's future.

We had a stabilizing financial environment.

We had community needs that had shifted from disruption to forward-facing with an eye on the future.

The board developed the fiscal year 24 through 28 strategic plan, and that plan focuses on six key areas.

August, we worked with you and we said, hey, let's take a look at Albemarle County's vision.

I don't know how long the vision has been in place, but it far outdates me.

I asked Mr. Walker, who's been here 10 years, and he said, Jeff, it far outdates me, but it's a vision for this community that has balance.

It talks about abundant, natural, rural, historic,

It talks about a physical environment that supports healthy lifestyles underpinned by a thriving economy that is vibrant, and we commit to educational opportunities that are exceptional.

This board affirmed that vision for this county.

You said, yeah, that still works for us.

And we began to build the areas that we focused on, the six strategic areas around that.

The alignment of resources and capacity to the strategic goals is the work of our team that has led us to today.

These are the six strategic goals in FY24 through 28.

We're a community that's going to emphasize safety and well-being, and it's more than just police and fire.

It's human services.

It's a broader, broader human services focus.

These are more complex.

We see that every day.

We need the right people at the table when things are going on to where we diagnose and help folks when they need our help the most.

It's resiliency, it's being equitable, and it's continuing to engage this community.

It's about infrastructure and placemaking.

It's about emphasizing our continued quality of life as a destination community and balancing what that means.

It's about our continued commitment to education and learning, and all of this is underpinned.

This is the board's words, not mine.

The board said if we had to emphasize something that drives the rest of the strategic plan, it is strategic goal number six.

It's our workforce.

It's a stable workforce with an emphasis on customer service so that we can recruit, retain, and stabilize our workforce.

Because we know that a stable workforce is going to do the best work

for the community and moving us forward.

But Lord, you've been with us every step of the way for the last six months.

You really have.

August of 2022 and we said, let's get these six strategic areas going and let's really finesse what this means.

But since August until today, six months later, you've been with us not just during the strategic planning process, but you've been with us as we've talked about our five-year financial plan.

that we need to keep an

talking about assessments.

And you've been with us when we've talked about our five-year CIP.

We met with schools and heard what schools' needs were.

We did a lot of work going into December.

And you also have been with us as we work through the fall into the winter on financial policies.

All of this informs our budget process for FY24.

Not every strategic plan goal will move forward at the same pace.

and with the same amount of resources.

The strategic plan is five years.

Our fiscal year 24 budget is the first year of those five years.

And so we're looking to put the money, to put the capacity and the resources where we can get the best return on investment now.

Where are the needs the greatest?

And where are we with process improvements that, where we do that alone, it can't give us the outcomes that we need?

That's how we're aligning fiscal year 24.

So I've talked for a minute about the strategic planning, the work that you have done since August, the work that we have done to align with your vision and what you think we need to align our resources to.

Now this section, Section 2, talks about our financial

and the revenues that are available.

So I wanted to spend a little bit of time talking about the financial drivers as we head into fiscal year 24.

I'll take a quote from the economic outlook report from the fall.

Remember when Dr. Cheryl Bailey visited with us in the fall of 22?

in a work session.

And she talked to us about the national economy, the state economy, forward focus of what do we need to be looking for.

And so one major takeaway was that Albemarle County's economy generally follows the state and national trends.

And it's prudent for Albemarle County to anticipate economic cooling in the year to two-year period ahead.

We've taken that into consideration.

The other thing that I'll tell this board is that Dr. Bailey, while she was before the board one time in the fall, she's continued to work with Nancy Burch and her team from the fall until today, because as you know, in five or six months, things can change.

Let's take a look at some of the key economic indicators.

This is what this page reveals.

I'll start with one revenue source that we did spend a lot of time on last year, and that's vehicles.

You remember last year that vehicles uncharacteristically went up, I think, nationally somewhere between 25% and 40%.

It was historic.

We've not seen that.

We've not seen that in our career.

We've never seen that happen before.

We knew that it would adjust.

So what we did last year with the board support

is we've lowered personal property by 86 cents.

That took it to $3.42 per $100 of assessed value.

Since then, vehicles have come down nationally about 20%.

Locally, they've come down 16.2%.

We've left that at $3.42, which is going to be savings to the taxpayer on the personal property side.

The other things that we're seeing with a mixed bag of economic indicators is we're seeing that residential dwelling unit COs are down 18.9%.

That's a slowdown to the units that are coming online.

We've seen a 12% slowdown in recorded deeds.

tax revenue, fewer refinancing, and higher interest rates.

Then we move to the right side of the page, and that's where we see a stronger local economy.

Real estate assessment values, this board knows because you received this report in December that year-over-year, residential, commercial and residential property assessment is going up about 13.5%.

In addition to that, consumer-driven revenues, business-driven revenues in our local economy, both strong

Over the last year, 16% and 11.6%, respectfully.

Additional economic indicators, we are continuing to see modest and consistent population growth

We've seen that the growth in Albemarle County is usually between a percent to a percent and a half, sometimes as high as 2%.

And we're seeing population growth in this current year at about 1%.

Inflation, while it has gone down month over month for the first time in a year, it still remains at 6.5% over the last 12 months.

That's an issue for us.

It's an issue for private sector, it's an issue for Albemarle County government, and it's an issue for our partner agencies.

It's showing that the needs of the community, those who need our help the most, those needs are growing.

It's why unemployment remains flat at 2.3%.

Ward, this has got a lot of important information on it, but I think I can boil it down

On the left side of the page, what you're looking at is you're looking at construction, commodity, price inflation from March 2020 through March 22.

And construction, commodity, inflation has been significant.

On the right side of the page, what we're looking at is interest rates and how they, as you can see,

between 2015, 2020, they edged up a little over two, then went back down, and now they've shot up.

So the combination of construction cost increases along with interest rate increases, how that factors in to our projects that are in our CIT.

I'll give you an example.

From 24 through 27, we factor in that those projects from a year ago had went up in cost over $38 million.

I'll say that again.

Projects that are in our CIP from fiscal year 24 through fiscal year 27, this is in our five-year CIP, we estimate that due to construction, commodity increases, and also with borrowing rates going up, that we're estimating the increase to those projects are about $38 million.

And that's just from one year ago.

Our capital needs have not gone away in the past year, and the percentage increase in cost outpaces our revenues.

And so in this budget, I will increase the transfer.

It's recommended to increase the transfer to the capital program over and above formula by $16.7 million.

That's one-time funding going to the capital program to cover the increased costs without having to slow down our progress

or scale back projects in order to meet our strategic priorities.

What I think that's important because during difficult and challenging times in the past, sometimes the board has had to slow down projects, you've had to pause projects, you've had to at times repackage what you were going to be able to do.

The $16.7 million of one-time funding over and above the formula going into next year will keep us on pace.

This slide is really to represent some of our key partner agency cost increases.

Rivanna Solid Waste, Transit, ECC, which is 911, James Madison Regional Library, and the Charlottesville-Albemarle Convention and Visitors Bureau.

When you add up the additional increases going into next year's budget,

This slide totals approximately $3 million, which is just over one penny on the tax rate.

This is cost increases going into next year.

And some of these are by agreement.

Some of these are by formula.

Some of these have service increases.

that are embedded in them that I'll talk about later.

But this is an example of key partner agency cost increases and it affects local government.

These are key partner agencies that do core services for Albemarle County.

Again, just over a penny on the tax rate.

As I wrap up the economic driver's section, I want to pull one more quote from the Fall Economic Outlook Report.

Albemarle County's history of prudent financial management and our overall solid economic base provides a foundation and community capacity for strategic initiatives.

In my mind, what that's really saying is that

We have a solid, proven track record of living within our means.

We have a strong financial foundation.

We have a strong local economy.

And Albemarle County, even when there is challenges with the economy and we're receiving some mixed data on our economy, we're still able to move forward with purpose and with significance.

And that's what we're doing.

The federal pandemic funding is now complete.

We have retired the federal funding.

And so our funding levels are now going back to match what they were in 2020.

The cost of doing business continues to increase.

And it's due to inflation, supply chain issues, labor shortages.

The cost of our regional partners are incurring.

That's also going up.

They have the same pressure on us that we have on us.

And then finally, our community continues to modestly grow.

But with that growth, our needs grow as

This shows our triple AAA bond rating.

These ratings allow us to get the most competitive rates when we issue debt for large capital expenditures.

The combined estimated savings that we appreciated due to our triple AAA rating in 2022 was about $5.1 million.

It gives us better access to the market.

Stay ahead of the economic outlook early in the fiscal year.

I'll remind the board when we were talking about fiscal policies, something that you did that's going to help us.

You helped us by allowing us to increase our budget stabilization reserve from 1% to 2%.

to give us additional flexibility in the event that we experience financial disruption.

One percentage point equates to about $4 million, and that's one-time money.

So thank you, board, for doing that, because that increases our capacity, and that matters when our folks look, when our rating agencies look at how we perform financially and what are some of the cushions that we put in place to guard that triple-triple-A.

All right, our third section really is the recommended 2024 recommended budget.

And so what we're looking at is aligning some of the big expenditure recommendations for next year to your strategic plan.

Our theme for this year is activating the strategic plan to strengthen our foundation.

It is the organization's foundation and it is the community's foundation.

We budget annually board, and here's where we are, FY24.

I like this slide for a lot of reasons.

And for me, one of the main reasons is that our decisions from one year affect what happens in the next year.

Decisions from 2023 inform expenses in 2024, and it also informs expenses in 2025.

We've got to look back at the decisions we've made, we've got to see where we are and how we connect to your broad strategic areas, but we've also got to anticipate expenses in 2025 and beyond.

You were with us in the fall when we did five-year financial planning and it's responsible for us

We tend to focus on the general fund during budget season because that's where the tax revenue is received.

It is the primary funding source for schools and capital debt.

And it is where the board has the maximum amount of policy discretion.

You can see here that our general fund revenues are coming in at $408.1 million.

That's going up approximately 10%.

You can also see, and I like to point out, Mr. Bowman is always good to remind me that the federal revenue is about $8.8 million.

That's about 9% of our budget.

So the federal government is contributing about 9% of our budget.

On the expenditure side, again to balance, we're at $408.1 million.

And then our total budget for FY24 is $551.5 million, $551.5.

And it's a decrease from fiscal year 23.

It's a decrease of $34.8 million.

Now, Board, I want to take a second.

I want to walk you through that, OK?

This is the total budget coming into Albemarle County.

The decrease of $34.8 million, it's happening for two reasons.

Number one, annual fluctuations in the capital program.

You have a five-year capital plan, but based on the timing of capital outlays and debt issuances, sometimes in a given year it's going to go up and sometimes it's going to go down.

And it's based on the timing of the projects and how they're coming on board.

That happens continuously.

In addition to that, we have special revenue and other funds that decreased this year.

And so what I would remind the board of is it's mostly due to the end of the federal pandemic relief funding.

And I mentioned earlier that that is retired and we're moving back toward 2020 funding levels.

So that's at the big level.

That's at the broad level with $551.5 million.

Before we move on, I would point you to the expenditure side, because sometimes citizens are going to say, where is Albemarle County's money going?

57% of our money goes to public schools.

$50 to operations, $4 to school capital, and $3 to school debt.

57% goes to public schools.

So of the six strategic areas, and Chair Price said this at one of our strategic planning retreats, we have six strategic areas.

And the one that we circle as being the biggest is the relationship we have with our local public school system.

And that's evident by the funding formula where 57% of our money goes to public schools.

This is our strategic goal number five, education and learning, where we commit to support exceptional educational opportunities.

Board, to support these exceptional opportunities, as I said, the single largest expenditure in our budget every year is to transfer to Albemarle County Schools, and we do just that.

This recommended budget that I'm putting before you today fully funds the superintendent's funding request, and it adds $14.6 million of new revenue to the Albemarle County Schools operating budget.

$14.6 million.

And that's by formula.

The capital improvements plan for schools, FYI,

We've not built a new public school in the public school system in over 20 years.

and the CIP funds the construction for three new schools in the next five years, two elementary schools and a high school center, in addition to the expansion at Mountain View Elementary, and as I said, renovations system-wide.

I'll next go to the strategic goal number one, safety and well-being.

This is on the local government side.

Recommended budget invest in safety and well-being and I want to start by mentioning to the board that in the recommended budget

Police and Fire for Warehousing and Maintenance.

We are budgeting for the full cost, full year cost, to bring that online.

In addition to that, in the police department, we've got added in the budget three new police officers in one support position.

I've also added in the budget a third round of SAFER grant request to the federal government.

This is a strategy.

This is third time around, and that's to go after FEMA money, and it continues the strategy

of us adding paid firefighters to our system and spreading the cost out over several years.

It's about three years that we spread that cost out.

So if the board supports this in the budget, we will go after a third round of safer grant money.

It's 30 firefighter positions.

If we're successful in getting that, we'll know later this summer, and that recruitment class would start January 1 of 2024.

This board asked several years ago for us to strategically think about what are our fire rescue needs over the next five or seven years.

This is probably as good of an example of that as I can give the board.

And it lessens the impact over 81 fiscal year.

It gives us several years to plan.

Finally, emergency management.

Local government emergency management.

Our work there is maturing where we cross-connect not just with fire and police, but also with other emergency response agencies to deal with weather, hazard response events, and other multi-agency events that are complicated that requires resources coordination in order for us to sustain a basic level of service industry.

I mentioned earlier about broadening social services.

This budget has full year implementation of some mid-year staffing and benefits that this board supported us with in foster care and benefits in foster care.

It broadens social services to more of a human service type of look to focus on community well-being.

It's supported by two full-time staff.

Board, for the first time, certainly since I've been here,

Emergency assistance funding, we're carving out and recommending $260,000 of local money that social services would use at their discretion to address urgent one-time financial needs in the community.

And finally, our budget for next year recognizes that we have a number of health and welfare agencies that we work with on a day-to-day basis.

This budget has $4.3 million to sustain human service delivery through

Finally, in the area of safety and well-being, we also have added additional funding next year for 2.25 positions in the Commonwealth's Attorney's Office.

That's due to workload increase.

We've added additional money for raises in the Public Defender's Office, and we're also going to fill the

In our second strategic goal, we're looking at resiliency, equitable and engaged community.

We have additional resources in the coming year on equity and inclusion trainings.

We have additional money to support the arts and cultural community partners in helping them to deliver their programs.

We have money in our budget to pick up and do the biannual community survey, which is critically important to reach to our community and ask for resident feedback on customer service.

And then finally, we have continued commitment and resources to work with to meet our climate goals.

Infrastructure and placemaking.

We're investing in investments in transit, including the microtransit pilot, transportation needs with an eye on multimodal safety improvements for our community.

We're investing in solid waste and recycling infrastructure with the funding of a new bailing facility at Rivanna Solid Waste Authority.

We're also budgeting for full year cost impacts of the new Southern Convenience Center that will open this spring and our continued move toward a full service public works division.

We're eyeing additional urban service delivery in the urban ring, and we're inching toward that.

Next year, under Quality of Life Board, we're planning to open Biscuit Run.

We're planning to open a park.

It's the Rivanna Village Park.

It's in eastern Albemarle County.

We are going to do internal planning for an urban

Pocket Park, we've not determined where that's going to be but it will be in the urban ring and our hope, we listened to the board in your fall retreat and where you emphasized a pocket park in the urban ring and so we're going to look to design that this year and hopefully to be able to build that in fiscal year 25.

We're doing phase 2 of Albemarle County 44, that's the comprehensive plan work and we've got $3.9 million

Earmark for the housing fund going into next year.

Before we leave Quality of Life, I do want to take a second and really spend a minute with economic development because it's strategic funding to help align better with Project Enable.

Project Enable is the economic development strategic plan.

So I want to take a moment to talk about economic vibrancy.

because this is one area that can have an effect on our overall tax base.

Commercial activity can reduce the reliance on the real property tax.

We've had recent success with public-private partnerships with economic activity and quality of life.

I'll remind the board

that not too long ago that we appreciated a $27 million investment in Bonumos's research and development facility with more than $20 million investment at Willow Trees corporate campus.

The Barnes-Lumber project, once complete, will include a public plaza.

that the county will maintain and program with community events.

So it's not just projects and local funding support.

Rivanna Station is currently undergoing $100 million expansion project using federal money to grow their mission in our community.

The University of Virginia recently announced $300 million

Virginia Biotechnological Institute that will be developed at the Fontaine Research Park with state and private funding.

And the UVA Foundation in Albemarle County recently partnered on a successful grant application to the Virginia Business Ready Sites Program at North Fork Discovery Park.

And that resulted in $3 million for site readiness.

These investments, they bring vibrancy into our local economy.

They bring jobs.

They bring economic activity.

And it's helping to balance and diversify

our economic picture.

This recommended budget supports $12.4 million of planned investment by county government over the next five years.

As Albemarle County positions to partner with continued public-private partnerships, it's aligned with Project Enable and it's aligned with our economic development strategy.

about workforce stabilization.

I do want to give you just a little bit of a background of our vacancies.

You can see on this chart that from 2013 to about 2019 that we were hoovering between 2% and 3%, maybe a couple of times, 4% vacancy rate.

So as we moved into the pandemic, we began to see higher vacancies.

And I'm sorry, and what has happened

since 2020 as we've seen that spike last year at almost right at 11%.

So from here to here, we've almost tripled in vacancy rates.

At a low, we're looking at probably 30, 35 vacancies.

At a high, this board knows that we were around 108 vacancies for this organization.

In the last year,

We've implemented a total of about 10% in pay increases.

I think this board helped us stem the tide.

We turned it back from almost 11% and we're just over 8% now.

We've got more work to do.

These vacancies are very costly to this organization.

It affects our workforce in a meaningful way.

It slows down our ability to get our core

So the vacancies have real expense to this organization.

Where I want to see us go over the next year to two years is back into the two to four percent range.

That's going to tell me that we've stabilized from a recruitment and retention standpoint and that's not going to be easy to do with this environment that we're in.

This board had an idea late in the fall, and you said, why don't you survey county employees and see what's important to them?

And so our folks said, that's a splendid idea.

And we did.

500 county employees responded to the survey.

And it was a longer survey that took some time.

I was thrilled with that amount of turnaround.

What we saw is in the near term, our employees want more balance.

They want to be able to take time off when they need to, they want to have work-life balance, they want to be able to step away, and they want to know that the organization is able to support that.

They also want professional growth.

Our employees want us to take an authentic level of attention with their growth and their development and their professional goals.

This budget

We're working to align that in the FY24 budget.

Long term, our staff said that we would like to be able to do hybrid work.

We'd like to be able to maybe explore a condensed work week, such as four-day weeks, work from home at times.

And the other thing they said was, they said, we need to see the organization invest and continue to invest in systems, technology,

Let's take advantage of technology so that we stay up with the times.

And what's amazing about this board is that this also has a dramatic effect on the customer experience.

Our customers don't want to go three places where they can go one place and get it all done.

And so this is underway and it will continue.

So the work that we're doing, we're aligning, we're going to have a budget work session in late March.

The work that we're doing now is that we're trying to align in the budget for next year five-year facility renovation that includes modernizing our office environment with the customer in mind, more investment in core systems modernization and centralization,

Enterprise Resource Planning, Financial Systems.

We've begun to do this, and we're seeing a return on our investment.

And then a real razor sharp focus on training and development.

Finally, compensation.

That's important for us to keep pace with the market.

So we're recommending a 4% salary increase for all county staff.

We're recommending that continued funding for the Public Safety Pay Plan, which is a 2% step increase in addition for our public safety personnel.

We're also taking on some employer health insurance increases.

We want to keep our health insurance affordable for our families.

And finally, board, you authorized a system-wide compensation and classification study.

We're in the process of receiving that back.

Mr. Bowman has put money in the budget that we think that could fully implement the findings from that study July the 1st.

We'll be ready to talk about that in concert with all of this stuff

March 29th.

So board I'm going to wrap up and I want to emphasize that activating the strategic plan has been our guiding light.

So thank you for August the 24th.

Thank you for the meetings after August the 24th to help to raise or pinpoint what are the things that we want to accomplish as we roll out our five-year strategic plan.

Our recommendation today is

I believe they make meaningful investments in our foundation in a fiscal year that many expect will bring real challenges as the economy does slow following a strong recovery after COVID-19.

But we're working hard to advance the strategic planning goals to meet the community's needs and desires.

So board, as I wrap up, I want to be clear about where is the new money going?

In summary, where on the operating side, where is the new money going?

So in the area of public schools, I've said that they're going to get $14.6 million of new money for public schools operations.

Workforce stabilization, we'll have refined discussions at the end of March, but we've got about $12.5 million invested in workforce stabilization.

And then, board, when you look at the combination of schools and local government capital for next year,

That is about $8.1 million to maintain our five-year CIP for schools and local government.

And then finally, partner agencies.

It's a $3.5 million cost increase.

So that's $3.5 million of new money going into next year.

On this capital improvement plan for schools, I'll summarize by saying that, as I said earlier,

We're looking at three new schools in the next five years.

We're also looking at renovations and maintenance.

It totals $194.5 million.

For local government, it totals $122.1 billion.

Not everything in the strategic plan requires

Board, we look at opportunities to reposition positions in our organization, to move them from departments when necessary.

We look at work plans and we look at connecting work plans across departments.

We expect our staff to show a collaborative execution.

And finally, Board, we're really beginning to take a hard look at centralization.

I think that's where we are with this process of core systems modernization and pushing performance through our departments is having meaningful conversations with our departments about the value of centralization.

All of this is exciting to us because we're looking to increase the performance in every department

Do you remember earlier in our conversations whenever

I want to show you this slide.

It's a moment before I wrap up to share our staff's work where they work hard to identify grant opportunities to leverage state money, federal money, to bring into our local economy and leverage the local money that we have.

These are just a few of the grant applications that are underway to bring outside funding to Albemarle County.

It makes our tax dollar go further than it otherwise would.

Section 4 and that's next steps.

And before I hand it over to Andy, I want to go back and remind you of the slide that I showed you at the beginning of this presentation.

We were at North Fork.

It was August the 24th.

It was the first day of school.

What are the big areas of concern that we've got to devote our resources and our capacity to as we move into fiscal year 24 through 28?

We promised you in August that we would be back here today.

And we've been with you every step of the way.

We've never had our strategic plan ever more interlocked with the annual budget process than we do this year.

and I believe that that is a strong sign of an organization that is aligned to optimize performance.

We will work with you over the coming months in a number of work sessions to identify if we've hit the mark.

Have we put our resources and have we put our capacity where you believe as a board that we can do the most good for our community?

You'll look at this and you'll challenge us.

We'll try to get back with you.

And Andy will talk to you in just a minute about that and give you all the information you need to make good decisions for our community.

But I believe this is our best work, where we have aligned our capacity

to your goals.

In closing, I would like to thank the board for your energy, for your collaboration, and for your vision to work with our staff over the last six months.

I'd like to thank our staff for their ingenuity, for their openness to collaborate and work differently, and we still have a lot of work to do.

And finally, I'd like to thank our community.

Our community is a wonderful community.

We have high energy in this community.

We are a destination community.

And so it's going to keep local government on its toes.

That's how it works.

This budget is scalable to some degree.

A lot of what we've suggested to you can be moved ahead, or it can be slowed down.

It certainly can.

If we were playing basketball right now, what I would tell you is, on defense, this is a full court press.

At the local government level, with our staff, we're in a full court press.

in the most meaningful way that we know how.

And over the next two months, we really look forward to working with this board and our community to see if this meets our needs.

Thank you, board.

I appreciate that.

Thank you.

I just have one slide to continue around the next steps.

The next step in the budget process will be on March 1st.

That evening, as part of the board's regular meeting, there will be a public hearing on the county executive's recommended budget.

We will then begin the following week on Wednesday, March 8th, in a series of budget work sessions with board supervisors.

The intent of those is to allow as much time for board discussion and questions and answers from staff about the budget process.

The way we'll do this is staff will cover the budget chapter by chapter.

and in those discussions we will make connections to elaborate on Mr. Richardson's comments about how the budget connects to the strategic plan and also discuss those major financial changes that may be taking place in the budget.

The board will take action on March 15th to propose a budget and a tax rate for advertisement.

Numbers can still change from there.

That is just one point in time where we will continue some work sessions The board will note that we have work sessions on the 22nd around transit and the 29th around workforce stabilization There may be time at those work sessions to add additional items that the board may desire Including leaving an open to be determined on April 12th again to give us flexibility Depending on where the board may be interested in delving further into the budget

We'll have a continued process showing the slides that would include May 3rd.

But I'll add that today has been a lot of information that has been presented in this past 45 minutes or so.

We have a more than 300-page document that you all have received today.

And this is a lot of information to process.

So in the Office of Management and Budget, we're really here now from here through May 3rd and beyond to assist the board in this decision-making process.

So a few things we will do is that ahead of every work session, and this week I will send the full schedule by chapter of what we intend by page numbers to cover each section that you all can be prepared.

It certainly will not be all 300-some pages on March 8th.

I can assure you that.

The second thing I'll ask is knowing that there will be lots of questions as you all do your own independent reading or other times if you could direct all of those to myself as a point of contact and just copy the county executive's office and I will be the central point to gather all of those and I will share for public transparency all of those questions and answers we receive and communicate by email we also publish those all on the county's website

The budget document is online for the public to view as well.

This presentation will soon be online as all the other presentations there.

We want to keep as much information on the website as current and fresh as possible so everyone is very clear about where we are in the budget process as we work through this.

Thank you very much.

I guess I'm a little uncertain as to how much detail you want in questions today because I did make a little statue to present.

But I can mention some topics and then not expecting answers.

I will send this to you also in an email as well.

I've received lots of comments throughout the last month or so, not unfortunately in October when it would have been most useful, about the need for

the great desire for Sunday afternoon hours at our public libraries.

So I'll be taking care of it.

Grothe and Northside are the two I've heard about, but there may be others as well.

I do not know.

And my only information to add to that is that the JMRL board said, well, we did our budget application in the fall, so take it from there.

But I do not know what that amount would be, and so maybe that's something we could learn.

The increase in the CACVB, that would be offset by incoming increases in the transient occupancy tax, correct?

OK, very good.

Because someone may ask about that.

Also, lots of recent discussion about

the increases in assessments and even with the same tax rate the increases that many many people will be facing and whether the board has yet considered increasing the caps on net worth for our property tax waiver program and some information provided to me last Saturday which I will be writing about other communities in Virginia who have substantially different net worth adjustments since the increases in value that have happened so I will provide whatever I have to you

All right, thank you.

Thank you.

Thanks to everybody.

That was really a great presentation.

Our presentation is just getting better and better and better.

I'm going to hold off on my questions today, and I'll be sending them to Andy.

I'm going to have some time to come through this before I start asking questions.

But thank you very, very much.

I was thinking, well, how can I change that?

I understand that that is a capacity issue, correct?

I don't know if that's a capacity issue, but that's what I've understood in the past.

So maybe with building new schools, that might help alleviate that situation and we can increase pre-K offerings.

And that's all I have right now with Supervisor McKeel.

Thank you.

I will add my appreciation for this presentation, which I thought was very clear and very helpful, very cut to the chase on it.

I have numerous, numerous questions, which I look forward to.

It's very striking to me because it shows that federal revenues particularly can't be expected in the way they have been in the past.

So I really appreciate that.

So where to go?

Thank you.

First, just sort of a general comment, observation, and this goes, I think Supervisor LaPisto-Kirtley and I are in a situation different from your Supervisor Galloway, Mallek, or McKeel, and definitely from Supervisor Andrews.

As we are at the beginning of our fourth year, our third year, fourth budget, this is really, appears to be the first year that we actually will have a regular budget process.

And within two weeks, we went from a presentation much like this to a pandemic.

In February, I was on vacation in the Pacific Rim wondering if I was going to get home because they were already canceling flights coming out of China.

And at that point, I underestimated the casualties at around 250 to 350.

So we went through a year of CARES and a year of ARPA.

And this appears to be the first time that we're actually going to have a chance to go through a budget that you've worked on without those federal funds, as Supervisor Andrews just mentioned.

And so it's great to be in this very unique position for us.

The work that you have all done

over these last three years to get us through that is amazing.

And for our county to still have the financial stability that we have is a testament to the work that you have done.

I will save most of my questions for later.

I do have a couple of

the slides, but slide 12 talked about a 16.2% decrease in vehicle values.

And I greatly appreciate that your budget proposes maintaining the same personal property tax rate this last year, which was a substantial reduction over what we had had for years.

Because while we have seen our real estate assessments go up, not everyone owns property or a home, many renters in our community.

but almost everyone in our county has to have a deed.

And that is a savings to every member of our community because if you live in Albemarle County you almost have to have a deed.

So we really appreciate you looking out for our community members there.

On slide 13 there was a, and again you don't have to go to the slides, but the economic indicators, a 6.8% increase in the value

with social services benefits to residents.

And I'm not quite sure what you mean by value.

Does that mean that we have a 6.8% increase in the frequency of services that have been provided, or does this cost 6.8% more to the county to provide those services?

So I would just ask for a little bit of clarification.

the actions that are being taken to protect our CIP.

The increase, the $38 million increase cost for that.

is significant and as Mr. Richardson you mentioned and every member on this board knows there has been times where 2020 we had to pause a great deal of CIP and when you do that you know you're simply delaying the inevitable it's a you know pay me now or pay me later we have to do these CIP projects so appreciate the work that you're taking there

The end of the CARES and ARPA funding is going to be significant and yet we've still been able to propose a balanced budget here.

On slide 17 we talked about credit worthiness in

The impact of losing that would be about 5.1 million per year in savings and that's important for our community to understand how significant it is that we're able to maintain to be one of what I think was like 45 or 40 counties in the country.

that does that.

And also that that 2% budget stabilization fund is not a surplus.

That is a protection.

It's a rainy day fund.

Now we're going to hear from the community.

You know, I heard Albemarle County has got a surplus.

And as part of our messaging, we need to be able to clarify the difference between protecting our financial house as opposed to anyone believing that we are simply overtaxing and underspending

The capacity to fully fund our CIP needs with the elementary schools, the renovations and expansions of our schools is significant.

These SAFER grants have been really so significant and the work that our fire and rescue has done

The stabilization we've been able to bring to our first responders is really important and I'm really pleased to see an emergency assistance fund being offered there.

I also just want to briefly comment.

There are a lot of people in the world who talk about the wokeness.

To me this is nothing more than courtesy and respect and equal dignity and I'm proud that Albemarle County sees that as an important message that we need to get out.

The economic development plan

And I'm really pleased to see, as we look at workforce stabilization, listening to our employees in terms of things like work-life balance, because that is important.

Mr. Richardson, on slide 31, we have a chart that shows the workforce stabilization.

And in 2022, it was about 108 vacancies.

And we've seen that 10% pay increase is reduced.

Yes, I can get close just a couple of weeks ago we checked and we had 78 that's off of the base

just under about eight and a half.

That's significant.

That's a 30% reduction in vacancies in just a year, which tells me that the actions that you're taking towards workforce stabilization are more important.

And there's a cost to that.

If we want to keep

I think the rest I'll just hold off until more detailed questions.

Yes, sir, what we do, and Mr. Bowman, I don't mean to step ahead of you, but what we do, let's say you had a question, you send it in, it's going to go out to all the board members, just for the very reason that you're going to be able to see what other board members are asking.

And then finally, Mr. Bowman will also put that on the web in a way where our community can keep track of those questions and answers as well.

Did I say that right?

Yes.

Going off of what Chair Price said, I just want to make sure because I have been also approached saying we have a surplus, correct?

So the understanding is we have no surplus.

The 8 million we're talking about is basically like a rainy day fund or it's there in case we have disasters and we need to be able to react to anything that happens so it's in a holding place.

Yeah, at some point in time, the fund balance is generated because at some point in time you had a surplus, right?

Once you spend it, it's gone.

And so we have a rainy day fund, we have policies that require us to maintain 10%, and then the 2%.

Again, once you spend that, it goes bye-bye.

It's no longer there.

And so we keep that, just like your personal savings, we keep that in the event that we need it for unexpected reasons.

So we never intend to spend the rainy day fund, which is the 10%.

That 2%, the reason we wanted to increase it last year, was because we knew that this economic uncertainty was going to happen.

there was some uneasiness about what might happen in the General Assembly and in Richmond and to help us offset an unexpected in the event it happens and we couldn't plan for it and so it isn't a surplus like an ongoing surplus it's a protected reserve to help us not have to go back and cancel programming and cancel things that you all have said you want to do in our budget

I sent a very detailed email that we can absolutely talk offline, Bea, if you have questions, last week because I was anticipating this question coming up about surpluses.

Fiscal 22, we did not have one.

We actually drew down our fund balance by $7 million, a little over $7 million.

And so it depends on where you go in our audited financial statements.

Some might pick out a number that looks like a surplus, but it actually isn't.

And I explain that in the email to you.

And so we drew down, like we wanted to last year, our fund balance, because we had, at some point in time, accumulated positive budgetary variances.

So we wanted to draw those down.

So we did that.

Yes, those are our financial policies.

So the 10% is a rainy day fund.

Which we have to keep by law.

No, not by law, but by policy.

It's also seen as something that we need to do in order to maintain a triple AAA.

So the rating agencies do not want us to touch that because that is a pot of money that needs to stay there for a very, very bad rainy day.

Okay, that makes sense.

It's a budget stabilization reserve.

We had, I believe it was 2017, somebody's going to tell me if I'm wrong, this was created at 1%.

And I just want to make the comment that we are at uncertain times.

The school division is still at uncertain times based on what could happen with their funding that they've not received full funding yet.

So we're waiting to see on that.

And I think Ann and I have certainly lived through a time when we had to give back money

So originally there was the 10% which in my brain I used as the cash flow between December's and June's and always goes back in.

and then what was the old 1% reserve is now 2%.

Or is it still separate?

You still have your strategic reserve in the capital fund.

That is still there.

I think as part of any kind of good budget management practice there's always a small reserve so the board may adjust throughout the year and those would be things that may come up.

The 2% would be a much more severe situation that would be unanticipated and the 10% would be even more drastic than.

and I just want to clarify just because maybe we did not maybe say it just to be clear in the presentation that five million savings in debt service was a one-time result or a result of the last two issuances rather than one going into your cumulative amount.

Yeah and certainly we're in a much better position and lots of advantages happened so I want to clarify that five million number.

And I guess the very last comment

All right.

Nothing further on the budget than board.

Dorian for any matters from the board not listed on the agenda.

Thank you.

I had heard some discussion on the news as well, but I wanted to just put out there that this is forest fire season and I did see the red flag sign up on the bypasses that came by a couple of days ago and was on the Department of Forestry website for something else and saw it on there.

So all of us hopefully can help to get the word out about that because it was the 10th of February in

I appreciate Ian saying that because yesterday we had numerous calls.

People thinking about the rain, but when it's this windy, it dries out very quickly and we're really upset about the fire.

Thank you.

I had the pleasure of third traffic town hall last week and I'm not going to discuss that, but just note that it was at the North Park volunteer fire department station and that has been a county collaboration to renovate that space.

I got a tour, Chief Stevens gave me a tour, I was thrilled.

The only thing I had last night was a Scottsville town council meeting.

There's a lot happening down there.

Just to piggyback on the improvements at North Garden, during the tour that I had, the most important part of the building to me was the new laundry for the turnout gear, which they never had before.

And Earliesville doesn't have one either.

Older stations that volunteers frequently would take off their gear, which is coated with all sorts of really awful, dangerous chemicals, et cetera, throw it in the back of their car and go home.

And so, without, or hang it up in

their booths, you know the typical picture where you run out, pull your coveralls on and jump in your booths and out you go.

But having the extra safety value of being able to properly clean that equipment is so incredibly important to the health of our firefighters.

Emily, anything?

I think we're good to go.

So at this time, we will adjourn March 1, 2023 at 2 o'clock p.m.

This will be our regular meeting, opportunities for the public to act