City Council Special Meeting - FY26 Budget   4/14/2025

Thanks for watching!

I call the April 14, 2025 Charlottesville City Council Special Meeting to order.

Ms.

Councilor Oschrin?

Here.

Here.

Is there a motion to approve or amend the agenda?

Can we vote?

This meeting has one item of business.

Ordinance adopting the budget and appropriating funds for the city of Charlottesville, Virginia for the fiscal year ending June 30, 2026.

And this is the second reading.

Good evening, mayor, councilors, members of the public.

I just want to walk you through a brief, let me get my notes right, a brief journey from last month to this month.

That slide is correct.

That is when I was last before you presenting to you the proposed FY26 budget, which was March 4th.

Seems like an eternity.

Things have changed a little bit, as it always does, from the proposed date to your adoption date.

So I just want to review some of the things that have come up.

And Ms.

Hammel's going to go into a little more detail about the last minute things that kind of came up in the past two weeks, just to make sure we're all on the same page.

What we want to do is just kind of reflect on the idea that you've unpacked the budget in this process.

We proposed the budget to you in early March and then we went through parts of the general fund budget to include CIP, agency contributions, and various aspects of the budget.

to make sure that you were clear as to what was being proposed.

If you had questions, we could answer those questions and also to highlight what changes were occurring in the marketplace as well as what we were finding as a part of doing the work of running this city organization.

So what I'll point out to you just in basic highlights is that the revenue expenditure at this time has now risen to $265,248,446.

That's up from 264, a little over $264 million at the time of the original presentation.

That growth was almost $1 million, which now moves our growth over the prior year to 5.28%, which previously was just under 5%.

Remind you that you did not change the tax rates.

I proposed the budget without a change to the tax rates.

And while assessments changed, therefore individuals paid more, we did not ask for an additional amount to that.

And that was the distinction that was made at the time of the presentation.

So the rates that you see on the screen are the rates that we will carry forward for another year.

Your budget drivers, these are the things that you focus the most attention on, big dollars in some of these categories, big changes that are being made internally as well.

Schools, affordable housing, transportation, and organizational excellence is the term that we're talking about for internalizing stability and strength of this organization.

So breaking down your budget drivers a little bit more, schools, there was $4.9 million annual, that local contribution that was above the formula, which comes in at about three, three and a half million dollars based on the formula that we've been using, but $4.9 million to invest in city schools with an additional 1.4 million per year in capital improvement initiatives and 1.3 million a year in ongoing maintenance and improvements.

Both of these are increases over the prior year.

We're acknowledging that there's $606,000 in increased funding that was allocated to transit that is in addition to fully recognizing the collective bargaining increase, which is absorbing $1.4 million in total costs for this budget year.

We added a transit mechanic to help with operations.

And we are also maintaining fare-free service across the system and absorbing the absence of the flexible federal funds, because those funds are now not available to us as they have been.

So we're continuing to operate our service with the new reality.

In addition, in the transportation section, there's $5.4 million in the new sidewalks program.

We have this spread out across all five CIP years, and that was as presented by our transportation planner, recognizing this was important for a variety of reasons, but the goal was to figure out how we could make this program begin to work, and we have funded it for all five years.

Affordable housing is $12.7 million allocated for investments in FY26 alone.

In the next five years, that will get up to $53 million.

And that $12.7 million does not include $2.5 million that was provided for tax relief programming.

So that is in addition to, along with, you designate it $750,000 a year to support fundamental designations that are all aimed at homelessness interventions.

Those are things that we're just beginning to work on.

That's correct.

OK, thank you.

Organizational excellence, again, is what we talk about internally.

We have recognized our fourth collective bargaining agreement.

No small feat, but we are our public works, utilities,

Public Works, Utilities, Parks and Recreation, and a couple of other employees that are in other departments are being represented by the Teamsters Union, so that's our fourth collective bargaining agreement that we've been able to come to terms with without it going to MPAS or any further obligations.

and that goes live July 1st.

We funded compensation increases for unaffiliated employees as well as our retirees and we continue to modernize our human resources systems processes and procedures all aimed at being able to do a better job for the public who expects that.

So that is my summary of where we are and what we were able to accomplish in the past month which is going through breaking down the budget but ideally just want to give you a chance if there are still any more burning questions

Counselor, are there any questions that we have?

I know we've been meeting two or three times a week sometimes over the last few months.

I'm curious, looking at the council amendment sheet that we were given, there are a few numbers that are

that are in red.

Yes, but I'm going to ask you to hold that for Ms.

OK.

All right.

Yes.

All right.

OK.

Michael?

Yeah, I mean, that's a good question.

I would say to you that I continue to track what's happening.

We are having internal meetings with staff just to try to find out if they're being made aware of anything.

We're meeting with external parties as well.

There's a number of nonprofit organizations who have presented losses that they've incurred as things have not materialized and or grants that they had with the federal government were being terminated immediately.

So they are first trying to recoup what they've spent and hope that they might actually get some continuation.

So that is beginning to build.

We're beginning to see that finally.

The city organization itself has not incurred a loss, but we still continue to monitor just believing that it's just a matter of time.

It's not a matter of if.

It is actually a matter of when.

So where I stand on the surplus at this point is that I am beginning to package the first request for how to use some of those funds.

It is for more emerging and significant matters that we need to make sure of that are aimed at supporting the organization fully.

I'll be bringing that to you within the next two meetings that you will have.

Yeah, I mean just knowing that the community will suffer directly by not having the benefits available, I would imagine that that would create a hardship for us as the local organization, meaning the city.

and that we would need to backfill whatever kind of supports that we can provide and these one-time funds are the place that you go to look for that.

But we also will have staff who will be in jeopardy should there be something significant in the way of cuts and funding because those individuals do that direct work on a daily basis.

So the goal would be to make sure that they could continue to work to help people even though that the federal program may not be available in full.

And just to kind of recap and reiterate some of the principles that I know I've learned throughout the budget process both last year and this year and also just for public who's here present and watching at home.

Good accounting principles are that we don't spend surplus money on recurring expenses.

It's good for one-time funds.

So if there were to be

A project that comes up where we can allocate funding, that's a good thing.

Right.

Yeah, and the goal is to try to help make sure.

It's not a matter of trying to block anything and trying to prevent any spending of dollars.

We will spend the money.

We always have.

This is a very volatile period of time that we're in.

We all know that.

But the reality is that if you're going to spend something that is recurring,

using one time money means that you're just guaranteeing that the money is going to be there when it comes up the next year.

So basically what you would be doing is if you spend surplus dollars today on a recurring expense, you've spent FY 27 money before we've even projected revenues.

And while we believe that the revenues will hold up and actually increase, we can't guarantee that right now.

And then in our last budget work session we went over some details about our transportation priorities including how last year when we

found $600,000 at the end and allocated that towards bus drivers.

That meant that because it was so late in the session, Albemarle County did not contribute a portion of that.

So it was all on the city's shoulders.

Now that's been incorporated into next year's budget and the county's contributing.

So we discussed in our last work session on Thursday how we want to see transportation prioritized in our next fiscal year because this year was still rebuilding year of sorts and we're making, we've gotten reports of, and I know we've gotten some primary source of information from

from Transit Users, but the goal is to get more of the routes on a 30-minute schedule before we drop any specific ones down to a 15-minute schedule.

But there's still a couple of spots open in the drivers that we allocated last year, but we did ask City staff to build in as a priority for next year.

This is something that it's clear we have to prioritize.

There's the demand for it.

And we all kind of agreed that that's something that we want to build in at first.

So right?

Is that what we talked about last Thursday?

Could I tag onto that?

Go ahead.

Yeah, since the mayor and I were actually at the session where many of these fine people were at, was it last Tuesday?

The commitment that the two of us made was to try to get something for this coming year.

the fiscal year that we're working on now which is some sort of amendment or whatever.

There's two votes out of five and we spoke last meeting.

Michael, Councilor Payne made the really good point about well what would we give up because that's what it would take and so we're going to have conversations about that as well as potential you know

Perhaps there's some pieces of this the surplus might could help around the edges with your point, Councilor Oschrin, which is a good one about not spending money on recurring expenses.

So I want people to know that this is not the end.

We heard you last week.

We're working on it.

And what you're hearing now is the sort of public

Outworking of the conversations that need to happen.

This is really sort of, I guess, beside the point.

Well, we're meeting with them in July.

We agreed to that.

Correct.

And I feel confident that although it's not part of this budget we're adopting in a few minutes that we have made it as

Yeah, one of the things, and we just have not had the time, literally, we've had the time to talk with the city manager about this, but looking at other pieces around transit, maybe they're, you know, the

Alternative fuels, maybe that gets delayed or we do something different there to fund this.

But those are things that we're thinking through.

Yeah, what I'd like to say is just to remind everyone we are definitely pushing forward on transit.

It's not an either or.

We're doing it and a whole bunch of other things, as you all have heard me say.

So it's not a matter of no interest or blocking or stopping.

That is not an accurate description of what we're doing.

We are trying to strengthen the system, and we're doing that.

That is evidence through the information that we shared with you in the last presentation that our route performance has improved in multiple ways and ideally we owe it to everyone in this community to make sure that they can have the best transit opportunity that is available so we need to spread that around and we're working to do that.

I think it's important for us to also appreciate the idea that it is a high turnover area that is just the reality, the nature of the work, and that we have 66 positions allocated.

I think we are just too short of being full, all positions filled, and I don't remember the last time we had that.

And I'll share with you that more than likely it won't stay that way very long.

because we do have turnover and that is the reason why we know that there's going to always be an advertisement running to fill driver seats.

It's important for us to do that.

Plus, we also run the public school system transportation as well.

So it's the same pool of people that we're pulling from.

We're working.

We're focusing.

I and my team, this team here, have all been prioritizing for our transit area that our goal is to get better.

One of the biggest priorities for getting better was fixing compensation.

That was what I heard when I first got here.

We were doing very schemey things to make sure it was possible for people to want to be a bus driver.

I think we have overcome that now, that we're actually paying a fair and reasonable wage that we have people who are applying on a regular basis.

That is part of the work of strengthening and stabilizing an organization that has had difficulty in the past.

We continue to focus on that.

I will not stop using those words because that's really what we're doing.

We have demonstrated better performance, which is what I think the measure should be every single year, that we should be able to show that it's getting better.

There were red lines in multiple places two years ago.

They're gone.

That is improvement.

It doesn't necessarily mean that we needed drivers, a bunch of drivers, to make that possible.

Some of it was just internal systems and mechanics of what we needed to change.

So we're doing those things and we're going to continue to do those things.

So we're under the hood working on the vehicle and making sure that it's ready to get out here and do what it needs to do.

And I have a couple of other points to support that we are working on.

We hired a transit planner.

As Michael hopefully pointed out in the work session last Thursday, the federal funding for transportation is one of those things that's in significant limbo.

And so we're anticipating assistance from the feds for various things, especially the alternative fuels is going to

suffer over the next couple of years.

Yeah.

So that's one of those things that we're holding our breath to see what happens with that too.

But we know you've been consistently advocating for

Yes, we hear you.

And just to put it in concrete numbers, just because it is such a clear, obvious focus of attention from the community, as you highlighted, the increase to CAT from last year's budget is over $600,000.

I believe from two budget cycles ago, the increase is about $1.5 million, largely from the collective bargaining and the increases in wages and providing benefits to all drivers, which was not the case before.

in that significant increase and then to go from the current 66 drivers to the demand from the community to get to the over 80.

to get to the 30-minute route.

So that would be, without factoring in, any increased need for additional mechanics that may come along with that, just the drivers.

That would be about $1.2 million a year.

So just for the community, that's the conversation we're going to be continuing is where is there about $1.2 million, if it is anywhere, that can be reallocated for that purpose of drivers.

errors that occurred in our budget cycle for advertising.

Just want to own that.

Buck stops here.

I'm not afraid to own whatever responsibilities I need to.

I just want to dispel the rumors that we were dragged into court to make it possible to fix this.

As soon as we were made aware, there was an internal team working that we had an issue.

We knew that we were going to have to change the dates.

We immediately worked through that, figured it out, and that night, that Friday night upon discovery of the issue, we had a plan.

When our city attorney arrived in court, the plan was already set.

So Judge Rorwell was basically able to conclude this rather quickly, and we did not go kicking and screaming.

I just want to make sure that people understand that.

Mistakes happen.

We apologize for the mistakes.

We made sure that we have checks and balances going forward, and we'll do better.

So, Ms.

Oh, okay.

No, no, it's a good thing.

I just want to thank you for incorporating the sidewalk money into the CIP.

I want to specifically call that out and appreciate that we acknowledge that transit and transportation is not just cars and buses, it's people and all of that.

Good evening.

Thank you, Council.

Just wanted to run through some amendments that are on the budget.

This was a sheet that we worked on last week.

The first column of this sheet are the amendments that were made to the proposed budget.

We talked about all of these last week with the exception of the Tonsilor League that Councilor Snook pointed out.

You all discussed allocating $30,000 from Tonsilor from your strategic

initiatives fund.

We did, when I was actually finalizing, I realized we had not reallocated the dollars that were awarded to Fralin through the VCF process that you all had noted you wanted to reallocate elsewhere.

So we did allocate those to the Tonsil League.

thus only using the 25.8 from your council account.

So again, the first column is all of the adjustments that were made to the budget.

At the first meeting in May, you will get a resolution that will allocate the stuff in the other columns through an appropriation because those are existing budgets and existing dollars.

They're not in this document.

They'll come to you separately.

We've seen this before.

Any questions from anyone?

There's not a hearing?

No.

Can we vote?

All right.

We've got a budget.

Great job, guys.

Yeah, great job.

Thank you all.

So may I get a motion to adjourn?

So moved.

Second.

OK, can we vote?

Thank you all so much.

Thank you.

See you in July at 9.