Community Budget Forum and FY27 City Budget Public Hearing   3/19/2026

I call the Charlottesville City Council Special Meeting to order for March 19th, 2026.

I call the Charlottesville City Council Meeting Special City Council Meeting to order for March 19th, 2026.

Councilor Flasher?

Here.

Vice Mayor Oschrin?

Here.

Here.

This is an overview of the budget and we're taking public input for this.

So what I will do now is that I will open the public hearing speaker for up to three minutes to speak on matters pertaining to the FY 27 city budget.

Just one for the time being.

OK, this is separate from.

I thought that was on the tax increase.

But anyway, OK.

It's on everything.

Yeah, yeah.

Well, I can speak.

I still was writing this up, just like they say it was coming later.

But do I need to go somewhere?

Right there to the podium, sir.

I'm sure what you have is, is fine.

I'm Jim Warlick on Bizzle Street, and I'm a small landlord on a May 8th property.

Mostly these are detached homes in Belmont built in the 1960s.

That's the end of my prepared marks.

Three of these units I manage, I tend to try to keep my rents a little below market and I have some tenants that really can't afford much more than that.

We've already scraped by, you know, I have one unit that the effective property tax

21 and 24, 25 went up 74%, $1100 a year.

We continue to seem to increase the cost of living here much higher, maybe double that of inflation.

That may not be exactly accurate, but struggling to keep these people in their homes.

And certainly the tax has a lot to do with that.

and also generally concerned, somewhat directly affected by the city, somewhat indirectly.

But you understand one of these properties, by the way, is $450 below market.

But if you were to succeed with Richmond to pass rent controls, I would immediately have to raise all of these rents to market rate because quite often rent controls mean I have a cap to how much I can raise rents

once I have a turnover.

And right now I keep the rates below market value for good tenants that are sometimes there a couple of decades with the expectation that I'll bring it up to market once they leave.

Under a lot of the rent control policies, that policy is impossible.

You have to keep it up so that you don't get caught with the gap in between tenants.

I forgot the other things I was going to bring up, but I'd like to see the city stay within the inflationary increase.

Thank you for your efforts to help us with affordable housing too, Mr. Moore.

Thank you.

Would anyone else like to speak on the budget?

We still have a few more opportunities if you don't get it, or want to speak tonight.

Any more?

I will close the public hearing.

And so I think that what we're going to do now, Sam, is I think you had some other matter.

So Ms. Hamel is going to pull up what we have worked on to produce as alternatives to the tax increase as requested by council and the prior budget work session.

We have spent considerable time looking at options.

The options are not perfect, as I indicated to you at that time that they probably would not be because the option of really finding what would have, I guess there's no pursuit of perfect, what might've been less negative in the impacts would have been to have tried to cut more before we balanced the budget to bring that presentation to you at the beginning of March.

So what we have available, and she's going to walk you through that, and then we can do any conversations on your interests in pursuing those alternatives or not.

Thank you.

So this is just a summary slide you've seen a couple times.

Just to look at the total general fund budget, we're at just over $279.6 million.

The budget currently as proposed does include the two-cent real estate tax, moving it from 98 cents to a dollar, which provides us with just under $2.5 million in new revenue.

And overall, that's $14.4 million, so 5.43% over 26.

As you know, most of the new revenue for the tax increase was put in the budget to offset the deeper transit investments, the increased match for the schools, and also the impacts of collective bargaining.

So since we last

proposed the budget and since we last met, our revenue team has reconvened as we said we would and we have revisited the projections for the revenue for 27.

And so the revenues that you see here, we are comfortable making adjustments to those, some down, some up, but notably you'll see that sales tax is up

BPOL, which was just coming in.

We were able to adjust based on what we've received there.

And then a few other things which are listed here to include utility tax, lodging tax, a slight increase, short-term rental, and waste disposal fees and also interest.

And so all of those combined, that is an additional million, just over a million dollars that we would be able to put in the budget to help offset some of the expenditure or to decrease part of the tax increase.

Do we have to say that, put it back in, or it automatically goes back in?

Do we have to vote on that?

So as promised, we went back to look at some of the things, the levers that we could pull in order to pull the tax increase out and what that might look like.

And so this slide here attempts to do just that.

So first, if we just look at the box over on the right hand side of the screen,

Knowing that the two cents gives us the $2.4 million, and with the revenue adjustment, we're now short just under $1.5 million.

And so in making, how could we make that up?

Again, revenue adjustments, that's the one we just went over.

There is a new scenario for the CAT investment, which I have a slide, we'll walk you through that.

which could save $369,000.

We have a citywide reserve account.

We would propose that that would be wiped out entirely and we would handle that account like we do the council's strategic initiatives and that we would carry over anything that remains unspent from this year we would carry over to next year.

One other option would be to move the schools back to the original $2 million that we had originally built the budget around, thus reducing their increase by $569,000.

And then also the council strategic initiatives.

If you recall, we put in just over, I think it was $131,000.

We could reduce that by $109,000.

The revised revenues you showed us on the previous slide, when were those revised?

As late as today.

Okay.

Yeah.

Okay.

There's always a revenue update before we adopt.

So that's why we've been, that's why he's smiling.

So I can describe what it has to do.

Business license was due March 1st.

So those are coming in.

And first we're working on the personal property book.

right now.

That won't be ready until after the budget is passed.

So those numbers are just kind of fresh when we start this process.

We've got almost nothing to go on on some of that stuff.

I think we've got more to go on now.

And sales and lodging tax.

Okay.

Yep.

Or where we were when we proposed the budget.

Yes.

Yeah.

and a little arm twisting as Todd just described.

Thank you, Todd.

Started off at 6.4, came back to 2.9.

Well, they would be short.

I did pose that question to the superintendent.

He said that would be likely, but that's an option because they too could do what we are doing is in these scenarios, we are creating still a structural imbalance because we're not covering the expenditure live.

Can you talk a little bit more about the Citywide Reserve?

It is, so part of what comes out of there are the payment for performance agreements.

That still would be intact.

That's about, excuse me, about $250,000.

The other portion is just a reserve to pay for things that come up during the year that are not necessarily budgeted, emergencies that come up during the year.

You know, we've used this also for things like our

One-time payment for CARTA.

We used it for legal fees that we had to incur when there was a lot of vacancies in the city attorney's office.

And what do we usually keep it at?

It's been all over the place to be honest.

We, you know, we've been anywhere from 250 to 500.

This would, you know, right now it's at 415, but there will be money we is likely right now it's about 500,000 in 26.

And I'm not anticipating we're going to spend all that knock on wood.

And so hopefully we would have that to carry over to 27.

Okay, so if this 415 here, if we kept it in the budget, it would turn that total reserve into 915?

Right, between now and July.

Yes.

Got it, got it.

I mean, that's the question.

Is it available somewhere else depending on what other things are going on?

As projects are moving, the CIP contingency becomes less available for that.

Well, but I would say there are things that this account is particularly at the discretion of the city manager.

It doesn't, whereas the city wide contingency rises to a level that we have to go to council.

So, you know, there are things that happen during the year where we need the extra money.

So,

It's not about funding it.

What we're proposing is that we just would not put any additional funds into the account.

Is what would carry over, yeah.

It has the potential to come from a non-recurring bucket

It would also be just to make sure that you appreciate the flexibility that is needed.

Some of the smaller offices don't have any fluff in their budget at all.

It's extremely tight.

So if they incur something, then they would come to the state manager's office looking for relief.

And if we don't

Have that anywhere else.

I'm just thinking about It's not handicapping us and that we wouldn't have anything.

We could adjust our script must to refill it from there instead of Or I may just have to say no.

But that's kind of the flexible one here.

Okay.

And then we'll learn about CAT on the next slide.

All right.

So on your left, you see the original scenario of what the proposal was for the upcoming year for CAT, which was to add 10 drivers, two bus technicians, an operations supervisor, inventory specialist and operations manager.

So looking at options that would reduce the cost of this CAT expansion for next year, we're looking at, I think one of the primary elements of this would be to have five drivers that start in July and then five drivers that start in January.

So that right there cuts your annual salary in half.

Now, it's important to note that that does create what

One of the things we're working to avoid is a structural imbalance because next year, each of those five drivers that were hired in January, we will need to cover a full year's salary, right?

So there's a gap there that we have created.

And then same thing with the bus technicians, it's splitting them.

So one starts at the beginning of the year and the other starts at the second half of the year.

And then we've cut the two operations support positions, supervisor and manager, we would kick to next year.

And then the inventory specialist would be a January hire.

It just defers those expenses.

And I probably, Garland would be asking me to remind everyone that those supervisory positions are ones that we have identified that we need now, even in our current without the expansion.

But we do, in terms of prioritizing these positions, we did prioritize them as something that we could handle them arriving in FY28.

Those are positions that become essential, particularly when there's any form of a problem.

If a bus is involved in a crash, the supervisor is the one that goes out and is actually assessing and managing that on site, which means we now don't have the supervisor at dispatch managing the overall operation.

So we've been feeling that challenge already.

Well, you know, that doesn't happen that often, but it happens.

It could be a sick driver who doesn't have to do a crash.

It's just taking out a service.

So on this, I'll add the note of, again, this still creates a structural imbalance.

It is more of a measured imbalance.

It's kicking the can down the road.

We will have to realize a higher expense in the FY28 year before we make any decisions about adding any additional staff, which is the plan that in FY28, we would continue investing in that.

to deliver the priority that you requested, and that is better service.

What this also does is it does not sacrifice the improvements that were promoted with this original scenario.

You still get the enhanced service by doing it this way.

I can't remember who was city manager at the time this happened, but I know in the first year or two of being on city council, there was a situation where the city had committed to funding positions within the fire department that were not actually covered in our general fund.

So I think what you're referring to are the 15 positions that we covered through a SAFER grant, which is they cover those positions for three years.

and then we have to absorb those positions in the, I think it's either two years and we absorb in the third year or it's three years and we absorb in the fourth.

And so what that ends up being is sort of like a big number we have to make up all at once.

But to offset that, we started setting some money aside a little bit each year.

and it was because of the time period that we could do that.

And then a broader question, but also one of the things the first couple of years ended up being a big budget conversation was the city had for a few years raised wages without a coherent

wage scale in different departments.

And then we ended up having to respond to that with the wage and compensation study because we were seeing that we couldn't fill mid-level in management positions.

That was like $10 million when we adjusted for that kind of... That was the combination of applying, class and comp, and three collective bargaining contracts at the same time.

So you remember Ms. Hamblin talking about a $9 million upfront payment.

We just recently talked about that too, because I was making sure I had it straight in my head.

That was good financial practice on our part because we were

Right.

And we ended up, after a couple of years, we just ended up having

to budget for increase in the general fund of each of those $10 million.

Every year after that, we knew that there was a planned increase because the contract dictates that.

And then having applied class and comp, which we did, I guess, maybe the first year or so after, we had a series of reclassifications just to get everything right.

But all of those were measured.

We were able to plan for those and to implement those.

So it wasn't as if it created grief.

It was just change.

Right, and it sounds like the response was a couple years of planning and anticipating that in future budgets there would be an increase as big as 10 million dollars and that thinking about all the other priorities they would override those.

And really shouldn't.

That's the heartburn of anything that is establishing a structural imbalance.

For me, my responsibility to you is to tell it.

Whether you like it or not, just tell you so at least you can appreciate the understanding of it.

Any creation of a structural imbalance is a risk.

The question is how much of a risk are you willing to take?

When you create the imbalance this year and solve it this way, next year you're saying that your reassessment should be higher.

to start with, and you can't guarantee that.

You're saying that your sales taxes will produce even more money than what we're projecting at this time.

You're saying that Todd is going to find every dollar that he possibly can, and he can't guarantee that.

So in making the decision today, which is yours to make and you have to make, because we have to have a balanced budget, you're risking that something could be wrong later

And then you're forced to address it by planning and doing the things that you're supposed to do.

We're always looking for, can we do that.

And the conversation that has occurred about surplus was surplus is one time what we're talking about is recurring

We can solve the problem again with a one time, but we're still kicking the can down the road.

And that is where it becomes the challenge of responsible management, which is what we have to try to apply at all times, because we have folks coming in to rate us for our credit ratings.

We have to be able to explain to them that we're doing the most judicious work and disciplined work to make sure that they can trust investing in us the way that they are to make it cheap for us to then do the bigger projects using

and what we use as bonds.

So it all comes back to the same scenario that avoid the imbalance if you can, limit any imbalance if you will, and make it appear less impactful to your sound business practice so that we don't have to explain it.

So we've already put the ad in the paper.

The official hearing on the tax rate is April 6th and that will publish, I believe it's March 26th.

And we advertise two cents.

So we can't go beyond two cents, but you can go down to zero if you want.

And so we have a work session next Thursday, which will be on the CIP.

The following Thursday will be the sort of a wrap up, if you will.

I don't think we have to make a decision tonight, or even before.

You still have time to make that decision.

Like Ms. Hammel said, the advertising of the rate is because we're required to notify the public that there's a chance that the rate will change.

It does not hold you to that, and again, you did not make that decision.

We are looking forward, at this moment, it would be helpful to know what you feel about this

Are there any non-negotiables that have to come off the list because you're helping us clear things up if we were to take anything off because your position is, no, we're not going to do this.

No, we're not going to do this.

So that would actually be indicating that you're going to apply.

You're going to levy some tax, maybe not the whole two cents.

Or if there are other things that have been a part of your conversation since we started this budget process that you want to talk about that could have an impact.

And I guess from a zero sum game, if you were not to make any adjustments on the expenditure side, you know, based on the new revenue, you can almost eliminate one penny without doing anything.

I mean, you'll have to make up about, you know, just under 200,000.

Yeah, I was just looking at the penny, I was using your calculator to do the penny when it was in here, you know, 1.2 and then trying to see where the 200,000

I have a question though as well.

With the strategic initiatives, the 109.95 means that the FY 27 total amount would be 398.

It would be 500 less than that.

and about the CAT expansion.

So just so I'm lining up my calendar year with fiscal year.

That means the positions would become available July 1.

So not one punch, which isn't guaranteed anyway.

That's the reason why this is a scenario that works is because giving CAT the ability to hire 10 drivers does not mean that 10 drivers materialize in one recruitment.

Right.

I mean, they're all, they're always having, um, recruitment classes, but they're also having to replace drivers that they've lost.

There's always a couple here and there.

It is much better than it used to be.

And then there's one technician that would be able to hire July 1 of 26.

Okay.

Right.

Right.

So in reality, we might see, we probably would not see 15 minutes service on our top three by the end of 2026 if we only found the five that we funded.

And it would be balanced by the losses that would occur as well, the natural losses.

So yeah, it would be, I mean, we don't know that yet.

So that's why this is a scenario that if this is the route, then we go back and get the clarity on it, but it would be a rolling improvement is probably the best way to say it.

Okay, and then just clarifying for the schools, if we didn't do the penny, we did zero tax increase.

Go back to the schools, the 569.

I was trying to find their slides again.

Is that the number that was on the additional?

The 569 is just the difference in what they ended up asking and what was built into the budget.

Because I give Ms. Hammel a budget number for her to begin framing everything around with all the other things that come in.

And the number that I settled on was two.

Got it.

OK.

There's no direct tie to anything they present.

I don't go there because I try to stay as apolitical as I possibly can.

Okay, super.

Thank you.

So I have, I do not yet have an opinion on what, I like the penny increase

No, you have to do more than that because you have a $2.4 million gap.

Right, but there's a billion from the revised revenue.

Then there's the one penny.

So what's left after that?

$230,000.

That's correct.

Leftover, which means we don't use it.

That's why it's on the list.

To be honest, that's why it's on the list because you carried over last year.

We had no fun last year.

Right.

You had no fun.

Yeah.

So even in some numbers I've been kicking around, like if we do 150 over in addition to BCF and then a

50,000 arts fund that would still- Even if we didn't add anything to our- If we didn't add anything, we'd still have 200,000 left, yeah.

Yeah.

I'm not interested in, or sorry, I appreciate finding that extra mill.

That's helpful.

Thank you.

I'm not that interested in the, I appreciate coming up with the CAT adjustment scenario to try and make it fit.

I would prefer not to do that since it just kind of kicks the can down the road a little bit.

And if we can find more than five drivers sooner, that sounds like we're working a little

Better, more quickly.

Sorry, it sounds like our transit will be working a little better, more quickly.

I'm also not that keen on the school reduction, but I am open to the citywide reserve, the council strategic initiative reserve or adjustment.

And the penny, instead of the two pennies, if that puts us in a bind that we're not quite sure of yet, as we get more details, then

You can update that adjustment on the way.

I guess I'm not like 100% ready for that scenario, but I'm liking it.

Michael?

Okay.

I mean, I would say I'm open to increasing the tax in either one or two cents.

You know, I would prefer trying to stick to the original expansion adjustment scenario for CAT just because

We're committing ourselves to that cost anyway.

And it's not big enough that it, you know, we couldn't figure it out, but I don't like in the past when we've set ourselves up with kind of fiscal cliffs.

And that's kind of where I'm at.

I think

Other things you suggested I'm open to, you know, seeing how they play out.

If we do go back to schools, I anticipate that there will be a lot of discussion.

So I don't think we can assume where that number will land on if we even went in that direction.

There's a lot of uncertainty there.

And yeah, but I would prefer if we're not cutting funding to try to funding it with

increases in the tax rate rather than one-time funds because I just think eventually we're going to have to figure out a way to cover it and then the other thing I'm again still thinking about is will we be in a year or two from now in a situation that was similar to where we ended up with the wage and compensation study where we deferred a very significant increase in our operational expenditures and

Thank you.

So I think I'm in the same boat with Jen and Natalie where we are comfortable with the one cent and using the new revenue monies, projections,

So I think that that is, it's definitely won't be over two, you know, so we're safe with that.

And so I appreciate, you know, we'll hear from Lloyd when he comes back, but I appreciate

the work that you've done to kind of bring back, because we've been hearing from residents about the cost of living, the tax increase.

And this, I believe, is a good, won't satisfy everyone, but I think it's a good compromise if we decide to go in this direction.

But I think that that's where I am right now with this information.

And we, it was late at night, you said nine o'clock, Todd?

Yes, sir.

Feel good about it?

I mean, we're not going to find it.

I can't find it.

No more coming.

So, yeah, just for our brand of 228,639, that's the one penny difference we would have to make up, which

You could do half of Citywide and all of Strategic.

Yeah.

So, any other comments from Council on this?

Yeah.

Tomorrow morning, the mayor of Broughnuck is in town for the Book Festival.

I'm having

Would the payback that we did for the taxes that we signed up on Monday night for the business that it paid in the city and not the county?

It actually comes right out of the revenue.

Got it.

Can we use our strategic initiatives fund to fund a position instead of keeping it on reserve?

Permanent reduction.

Yeah, yeah.

So it would be enough to cover it because you're not just paying the salary, salary plus benefits.

I would discourage you from considering.

OK.

So we had a public hearing, but we

Since it's early, if anyone else from the public wanted to speak before we end, I would entertain that.

Great.

Sorry.

Come on.

Come on.

All right.

Good evening, everybody.

Appreciate the opportunity to speak with you.

Chris Meyer, 124, Oklahoma 4.

I am speaking as an individual resident and not in our role as a school board member.

Let me make that clear.

I appreciate the conversations.

You're all having not easy conversations.

And really evaluating all the different policy cost centers, you'd have expenses and really thinking about it.

Think how you do this in an equitable manner.

Longer term in a

I do want us to prioritize, I would say, tax revenues that are progressive and not regressive.

How do we tax, as I think Mr. Sanders pointed out in the budget presentation a couple weeks ago, we kind of hollowed out the middle class here in Charlottesville, but we do have a lot of wealth.

We don't have a lot of tax levers, but how do we basically tax that wealth?

And that's probably through real property taxes and personal property taxes.

But are there ways to, and I think we've done in the past, to subsidize those folks who through

and Commissioner Revenues, tax subsidies, et cetera, for low income and fixed income folks, elderly folks.

And there are other ways, again, that we can be creative to, again, subsidize those with the least means in our community.

At the same time, I really do want to see how do we raise that higher level number from other sources other than our real property taxes and our tax rates?

Have we really chased down a pilot with UVA?

UVA tosses us scraps, and those scraps, I think, we found out.

with Oak Lawn, for example, are almost kind of like dead ends.

And then we end up spending more time doing due diligence on these things and we're subsidizing them also for that they're actually worth.

How do we take advantage of those UVA students, their visitors more, their sales tax, their lodging taxes, their meals taxes?

And the only way I see that is by hosting more student housing in our community.

There was a hearing on a building this afternoon that would have I think 800 beds or something crazy like that.

That's 800 students that are also paying sales tax, meals tax, you know, probably visiting this downtown a little bit more, etc.

How do we get more buildings like that?

because that's I think going to be we're going to need those diversified sources of revenue here and to alleviate the pressures on the real property tax base here and stop, I would say, really impacting those middle class folks who are being driven out because of

housing costs, et cetera.

Finally, I will just say, hey, I'm looking at that too.

How do we accelerate?

And again, you put in this great new zoning code.

How do we get more housing built quicker?

And especially that for those younger, middle, upper starter families that aren't going to have a lot of costs associated with them, that we don't necessarily have to educate their children quite yet.

So thank you for your time.

I appreciate all your effort and wish you luck for the rest of your budget season.

Thank you.

Anyone else like to speak?

You can email us.

I'd like to speak.

Can I go up there or can I speak from here?

Please, sir.

We can hear you.

How's everybody doing today?

I was here last week and I know we got 23% less this year.

I just wanted to speak on the importance that we have on our community and the youth that we're working with.

I have a letter that I can email everybody.

It was a student, a misunderstood student, who was not

a real strong story to tell.

My program is Wartime Fitness Warriors.

We are a nonprofit here in Charlottesville, and we basically deal with a lot of misunderstood youth and trying to develop confidence and self-love and trying to, you know,

You know, help them out with, you know what I'm saying, life in general.

So I know I got like less than two minutes, so I'm just going to read just the bottom part.

And what they basically saying is, since this youth had joined our program for two years, I got my contacts on.

Can't really see.

His grades has been going up.

His social life has been a lot better.

He's been getting along with a lot of students and they're trying to get him back in school because he wasn't allowed in school for like the last two years.

He was in a situation where his dad was trying to teach him how to build bombs and hurt

other kids in the school and they have found out when his dad passed away the mother brought him to us and since he joined our program he's been a lot more diverse he's been a lot more confident and he turned his hate into love so now he got a whole bunch of friends that he's joined with Wartime Fitness where he was actually trying to build bombs to hurt them

So now, you know, since joining our program, he's actually helping the kids that he was trained to hurt.

And this is just one of the many stories that we have in our programs where youth turning themselves around and also got another story about a young, another young kid who grades was 10%, 20%.

And since joining our program, his grades went up to now he's getting 80% a C's in his class.

And, you know, like I said, this is just one of many stories that we have.

Thank you.

Anyone else like to speak?

If not, can I get a motion to adjourn, please?

All in favor, please say yes.