City Council Budget Work Session - FY2025 Budget Wrap Up   4/4/2024

Hello, I'm going to bring the Charlottesville City Council on budget work session to order.

This is an in-person with an option to listen in electronically.

Here.

Yeah, she should probably be coming along.

So this is a budget work session.

I think this will be our last one before we vote on it at our April 15th meeting.

All right, as the mayor said, this is hopefully we're all fingers crossed the last work session for the budget cycle.

This is a catch all meeting in that we are looking to wrap up things that are not quite settled at this time, as well as making sure that there is nothing else that needs to be considered before you cast your final vote on the 15th.

So we have a few items to discuss.

We're going to review Vibrant Community Fund and the hopeful reconciliation of that to finalize that particular aspect of the budget.

And then we're going to spend some time discussing personal property taxes and then the tax scenario in general that is a part of the proposed budget for F525.

And then we'll answer any questions or go over anything else that is of the pleasure council.

So I'm going to turn it over to Ms.

Hamill and she will begin.

It's me.

OK.

So the first slide represents the series of conversations that have occurred over the past couple of weeks.

As you all, as we had the work session on outside and nonprofit agencies, there were a series of questions and further considerations that appeared to be counsel's interests.

I shared with you at that time, naturally, that our goal as a staff recommendation was to preserve the process.

But understanding that, of course, you have other considerations in balancing the various priorities and the requests that come to you.

So what I did over the past couple of days was to capture what I heard from you.

and wherever I heard enough in the way of designating or able to demonstrate what was a majority, I have captured it on this list and it speaks to the final questions of, there was I guess what, seven?

6.

6 organizational grant awards that are a part of your conversations.

I'm showing you here the total request.

The recommendation, which was the recommendation that came from the VCF process, the site review process where individuals are part of a team and they review it.

And then the revised distribution based on what I heard from all of you.

This is presented to you as more of a question.

If this is your desire, then you should be able to

Thank you.

So before we begin, I just wanted to talk one about the buck squad because we received a lot of emails over the last week or so on the buck squad and some misinformation that we weren't going to fund them.

It was a recommendation to fund them at a higher level, but the recommendation is now $200,000 and I think that's still a 25-30% increase from last year and it's certainly not unusual for council to make recommendations to the recommendation from the committee.

Sam doesn't necessarily like it, but it happens sometimes.

So I just wanted to put it out there that we're still funding the buck squad at a high level.

treasure the work that they do in the community, the difference and the impact that they're making in our community.

And the funding level that we've given them shows that.

I think what we have up there looks fantastic.

I'm fine with it, but would only add in addition

I would recommend not funding the Freyland Museum.

I second that.

A quick clarification about this chart.

Never mind.

I read it.

I figured it out.

So I'm looking at the chart and I'm seeing that.

I didn't think so.

So the total request was what was in the actual application.

The recommendation was what came out of the VCF process.

And then the revised numbers are the total of what they would receive.

So there was adjustments to be able to make sure that it balanced.

That was my attempt to check my math.

OK.

I mean, I will come back to some of what I said before.

And one of my broad concerns is that when we end up second guessing the committee that has spent a lot more time on it than we have, that seems to me ought to have a pretty good reason for doing that.

And we ought to have superior information to that which they had.

I'm looking at the few things here.

And I always say, I'm not having an issue with the recommendation for the buck squad being cut significantly from what originally the VCF had said because I think that's a situation where we do have some additional information.

But on things like the Uhuru Foundation,

I think I understand the theory as to why we would fund them when the VCF committee did not.

and apparently the reason they weren't funded by the VCF committee was that they felt that the VCF committee felt that the capacity building kind of study that they were looking to do didn't really fit very well with the purposes of the of the vibrant community fund and we can make the policy decision that we disagree with that.

but I'm also struck by the fact that I personally don't have, I tried to do a little bit of looking since getting the recommendation yesterday afternoon, tried to do a little bit of looking to see what I could find out about, for example, about the finances of the O'Harrou Foundation.

I found a year out of date 990, the most recent 990 that had been filed, but still a year out of date.

I saw something about them getting a $500,000 federal grant apparently in September, but I don't really know anything more about why this is a particularly good expenditure of the city's $94,600.

For the CRA resident services program,

I have sort of the same issue that I don't know why it is exactly that the VCF committee did not approve them.

I also don't know exactly what it is that is going to be done with $137,000.

I assume, given what's being talked about, that they would be hiring some people to do certain things.

I'm a little bit troubled that nobody from the city has apparently looked at it and passed on it as being something that's a good expenditure of the city's funds.

When we put ourselves in

I don't have the superior information behind the request for the Uhuru Foundation or CRHA.

They may both be perfectly valid expenditures.

I think that we do ourselves a disservice and we do the VCF process a disservice when we simply disagree with them.

Just to clarify, two people were addressed in the Frayland Museum.

sort of.

I don't favor a blanket policy of we're not going to support the University of Virginia and what they're doing.

But I will say that in this particular instance for this roughly $6,000 at a time, their selling point was going to be that they were going to be able to do some programs that they're doing and offer free admission to Charlottesville school students or something like that.

and I just note that part of the argument that they always give to us about why they're not going to give us any pilot program, putting in payments in lieu of taxes is all the free things they do for the local community.

And if they're going to rely on that, then let them rely on it.

So is that a third, Lloyd?

Yes.

And to clarify, we were checking, we see 12,000 is the number.

Okay.

There's something else that we're asking for, we gave them six that were worth.

are going to be giving him six.

Is that like the vessel of the book or something like that?

I don't remember.

There might be.

And so it's directly only one Freyland.

Yes.

OK.

So that in addition to what's on the board, I mean, yeah, I'd just like to say about that topic just so that it's it's clear.

I support what's being proposed by... I support what has just been said.

I will say, and we don't have to get into it now, the university does do a lot for the community and just like it's not helpful when we talk with folks at the university and it's one-sided about how they do all this for us, I think that

as valid as the points

a proactive in working through this together as opposed to at loggerheads.

It does feel a little petty to be taking out $12,000 for something that's a valuable program.

On the other hand, maybe it's what we need to do to sort of make clear that we want some things to change.

And on that note, I'd like to add something that, well, the 12,000 might seem petty, especially in light of the overall budget that UVA has.

So I'm just saying that I just hope in the conversations going forward, we can

It feels a little, just around the sort of narrative that I've heard, it feels a little negative in any way.

It's fine.

I don't disagree with you.

$12,000 is a lot of money to another group.

So in the past, just a quick question on that.

Any money that has been unallocated has gone into an unallocated pot to use for new and emerging or other things that come up.

Is that what you want to do?

So now it's $12,700 in the unallocated.

All right, we're good.

We are winning right now because you made that decision.

All right, so as promised, we have gone back and the revenue team has met one last time, sharpened our pencils and all our estimates.

And we do have some changes to add to amend revenue, which is good news.

Tax on bank stock is coming in a little higher than anticipated.

Beephole is coming in.

We have at $800,000 more than we had originally now that they've actually those returns have been submitted.

We've also gotten numbers from the state for the constitutional officers, which will amount to a little over 175,000.

In addition, we took a look at the EMS revenue trends.

And we have adjusted those upward about $250,000.

and then there was an error in the budget book.

There was some revenue for the police department from UVA actually for reimbursable overtime that was put in as a negative and so that is a correction there.

So we have additional revenue of just over $1.3 million.

In addition, we have two adjustments on the expenditure side that also are a reduction in expenditures.

The regional jail board met and they have continued to work on their budget and revised that, which gave us about $106,000 in budgetary savings.

In addition, our transfer to cat is going down slightly.

We had originally when we were working on the budget, it was unclear where the county was going to stand with their share of those costs.

And so we are reducing that we know now and we're reducing that transfer.

So that gives us some expenditure reductions of just under 180,000.

So altogether,

If we take the additional revenue and the expenditure reductions, we have just over $1.5 million that will be increased in the budget.

Can you explain the cat transfer again?

So for cat, their revenues are federal, state, city, county, and the county has a share.

When we were, we added some things to CAT, as you recall, some new positions, some new things.

We had not discussed that with the county at the time.

And so our transfer, because we weren't sure where they were going to land, we had put in a transfer hire in the general fund to cover those if the county were not going to ante up its full share as part of its budget.

and so they are and we've adjusted that transfer correct so it was just we had over budgeted basically thank you so keeping that in mind we're gonna move on to talk about the tax increases

Sure.

So if I'm stealing thunder, let me know.

I know that one thing that Councilor Payne rightfully pointed out was that we're not funding CAT.

There's a need for 11 drivers or whatever at 800.

Ah, I see the green signs.

Yeah, because with all the other stuff you're doing with the bus system, I have some concerns, but I'd be glad to be happy to find out if those concerns are unwarranted.

So moving on, this is a table you've seen.

We took a look at the incremental values of each of the four taxes that you've been talking about, basically either as it relates to a penny or a percent on those, and these are the values for those.

And we can come back to this as a reference if we need to.

In the 25 proposed budget, as you recall, we included a two cent real estate tax increase, a one percent meals tax increase, and a one percent lodging tax increase.

Those three tax increases accounted for $6.3 million in the proposed budget.

So, and now we know that we have a budget amendment of just over 1.5.

So the point of this slide being is that for the budget amendments, you can either use that to fund something that is not currently funded or you could use that as an offset to one of these taxes.

Finally, from our discussion Monday night at the council meeting, again this table that's under the blue line is what's included in the budget that was just on the previous slide.

In addition, because our advertisements have to include the maximum rate that you'd be willing to consider.

We did advertise a three cent real estate tax increase, which you could still have that lever to pull if you wanted to, or as was requested for the personal property, a public ad and a notice of public hearing, which will happen on April 15th, will be published in Saturday's paper, publishing $4.80, which would generate about a million eight in additional revenue.

I'll share it again.

That's the max.

Okay, been exciting week.

Let's get this up here.

So I'm not here to, you know, tell you, do it or don't do it.

I'm just sort of here to kind of go over the implications of

in the personal property tax rate.

The first thing is, obviously now we know we can do it.

When I walked into the meeting on Monday, and y'all were talking about personal property, I wasn't quite sure if we were going to be able to do that.

We're getting to the end of completing the

The Personal Property Book for 2024.

And so we kind of had to accelerate that this week and to get you some good projections.

One of the things we did figure out is the $30,000 per penny increase was pretty close.

It ends up being $30,238 for each penny on the personal property rate.

Um, as you see on the chart, what we've tried to do, um, I'll talk about what on the right first.

Um, this is sort of a breakdown of all of the vehicles in the city.

Um, we're talking passenger vehicles.

Um, not big, heavy trucks.

Um, we're not talking about trailers and RVs.

We're talking about passenger vehicles.

This is how the valuation on passenger vehicles breaks down in the city at this moment, um, as they're assessed for the current book.

Those at the very top, you see from 0 to 1500, as we talked about the other night, those are going to get full tax relief.

So those don't get any, they won't pay any tax if it's a personal use vehicle.

But you can see that 85% or so, 90% of all the vehicles in the city

are under $25,000.

So there's not a lot of people driving high dollar vehicles.

That's the first thing I want to point out.

If you look at the chart on the left, you can see

We're trying to show you what the impact of the increase in tax would be.

So Chrissy, if you want to put the revenue increase to 480, which would be a 60 cents increase, you can see what

The markup is going to be for each person or for that value of a car.

So for instance, if your car is, if you've got a $40,000 car and personal property rate gets increased by 60 cents, you're now going to, you're going to get an extra $241 you got to pay.

I've given

The wagon, the five door, the premium, you know, these vary by trim level.

So these are generalizations.

But that's generally where 17 Subaru Outback lands.

So that person's probably going to get 84 cent increase.

2018, excuse me, $84 increase.

18 Ford F-150 is going to get probably about $144 increase.

And then, you know,

and the electric Tesla Model Y, very popular vehicle, $262.

So I just kind of wanted to point that out just to kind of give you and I think you guys were curious how this was going to impact regular folks.

So he said zero to fifteen hundred is waived.

Zero to fifteen, a vehicle with a fifteen hundred dollar or below value gets a hundred percent.

It will get a hundred percent personal property tax relief after the next city council meeting.

Currently it's a thousand or less.

And sorry, you just said Tesla was a popular vehicle.

It's pretty popular in Charlottesville.

Yeah, I mean, there's a lot of Teslas around.

Although it looks like the assessed vehicles with a value of that or above is in the range of like one to two percent.

Yeah.

But I wanted to it's an electric vehicle.

Yeah.

So I wanted to give you an idea.

Those are expensive vehicles.

So that's what we're talking about.

No, no.

But it's it's a popular electric vehicle.

Um,

So let's see here.

So we covered the examples I wanted to show you.

I wanted to also point out there was some talk about business tangible personal property and machinery and tools.

You are allowed to set a different rate for business tangibles and machinery and tools.

We, in Charlottesville, we have always booked those categories with the larger category of personal property.

So for all of the math you're seeing, business tangibles and machinery and tools are included in that.

So if you take those out,

The numbers don't add up anymore.

So what I'm telling you is if you're going to raise personal property, you need to raise those as well.

Next year, if you want to tease those out and set different rates for those, we can talk about it.

At this late date, it would be a nightmare.

It would be a nightmare because logistically to try to do that and would have to give you a whole new scenario of

figures.

The revenue increase right there.

It's not the same.

I would be curious.

There are only 36 accounts for machinery tools.

We don't have a lot of manufacturing here.

So that's $9,400 per account.

If you did that, if you took it up to 60 cents, you'd get another $35,000, $45,000.

And each account, you'd get a $1,300 increase for each business.

Business tangible, personal property accounts for $2.4 million.

That's a lot.

We've got a lot more of those.

We've got about 2,900 accounts that pay business tangibles.

That's at $825 per account.

If you increase that by 60 cents, you're going to increase their tax by $115 per account.

That's just for your edification.

is is I mean we don't know what those accounts are and we don't know like we like you do but we don't um is this is like I don't in your best judgment knowing what these companies are and what they do is any of that increase going to be painful

Yeah, like, is it going to close a business?

But I mean, if I've, you know, if I've got if I've got a small manufacturing business, and you know, my my tax bill goes up, I'm not going to like it.

You know, well, yeah, these are average.

Yeah, I can't answer that question.

I guess you're saying it's just the time you've had this week and what it would take to really do the exercise that Council Oschrin understandably would like to see it.

It just has not worked out.

We do it next year.

Um, and to read, you know, refigure our numbers to give you guys the revenue that you're looking for to be able to offset meals tax or do whatever other things you need.

Yeah.

Yeah.

So I think that, you know, again, on this time, these are some great questions.

I think that, you know, that you can get a, we all can kind of get a list of things that we want them to consider for next year and we'll have

You know, a work session or it'll be something that maybe Chrissy can bring when we have our first work session or something on that.

I don't want to, without knowing the full impact, I just don't feel comfortable, you know, even going down this path this late into the budget process.

No, it's fine.

I mean, I want you guys to ask questions.

It's

It's just, you know, I've been here 10 years and nobody's looked at personal property.

No council has looked at it because it's not that much, you know, they always look at it, it's not that much money.

I mean, that's what we did too.

And so no, and so it's never come up.

We've always had the tan, all of them have always been at the same $4 and 20 cent rate.

Well, I do appreciate Councilor Oschrin.

I think having a new set of eyes helps.

And I think she picked up on this.

And I think it is a lever, whatever, that we should consider.

I don't know if this is the right time or not, but I do think it's been a good exercise and will be a good exercise.

For me,

I see this, it seems like it's interesting, 75% of the vehicles in the city are less than 15,000.

This is really good information.

For me, I almost would be willing to say, do you still have more in your presentation?

Yeah, it's fine.

Yeah, I would like to.

Brian Ray did this.

It's really, and the interact just, I love his spreadsheet.

He's pretty sharp.

So there's two other things I wanted to point out.

And I said it the other night, I'm just going to remind you again that this is the tax that people are going to complain about.

This is the one that they stroke a check for.

You know, they don't sit down and write a check for real estate tax.

This is the one that we're going to hear about.

And so I'm just pointing that out one last time.

The other thing I wanted to tell you about, this has nothing really to do with any of this, but just something housekeeping issue that we're doing in my office that I need you folks to know about.

I don't need you guys to bless it, but I need you to be aware of it.

For 20 years, the minimum value on all vehicles that we assess has been at the same level.

So the way, let's say for instance, when a car is assessed, we get it from an assessment guide.

It stays in that assessment guide for a number of years until it gets sufficiently old that it falls out of the guide, and then we assess it using a depreciation schedule.

Well, eventually that car is going to depreciate to a point where it hits a minimum.

Those minimums have not been adjusted in 20 years, so we're going to be adjusting them now.

We're going to move, when I mess with boats, we're going to take mobile homes, believe it or not, the minimum value on a mobile home in Charlottesville for 20 years has been $100.

We're going to make that $1,000.

Motorcycles has been $100.

We're going to make that $300.

RVs, $600, we're going to take that to $1,000.

Trailers.

We're leaving at 100 because there's some pretty crappy trailers out there.

Cars, pickups, trucks, up to 4,000 pounds.

The minimum has been $250.

We're taking that $600.

Cars pick up trucks above 4,000 pounds.

It's been 600.

We're taking it to 1,000.

And then heavy trucks have always been 600.

That's like dump trucks and whatnot.

We're taking that to 1,000.

That'll be the minimum value.

This should have no impact on personal vehicles that are eligible for personal property tax relief because those are all going to be below the $1,500 threshold.

It's not anything you have to bless.

It's just a housekeeping issue in my office that we've decided it's time after 20 years.

We need to do that.

Now I'm done.

So we got some, I'm sorry.

Jason Vannevar is going to address that.

Part of what I really like about this chart is that you've given concrete examples so people can kind of put themselves in that theory.

It's hard for people to estimate where they are in kind of a number, just a thing of numbers.

So I think that's important because none of those, I mean, it makes it seem reasonable.

for me looking at it also.

And I think that's useful to get to kind of see how that does apply, especially since this isn't a tax that we've looked at in a long time.

Because we have, you know, we've raised the real estate tax recently.

The meals tax is already kind of coming to as much of a peak as it can get, especially relative to other cities in Virginia.

And so I still find this to be an attractive option.

And while you said that, yes, people will notice this more, I don't really think we should rate our taxes based on sneakiness.

No, like noticing whether or not it comes out of your escrow for your mortgage versus something you have to write a check for.

I mean, it's still coming out of someone's pocket.

I just meant that's the one we're going to get calls about.

That's we're going to get out.

Yeah, no, I mean, we get emails too.

But that that I don't find that as I mean, I know I'm not going to be getting all of those, but I'm going to be getting some as well.

So but people people will notice, you know, people paying attention to their wallets.

Do you have any sense on that?

I know that this is a lot.

I don't.

I can find it.

Like I said, there's 36 accounts in the city.

I can get it for you.

I've got actually one more question.

Is there any other rate differentials other than $1,500 or below is waived?

Well, I mean, the way personal property tax relief works is that 100% the city gets a $3.5 million grant from the state.

We figure out all the vehicles that are eligible that are $1500 less.

They get 100%.

Then we look at the 3.5 million and see what's left.

And we have to split that evenly.

over the rest of

I think right now it's going to be 31%.

We've still got some more cars to assess.

31% on the first $20,000 of value for eligible vehicles gets paid by the state.

That is accounted for in this number, right?

So if we look at the $40,000 vehicle that you're paying that $241, that's the taxpayer share.

We've already accounted for the state paying what they're going to pay.

But no, I don't, yeah, I think I understand what you're saying.

There's no other

But so if you had a $40,000 car, the first, is it eligible for that state?

$20,000 of it would get some.

Thank you.

Your bill is reduced.

It's already, it's cooked in already.

Thank you.

That's helpful.

Could you go back to the tax list?

Yes.

So maybe that was one of the scenarios in the drop down.

I guess my point is if we could say what's being proposed is 14 percent right so let me show you this and then you can let me let me just walk you through this for a second because this is intended to help you do some math here in public the drop-downs on my sheet with round numbers it wasn't yeah so these are the four taxes that

that you are discussing for increases.

These are the current, the first column, the rate.

These are the first, this is the current rate that people are currently paying.

What is keyed in here now in terms of the increase is what is actually included in the proposed budget.

And this would be the resulting new rate of that.

So when you come over here, this is the revenue that's generated.

The 6.3 is what is actually already baked into the budget.

The budget amendments that we just talked about a few minutes ago, that gives you an additional $1.5 million of revenue.

And then as we compare that to what's already baked in the budget, you can see in this case we have a budget surplus of the budget amendments.

So that's a 5% increase, basically.

and then if you, let's say you wanted to get rid of the meals tax, well you see that doesn't get you there because now you're short $925,000.

What would the meals be in half?

This one?

Thank you.

I mean, would you counsel Oschrin be as opposed to 14% given the fact that this is such a seismic question?

Maybe we say, let's try 5%.

And I understand where you're coming from with that, because I am concerned about the business items as well, the industry tools and things.

So it's funny because I have the exact opposite response.

So let me I'm gonna try to get not get myself in trouble.

We're assuming a lot.

and we don't know.

And the restraint that I would be asking you to consider would be an association with the idea that if you want to truly demonstrate that equity matters, then we should leave some room for the possibility that we may not know and we need to hear from people.

and by not really restraining ourselves at this moment and assuming that $84 won't make a difference, we will miss the chance of really finding out if it would.

I think it's important for us to not miss this opportunity to consider whatever changes and options that we have here because we just realized an additional $1.5 million as well.

that we don't have to do everything right now.

And as I have stated to you, we will be back at this conversation again next year because collective bargaining is going to continue to cost us.

So it may not, it won't be as complicated, I hope, as this is because of the size of the changes that we're making.

But because we are going to be making yet again a sizable change with our next bargaining unit,

You're going to have to consider some use of these levers again, and we can do more than if you feel comfortable doing that.

I hear you.

Yeah.

To me, the only counter to that is we've been told that Mule's tax is very regressive.

To me, I'm just looking at this like, what seems a reasonable nudge?

I personally have a lot of skepticism about what and the reason is I've said on the MPO and the RTP and I've been hearing about bus drivers and trying to hire bus drivers and now you've got a union.

No offense.

I know you guys are working really hard.

And I appreciate where Councilor Payne comes from on the real estate tax.

But again,

And I recognize the value, you know, you would call it a policy choice.

I'm not quite sure that I'm able to follow you on all of those things, but mostly just because of my own lack of education, I suppose.

I have to think too about how people, most of the money that we raise is through real estate tax.

And so if we're talking about two cent or three cent, I would prefer to keep it at two cent because we're probably going to be coming back around with the things that you just mentioned and be right back here again.

And so for me, I would rather sort of, you know, preserve my

What is the word I was looking for?

And I'm very reluctant to increase the property tax.

Real estate tax?

Personal property tax.

I'm sorry.

I could be convinced to do 5% because particularly because I don't have the information of the impact it's going to have on those who might delinquent in that process because I know in particular they might hit the community of low wealth in color a little bit more disproportionately and I just want to have that information and that's what

So if we did what's there now, we would not be increasing those tax by 1%, but only by half a percent.

And we still have $600,000 more and you could get two or three bus drivers.

Yeah.

Well, let me say a couple things.

First of all, if we end up with $600,000, you know,

Unspent funds at this point and we're trying to convert that into bus drivers.

It would probably convert into about seven or eight bus drivers The question that I've got is if you had seven or eight bus drivers Does that get cat to a reasonable next level?

is there an intermediate step between 59 bus drivers and 70 bus drivers where let's say 66 bus drivers allows certain things to happen on Route 7 and that sort of make those kinds of determinations.

The other one point I just wanted to make about the personal property taxes over the last couple of years when the

when the assessed values were going up even faster than the real estate values were going up in the last few years.

for one, argued against lowering those rates in part because I just didn't think that it was something that we ought to be trying to play with year to year.

The consequence was that people who own cars, perhaps in some cosmic scheme of things, sort of got stuck worse over the last couple of years than they might otherwise have been.

And I'm just sort of reluctant to say, OK, now that

Now the situation has changed a little bit.

Now we're going to go ahead and stick you again.

The personal property.

At a time when the county was reducing their rate by, I don't know, 60 cents or something, we caught a lot of flak because we held where we were.

I haven't really figured out where I come out on all of this.

I would like to try to figure out if there is a reasonable way to, I mean I share Brian's concerns that I'm not sure that even if we said fine here's

So while we didn't fluctuate our personal property tax rate, we did waive.

Was it license registration fees that cost us a million dollars?

Vehicle licensing.

So that was close to a million.

And so we did that as a personal property relief.

I have a number of thoughts and none of these are new and surprising to anyone, but I still think they're important.

and I'll just keep saying it.

I'm looking at the total context and I have a concern that you look at the meals tax increases over the past few years, this proposed increase, combine that with we're likely going to have a referendum for a sales tax referendum, which is also one of the most aggressive taxes available.

And then you look at personal property tax on top of that.

I'm worried that in the context of the next

over the past three years through next year that we've significantly increased and leaned on the taxes that disproportionately hit poor and working people the most.

And I'm concerned that the personal property tax is a piece of that, particularly in the context of meals tax and sales tax increases that are coming either this year or potentially next year.

This is just my perspective from my family and people I know, but in Charlottesville, many poor and working people need to have a car.

If they work in Albemarle, if they're a single parent with hourly wages, they don't have that choice.

If you're living with a $10,000 car, you're not necessarily living large, you may need it, and that $84 for some families will be a meaningful increase.

All the taxes are bad, but the real estate tax is correlated with wealth that you own.

If you have a $500,000 house, one cent is like a $50 increase to your annual bill.

And then in addition, we have those tax relief programs where if you're 65 or above, based on your income, you qualify for relief.

I believe if you're about a little less than 40,000 a year in income, it's 100% relief.

And then there's the CHAP program where if the assessed value of your home is $460,000 or less and your income is $60,000 or less, you qualify for some pretty substantial relief.

So I do think that we're making a policy mistake relying so much on our most aggressive taxes, and I still think I would say our best option, given what we've advertised, is a 3 cent increase to the real estate tax, lodging tax,

and then probably personal property tax.

If there's absolutely no way we can find any way to not need that increase and then meals tax last.

Well, we are.

We've raised it two pennies.

We've raised it a penny two years ago.

We'll probably raise it two pennies.

I mean, we're going to, again,

And if you look at the total amounts of money that we're raising, we raise a whole lot more money off people with real estate tax and do with meals taxes.

I mean, you talk about the big picture in context, I appreciate that, but most of the money that comes into the city in terms of taxes is from people on their real estate.

To me, I feel like this is spreading out the pain to your point.

No taxes is a good tax.

But anyway, so I'm not trying to like attack your position.

I also counter both of those assertions of no taxes.

A good tax taxes are how we pay for bus drivers and schools and that sort of thing.

So we can't.

not use them or collect them.

Brian's point, the rate has gone up a penny but the assessments have skyrocketed.

My home has doubled in the last five years.

Other people are feeling that, too.

I think the question is that's going to be driven primarily by assessments.

If their landlords, because of the rate change, goes up $50 in a year, I don't know how much, if at all, that really filters down to rent.

But certainly, assessment increases, no matter what we do, unless we

Her point is that assessments are going up and then also tax increases on top of it.

I'm not comfortable with more than two cents on real estate tax.

I would like to add Mr. Williams is on the phone.

Yeah, I'm able to speak to you, but I will share with you that as I expressed to you before we got to the point of finalizing what became my proposed recommendation of a budget that I did have transportation as one of the priorities for this year.

And that priority was six drivers.

That's what I was aiming to be able to

be able to provide to him as he had made the request for 11.

So if we are able to deliver those six, then we would actually be reverting back to what we had really worked our budget scope around in the first place.

So at a minimum, that would be nice to be able to say despite and really with everything that we did get done, which we got a lot into this budget.

Being able to do that would be helpful.

And what was six?

Six drivers.

Because that slide that you just saw, we had already done all this work for

Do you want it?

I think it was .5 meals and you want to leave the 20 meals?

I think that's what was there.

We're not doing that.

And then I think you had 20 cents on personal property.

So that gives you a little more than you need.

I would.

Do you see him, Remy?

I'm here.

Good evening.

We're getting six additional drivers.

Any additional resources is going to help us first and foremost.

Additional six drivers though is going to get us closer to, we had a plan that we worked out with the consultants.

We kind of phased it in because we were very aware and cognizant that

We weren't going to be able to add all the drivers we needed.

So we looked at a phasing in approach.

It gets us very close to getting into what we would call phase 2, which is a little bit of enhancements over top of getting us to back to pre pandemic level of service.

So we would prioritize.

adding service to the center off of the Route 11.

We will prioritize 30 minute service on the 6 would get service and to the, you know, low income section of town.

and then try to do our best to restore some Sunday service.

But the 70 number was where we were targeting.

So, Garland, I think the issue was, you know, when we, and I know this would seem like a wild back, that when we were up in the salary to get school bus drivers and in that,

All the localities were looking for bus drivers and no matter what we did, as far as increasing the salary, it was still a problem recruiting.

And I don't know if that's been resolved.

Um, is, you know, I know that now it's it's have collective bargaining and that may make a difference.

Sure.

So, um,

The city manager and I have a conversation about this quite often.

I believe that as we have now a tentative agreement for a contract, I think it's going to be a recruiting tool for us because if you look at the nature of the contract, individuals when they come in the door will know what they get paid and it basically points to the fact that how long it takes them to get to the top of the scale.

That is a direct recruiting tool that most transit agencies around the country use.

We are now in that grouping, assuming that we'll be able to sign that contract.

I think it is a fair contract on both sides.

No one got everything that they wanted, but it is a fair contract and I think the drivers

will fill the effect and also are very pleased based on their tentative vote, which was unanimous.

And then you look for me to provide the sobering news only if we stay ahead of everyone else, because if they react, it blunts the impact.

And I am concerned about that.

But I do think his point of the predictability of being able to know how you escalate up the scale and arrive at the top with a prescribed set of years is very attractive.

Okay, so we need to kind of come to a resolution on

the tax rate changes.

So we I know everyone has a preference or their position, but we need to give staff some direction.

Can we see the fancy spreadsheet for the cars?

Yes, please.

And do the drop down for the because I noticed there were other options in there.

I think we'll be able to see what the rate would be if it was

Does that's what it is now?

But if it was 4.4, which would be the 20 cent raise, what would that look like?

So instead of $84, it would be $28.

Instead of $252, it would be $87.

I think that the spreadsheet that you used to add is what I would support.

I think it spreads the pain out.

I realize taxes can be a good thing.

There you go.

It spreads the obligation out to care for the common good.

I hear Michael's point.

He's always making really great points about

Progressive versus Regressive.

I have to balance that off what I said earlier about people who own their homes.

I think we have a little room to

on the other spreadsheet.

We don't have to go back to it.

But then I am with not touching this one at all.

Again, it just doesn't strike me as right to be relying on our most aggressive taxes.

And I say, respectfully, I worry if we over-represent the perspective of homeowners and under-represent the perspective of, say, people at 30% of area median income and below.

One of the things that I had said a month or two ago, and I still haven't figured out whether there's an answer to the question that I was posing, is if we assume that the General Assembly and the Governor allow us the option of having a referendum on a 1% sales tax for school construction,

I believe that the only way that it would make sense to try to present that to the voters is in the context of saying we're going to cut certain other taxes.

It doesn't have to be a dollar-for-dollar trade, but it ought to be some kind of a statement that says we're not just going to put on another 1% and take that roughly $10-12 million or whatever it's going to be and go wild with it.

I was hoping that there might be some way that we could find some taxes that if we increase them, well, not we increase them, but that we could in, let's say, in the month of May, or probably in the month of December, after we have hopefully gotten approval for this sales tax bump for school construction,

where we could say because of that we're going to reduce certain other taxes and I acknowledge that with real estate and personal property both one of the tax payments will already have been made and that I think is although there I've heard of jurisdictions that that cut in the middle of the budget year or change in the middle of the budget year I think it's more confusing than and not to mention probably more work for the commissioner

I don't know whether there is going to be anything that we could reasonably do at that point with this mixture, except perhaps to cut the meals tax significantly.

I would support that.

I think in terms of, you know, regressive taxation, I can certainly see how the meals tax hits people most in that context.

But we're still, I mean, we may or may not get that sales tax.

And the other thing that, of course, that we don't know in all of this, and we're coming right down to the wire in a way that is very difficult for anybody to make any plans for, but we don't even know whether we're going to have a budget, a state budget.

We don't know whether that state budget is going to embrace any of the, potentially, by my, somebody once said it could be up to five million dollars worth of money coming from the state budget back to the school system.

And if so, then that enables the school system to solve a number of their problems without additional funds from us.

I don't know how to figure on that.

and except to hope to God that we don't end up as we did last year with a budget going until September.

So I don't know how to plan in any way that kind of takes some of these contingencies into account.

And maybe the only thing that we can do is to say, maybe the only thing that would be significant would be to cut the meals tax if and when we get the approval for the additional sales tax.

It still isn't going to get us close to a dollar for dollar.

Breven to one to two kind of a balance.

Yeah.

And so, yeah, I think that that if we find out something during the year, but something else to in relating to Michael's concern is that what, you know, maybe I can be reminded of what we're putting towards like rent relief and, you know,

I know part of the $10 million, approximately $10 million we put aside each year for rent relief and support and things like that.

I mean, it's 2.8 million in the budget, I think.

I want to hear, we still have public hearing on, I want to hear some further thoughts.

Mayor, here's the tax relief.

Can I ask a logistics question?

Never come up.

I imagine we could supplement the budget.

I mean, one thing to keep in mind, too, is that, you know, as we reported with the first quarter financial report, we are anticipating a surplus, a revenue budget surplus right now for FY 24.

In addition, any tax increases that you impose, we're going to get half of that in 24, which is also not counted for and we'll add to the surplus.

Did y'all catch that?

Make sure you understood that.

Like the person property in real estate, some of that's going to appear as a surplus for 2024.

which I think we had just talked about this a little bit but it sounds like I'm not saying this is guaranteed and I understand the past few budgets had very unique circumstances coming out of COVID but if it were the case again that the revenue estimates

We're off not factoring in the tax increase component being part of the surplus, but it was off in a systematic way.

No, I think Lloyd was touching on it.

I don't know what it would be, but would our posture be okay?

Then we're first looking to reduce the increase that we made to the meals tax or keep it as a surplus or reduce this other revenue source we raised.

Or are we just anticipating that because of the next steps of not common class collective bargaining?

Right, but that would go into your base budget for 26.

So our revenue projections, this is what we will balance the budget off of.

And we won't know what the actual collections are to assess a surplus until we've actually completed the year, which again, you would pick up that base in 26.

So anything that you couldn't adjust your budget in 25 for your revenue projection without knowing your actual collections.

I mean, we try to account for that when we bring you the revenue projections for the budget.

Yeah.

Um, so I think that that is that's kind of already baked in.

Um, and hopefully as we're getting further away from COVID, those margins are going to be more narrow.

Again, assessed values.

We don't have anything to do with.

Um, but personal property is another one like those assessed values are

still pretty artificially high.

And the expectation is those assessments are going to come down.

So even raising the tax, you know, it might be worth $30,238 this year, but it could be worth $28,000 or something next year because those values may be less.

So what I'm hearing is that we are

I mean, one of the things you can think about is that if you are able, if you, the meals, excuse me, the sales tax passes and we are able to take that to referendum,

and you're able to, and that's approved, that is definite money that you can attribute to debt service, which is an absolute, it is a cost that's in the base of the budget, but we already know what our five-year plan looks like, and so that is something that you could definitely attribute to a cost savings, which would be ongoing to reduce your budget.

If you're looking at meals tax because that is more of something that is funding your base budget, it's a little bit harder to flip back and forth with those rates.

I'm not sure you can, once the personal property or the real estate rate is set, I'm not sure you can change that midstream.

It was there was a special there was a bill that passed during COVID when the personal property rates were going up.

But it was like a one time thing that allowed localities to do sort of a rebate against taxes already paid.

But in general, I think you're you're sort of stuck with your personal property rate and your real estate rate for that fiscal year.

Well, I think I had concluded, and maybe from prior conversations with you, that it would be an administrative mess, and that was sufficient for me for these purposes.

So, Council, is this what staff shall advertise?

Yeah, it's already advertised, I guess the question is, so for purposes of the 15th, we need to bring to you in ordinance with the balanced budget.

So we would include these revenues and then is the, what are we doing with the 601,000?

I'm seeing four.

Was that the final answer?

Oh, that's right.

Yeah, I'm sorry.

Six drivers is $456.

So, seven, eight.

Eight drivers gets you right about $600,000.

and within a few thousand bucks.

I really think it is important that we begin the process of getting the bus system up to snuff.

Everybody has said for years it's not up to snuff.

We've got to do that.

Yeah, I think it was very sober in when Garland, I think, sat right there and said that was it a horrible bus system, he said.

Yeah, we can do better.

So

Yes, there was one lingering item that was included in what I shared with you.

I felt like most of you indicated an interest in doing something for AHIP.

AHEB is outside of VCF because they applied in hops and that is a different program and a different support mechanism.

75,000 was the number that I had I captured

Your memo talked about 100,000, it said up to 100,000.

This is one that, you know, at least I know that I've talked with Sam on because I know the work that AHIP does in, you know, particularly the five field and 10th and page neighborhoods where they keep people in the house and this is

It takes man hours to do that, and I'm not sure what was up with the application, but I know the work that they do.

And I understand that we couldn't deal with it with the VCF funding, but it is a consideration that I would like for council to consider.

For program, yes, but not for operating support.

They were funded in CAF for actual work and this request was in hops that was for operating support.

Well, I would say

Potentially, but quite frankly, I need to go through and look at their hops application summary again because I can't even remember what the specific request was for.

But I'm happy to email tonight when I look at it.

I'm a little reluctant to touch the strategic initiatives fund just because we know there's always going to be unexpected things that come up.

So yeah, I didn't mention it with the budget because I knew that we were going to be coming down to a few dollars.

I was looking at 40 to 50 from the strategic, but we can do that.

We don't have to do that by the 15th.

So I don't know how that's different.

So where are we landing on this?

You're going to punt that.

Yeah.

And that's okay with you.

You can still get the 15th.

We don't have to have that decision because it's not associated with VCF.

VCF is a part of the budget.

Therefore, it needed to be resolved.

This was separate and apart.

It just came up as a part of the work sessions.

That would be, you could use your council strategic initiatives accounts.

We still have the art reconsiderations and all.

I mean, there's, there will be options, but it's just a matter of timing.

I was going to mention that tonight with this because, yeah, but thank you.

We will note the deferral.

Sam.

So is that what you needed?

Is it public comment now or you want more, you know, you had that's all we have left.

Okay.

So we we now have public comment.

If you want to come up, if anyone from here for the public would like to speak, you have three minutes.

I'm state your name and your residents and thank you if anyone like to speak.

Good evening, I'm Doreen Bonnet, I'm Executive Director of Birth Sisters of Charlottesville, and I live in Charlottesville.

We are a community-based doula organization supporting women of color through their birth journey.

We requested $100,000 through the Vibrant Community Fund.

And while we're grateful for the $60,000, I'm here to request that we be fully funded for the essential work that we do in the community.

We have a team of 18 community-based doulas, six of which are state certified doulas.

The efforts of these women and our organization is literally saving lives.

Couple of statistics.

Maternal mortality rate for black women in Virginia in 2021 was 79.1.

For white women, it was 32.6.

In 2023, for the women that birthed, sisters supported, it was zero.

The infant mortality rate among babies born to black women in Virginia is 10.4, nearly two times the state rate.

Those supported by birth sisters, zero.

The preterm birth rate among babies born to black women was 13.3, 1.5 times higher than the rate of all other babies.

Those supported by birth sisters of Charlottesville, zero.

We also had zero miscarriages in 2023.

So this work is essential because we are literally saving lives and we're supporting healthy birth outcomes for black and brown women and families in the community.

And I wanted to share a quote from Dr. Chris Chisholm, who is with the OB Department of Maternal and Fetal Medicine Clinic.

He said, during World Duel Week, we want to take a moment to acknowledge and celebrate the important role that professional duelists serve in the lives of their patients before, during, and after their labor and birth.

In addition, providing important support for physiologic childbirth, early postpartum care, and lactation, doulas are an important source of personal support for pregnant persons

who have experienced traumatic health care events that can help their clients navigate a sometimes confusing and overwhelming health system.

Patients who use a doula experience positive outcomes of pregnancy more frequently.

We are proud to support the role of doulas in improving outcomes for their clients and especially celebrate the important role that the birth sisters of Charlottesville are playing in improving pregnancy outcomes for black and brown birthing families in our community.

Thank you.

Thank you.

For our core program, the core services, we serve 37 families last year.

But we serve a lot more families and individuals through our other programming, like our welcome moon boutique, which we receive donated items and our clients can come and take whatever they need.

We have, we also do programming to support emotional needs of our clients.

We have support groups.

We had a buoy queue this past year, which celebrated Black Breastfeeding Week to encourage more breastfeeding among our community.

So a lot about other programs.

Thank you.

Thank you.

Next person?

Hi, Debra Weiss.

Live on Head Street, about four blocks away from here.

Just wanted to talk about, like, I'm just a normal person.

I'm single, one income family.

I have my own home business, which I've had since 1995 when I moved here.

Bought my house for $115,000.

did something about 10 years ago that y'all want now, which is I built a house in my backyard, right?

Because I thought, you know, the taxes are going up.

I'm going to need, you know, extra income.

And was one of the people instrumental in getting the detached accessory unit in the zoning code.

Last time you did it, you know, 20 years ago.

And so now I'm like the canary in the coal mine here.

So now my property is assessed at $929,000.

My assessment's gone up over $60,000 in two years.

I haven't done anything to my property.

I short-term rent it because it's in my backyard.

It's a lighter footprint and more respectful for my neighbors.

The people who come in and stay in there eat at our restaurants and they go to wineries and they participate in weddings and they spend tons of money in the city.

But my taxes are now, right now, they're $8,900 a year.

And I'm starting to struggle.

I feel like I'm being priced out of my home.

I feel like I'm being priced out of the neighborhood.

And I may be struggle to stay in the city.

And I feel like I'm being penalized for investing in my property and trying to stay in my neighborhood and make things nice.

And I have to get a business license for my home-based business.

I have to pay business personal property tax on my home-based business.

I have to get a business license for my rental.

Business personal property taxes on my rental, which is a home-based thing.

I have to get a special use permit for my rental, which I have to pay $100 a year for, which other home-based businesses do not have to pay for.

You know, I I drive my car less than a thousand miles a year and I have to pay, you know, personal property taxes on my car.

And, you know, I just feel like I'm soaked, you know, on the taxes.

And every time that you raise the personal the real estate tax, you know, the assessments are going to go up.

And, you know, it's my my short term rental keeps my house affordable to me.

and I just want you to know that when you just say, oh, let's spend another penny, get another million dollars, that has a real effect on homeowners like me that are just trying to stay here in the city.

Thank you so much.

Good evening, everybody.

Dan Miller.

I live at 1107 Avon Street.

It's kind of my job is sort of to ask dumb questions and then have smart people tell me how I'm wrong.

So I was going to kind of do that here.

I was curious

If the meals tax that you're talking about is on, that's just, that's not on groceries, right?

That's on drinks and prepared meals.

I was just thinking, and this isn't really a common as much as it's a question or a framing, I think Council Member Payne, I'm kind of aligned with you on find the most progressive way to do something that nobody wants to do, right?

And I'm wondering here,

I think a lot about Charlottesville and how we have the core of this city that really is white people.

I moved here, so I think a lot of people visit here.

It's the driver for a lot of the economic activity that we have.

And I've just been thinking, as we've been talking about taxes here, that while a meal's tax or a lodging tax in some ways are more regressive, they're also the only way that we have to expand our tax base to people who live in Charlottesville, but actually don't live in Charlottesville.

And so I'm wondering,

If that's something you guys are thinking about, if it's part of this context for how we're going to tax the area and not just by making something more progressive in a narrow sense, we're actually making it more aggressive in a wider sense in that we're removing some tax burden from people that live in the county but do a lot of

Thank you.

Anyone else like to speak?

If not, I will close the public comment.

Thank you.