Housing Advisory Committee Meeting   2/16/2022

I will in the meantime call this meeting to order.

This is the February meeting of the City of Charlottesville Housing Advisory Committee.

This is actually our first meeting of the year.

Welcome all.

The chair notes that we do not appear to have

and half of our voting members present.

So we don't have a quorum, but that doesn't stop us from discussing business, even conducting business, just not, our votes don't matter.

All right, so welcome all.

Let's see, in the housekeeping realm, I believe you all should have access to the minutes.

Were you able to pull those?

Yes.

Yes, ma'am.

Motion on the floor.

Thank you.

Any discussion?

All in favor signify by saying aye or raise your hand or something.

Aye.

Any opposed?

Hearing no opposition.

Approved.

So let's see, are we.

So we do have a couple of housekeeping matters, but in light of the updates with the city, et cetera, it may make more sense to circle back to a couple of those later.

and the main thrust of this meeting is to catch us up on where we are, get updates and figure out next steps for the hack on a whole variety of matters.

To begin with, if we can get a city update and the way I envision that is per the minutes,

and following up on those matters, we had the discussion of the tax abatement program and there was a pending meeting with Ridge and I and city staff on that.

Yeah, we've got a substitute.

Yeah, perhaps some introductions are in order too.

You're right.

So just as well.

So arbitrarily, since we do seem to have a new face or two and a steady sub, maybe that's in order.

So let's start with you, Chris, and we'll go around my screen.

Great.

Sure.

Thank you.

Yes, so that's also on our housekeeping matters.

Hopefully, Erin and Brenda can get that sorted for you.

And then as a general rule, if you're using a virginia.edu address, there's a chance that's greater than zero that there's a town and gown dispute.

And they don't always talk to each other on these distributions as well as they should, just as a word to them in general.

But welcome.

Welcome aboard.

Well, I think our communication disputes have been smoothed out.

I've been getting the invitation so thank you.

Good afternoon, everyone.

I am Rich Schuyler, and I am

the Dean of Community Self-Sufficiency Programs at Piedmont Virginia Community College.

I was born in May of 1961.

That was great.

I didn't know that about you Rich.

Thank you for sharing.

Yes, and as we discussed earlier, they're a future fearless leader.

Yes, I'm Elise.

Nancy looks frozen.

Nope, there she is.

I don't think she can hear us.

All right.

Then Alex.

Alex, again from the City of Charlottesville, Office of Community Solutions.

I'm Steve Stokes, Asset Manager for Jeff Snare, Board for Aging.

We have communication staff with us too.

I'm Frank Stoner with Milestone Partners.

I am the banker rep to the HAC, City Council's banker rep to the HAC.

And my day job is as the CEO of Pilot Mortgage.

Welcome all.

Again, I view this sort of as an update catch up and configuration meeting and starting with getting back to our prior question on the tax abatement program and the rehab tax abatement program and reconfiguring it towards affordable housing.

goals.

We did have a meeting in January with staff with the plans as they came out of the hack for adjustments to that program and our recommendations.

Yeah, just a couple of points.

So I had a great meeting on January 5th and my

Day job of trying to reduce poverty has kind of gotten in my way of sending a series of notes around to update the members of the HAC on those meetings.

But what came out of it are a couple, I think, of interesting items of note that we ought to discuss as a HAC.

And one of them is that we've been focused on the partial tax exemption or the tax abatement that was focused on the rehabilitation of older properties.

and we worked up with the Policy Committee some ideas about how to refine that to aim it toward our affordable housing challenges.

What became clear in the January 5th meeting is that that is just one of the tax abatement statutes in the Code of Virginia that could be used to reduce the property taxes of folks who are providing affordable housing.

There's one that we talked about a couple of years ago, which is to provide some benefit to the owners of what would be called naturally occurring affordable housing.

So people who just decide on their own to rent at a lower rate to low income people.

That's another statute in addition to the improvements statute.

And there's another one that talks about encouraging new improvements or rehabilitation of improvements

in specified zones within the city.

And during the meeting on January 5th, there was some thought to saying, if there's not a legal way to say this doesn't apply to UVA students, while they may appear poor on paper, they may not actually be low income.

A way to maybe adjust that would be to establish zones that are kind of outside of the university's

Close proximity where you are less likely to find students.

What is common across all three of these statutes and and adding tools to our toolbox is that there seemed to be a desire on the part of the policy subcommittee to not only look at how much rent is being charged, but also that they are that these rentals are being provided to low income residents.

And the question came up, who determines whether somebody is a low income resident?

And both the city treasurer and the city assessor said that's kind of outside of their scope of what they do.

And so what came out of that were, I think, two different options.

If we want to continue saying not only do you provide rent at an affordable rate, but also

that you provide it to low income individuals, which means you have to have information about the tenants as well, who certifies that the tenant or the homeowner is low income.

And there are two options that are out in the world that I think we should discuss.

And then they could apply across all of these different statutory provisions so that we have all these tools in our toolbox.

One is to find some third party entity

like the housing authority that has some expertise in certifying people's incomes.

That's one option.

And we would have to talk to that entity like the housing authority to say, is this something you'd be willing to do?

Would there be a cost associated with that with such a certification?

What would that look like?

And we could proceed down that road to find somebody to do those certifications or

We could go the way the city of Richmond has gone with their tax abatement program, which is to say it's up to the applicant.

So the person asking for the tax credit abatement, it's up to the applicant to provide evidence satisfactory to the assessor or to the treasurer that shows that the tenant is in fact low income.

And so that places the burden on the applicant rather than some third party.

and so I think getting some sense as we sketch out how useful these tools may be to just reaffirm whether or not we want to make sure that we're not just providing tax abatements to folks who charge below market rents, but that they're all actually also renting to low income tenants.

I want to confirm that we want to go that route and if we do go that route, get some sense from the group about whether we think a third party certifying body is the best way to

Best Avenue to Explore, or whether we should leave the burden on the applicant to provide paperwork suitable to the powers that be.

And we can help decide what that paperwork should look like.

But the burden would be on the applicant to show that the tenant that they're renting to is low income.

So I'd like to, so I would like to have some time during this meeting to discuss, you know, those questions.

And then lastly, the other thing that came out of that meeting, and it came out of our last HAC meeting is

The amount of benefit that is gained through tax abatement is not that great.

So, you know, I can share my screen and I think I will just to show, just to remind people, you know, what benefit you get as the person seeking the tax abatement, what benefit you get if you get a reduction in the assessed value of your home.

And let's see.

That is not sharing what I wanted it to share.

Let me try this one more time.

And if it doesn't work, I'll just say it rather than show it.

Okay, it's not working.

Okay.

I will just

It's showing that I can share a screen, but when I click on my Word document to share it, it's glitching out for some reason.

But anyway, this isn't much to have to tell you.

So if you increase the value of your property through an improvement or a rehab or a new build in a zone that's qualified, if you did a $75,000 rehab and increased the assessed value by $75,000 and we were gonna abate the tax on that, you would get a $712 benefit

in terms of tax abatement for that $75,000 investment in your property.

If it was a $200,000 investment in the property, you'd get a $1,900 a year tax break for as long as the tax break is in effect.

The benefits are probably not enough to encourage somebody to do this if they weren't already going to do it.

So it is more like a reward for doing good, it seems to me, rather than an incentive to do something different.

And there is cost associated with implementing the program.

And so I think doing a temperature check about whether or not it's worth it to create this incentive, given that the incentive isn't so high, given that there are paperwork requirements in order to get it done, and then

Just to close that out, the cost to the city of the revenue foregone through at least the home improvement program is $150,000 a year.

So running a program like the one that we're envisioning, if it matched the same kind of participation we've had in the past, would cost the city $150,000 in revenue

and would provide these modest benefits to the folks who are rehabbing or building new improvements in a zone to provide affordable housing to people.

And so a fundamental question is, is it worth using these tools with the modest incentives it provides?

Or should we try to take that $150,000 and say, you know what, instead of running these programs, maybe the city should collect that $150,000 and do something

Affirmative with it rather than providing these small incentives around to folks who are offering affordable housing.

And so those are the things that I glean from our meeting on January 5th that I just wanted to come back to you all with and just make sure that we're headed down the right road.

Are these tools that we want in the toolbox given the fairly modest incentive?

And then if so, do we want to make sure that we're

renting to low-income individuals, and if so, do we want it to be a third-party certifying body, or should it be the applicant who has the burden of proving that the tenant that they are renting to is low-income?

A couple of follow-ons to that.

Now, Ridge is quoting stats that are for single-family, essentially almost exclusively owner-occupied persons who have done this heretofore.

under the present configuration with the present age of the property, you know, the age requirements and the present configuration of how the ordinance actually works.

So we shouldn't rely, I think we're

and the program has not been pointed in the affordable housing direction, right?

It's done irrespective of the affordability that's impacted.

So I would caution us when we're talking about the revenues, costs, the number of units generated, et cetera, we kind of don't know what we don't know in that direction.

That's certainly true.

And then I guess that's sort of the main point there.

Another sort of discussion that we had at the end of that staff and that Rich and I had with staff was a concern that this is an existing program that can be modified to continue to do things, but administratively, legislatively, procedurally, if we're going to

essentially retire it and do something else with the money, then we have to procedurally retire the thing and then procedurally do something else with the money, which may be in itself fraught and more time consuming than simply moving forward.

So having said that, any questions for Ridge or any discussion on this point?

I've got my opinions on the third party, but I'll open it up for, so.

So, and let me address, actually, Lisa had a question, and I think Ridge can answer this more thoroughly than I can.

The statute that we're using will allow, is it four units or full multifamily if we can get it?

If I want to add on to that, I definitely don't think that we should do away with a program that's already in existence.

I'm not for that.

I do think that we should follow the Richmond model, which allows the applicant to provide the information.

I think that if they provide taxes, W-2s, or any other information tied to their income, it's fine.

because having a third party, that limits the pool of participants.

Not everybody who is economically disadvantaged participates in those groups.

Sometimes they are disadvantaged financially and just going along their own way.

making sure that they do and pay their bills as best they can and they don't participate in any program.

Either they don't qualify for the programs or they just decide not to participate in the program.

So I think that would be in a limiting aspect of what we do and we don't want to limit.

We don't want to set barriers.

Rich, can you maybe you and Brenda can clarify this, although no, actually, I think Brenda was still communicating, working by candlelight and communicating by semaphore that day.

But

If I recall that conversation, the question wasn't, would they come from those programs, but would the city on receipt of the information, rather than making the decision, there would be one third party that the city had agreed would certify, be it CRHA.

So you'd get it in, the application in, and the city would say, certify the income.

And the alternative to that would be to give frameworks to the treasurer or commissioner of the revenues office

to know what counted and what didn't, and they'd just apply it.

Yeah, just to clarify, and I'm not weighing one way or the other about whether it should be the applicant or a third party, but essentially the city would be hiring somebody like somebody who is familiar with how to do income qualifications would be hiring them as a vendor to say, can you income qualify people who are renters or homeowners in these programs?

And they would essentially just be a vendor.

So you wouldn't have to be a resident of a CRJ property.

And I just pulled them out as an example.

There could be other vendors who could certify people's income if that's something that's within their wheelhouse.

So just to be clear, it doesn't have to be a participant in those programs.

And excuse me, Mr.

Chair, I was about to call you Madam Chair, but Mr.

Chair, Chairperson, Chairperson.

My opposition is that I think that that's adding another expense to the city that doesn't need to be there.

Yeah, I mean, the question is that then the gatekeeper becomes somebody in the city to sort of check that box.

And can I tug on that for one second?

I'd like to make sure that I have a sense of the group.

I mean, it sounds like

You know, the thought was, let's not scrap these tools that are in our toolbox.

Let's see if we can make them work for us.

That's what I'm hearing.

And what I've heard from Madam President-elect is that, you know, put the onus on the applicant who is seeking the tax abatement to meet the standards that we set out, which would be providing to the city, to the assessor, to the treasurer,

certain documentation like maybe their tax returns from the prior year or the last two months of somebody's pay stubs, whatever.

Sure.

So group, let's make this simple since we've discussed one in detail and not the other.

Anybody here have a savage preference for a third party vendor?

Having seen no response to that whatsoever, I think we've got a pretty good consensus.

So having said that,

My understanding was that at least a portion of this was headed in the general direction of the city's attorney's office to see if what we were doing was possible to be structured up and where we were.

Well, Javier provided us a template, which is the tax abatement program that exists already in Richmond.

And so I think we've got a pretty good template.

was under the impression from Javier that that ordinance was compliant.

And so what I thought I would do is just see if I can take that template and apply it not just the way Richmond did to the one statutory provision, but see if we can provide uniformity across all of these statutory provisions, where we are encouraging landlords to rent to low income people, whether they're rehabbing or not,

and also provide benefits to landlords that are renting on their own motion to low income people and also for low income homeowners that are rehabbing their properties.

And so that we have a kind of a uniform process across all three statutes so that we can have all three tools in our toolbox with a standard way of accessing them to make it easy for everybody.

So that would be my next step after having taken this guidance.

And then I would send that back to the attorney's office to make sure that what I've drafted in terms of templates is legally permissible.

Right.

All right.

Great.

All right.

Thank you, Ridge.

Appreciate it.

City update otherwise.

Brenda, do we have other developments?

Brenda?

Brenda, I didn't hear her, so I was trying to, by all means, leap into the breach.

Okay.

Well, if she's, we've got the Affordable Housing Fund, you know, ANOVA still out there.

We've got a couple of this.

to close, so if you haven't turned in your application, please turn in your application for the Affordable Housing Fund, NOFA.

We're also looking to issue a CDBG NOFA.

We are still working on it.

Once we get it done, we issue that.

That is a quick one because of timeliness, involvement, and

Once it's issued, the project has to be completed by December of 2022.

I have a couple.

One is to be clear, at our last meeting, we urged by motion that as we do have 3 quarters of a million dollars

HAC, and after staff, that committee goes through it and then we present it to HAC and then finally we present it to the city council for consideration.

But we're not going to be using any instrument or any

procedures based on the current performance evaluation.

I'm sorry, so we are not going to be using the existing procedures now for this round.

Yeah, we have a technical committee made mostly of staff and perhaps one representative from a CAF

Gotcha.

Just the template.

Yeah, we can.

We're finalizing it right now and

Well, the committee that was recommended in the plan, you know, we still have the city manager, the deputy city manager is talking with the city attorney's office.

You know, we are still going back to the city council for some clarifications.

I think that was my response the last time.

You think you can get time frame on that so we get this out this spring?

this time with the city attorney.

And the city attorney helps them to clarify things and then put the ordinance together.

Gotcha.

Well, again, once we've got a draft of how this is going to work, it'd be helpful to see that.

Councilor Payne, can you frame, this has been coming up a lot, and I think that we've heard nine different versions of this, but can you frame what sort of the immovable object and

Sure.

I'll try to be brief.

And I've talked about this before, but we'll run it down again.

And I guess I'll just start by saying, I do think it's really important for any planning we're doing to just do our best to look at the budget numbers as they are, whether we like them or not, and figure out how we move forward, given them.

So our budget season is sort of just beginning.

The first draft budget won't come out until actually March 7th.

But so far where we're at, there is definitely a budget crunch.

Assessments went up, which is a revenue driver.

But there are also expenditure drivers along with that of about $14 million in increased expenditures.

A lot of that for employee compensation and benefits as adjustments for inflation, contribution to local schools, some other operational needs in the city.

And then the biggest issue I think we have in our budget is where our CIP, Capital Improvement Programs, budget is at.

So just to run through the largest expenditures there.

There's currently in the CIP $75 million for school reconfiguration.

That's for the first-fade Buford.

The second phase is an additional $20 to $30 million.

Public housing redevelopment, $13.5 million.

Friendship court redevelopment, $15 million.

CAF funding, $4.6 million.

Supplemental rental assistance, $4.5 million.

All are street milling, paving, transportation and infrastructure needs combined, $19 million.

All facilities maintenance HVAC updates combined $6 million and transfers to schools for non-school reconfiguration related capital needs another $15 million.

Why does that matter?

Because if you, under the current projections from city staff, our current budget with all those things in it,

will create about a $24 million deficit within our CIP.

If you just assume everything in there as is with their projections, no revenue increases.

And we'll also deplete our debt service fund.

Obviously that is not sustainable.

So looking at what would be necessary to cover everything currently in

Our budget, if you assume the staff projections are correct, would require a 10 cent real estate tax increase or some equivalent on top of the assessment increases that there have already been.

And again, if you assume that the city staff's budget projections are correct,

even with a 10 cent real estate tax increase, it would largely freeze our ability to make significant new investments until about 2032.

Practically, what does that look like?

It would mean on a 10 year time horizon, not room to fully fund the affordable housing strategy.

Some of the things that are not currently in our budget,

that again under current projections there wouldn't be room to even with a 10 cent real estate tax increase would be things like the proposals for expanding CAT, Piedmont Housing Alliance, recent proposed projects on Park Street, future phases of redevelopment of public housing, unexpected cost increases for redevelopment of public housing or friendship court,

major operational expenses such as about 10 or so fire department positions that were paid for with one time CARES Act money, collective bargaining or a wage and compensation study, pay increases and reforms to our pay scale throughout the city organization.

Those are just some of them.

So hopefully to give some context and make it concrete where we're at.

When it comes to tax increases, some additional context, so I'm sure you all are aware, average assessment increases were 11%.

That was not uniform.

Neighborhoods such as 10th and Page saw average assessment increases over 20%.

So on average in the city, with nothing else changes, the average real estate tax bill will go up $400.

If you did a 10-cent real estate tax increase, the average real estate tax bill goes up $800 in one year.

and when you think about, you know, is there a way with our existing real estate tax relief programs to offset any gentrification and displacement pressures that that would create?

I'm happy to sit along this data, but if you look at data from the Commissioner of the Revenue, utilization of our two real estate tax relief programs has declined over the past five years, despite over that period having significantly expanded both the eligibility criteria

the amount of relief as well as advertisement of those programs.

I think likely the largest driver of that is that there is a General Assembly set limit on the assessed value of a home that can qualify for the CHAP program of $375,000.

And so obviously as assessments continue to increase, people are kicked out of the program even if their income didn't change.

And again, that would require General Assembly legislation to change that limit.

Finally there are, when thinking about revenue, there are potentially some other areas in the medium to long term.

One of them is a proposal in the General Assembly for a

to authorize Charlottesville via local referendum to create a one-cent sales tax that would go directly to school buildings that would raise about $12 million a year just for school buildings and would cover a lot of the crunch in our budget.

There is also other legislation in the General Assembly related to school construction.

There is a package of Senate bills.

One is to expand the literary fund loan amount for localities.

The other is to establish a school construction program and fund to disperse grants to school boards to finance both the design and construction of school buildings and facilities.

Those have passed the Senate.

They have not yet passed the House.

Crossover has just began where bills that passed in one chamber can go to the other to pass.

You know, medium term, it's always hard to guess.

I don't know if it happens this General Assembly session.

It still could.

But the sales tax legislation, I think there's reason to be optimistic midterm.

It passed the Senate with broad bipartisan support, 28 to 12, including support from the Republican state Senate leader.

and it died in a House subcommittee, but from what I understand, if it could just get to a floor vote in the House, it would probably pass and again, that still could happen in crossover this year, but if it doesn't, I don't, I am cautiously optimistic that it would happen just because Southwest Virginia needs school funding so much and

Final piece is this would definitely be a longer term lift but another source of revenue that I could see is UVA entering into a payment in lieu of taxes program or pilot program where they would enter into an agreement with the city to pay property taxes.

My understanding is if they pay the same rate everyone else does that would be $9 million annually in revenue.

Currently they pay the city about $33,000 in revenue.

And this is a type of program that many other universities, including University of Michigan, Harvard, Yale have entered into.

And UVA's operating budget is about $1.4 billion each year.

So both in terms of their ability to do it operationally and the precedent of other universities, I don't think that's impossible, but it's obviously a longer term lift and involves a lot of conversations between

Albemarle and Charlottesville with UVA that have not yet happened.

So anyway, to summarize all of that, I think the quick and dirty takeaway is the current state of our budget, not affordable under staff projections, creates a twenty four million dollar deficit to afford.

It requires a 10 cent real estate tax increase or some equivalent that still largely freezes the ability to make significant new investments for about a decade.

and that is still without including significant operational expenses as well as other policy priorities that are not in our budget and wouldn't be part of those projections at all.

Thank you, sir.

Well, other than that, Mrs. Kennedy, how was Dallas?

That was just left up from the last time.

But I would like to, I don't even know if it's appropriate at this time, but my feedback would be, let's explore the issue around UVA paying regular taxes.

Michael, sorry, I haven't kept up with this, but as you were talking about the CIP, I didn't hear anything with regard to this parking deck that the city was supposed to build per agreement with the county.

What's happened with that?

And second question is just how did we get here?

You would think so.

So as to the parking garage, that is not in our CIP.

The two major cuts that have already been made to the CIP are cutting both the West Main Street streetscape project and the parking garage.

So this is with those having already been cut.

There is some money still in our CIP for meeting the court's agreement because we still can meet the court's agreement if we turned

Instead of building a parking garage, you turned the parking lot in the land where it was going to be built into a surface lot.

That would provide enough spaces to meet the agreement, would still be an expense which is in our budget, and would create room to see what the parking demand is and doesn't foreclose that if it turned out that there really is a parking

Emergency.

I've been very public about it.

I don't think that is the case.

I don't think that will be the case.

But that's where it stands.

But there is still money in the plan to meet the court's agreement through a surface parking lot, but not the garage.

As to how we got here, I'm sure there's a lot of reasons why.

From my perspective,

City Council and the city should have and needed to be doing a lot of long-range strategic planning, looking at expected expenses, planning for them, and it should have begun years ago.

It didn't.

There's a lot of reasons for that.

I think a major one is just the level of staff turnover.

Just in the two years I've been on council, we've gone through four city managers, and that does make it extremely difficult to do long-range strategic planning, and I think is a part of what put us in this position.

Thanks.

One housekeeping moment.

Communications staff, could you please promote Rory to panelist, if you can hear me.

He is now repping for the PC.

All right.

Yeah and thanks Michael for that recap.

I think this is fascinating and I want to suggest that we request the policy subcommittee to review kind of the implications of real estate taxes, you know, where we're at currently vis-a-vis our peers.

My understanding at 95 cents per 100 we are

I won't say grossly, but very low compared to our peers, especially if you're looking at other cities that haven't maintained a AAA bond rating, which I think they average $1.13.

Actually, I know that because I've done research on it, versus our $0.95.

What happens if we don't raise the revenue, though?

I think there's also things that would be interesting to hear about.

I've been talking to someone at the Welcome Center, I'll put the guy's name in, or Bill Shobey, Dr. Shobey over at the Welcome Center about potentially having one of their experts on municipal taxes and real estate taxes and sales taxes, et cetera, and maybe that person would come to our policy committee meeting and be a resource and help us frame a discussion around it.

So those are some of the ideas and observations I have.

I don't know if other folks would be interested in this.

So the remit would be to evaluate

the best way to or the positives and negatives of a real estate tax increase when considering, you know, getting additional funding that would be brought in that could then mitigate, again, potential displacement.

So we need to raise money in order to fund affordable housing, do rehabs, do energy efficiency, pay for the affordable housing plan that we've approved.

And one of our main levers to raise revenue is the real estate tax.

But are we also potentially negatively impacting folks by increasing the real estate tax?

Does that make sense?

Or are we making it also unaffordable, for example, that we increase the sales tax and not increase the real estate tax?

Yeah, to chime in, I think there's some data, you know, I've seen that can help inform the decision.

It isn't perfect and there's more granularity that would be helpful.

But for example, you can look at average assessment increases by neighborhood.

Likewise, and I can send this along, I have data about

average assessment increases this year by percentage increase by the value of a home and you can see very starkly that lower value homes from one assessed at one to three hundred thousand dollars or in 2020 had the largest percentage increases in real estate taxes and in looking at research on it you know real estate taxes are

often but not always regressive and a lot depends on your local market conditions and so it's very imperfect but the data I've seen and have accessed there's some indication that would lead me to think you know it would be regressive under our current market conditions but there's definitely more granularity we could get into and then

The final comments I have, I think some other context that's useful for evaluating trade-offs is not just the rate, but the average assessed value of a home in the locality to get at what is the dollar amount people are actually paying.

And then the second would be any tax we choose

So, from the point of view of the subcommittee taking it up, to the extent I have any reservations, it's just that it seems that

I'm sort of casting about for our source data to figure out where to start.

But I'm not saying we shouldn't do it.

I'm just trying to figure out on the fly how do we start and come up with a meaningful response or a meaningful set of numbers, which I don't think we can solve here at this meeting.

I'm certainly, I mean, I absolutely agree with you.

This sort of learning about the trade-off benefits, you know, the cost benefit of it all is absolutely worth diving into.

I just don't know how to dive into it.

In just a final thought, you know, when thinking on a medium term time horizon,

I think we should also be thinking about trade-offs in terms of the possibilities of both the UVA pilot program as well as additional state revenues that are being discussed beyond just the sales tax via referendum.

Again, there's that package of Senate bills and the state Senate had a commission, I forget the name, something like commission on school

construction and modernization in Virginia that had a huge package of recommendations because the issue of school buildings is one across the state of Virginia.

I think what is it there's like over half of schools in Virginia over 50 years old and there's like 24 billion dollars or something like that in deferred

School building needs across the state of Virginia and the commission was very explicit that the only solution to this is a state level solution.

Michael, can any of this deficit be financed with debt or are we assuming this is all cash?

The biggest increase is in our capital improvement programs budget, which is debt financed projects.

And what is causing that, the budget crunch is the increase in our annual debt service payments, which are doubling and reducing our debt service fund.

Michael, one thing I noticed in the budget presentations, which I've been paying attention to, is in the scenarios that the staff have been presenting also included, though, issuing after the reconfiguration funding being paid, after the affordable housing projects we have in this five-year CIP, in 2027, I think through 2032, they were issuing an additional $15 million of bonds each year.

So it was another $105 million worth of bonds they were planning on issuing.

What's that $100 million in those scenarios that they presented?

So my understanding is that scenario is if you had a 10 cent real estate tax increase, and the scenario was council said we wanted to maintain funding for these priorities, and so they put forward with what that would look like.

So you can run that scenario, but the unsolved issue is you're still not addressing your expenditure drivers and the operational needs of the city.

Well, sorry, I mean, you said in the scenario, and correct me if I'm wrong, sorry, at the top, that even with the 10 cent increase, we aren't able to spend anything more in the CIP, but in the scenarios that the staff presented,

not about operations, but about available capital spending.

They're still spending $100 million from 2027 to 2032.

What is that $100 million being spent on capital-wise?

Yes, but that's with- Sorry.

That scenario shows a portion of the 10-cent real estate tax increase going to operational expenses to meet that need that city council said they wanted to cover.

the CIP, which city council wanted to cover.

So again, what I'm looking at is that still creates an $8 million deficit in 2032.

If 5 cents of it is going to the CIP and the other 5 cents of it is going to cover the operational side and the expenditure increases there.

So I don't think it's helping us get to a sustainable, if you assume the budget projections are correct.

All right, thanks.

Well, talk about getting into the weeds.

And by the way, Chris, your microphone and your audibility stinks.

No offense.

Thank you for pointing that out.

I've been poked by a couple of people on that.

So, all right.

Thank you.

Back to the question of, should the policy subcommittee take up the issue of what to do about money?

I certainly think it's worth the conversation in the policy committee.

I'm not sure what we can do about it, just to sort of get a sense of revenue sources.

So is that a suggestion that we put a date on the calendar for the policy subcommittee to talk about these?

Because that is on my to-do list from our last meeting.

Yeah, well, I think as long as we're going to schedule one for, I think that we need to sweep back on the tax abatement issue.

And as long as we're talking about that money, we can just broaden the conversation to talk about money.

And just so I know, I take it, if this is going to inform current decision-making, we need to do it sooner rather than later.

This isn't...

I mean, honestly, I think that any recommendation the hack has on the larger revenue piece is the ship has sailed for the next year.

I mean, unless it's, yeah, we think, you know,

unless it's a direct immediate, please raise taxes or please don't.

All right, great.

I guess that sort of covers the city waterfront.

So as you all may be aware, Dr. Pethea has trouble joining us these Wednesdays because they typically have Board of Supervisors meetings at the same time.

And actually today, Dr. Pethea will be discussing developer incentives with the supervisors.

All right.

So let's see.

I guess that next brings us to the subcommittee reports.

We've already had Ridge on the policy committee.

A couple of general words on subcommittees in general.

Communications has also poked us and said, can we please make sure that our roster is our roster?

Having said that, a couple of comments, and this is sort of a housekeeping matter.

As some of you know, back in 17, when we revised the bylaws, we put forward a motion about the operation of subcommittees, which has sort of been our SOP, which is if the HAC

tells a subcommittee to look at an issue or absent a meeting, the chair shoves something to a subcommittee.

The subcommittee can address those issues and report on behalf of the HAC.

This was designed to speed

Speed turn time on policy matters and on other matters that came before the hack and pre-pandemic was extremely useful.

The entire hack can attend many times, most of the hack does, but it allows for the smaller quorum and a faster turn.

to let those things come forward.

The Policy Committee got quite a bit of exercise a few years back and continues to do so.

In terms of updating the subcommittee list, that is sort of in part driven by what's going on with allocations.

And it sounds to me that the city would at this point is pointing its direction towards doing an interim something

That doesn't involve the allocations.

That's going to drive sort of our committee structure a little.

And then we're sort of having a conversation about the having an ad hoc committee for implementation.

So, I may be circulating a poke to everybody in terms of the subcommittee rosters with an explanation, once we have a better clarity on what we're actually doing.

So that's a subcommittee report that isn't a subcommittee report.

Chair, sorry, during the city update, I don't know if the city can update us.

I saw Mr.

Sales was on the call and I'm reminded that he used to be the housing coordinator for the city, except he left that job.

A year and a half ago.

And I wonder if the

The city has been in progress in replacing John and can update us on that because, again, I do this every meeting, right?

Brenda, Alex?

Well, I'll pass your, thanks for your reminder.

So there hasn't been any progress.

Well, there is nothing that we need to do.

We are not getting done right now.

So in terms of that particular position, there is something that the pre-city manager is evaluating.

As you know, we just have a affordable housing plan.

And then also going through performance evaluation of CAF itself.

So that's not,

All right, thank you, Alex.

Actually, I realized I skipped over Alice in the UVA update.

Well, thanks, Mr.

Chair.

And thankfully, I'll say that that's out of my area of expertise.

But just a brief update.

When we announced our potential sites for the housing development in December, we solicited input from community members about those sites via survey and online comment wall.

And it's interesting to note that by the time we closed,

Those two sites on January 31st, we received more than a thousand survey responses and dozens of comments.

That's all up on the public site if you're interested in reading any of these comments.

So the project team is now reviewing all of this community input.

We are using it to inform development principles that will be part of the request for qualifications and request for proposals.

that we expect to issue this spring to shortlist qualified developers in advance of the actual RFP.

And then finally, I guess in December, last December, the UVA Foundation submitted documentation to the county regarding a rezoning request for North Fork.

And the foundation proposes to rezone a portion of North Fork to neighborhood model development to allow residential use.

Rory?

Yeah, thanks.

I was curious if you guys kind of were starting to get a sense of how the distribution of units might look between those three sites.

I know you just got in all this public comment.

Well, I hadn't heard that about the utility issues but I'm sure the foundation's working with the county to provide upgrades to utilities because we'd like

Clearly that's the largest of the three sites.

And we'd like for it to be able to accommodate most units and the most diverse in terms of mixed income units that we can get up there.

So I'm not the, I haven't been in the weeds on the utility issues up there, but I have not heard that we are pulling back on the number of units.

And I think we're hoping for the,

Great, thanks.

I just wanna emphasize that it is important to have mixed income throughout all of those developments, not just one, and not just cater to luxury, but to affordable housing.

Well, we're doing this to provide affordable units and we're also hoping that developers will understand that and provide viable business plans to allow that to happen.

Yeah, just a quick comment.

I would second the previous comment.

I'm curious if there's any thought or plan in terms of long-term affordability, because I know sometimes with affordable housing developments, there's an affordability period and it becomes a market rate after that.

I'm curious if it's further along.

enough in the process to know that and would just plug some potential opportunities to be utilizing the land trust model to have more permanent affordability as well as wealth building opportunities.

Well, I think when we issue the RFQ, we'll get lots of interest.

We're not specifying who's responding to this.

It's going to be a broad, hopefully a broad appeal.

We'd love to work with local

development partners, if possible.

And I would imagine that there would be some agreement to ensure the affordability mix that comes out of this.

Thank you.

Maybe to follow up on that question in part,

I understand the UVA Foundation is planning to do a long-term land lease and retain ownership of the land underneath.

We haven't gotten that far and I don't know that it's

That's true for North Fork in particular.

I think it's harder with state land to be talking about other opportunities.

So ground bases for state land, but those represent the two smaller parcels.

I think there are more opportunities to discuss wealth building opportunities.

Thank you.

Yeah.

So Lyle is teaching a class on GIS this semester.

So he has a long-term conflict.

So I am no longer subbing as your Lyle for the day.

OK. All right.

Thank you, sir.

Welcome aboard.

Thank you.

We'll make sure we're updated properly there.

Any other business before I turn to public comment?

Having heard none, public comment.

Any comments from the public on matters that have become before this committee?

You can raise your hand.

Yes, ma'am.

Emily, let me see if I can recognize you properly.

I can't recognize you.

There you go.

I can.

This is Emily Dreyfus and I'm a community organizer with Legal Aid Justice Center and on the Public Housing Association Residence Advisory Council.

and I wanted to encourage you all to speak out about the budget because Michael's information was really weighty and concerning and it's going to take a significant influx of city funding in order to actually make good on the affordable housing plan and

I don't like that the schools are being pitted against the housing, affordable housing needs because kids need both.

They're not going to grow up as well without good quality schools and good quality housing.

So I hope that we can be unified around that and that the school's request can potentially be made more reasonable.

My understanding is that this money will go almost entirely to Buford so it isn't going to do a city-wide initiative as much as it's going to renovate the middle school and incorporate another grade into the middle school.

both of which I think are helpful, but I'm not sure they need $78 million of helpfulness to get there.

And we have such extreme affordable housing needs that if we don't make good on the affordable housing plan and the $10 million a year that requires, we will find that our city is losing culture even faster than it already has and losing diversity, losing workforce and all the rest.

So I hope that the

Committee can take action and speak up.

Any other comments if you wish to address the committee, please raise your hand to be recognized.

The Q&A function really isn't practical here.

Okay, any other further questions?

He did have somebody using the Q&A function.

That's why I suggested the hand raise.

All right.

Quick question to Michael.

Pursuant Demily's question regarding Buford and the need for 78 million.

Michael, what's driving that?

Yeah, so people to get the clearest answer from would be VMDO, the firm working on it.

My understanding is the big driver of it is renovating Buford as a phase of school reconfiguration.

done as a phase of school reconfiguration because you're expanding the capacity significantly raises that cost to the cost estimates right now actually over 80 million dollars for that.

My understanding and my numbers these these could be off because I don't think I don't know if VMDO has looked at a very tailored project that's just looking at without

reconfiguration, what is the cost of looking at existing known issues in terms of natural lighting, lighting, school classroom location, et cetera, what that cost would be.

But last time I inquired with staff, a very rough estimate would be like that's a 20 to $30 million project.

And I will note just, I have some of those questions myself because

The Virginia Department of Education's website lists data about the past two years of school construction and on a per pupil basis, including the increased population after reconfiguration expanding Buford's population.

The per pupil expense is more than double the average of new school construction in Virginia over the past two years and would be

by a significant margin, the most expensive school construction on a per pupil basis in Virginia.

So I am curious to sort of learn more about the scale of the cost, what exactly is driving it and why it comes so above new school construction over the past two years.

Chris, I don't know.

Chris was part of the school reconfiguration team, the community team, and maybe can speak to some of this, but there's lots of resources.

I know Chris included a link to a Daily Progress article in the chat that gives some overview.

The $75 million cost is significantly less than what we would love to see, but I think some of the cost comes from trying to keep students on site and not spend money to move

Yeah, Frank, I'll just, sorry, thanks.

I'm gonna jump in a bit.

I've been studying and working on this a fair amount as a concerned parent who has younger children, but you're,

Basically, this was brought up back in 2008.

Was that 14 years ago?

And I think the cost at that moment was about $45 million.

And I think the folks that are in the construction business or building business know how, unfortunately, inflation-related building costs have been skyrocketing lately.

the unfortunately kind of indecision around it even after they kind of had the momentum to get going in 2008 and then we hit our financial crisis and then it delayed and then we finally got back to it again kind of two or three years ago has unfortunately led to these again extreme price increases.

I'll just say VMDO went through a community design process.

There was multiple different meetings held last year.

I know Michael participated or Councilor Payne participated in a number of different work sessions with VMDO.

and the school board where they talked about the different options and the community and design team with VMDO after taking all the reports.

This is where they landed after also having some guidance from city council on a target number to hit.

So it was not necessarily a number that they pulled out of

and Aaron.

It was also constrained.

And within those constraints that city council had provided them, they, they, they hit a number.

So this is where we're at.

I don't think it's, you know, 47 years was the last time we built a school in this community, 47 years ago and or remodeled heavily.

So you're seeing decades, unfortunately, I think, of the lack of investment, which I think Councilor Payne kind of hinted at.

You can think about why that might have happened 47 years ago, why there wasn't as much, let's say, city revenue coming in to pay for basic public services and especially public schools.

But that's just unfortunately how it's played out.

In the meantime,

I think I looked at a private school in this community and was able to raise $100 million and build in multiple new private schools have gone up.

I don't know if people have noticed that also in this community.

So, it's not that there's not money in this community to build and fund education and build schools.

All right, thank you, sir.

Anything else?

Motion to adjourn.

Great.

Any discussion of that?

To make this simple, anybody object to our adjourning now?

Okay, thank you.