Albemarle County Board of Supervisors Work Session on FY 2025 Operating and Capital Budget

On March 25, 2024, the Albemarle County Board of Supervisors held a work session to discuss the FY 2025 operating and capital budget. The meeting was called to order at 3:00 PM in Room 241 of the County Office Building. Key topics included the Capital Improvement Program (CIP), debt management, and scenarios for the proposed budget and tax rates. The board reached consensus on several expenditure priorities and revenue options to be refined for the March 27 work session.

Consent Calendar

• Approved the consent agenda, which included scheduling a public hearing to consider an ordinance modifying real estate tax relief for elderly and disabled persons.

Public Comments & Testimony

• No public comments were received during this work session.

Discussion Items

Capital Improvement Program (CIP) – County Government Projects

• Staff presented the recommended CIP for FY25-29, totaling approximately $129 million, with about $34 million allocated for FY25. Key projects included:

  • Courts Facilities Renovation: Additional $6 million needed in FY25 for the second phase.
  • Transportation Leveraging: $30 million over three years for high-priority transportation projects.
  • Northern Convenience Center: $500,000 for design in FY25, construction in FY27 (moved from FY26 to align with other facility openings).
  • Central Library: Design funding in FY27 ($860,000) and construction in FY29 ($9.6 million), contingent on city funding and library partnerships.
  • Biscuit Run Park: $9.2 million in FY25-26 for entrance, trails, athletic fields, and a maintenance facility.
  • Darden Towe Athletic Fields: Phased rebuild over four years, with city cost share at 31%.
  • Urban Park (Pocket Park): $150,000 for design, $1.5 million for construction, pending site selection.
  • Woolen Mills Trailhead: ADA compliance improvements funded in FY25.
  • Fire Rescue Station 11 Renovations: Funded in FY25 to support additional personnel from FEMA Safer grant.
  • Workplace and Facility Renovations: Continued space utilization studies for county buildings.
  • Core Systems Modernization: Funding for IT system upgrades.

• Community Nonprofit Projects:

  • Bennett's Village: $65,000 for an adaptive playground at Penn Park, with city contributing land.
  • Blue Ridge Area Food Bank: Originally requested $165,000, but secured other funding; staff recommended removing from CIP.
  • Earliesville Volunteer Fire Company: $800,000 for station improvements.
  • Seminole Trail Volunteer Fire Company: $230,000 for station improvements.
  • Board consensus: Staff recommended moving Earliesville and Seminole Trail projects from FY27 to FY25 (year three to year one). Supervisors Galloway, Malik, Lapisto-Kirtley, McKeel, and Pruitt expressed support for accelerating both projects due to inflation concerns and local fundraising. The board also agreed to remove the Blue Ridge Food Bank project.

• Supervisor Lapisto-Kirtley requested exploring acceleration of the Northern Convenience Center from FY27 to FY26. Staff noted operational cost concerns but indicated design may be completed early; board deferred decision pending further analysis.

Debt Management

• Staff reviewed debt service as a percentage of general fund and school fund revenues, with a target of 10%. Current projections show the rate below 8% through FY29, providing capacity for about $60 million in additional bonds if needed. The board expressed comfort with staying under 8% to maintain flexibility.

Expenditure Scenarios for FY25

• Staff presented three major expenditure options:
  1. Fire Rescue Staffing: 16 FTEs for 24/7 coverage at North Garden and a second ambulance at Burkmar (Station 18). Cost: $665,000 in FY25 (half-year), with FEMA Safer grant offsetting $275,000. If grant not awarded, Burkmar would revert to daylight-only service.
  2. Heart Team Expansion: Second response team with 3 FTEs (human services, firefighter/paramedic, police officer). Cost: $1.154 million in FY25, with state revenue offsets.
  3. Sheriff's Office: One additional deputy for teen-year transports (original request was 4.5). Cost: approx. $110,000 per deputy.
• Additional items raised by board members:
  • Supervisor Pruitt advocated for increased funding for eviction prevention (currently $40,000 requested), citing high eviction rates.
  • Supervisor McKeel noted a $1 million grant from McKenzie Scott to Virginia Poverty Law Center for evictions.
  • Supervisor Galloway and others supported adding one police officer FTE.
• Consensus: Majority supported the three main options plus one police officer FTE, totaling approximately $1.4 million in FY25 ongoing costs (FY26 estimated at $2.0 million).

Revenue Options for FY25

• Staff presented funding sources:
  1. Capital Advancing Strategic Priorities Reserve: $1.9 million available for one-time costs (e.g., from Jaunt return of $250,000).
  2. Transient Occupancy Tax (TOT): Increase from 8% to 9% (matching Charlottesville) to generate $900,000 annually split among capital, schools, and county operations.
  3. Personal Property and Machinery & Tools Tax: Increase by 54 cents (from 342 to 396) to generate $4.5 million, based on the peak revenue in FY22. This would fund the expenditure package without a real estate tax increase.
  4. Service Reductions: Staff proposed $500,000 in operational efficiencies (e.g., vacancy freezes, reduced services).
  5. Real Estate Tax: A one-cent increase would generate $2.9 million, but the board expressed no interest in advertising this option.
• Board feedback:
  • Supervisors Galloway, Malik, Lapisto-Kirtley, and Pruitt supported advertising the TOT increase and the 54-cent personal property increase.
  • Supervisor Pruitt suggested delinking machinery & tools from personal property to maximize solar revenue.
  • Supervisor McKeel preferred not to include real estate tax increase.
  • Supervisor Galloway noted that service reductions should be considered but may be more appropriate for FY26.
  • No consensus on directing specific service reductions; staff will present options on March 27.

Key Outcomes

• The board directed staff to prepare a proposed budget and tax rates for advertisement on March 27, incorporating:
  • Expenditures: Fire rescue staffing (North Garden and Burkmar), heart team expansion, one sheriff deputy, and one police officer.
  • Revenue: TOT increase to 9%, personal property tax increase of 54 cents, and use of one-time funds from reserves. Excluded real estate tax increase and specific service reductions for now.
• The board agreed to schedule a public hearing for the TOT ordinance amendment on April 24, with a consent agenda item on April 3 to initiate the process.
• Staff will present detailed fiscal year 2026 impacts and options for service reductions on March 27.
• The next work session is scheduled for March 27, 2024, at 3:00 PM in Room 241.