City Council Budget Development Work Session   1/30/2025

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I call the January 30 of 2025 Charlottesville City budget work session to order.

Miss Thomas, will you please call the roll?

Did you want me just to read this off for okay.

Oschrin here.

Payne I know he'll he'll be here but

and Wade, I'm here having established a physical quorum.

Council will consider a request from Councilor Snook to participate electronically pursuant to Council adopted procedures in compliance with Virginia Freedom of Information Statue for meeting participation through electronic communication means.

Yes, I am.

Are you able to hear me?

Yes.

Our participants in the room are able to hear Councilor Snook.

Yeah, got a lot of thumbs up Snook.

Okay, great.

Second.

Second.

All in favor, please say yes.

Yes.

Yes.

All opposed, please say no.

I'll note that Councilor Payne is here.

Thank you.

No, thank you, sir.

Budget work session, Mr. Sanders and Ms.

So I'll kick off with a general statement and then let Ms.

Hamel go into the prepared presentation.

Just want to say good evening to council and members of the public.

This is the kickoff to our budget series, our budget work session series.

We so look forward to this moment to be able to bring to you

The work that it takes to put together a local government budget.

It's not an easy process.

It has many layers as you all know as it relates to trying to determine how best to project what the revenues will be and then make determinations on what the expenditures can be.

There's always pressure in that the expenditures always tend to outweigh the available resources.

So that means decisions have to be made.

I choose to specialize in that work because I can say no.

And at times have had to find myself in the position where that is necessary.

So what I have tried to do with the budget team this year is to take a closer look going a few layers below normal.

taking a look at how we budget and what we're budgeting as priorities, how we interact with the team in producing what is the request that they make with the goal of making sure that what is brought to you is the most responsible version of a budget that we can bring to you.

We are looking at ways that we might be able to make reductions in how we do what we do, make changes to how we do the work that we do with the goal of trying to meet and exceed expectations of our public.

I started the budget series this year with three budget briefs to give you indications of what it had begun to look like for putting together this budget.

The goal was not to scare you, but was to basically invite you into what can be fun for us in trying to figure out how to make things work.

We see operational increases in a number of places and we see, of course, a lot of requests for a number of things.

The commitment that I made that I'm trying my best to hold to, we'll talk a little bit more as you talk about tax rates, is to try my best to bring to you a balanced budget that does not rely on a tax increase.

But that is something that we still have to have conversation about.

And at this moment, we cannot make a guarantee of that.

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

Hamill.

She's going to walk you through a series of things.

As the kickoff meeting, it's a lot of things that we normally talk to you about.

Thank you.

So a few of the things we're going to talk about tonight, this is we're about to round the corner to the great release of the budget and the numbers.

We still have a few weeks left before we get there.

And so this is an opportunity tonight to hear from you all to get some ideas at a high level of some things that you want us to make sure we consider as we're developing the budget

So with that, we'll be going over a few budget guidelines, a review of our financial policies, which sort of govern decisions that we'll be making.

We're going to give you a first glance at the 2026 revenue projections.

Going to talk about a few high dollar drivers that are in the budget this year, and then we'll talk about tax rates and advertisements for those.

So the budget guidelines are things that we are keeping in mind as we are developing the budget.

We bring those before council each year for your review to make sure that these are things that also align with what you would like us to be doing.

So, for example, every year we make sure that we review the major taxes, all the local tax rates annually.

We do that both as part of the revenue team and our revenue projections, but also to give council an opportunity to review those as well.

We look to develop all the operational budgets to make sure they are within what our revenues say.

We always have to have a balanced budget.

We want to make sure that we provide sufficient funding for staff operations to meet priorities of both management and council.

We're looking to incorporate your strategic plan outcome areas.

We are allocating at least 40% of the city new city real estate and property tax revenues to schools.

We're investing strategically in employees.

We're continuing to conduct and fund outside nonprofit agencies through the vibrant community fund process.

And we're going to continue to develop and fund what we call intergovernmental and fundamental agency agreements, which are agencies that are providing indirect services or operations on our behalf.

and then we transfer at least 3% of the general fund expenditures or the general fund budget to the Capital Improvement Program.

So these are kind of the guiding things that we start with.

These are the things we look at first and then before we start branching out to the other things such as new requests.

Any questions here?

Any changes?

I would say the free clinic is one, OAR is one.

Yes.

Good one.

Good.

That's the way to put it.

Any other questions here?

This is a review

So the first two address our fund balance policy.

As you know, we spend a good time talking about our minimum fund balance at a total of 17%.

That's really divided into two pieces.

One is the 14%, which is just an allocated fund balance that we keep.

as sort of our rainy day fund.

And then 3% is what we call our downturn reserve.

That is where we give ourselves some area.

Should we get into a position where our revenues were declining and we needed to dip into reserves, we would go here first.

But also the policy requires that if we do that, it also has to be replenished within a specified period of time.

Additionally, we make sure that all of the utility funds, so that's water, wastewater, gas, and storm water, have sufficient working capital.

We look to stabilize all non-general funds by ensuring that they have a positive fund balance.

So that would be things like CAT, Social Services, DHS, Department of Human Services.

Those are separate funds.

Our debt service fund is another one.

We make sure that they have a positive fund balance.

In addition, in terms of when we are balancing the CIP and we talk about the amount of debt that we're planning to issue, our policy is that our debt service will not exceed 10% of our general fund budget, but we have a target of 9%.

So we talk about that calculation a lot.

and then also we transfer the equivalent of 1% of the meals tax rate to the debt service fund each year to help pay down the debt service.

Any questions on those?

And those are those are policies that are longstanding policies that we meet with the ratings agencies every year.

They're like

These are good policies.

That is correct.

Okay, so this is where everybody wanted to go anyway, right?

So this is a first glance of what our revenue projections are looking like, both for the current year, FY 25, but also for the 26 budget that we're working to develop.

We have a revenue team as we've talked about many, if not all those members are here tonight to help answer any questions on any of these specific projections that you might want to

You'll see a lot of

An increase in 26 of just about $7.9 million of revenue.

Again, part of projecting the revenues for the budget is that the assessments that come out in January, half of that is in one fiscal year and half is in another.

Part of the crystal ball of projecting this revenue in particular is we know what this January looks like, but trying to figure out what next January looks like.

So we're still working on that, which is why this is marked as still under review.

Personal property is the same way, although we are still looking at this year as well as next year.

And so this is our best guess as of today.

These will likely change by the time we come back with a proposed budget.

One thing to note these two tax sources make up the 40% formula that goes to school.

So 40% of any increase in these two lines

represent the new dollars that go to the schools based on our guidelines that are set forth previously.

Anything that is marked here in red, this is a change from what we've seen over the last few years.

The last few budgets we've been coming talking to you about how strong our revenues were.

We've been sort of talking about the COVID effect or impact.

These have been the reason that have been a pointed source for continuing larger surpluses and

This year, not so much.

In fact, sales tax, as you'll notice, for $25 has actually started to, we're projecting a budget deficit for sales tax in $25.

A slight increase over $25 to $20.

We built less than what we had budgeted for 25.

So that's why that one is in red.

Occupancy or lodging tax, same sort of story and meals tax.

Although they still are, they are looking down from where our original 25 budget estimates were.

Those revisions were of what did we meet last week?

Yeah, yeah.

And we'll continue.

What you'll notice is that revised column is what comes to you as part of the quarterly reports.

Um, and so, um, those continue to change and we'll keep updating those quarterly free, but this is what they look like at the moment.

I guess this is taking us too far afield, but it would be interesting.

We've been trying to water the money tree, but it's not doing what we want.

You know, we've got some theories about what's going on, sales tax in particular.

I just think structurally, the city of Charlottesville compared to other localities like Albemarle County, we don't have the retail base that they do.

We did fairly well during COVID.

This is a theory.

We did fairly well during COVID and shortly thereafter because a lot of the online sales and those things were coming back to the city.

Now that that period is over and people can go out and shop at brick and mortar stores, they're not coming to places in the city.

They're going to Fist Street Station or

I think it's a bit of a structural issue that we're always going to have because other localities are definitely seeing increases in sales tax that we're not.

So that's my theory.

We're trying to do some analysis to see if it'll bear that out.

Transient occupancy tax and meals tax.

You know, I guess folks are just not coming like they were, not eating out like they were.

I think as well in the sales tax, there there was a time period where there were some businesses in the county that were reporting to the city.

That's true.

We've had some recent transfers out whenever a business in another locality reports to the wrong jurisdiction and pays to the wrong jurisdiction that gets caught down the road and then it comes out of subsequent transfers.

Yeah, that's a problem we deal with constantly.

Okay, thank you.

The first question I have, looking at the meals tax, I mean, it's down a little bit, but I frankly think that the amount that it's down is not really statistically significant, except to the extent that it varies from the fact that it's usually been going up.

if we were proposing $18,100 actually originally $18,217,000 and now we're proposing $18,200,000 I don't see that as something that we need to worry about as an economic trend I'm a little bit more concerned about the sales tax obviously because it's a larger percentage change and to some extent the transient occupants

The real question I have is this, dealing with the real estate tax, you've got a proposed increase even compared to the revisions for FY 2025 of about $6 million, roughly 5.8% or 5.7%, something like that.

If the only factor driving that was the increase in valuation that we expect next year, that would suggest an overall increase in valuation of about 11%, which strikes me as probably high.

And so I'm wondering whether you've got built into the 2026

Well, I guess to address the first question on meals and lodging, I don't know on the surface, some of those decreases don't look significant, but I think both of those had a rate increase.

So these are decreases even in face of a rate increase.

That did generate conversation for us because that's material.

We expected it to go up and we're seeing it lower than that.

So it's telling us something.

Well, for the sales tax, without, you know, I think that after y'all get time to review it, maybe talking with Chris Engel to maybe come up with some recommendations for us or some things that we can do as counsel because we want to keep it healthy and attractive for businesses and something that we can do on our end.

Chris is a part of the team.

I didn't ask him to come tonight, but he's part of the team in looking at what's happening in the business community as well.

Okay, and so my question was how much of that increase of, depending on how you want to look at it, from either six to eight million dollars, how much of that increase is assuming a certain amount, I mean, I guess I'm asking the question awkwardly, how much of that increase is based on the assumption surrounding new construction versus

Well, the new construction increase is usually so little represents such a small portion of the overall increase.

I think it was about four tenths of a percent this year.

No, this doesn't project next year's increase in reeassessment.

Well, I mean, it would seem to me that there are only two things that would cause an increase from year to year.

One is new construction and the other is expected increases in valuation.

No, those are the only two.

Those are the only two.

But we only saw an overall increase, this reassessment of about a seven and three-quarter percent increase, change of assessments.

Four tenths of that was new construction.

Yeah, I mean, we take into account the calendar year 25 assessment increase, which we just received for the reassessment.

I see where I'm making my mistake.

I got you.

Okay.

Right, so those are in there and then, you know, half of the FY26 is going to be whatever the calendar or 26 increase is, which we have to make an assumption on what that's going to be.

Sure.

Your crystal ball is not that clear.

All right, moving along, Todd, don't leave yet.

So business and professional licenses.

We have not made any assumptions here.

This is also one I should have marked still under review.

Business license renewals are due March 1st.

So that's very fluid.

And it's

It's subject to fluctuate.

We've got a number of large taxpayers and how they come in has sort of an outsized impact on the overall number.

So yeah, I wouldn't expect anything firm until March 1st, but we've got some methodology we use to try to give up.

an estimate of it based on sales tax, which is down.

So we're not sure how that's going to end up.

We're working on it.

Yeah, and moving on to building and related permits, we've had, you'll notice that there's a large number in the revised column for 2025.

We've had two building permits in this calendar year, two, yeah, for two large developments, which are skewing those numbers a little bit.

So we are looking to see a little bit of an increase in the building permits, but 25 will be an outlier.

doesn't have to be an outlier here.

Fair point.

That's right.

Yes.

Outlier in terms of our crystal ball.

How about that for now?

And then the other permits and license, there are a bunch of there's a bunch of stuff that's tied here.

I think the one that is the decrease here, I believe that is parking permits.

And when I say that those are ones that are related to on street parking for construct

construction sites and so that sort of depends on developments that are happening and that has just been falling off a little bit because of the construction activity and where it is so that's a small decrease there and then the other intergovernmental revenue largely this is state revenue we don't have any idea what the state budget is going to look like

We are making an assumption here.

At this point, I've just added in a 5% increase on those.

And then the largest piece is the City County Revenue Sharing.

You'll see that in two places on this chart.

This is the one place.

This is the portion of that that actually goes to operations.

And then we take a portion of it and send it to the CIP to use for projects.

but overall this year we are going to see about a 2.4 million dollar increase in the revenue sharing payment that will be coming to the city.

Moving right along, recreation income or charges for services.

No real changes here other than the payment in lieu of the taxes that is

payment that comes from the utility funds to the general fund that's based on a formula that will be increasing about a half a million dollars.

Um, the rest of those are we're projecting right now to be pretty static.

No real change.

Interest income.

We've been living in the land of cotton lately for high interest rates.

Those are coming down, which is causing those projections to come down in terms of revenue to the general fund.

And then rent, you'll notice, has gone to zero.

That is not because we are not charging rent.

It's because we're changing the way that we're using those funds.

We have had conversations about lease property and working on those leases.

But we've not had a funding source for maintenance and things.

And so we have we're taking those revenues out of the general fund and pairing them up with the maintenance expenses for those lease properties.

So that's why that's a decrease there.

and then finally we have our designated revenues, which as we talked about per our policy, 1% of the meals tax goes to the debt service fund.

That is going down a little bit in proportion to our projection from meals tax overall.

This is the increase for the city county revenue share.

That is the portion that's going to the CIP.

So that is going up because the total went up.

and then we are right now projecting a small increase or not small but $400,000 increase in the school contracted services that those are services that they contract from the city and they reimburse us for those so we're looking at a small increase there so overall

We are looking at new revenues of just over $10 million for FY26.

That represents a 4, just over 4% increase.

The revised revenues for 25 were looking at about $2.9 million revenue surplus.

This is different from what you've seen for the last two budgets.

We have been talking about in the $20 million of new money, $15 million of new money.

We're now what we think based on the projections that we're kind of moving back to more of a new norm, which is increases, but not at nearly as significant levels that we have been seeing.

And so that's kind of the first brush.

So of this 10 million total, right now, 3.4 of that, we're going to talk about this a little bit more, but 3.4 of that by the formula would go to council, excuse me, school board.

And for the

So we're going to get to this, this is jumping ahead a little bit, but essentially we are working to balance the city manager's proposed budget by February 14th.

So we are going to be talking a lot in the next few days and a few weeks to finalize what we think is a number that we will bring to you all as part of the budget.

And then, of course, you will get the budget in March and we'll have all of March

that we will continue to revise those numbers come back to you until you finally adopt in April 14th.

Ms.

So let me just go on and get to that slide.

So March 17th is our public hearing on the tax rates.

That's the first public hearing on the tax rates.

The state code was changed.

It used to be that we had to advertise 30 days before.

We do not.

We only have to advertise seven days before the public hearing now.

So we don't technically have to advertise those rates until right around the beginning of March.

But we, for the budget, which Mr. Sanders has already said he's working on a budget with no tax increase, if you are going to increase taxes for a specific purpose, we would need to know so that we can advertise that.

Yeah, I'm not suggesting that at this point.

I just wanted to know the parameters.

I guess ultimately what you saw in the recent public hearing on the CIP

That was your moment to look at that document and see if there was anything missing.

And if there is anything missing, then we're looking to hear from you in short order to make changes, because that is where we are literally doing, working towards about two and a half weeks left.

Is it two and a half weeks?

No matter if you give myself a little more time than I have.

right at two and a half weeks maybe of trying to finalize the budget because we do have to go and print the preview of the budget for you all to have as I'm presenting it to you and then for you to begin considering what to do.

So

We'll be updating

You could still make changes.

We were prepared for you to make those changes.

But what I am indicating to you as trying to bring you a budget that's based on no tax increases, what I'm going to bring to you is not going to have any room in it.

No, I can tell you that the things that I shared with you in the budget briefs were the most important things for me to highlight for you.

I can, well, am I taking one of the slides away?

Well, we're there.

Collective bargaining continues to be one of the key things that we have to embrace as a part of the change that's affecting the organization with the decision that we've made to allow bargaining to the extent that we are with up to six contracts.

This year we bring on number four.

The Teamsters contract will go live July 1st.

I have signed that agreement.

It has a $1.9 million impact.

So that's a change that will that has been factored into FY26.

We have the second year of police fire and transit.

Those are the contracts that were negotiated last year.

This is what it costs for those to be implemented for this next year.

So that's 2.6 million.

I still have staff who are not a part of a bargaining unit who are expecting to hear from me that they too will get an adjustment in salary from one year to the next.

So I have a decision to make.

That's why TBD is there.

So for those that have tuned in thinking they were going to hear what their change will be, I am not telling you that tonight.

But we are working on that.

And then just the cost increase for benefits at large.

We've identified what that increase is going to be.

Schools is $4.9 million is the request that has been edited from what you heard in December.

So December 19th, we had a joint session where you heard $7.9 million from the superintendent.

He is probably literally speaking to the school board right now, letting them know that the number that he has shared with me is 4.9.

We hope that it stays 4.9 because, again, as I've indicated, I'm accepting that number and we have already plugged it in.

If that number changes, wherever it changes means that I am going to have difficulty with the expenditures adding up to the right number for what revenue we just talked about, or I'm going to need additional revenue to make that possible.

and then we have two decisions made is the way I'm referring to it.

The jail renovation, it's a million dollars.

I'm sorry.

So the 40% formula is 3.4 and we're committing 1.5 in addition to that.

When we started the budget planning process, Ms.

Hamel dropped 3.4 in there after we finalized what we thought the revenue projections were at this time.

And then after hearing from the superintendent that the number that he was able to go back and bring forward was 4.9, then I shared with her, let's squeeze that in, and we're squeezing.

Right.

So 1.5 over the formula, which has been a trend.

We have gone over the formula in years past, but 1.5 is what I'm at this moment saying I'm ready to agree to, and that's what we can do unless I have to make other changes.

And we have other drivers, as I refer to them as decisions made.

The gel renovation is a million dollars a year increase that we've integrated into this budget.

And then the Carlton Mobile Home Part, the debt service is 1.3 million that we also have to now plan for.

So those two things are there.

And then an increase in debt service just because of decisions that we've made for what it is that we're going to do work on and bond is another 1.5 million that we've had to add.

So those are the key things that are driving the budget.

probably the smallest, most compact list of expenditure drivers that I've seen.

We still have some big conversations left.

So I wish I could accept that as yes.

Well, you'll also note that all those numbers there add up more to the $7 million that I told you that we had in new.

Yeah.

Not to say anything, will or wouldn't change.

So the jail will be bringing a resolution for you to approve their financing plan.

That is correct.

Well, it kind of, it's sort of complicated and I'm not sure I'll do a good job explaining it, but there was like preliminary financing that you had to go along with and that was 18 months ago, maybe we voted on that.

And then last year they came around and said, okay, what are these three options that had been shopped out or had been scoped out?

Correct.

And to be fair, that number is an estimate.

We have not gotten their final number and the financing has not been approved, so that could change.

And from a budget perspective, because we feel as though the indication has been that

something will happen.

Then we've tried to plan for what that might be.

So the million dollars is the most realistic number that we have available to us at this time.

So that's why we plug it in to claim in space.

If you were to do something different than that would be different.

What you don't see on this list, because I was waiting for somebody to say something, you don't see transportation up there.

That is a real big thing that I'm still kind of wrestling with.

If I had to say what is the biggest thing that's still a bit unresolved, that's probably it.

We had a four hour budget meeting with our transit team.

and that's a sign of how complicated it is becoming because we're moving into accelerating some of the transition of the fleet and bigger decisions that come with that as we make decisions about transitioning the fleet that then requires additional personnel.

So those are big ticket items whenever we start talking about buses that cost more than what we've been paying and then additional people to drive those buses.

So I still have to wrestle with that and come to a conclusion on what we're going to do in the transit space.

That's probably the biggest thing that's not there.

And I shared with you with the last last year when I was working on the budget that transportation was going to be a driver and that was pretty much boxed out by what we ended up doing for schools.

Transit.

Transportation, I will say, the effort has been to kind of get our mechanics right, make sure that where we can immediately deploy resources and not allow additions to the CIP to sit.

We've integrated sidewalk priorities list,

ADA, because we have an ADA transition plan, so there's a considerable increase allocation there.

Parks and Rec Master Plan, I've put in a placeholder, although we don't have the plan yet and we will have it by the time you adopt the budget, but I didn't want to be more or less baking that close to the end.

that I put in a placeholder there to get us started.

So those are big changes that have been integrated in the CIP.

There is a lot more, of course, that can be done in the transportation space.

And I think that's what we're trying to get to.

But for where we are right now, we've made the changes in the CIP.

So if you revisit the CIP, that's really where I would say transportation is today.

I would say that we should anticipate, I have prepared myself to accept that the transit director is going to ask for new drivers every year.

until we hit this maximum number for the volume of buses by the time we transition the fleet.

So this week and they may I met with the impact committees or transportation.

They may have met will be meeting with others, but

One of the things that they're going to be pressing, I don't know if the city and the county, but definitely the city is like more drivers, you know, we committed to more drivers.

As I wanted to, it was the day that the current administration had, you know, removed all the funds.

We're like, I'm not even sure if we're gonna, you know, have funds for, you know, the buses that we have the commitments, but I know that's changed.

So, but anyway,

Yeah, one of the things that we're doing, part of what the Russell will be, is I can't remember how many drivers we approved in the budget last year, but I have to look at how many of those were we able to hire to make sure that those got filled.

And that means that if we did not get all of those filled from last year's new allocation, then I'm probably not going to grant the request for all of those that are being requested at this time.

That's the balancing act that I'm going to kind of endure.

and look at some of the other key personnel.

We added a transit planner so that we have a specific person who is a part of our transportation team to look at transit issues and the changes that we're trying to make there and marry them to the transportation improvements that we're looking for.

so that we can claim transformation.

That's the word that I want to use and what it is that we're doing so that we're doing something comprehensive.

In with the funding for bus drivers for getting even the long-term plans for expanding the fleet, we still haven't returned to the pre-pandemic level of service, correct?

And then has... Which I would say is a priority.

I think for me, the desire was to try to make sure that we can allocate the right number of bus drivers to resume all pre-pandemic service as soon as possible.

And then as CAT, been able to, I guess, start to game out different scenarios in terms of which federal funding sources remain available.

I think particularly with the transition plans, but I'm sure it impacts other areas as well.

Or has it just been too soon?

Yeah, I think I think we should all be in a perpetual state of prayer, hoping that we don't have the spigot turned off because we need it.

Yeah, speaking to just kind of the impact of federal moves, we this week in our budget team meeting had a conversation about there being anywhere from $25 to $30 million that moved through our local budget that originate from the federal government.

and with the news of freezing, it poses concerns inside the building for us and the mechanics of doing the work and it absolutely sends chaos and terror throughout the neighborhoods, unfortunately.

So we started talking about that and I haven't, I've never lost sight of that for what it was that we were hearing that could possibly happen and to see it begin this week is a bit jarring.

It's an uneasy feeling in that

It causes me to be even more conservative in the things that we have holding on to them just a little bit longer before we start deploying them in different ways because we might need them for what is more of a necessity if something were to just get cut off.

But I think to answer the question directly, it's too soon.

to know for sure.

I think we're being tested at this moment.

If I had to speak personally, tested to see what we could do.

And the test for us is what is it that we can withstand?

What can we absorb?

What can we handle?

And we've got to be careful.

So you're not hearing from me about the surplus tonight and spending that.

I think it is more prudent for us to hold on to that at this moment.

And

Give a little time for a little calming down of things and seeing if maybe we can find some better approaches to how we can make various changes on the federal level.

That will have a trickle down effect and go from there.

Yeah, I know Lee just did an analysis of

and

create specific scenarios of what that looks like.

Well, we ended the year because we had to end the year with our ARP evaluations to meet the criteria, trying to expend as much as we possibly could for what we had in the eligible categories that, in my opinion, were less questionable.

We were able

But we carried a little over $3 million into this budget year, into this calendar year, that is ARP specifically, and that is the remaining balance of what we had earmarked for different projects.

If there is a clawback of those funds, which we didn't hear that that would have been interrupted because those funds have already been received, but they, every contract with the government, they allow themselves to clawback.

If they would have clawed that back, whatever those projects are, are now unfunded.

And it doesn't matter what they are, we would have to try to figure out which ones were urgent to keep going and which ones were ones that we're just going to say, oh, well, we're out of money.

We can't do it.

And we'll just let it in.

There are people associated with some of those because they're grant funded positions with different organizations that might be doing work, as well as direct aid to individuals in our community.

So

I made sure in the conversations that we had as the director of finance was finalizing his assessments to reduce that number to as small as we possibly could for the uncertainty that we would expect in the new year and the transition.

So if we were to have a clawback, then right now I'd have to find basically $3 million to keep that alive by holding on to the surplus right now.

There's no question we can do that.

Yeah, that makes a lot of sense.

I just had one question.

So that actually is in the capital projects fund.

It's a line item.

It's in there for the next five years.

But it has to be cash funded.

It can't be bond funded.

Correct.

Because we had other projects that have basically eaten up already the other amounts.

Okay, so we're trying to balance the cash funded portion.

Gotcha.

that concluded our presentation.

I love it.

Thoughts.

We did what why the staff is here at the table.

Any on

It's a loaded question.

Everything keeps me up at night.

What are you saying?

I'll say that it is, and it's just the nature of Albemarle.

It is very difficult to have your team identify a number of things that they feel that they need and not be able to say yes to them.

So that's one.

There's always then, of course, the need to challenge and question how they may be asking for what they're asking for.

We've had a conversation about how many more people can we add to the employee pool?

Like, sometimes we just have to try to do a little bit more without adding a person because that comes with such a huge expense associated with that.

I'm rethinking all of that.

I'm questioning all of that.

We're looking at those things.

And part of it is, as we're looking at the processes that people are hearing me talk about more regularly, sometimes we're finding that we might need different amounts of people in certain positions, but we also just need to change the process.

And maybe we don't need a person.

So there's always going to be that rub of just trying to get it right.

That's really my commitment to continue looking for that.

You have heard me say, so it's not a surprise that I'm going to say this is we're doing a lot.

and that's a positive and a negative and I'm saying it with that intent.

It's a positive and a negative positive because we can and we have been able to pull that off and continue in that whole thing of punching above our weight class.

We're doing a lot that the city of our size is not doing around us, but it comes at a cost.

It comes at the expense of energy of not having everybody that you need to do all those things.

It comes at a cost of

what we have to put together in the way of a budget and it comes at a cost for the community who we have to then ask to help us pay for those things.

So all of that is about balancing.

I think it's just a nature of the job that I don't get much sleep.

I'm not supposed to because I'm supposed to keep trying to figure this thing out.

I get more sleep more, more recently than I have in years and months past.

So I hope you all don't worry about me.

I got it.

I'm trying to be here.

But I don't know that there's anything that is just

Yeah, stress day.

Yeah, I had about a dozen nonprofits to kind of call me and I was like, you know, we, you know, we're going to be, you know, they were coming to, you know, like city have kind of hooked us up.

I was like, no, we're going to need to hook up, you know, because it's a lot of things that we do, depending on federal funding, we just we can't fill in that gap.

Yeah, I didn't think about issuing a press release, but I felt like I could have.

Don't call us.

We're not the answer yet.

We don't know because we cannot feel that void is too big.

I would just add to that over the last few years with COVID, we have gotten lots of federal dollars, our cares.

All of those dollars as we've been talking about tonight are are gone.

And they have allowed us a lot of flexibility.

In addition to revenues that have been really, really strong.

All of those have allowed us a lot of flexibility to do one time things as they come before you.

We've been able to do a lot of stuff

We're now back to really the budget and our normal revenues.

So it does feel a little less like we're getting into a territory with a little less flexibility.

We've sort of, you know, it ebbs and flows, right?

Like we go through periods where we are building up reserves because we're afraid of the impending doom and then times get really good and we stop building up reserves.

You know, we're kind of there now.

We don't have a lot of reserves.

We don't have these extra pots of money to rely on.

Speaking of one-time funds, just to clarify, the numbers that we looked at today, you know, there's the three, of the 10 million that we had, the three, whatever goes to the schools, then there's the seven-ish leftover.

That is new budget money.

That is new money.

And so I said that, but I've added a whole another level of confusion by saying that that way.

So I just want to be clear.

We have the 10 million that was in that line, but 4.9 of that is what the schools have asked for.

And then just to kind of keep going with that, because I want you to make sure that you are

Go back to December for end of November and December for the three budget briefs that I did on the higher level categories of just trying to show you what we were learning as we were going through the budget meetings with the departments.

There is an increase to do business that we heard consistently.

So software programs that we're using across the city, contracted services that we rely on to do certain things, all of them were going up.

And the thing to remember in that moment is you get nothing for that.

It's the stuff that we've already been doing and it just costs more to do it.

So you don't gain anything, you just keep the service, you keep the software program, you keep the ability to do what it is that you're working on.

That stood out in this round of budget meetings more than it ever has with how we were seeing those numbers just creep up from one department budget to the next for wherever they're relying on a program or service like that.

And then we had, I'm just remembering just off the top of my head that we had, we haven't had, I don't believe I remember seeing that we've had a lot of requests for new employees.

It didn't feel the same this time around.

But we have some.

There are some requests and there are some adjustments that we need to make.

But because our surplus is partially being driven by vacancies, I'm spending more time in that category before making any commitments to accepting a request for a new employee because I may end up taking some of those positions.

Well, taking some of those positions might be to try to drive the surplus down, but it only drives it down if I use that money some other way.

Because if not, it's just sitting there unallocated to that individual purpose.

So there's those, those are the kinds of things that over the next couple of weeks, I have to make decisions on to bring the clarity for

Can I ask a couple of questions about the employee compensation?

On page 10 of the presentation, you've got employee compensation benefits and as I added all up, you've got $5.4 million in additional money plus the TBD, an affiliated pay adjustment.

How much are we currently spending on total

O'Neill,

It's a question not only for our own analytical purposes but to help explain to the public what we're doing with the money.

I'm curious, I know going back three years we had a lot of employees who were leaving because they weren't getting paid a competitive wage and then we

and

Do we think we have now perhaps with this budgetary adjustment?

Do we think we're now to the point where overall our wages and salaries are competitive?

Do we have any more sort of competitive market adjustments that we're going to be needing to make on any broad scale?

Are we looking at perhaps for years going forward basically just sort of keeping things

competitive, keeping things with the cost of living.

We've got folks who are writing us letters saying, hey, I want a fixed income.

My social security went up 4%, 3%, whatever it is.

That's all I've got to play with.

And now you want to raise my taxes just on my house by 13%.

Why are we giving more money to our staff?

And I think we need to be able to explain that

I'm going to go out on the limb.

I'm going to hate that I did this because I hate doing this, but I'm going to guess that with this number, this increase is probably somewhere around two to three percent of our total pay.

just based on the increases that were approved in the contracts.

Okay.

Yeah, okay.

I'll speak to the first part of the conversation comment that you made and I'll get myself in a little trouble here.

The city implemented, well we conducted a comp and class study, we implemented class and comp study, we implemented that and while it isn't a perfect science to do that and it's not complete in its ability to just make everyone feel better about where you are,

It was a process.

It has been implemented.

There is additional work that we believe needs to be done that is probably more specific positions versus an across the board review of salaries, where we are looking to make sure that we are at the right market level for certain jobs for a variety of reasons, one for being able to attract the right people to the jobs that we're trying to fill.

and to keep them, but also just in the fact that we are in a community where most of our jobs are replicated times two.

The university has the same position, the county has the same position and there are only so many people here to do those jobs so that in itself at times could drive some specialties up and we've got to be open and able to consider that.

and I don't know that we have done that in the more recent years and I do think it's important for us to do that so that we can fill the positions that we have and not have the conversation that we've been having routinely about vacancy savings.

Some of that has resulted from our inability to fill positions.

We don't

members of our public who are having different conversations in their own households.

So I don't lose sight of that.

I do think about that as we prioritize what we do.

The goal is to try to make sure that the workforce is comfortable and therefore capable of coming to work each day and doing their job.

and when we can make increases, we will do our best to make sure that there are substantive increases that allow them to want to come back.

I would just offer for the public along those lines, I think there was a news story a couple months ago of interviewing one of our bus drivers after the union contract and their wages went up.

I think they had worked as a driver for the city for over 10 years, and they said after that increase was the first time in their life they were able to go on a vacation and be able to afford it.

And, you know, that's just one anecdote, but I think that's the direction we've been moving in, and that's the foundation of people wanting to work for the city, stay for the city, and it's the foundation of everything people expect from the city in terms of transportation, cleaning up litter, you know, snow plowing.

And so, you know, I would just offer that as just one anecdote of kind of the

I think positive direction we've moved in.

We don't have a choice but to do if we want a city that staffed.

That's right.

So staff finished their presentation.

We heard from

Lloyd, and of course you can chime in again, Lloyd, if you need to, but we're just going to kind of go down if you have any more.

This is going to be the first of many.

I think this is that time of year when I see you all face forward and I do the misses.

We received quite a few comments today about funding efforts at Riverview Park.

Yes, there's a request for $250,000 from the Rivanna Conservation Alliance and Friends for riverbank restoration and stormwater improvements in Riverview Park.

That request has been received

I have it.

I have it.

It came to me.

It made it to me.

It's on the list.

Um, it came through our parks department as a request.

Um, no one has gotten an answer on your request.

So, um, what you want to understand that no one knows anything at this time.

So a decision has not been made.

Um,

One of my questions as it came in is it came in through parks?

I question should it have come through parks or should it have come through one of our other means?

So we initially had conversations that way, working through those answers as I get to the part of the budget process to make decisions on new requests.

But it is on the list.

And at this moment, there has been no reason to consider that we won't.

Debt Finance to the CIP or is this required to be a one-time contribution?

No, it would be a one-time contribution.

Either way.

It could be either.

It depends on timing and I think that's part of the detail that would come back.

We can figure that out after the fact.

I also, I know we've spoken about this at the last city council meeting, but I would be interested in potentially contributing more to the schools.

I can't remember the name of the sort of on the main funding.

Yeah, it's 1.25.

You know, there's a way we could increase that.

I realize that has staff implications.

And just because we give you more money, it doesn't necessarily mean you can get spent.

But I think

That has not changed over a number of years, just in terms of the cost of construction materials, the actual value has gone down.

It was pretty clear in talking with the school board that that was like high impact sorts of projects and really made a lot of difference.

I hope we can try to do that.

But so is mine, so thank you.

But I just want to reiterate that we got a great presentation last week about a lot of the not transit projects for transportation.

We got a great presentation last week from our transportation team about a lot of projects that we all felt pretty good about, but there wasn't

A clear line item for that in the CIP, and I know a lot of those projects haven't been costed out yet, so we don't know what that necessarily is going to look like.

But in terms of setting funds aside to build some reserves, so when those projects are ready to go, we're able to knock them out.

That's correct.

So you won't, and the reason for that is you don't actually get the budget until March 4th.

So the work sessions are after that, but I'll just pop these dates up real quick.

Oops.

And I guess it'll be, you know, touch and go, and I know nobody wants more

Yeah, so I have thought about that.

We have an open work session right now on your regular agenda on the 18th.

I didn't fill that with anyone else yet.

at the four o'clock for the February 18th meeting.

I would have ordinarily tried to fill that, but I've decided to kind of leave that open and it might just be a moment in case we need to talk.

So I left that and for the public to benefit from hearing any further conversations that we may need to have.

So I'll leave that

particular session open.

And then we already operate with the notion that you could always get called into that last Tuesday of the month.

I hope y'all are still reserving that tentatively, because we've operated from if there was a need for another gathering, then I would give Miss Thomas about coordinating the use of that time.

But we all hope to not need to use it unless you deem it appropriate.

I would say schools transportation and I believe our federal housing population is a matter of concern too.

But other than that, like everyone else, I'm very curious to see, you know, the FY26 as we just get additional information on how those projections change.

And I guess it doesn't impact balancing this budget, but I'm

Just worried about what planning may be necessary for things we assumed were funded, not through ARPA and CARES, but Inflation Reduction Act and Bipartisan Infrastructure Law.

I think that's going to potentially just change a lot of longer term plans we had.

And then just CIP feedback, just because there's many people here I know, like you said, nobody has said no to it, but I am definitely interested in the

Oschrin.

save as much of our surplus as we can.

And if it goes into the CIP contingency, I'm fine with that.

But if there's some mechanism to try to reserve funding for the purpose of preserving some of our last low income housing tax credit properties that could go up for sale and lose their affordability, that would be important along with, I still think, one of our top priorities this

year has to be trying to fund a year-round permanent homeless shelter.

Because I think even just looking at the changes that are likely to come through HUD, I think that need is only going to get even greater over the coming years.

You have some money in the CIP for the homeless shelter, right?

No, not yet.

That was a recommendation, remember?

One more follow-up, Counselor Snook.

So the general fund total personnel budget is about $78.7 million of the 5.4 that represents about a 6.8% increase.

So the thing that is driving up

from the two to 3% that I was talking about is that this was year one of the Teamsters contract, which placed them in a step.

So they're going to get, you know, that placement is a little higher than the percentages of the annual increase in the contract.

Thank you.

So if there's no other comments by the council at this time, this is a work session, but we also allow for public comment.

You don't like it up here?

Come on.

Thanks for joining us.

Yeah.

So if anyone from the public would like to speak, you can come up.

Thank you.

Heard the background.

So.

So when you get three, three minutes.

Yes.

And I need to turn this on.

Yes, I'll wait till then.

Do you need a copy?

Thank you so much, Mr. Mayor and members of City Council.

Mr. Sanders and Ms.

Hamill, I appreciate the hard decisions you're having to make and I appreciate the opportunity to speak with you.

My name is Lisa Wittmore, I'm the executive director of the Rivanna Conservation Alliance and we're a nonprofit organization that's been working in the community for 35 years to protect the Rivanna River.

Like so many community members you have heard from this week,

I'm here tonight to encourage you to allocate $250,000 of funding that is needed to move the Riverview Restoration Project forward to implementation.

I trust that the outpouring of support you've received has made the case for how important Riverview Park and the Rivanna River are to our community.

So I'm going to focus more on the project itself.

I will also point out that our project engineer is here.

If you have any technical questions about the restoration.

And I'd like to highlight before I start that we have been working towards this project in partnership with the city.

since about 2021.

So many years we've been working on this.

We've completed a lot of different technical analyses to ensure the project is feasible and will be effective.

And we've also collected input from hundreds of city residents to ensure that the community wants this project to happen and to incorporate their ideas and desires into its design.

So this has been a very well thought through project.

So using the fact sheet that we've just handed out and you can

get all the details later.

But there are seven main components of the project that we're going to be pursuing.

The first is to repair the park's deeply eroded riverbanks by regrading, stabilizing, and replanting more than 900 linear feet of riverbank in the heart of the park.

Second, the project will fill in and stabilize a dangerously eroding stormwater channel that's threatening sewer lines in the park and polluting the river.

The project will bring the view back to Riverview, because you can't see it right now, by creating a low slope amphitheater-like area, an accessible overlook trail, and an overlooked berm.

The project will add four new river access areas, including a separate boat launch.

It will add two rock veins in the river to reduce the erosion pressure on the newly restored banks.

It will replant hundreds of native trees and wildflower meadows.

And the project will add new trails and protect the Rivanna Trail by moving it over the sewer line easement.

So this project will transform Riverview Park into exactly the kind of vibrant riverfront area that is in the city adopted urban Rivanna River corridor plan.

This is exactly what that plan envisions.

And the best part is that because we have been raising most of the funding, more than 80% of the funding will come from other sources.

The city gets all of the benefits for really investing a small portion of the whole project cost.

I hope that you will act now to make this project and make it happen this year, make it a reality.

Thank you.

Good evening.

I'm Peter Krebs from the Piedmont Environmental Council, also a city resident.

I wanted to just come in and really quickly express the Piedmont Environmental Council's support for what Lisa said and what many other community partners have

Been here and communicated with you about Lisa told you about the sort of broadness of the project and Kipp is here for the technical questions.

I wanted to just put a sort of fine point on what Lisa talked about, maybe give a little bit of a human face.

So right now, the Rivanna River is really not accessible to the public.

This is something that we have to work on broadly.

We're going to be talking more about this with the Parks Master Plan.

But here we have a sort of tactical situation.

It's a really dire situation where the river bank is so steep it's not accessible at all.

In fact, one time I was paddling down the river and I saw there was a family up on the river bank

and one of the family members lured themselves down using the tree roots and they found themselves stuck in the river.

They couldn't get out because the bank was so eroded, it's clay, it's slippery.

This project is going to give city residents something that they do not currently have, which is safe, walk right up to the river, tip your toe in it, put your boat in it, etc.

Really,

The promise of Riverview Park is not being met at all until this improvement happens.

A couple of other just notes about it, the question about whether this is appropriately a parks project, I'm not sure, but I will say that because of where this project is situated, it doesn't fill the whole park.

but it implicates the rest of the park.

So I do think that it makes a lot of sense to work closely with the Parks Department.

And as I was going to put my own campaign together, the way I would describe it is to give the Parks Department the resources they need to get this project done.

Lisa's given a specific number.

I defer to you all.

Just a couple of other things that I think are sort of

from Fiscal Stewardship Important is that this is a project that is not going to incur future costs.

It's not going to add staff or program costs.

And in fact, I think it's actually going to lower your future maintenance costs by making the bank more sustainable.

Awesome project.

Hope you guys fund it.

Thank you, Peter.

Good evening, counselors.

Thank you all for being here.

It's so clear to sit and watch this process that you all don't have to do the right thing.

You all have to do so many right things.

It's hard for the mind to comprehend.

So my name is Gabe Silver.

I'm the co-owner of the Rivanna River Company, also set on the tourism board for four years.

And I wanted to speak to that aspect of this project, the Rivanna River

as a corridor in all jurisdictions, primarily out in Charlottesville, is a primary draw to the area.

And when there's fiscal uncertainty facing us, I think one thing that's always going to be important in this area is tourism dollars, almost a billion dollars a year coming to this area, 400 million to the city.

We have a

outside the

there's a growing rich playground so I think there's definitely environmental sustainability reasons for doing this project here at Riverview and there's all sorts of other good reasons but it will be an asset that continues to build up this area for quality of life and as a destination and we see that in our business all the time and when we see it as tourism professionals making it

Hi, my name is Margaret and I'm just a resident from around here, but I'm very involved in the native plant movement, which I think you guys probably know a little bit about.

And you were talking about Charlottesville punching above its weight.

Here's yet another opportunity for you to do that by way of a project like this.

You know, I think we've all heard these dire reports from UN and other agencies about how there's the insect apocalypse and

a lot of extinction events happening and projects like this are a wonderful way to counteract that in a way that's not just a drop in a bucket because of the huge symbolic value of a project like this not only symbolic but actual because all the people getting into canoes are going to recognize what's happening and

I am very impressed with the work that you all are doing.

I've only been exposed to this sort of thing very little by being on the board of my condo where I used to live and we spent so much money on landscaping and it was just money down the drain every single year.

So projects like this that can help restore something and

You know, not just be something that causes you to keep having to mow the lawn and keep having to do all these things.

I'm sorry, I'm not being very articulate the way these wonderful people were, and the way all of you are, but I think it's probably correct that it will save you money in the end, not just because other people are contributing the money, but just because the more we can adopt these kinds of

returns to the natural state of affairs, the less we can keep spending money on things like mowing lawns and things like that, like the native trees that go in here.

You won't have to keep hiring contractors to get rid of the invasives, because if you can, re-establish a balance.

I'm sorry, I'm not very good at this sort of thing, but I feel very strongly about this, and I'm sure it's a wonderful idea, but I know you have lots of important priorities, but I hope you can find a way to fund this one.

Thank you for all the work that you're doing.

My name is David Smith and I'm a longtime volunteer for the Rivanna Conservation Alliance, particularly in their benthic macroinvertebrate sampling program.

One of the most important parts from my environmental perspective, I'm a geologist by training of this project is to stabilize the bank and reduce the erosion.

We take samples at 50 locations all throughout the watershed.

and sediment dispersion in the water is one of the biggest problems for affecting habitat of the critters that we create.

So this project would go a long way in helping to decrease sedimentation into the river and help the macroinvertebrates and the water life habitat.

So again, thank you for what you're doing.

Thank you.

Just a very brief comment.

I'm Jim Knicks.

I'm on the board of the Rivanna Conservation Alliance.

You know, we are very fortunate in Charlottesville.

We have a wonderful asset, this beautiful river that goes by the city, but it's underutilized primarily because access is so limited.

This park is the key access point for our citizens and visitors.

and it's really seriously degraded.

This amazing project will restore it and make it better than it ever was and it will be useful for all the citizens of Charlottesville and the county and all the visitors to the area.

So I really encourage you to act favorably on this proposal for $250,000.

Thank you.

Hello, my name is Layla Balber, and I'm a resident, longtime resident of Charlottesville.

I've been here since I was probably around five years old, so around 2011.

So I'm a student, I'm a first year at UVA right now, and I just kind of wanted to provide a youth perspective on this project and how personally valuable it is to me, but also other people my age.

Growing up in Charlottesville, I remember I have very fond memories of going to Riverview with my family, taking bike rides there, you know, swimming in the river.

And it was not only me, like it's a very popular destination.

I see kids, they're my age, they're all the time.

and honestly people of all ages.

And so it's a really beautiful park.

Again, lots of beautiful native plants and flowers and it just, you know, makes you really happy when you just kind of go around and see all of that.

I also think it's really important in this day and age especially for people of my generation with the rise of social media and getting kind of sucked into our screens and seeing all this negativity online

and just kind of becoming destabilized is possessed from things that are actually happening in the world.

I found going out to a public space in Charlottesville with nature access to be really rewarding, really important for me to kind of ground myself and I think a lot of people my age

need that at an increasing rate.

So yeah, I just kind of wanted to provide my like personal perspective and of, you know, my peers as well, you know, growing up in Charlottesville.

Thank you.

Thank you.

Anyone else like to speak?

I just like to chime in is that, you know, I think that you guys have been doing great through the conservation alliance for many years.

Ironically, I got you a report that we get periodically and I had set up some time to meet with Lisa and that was before this came up on the radar.

We haven't, you know, met yet, but I think this project looks good.

I know that I've been wanting Charlottesville to do more

Greenville,

bringing the Rivanna closer to town, if you will.

So we're just starting this process.

We hear you, and we're going to do what we can.

So thank you all so much for coming out.

And I think that it's not the top five of the emails that we've gotten for different projects, but you're getting up there.

We hear you.

Yes, yes, yes.

Well, it's probably number one for positive emails, you know, numbers.

Yeah, we'll keep cracking.

Get it done.

Is that motion for adjournment?

So moved.

Second?

Second.

Second.

All in favor say yes.

Aye.

Opposed?

Aye.

Thank you.