FY2026 Budget Work Session: Schools & Capital – March 17, 2025

On March 17, 2025, the Albemarle County Board of Supervisors held a budget work session in Room 241, focusing on the FY2026 Operating and Capital Budget. The session included a detailed presentation from the Albemarle County Public Schools (ACPS) board and staff, followed by a review of the Capital Improvement Program (CIP) and debt management. No formal votes were taken; the session was preparatory for the March 19, 2025 work session where the proposed budget and tax rates are scheduled for advertisement.

Discussion Items

Albemarle County Public Schools Budget Presentation

ACPS Chair Kate Acuff and Vice Chair Dr. Rebecca Bolyn presented the school division's needs-based funding request. Key highlights:

• Student Demographics: ACPS serves 14,173 students (K-12), with 28% economically disadvantaged, 13% English learners, and over 400 homeless students. The division operates 24 schools and employs 2,800 staff, with an 86.8% teacher retention rate.
• Total Budget Request: $308 million (all funds), with a $284 million operating budget (school fund). Local sources provide 71% ($219.3M), state 25% ($75M), federal 4% ($13.5M).
• Funding Gap: After $6.4 million in service reductions (including 40 FTEs), the remaining gap is $750,000 for FY2026. However, true recurring gap is $1.7 million when including $934,000 deferred costs (classification review, technology, furniture).
• Key Investments: $8.3 million for five strategic proposals: 3% employee compensation increase ($6.5M), instructional resources ($500K), Scholar Studios staffing ($406K), special education expansion ($649K), and adding school resource officers ($252K) at Monticello and Western Albemarle high schools.
• Service Reductions: $5.5 million in structural cuts (reducing instructional coaches by 40%, eliminating foreign language in elementary, freezing positions) and $935K in deferred costs.
• State Funding Challenge: The Local Composite Index (LCI) change reduced state funding by $10 million annually, forcing heavier reliance on local revenue.

Board Questions and Discussion

Supervisors questioned the school board on the gap, tax rate implications, and specific programs:

• Tax Rate Impact: Assistant CFO Andy Bowman noted each tenth of a penny (0.1 cent) yields ~$310,000. To close the $750K gap would require 0.3 cents dedicated; to cover the $1.7M true gap would require 0.6 cents. A full penny (undedicated) would be worth ~$1.7M to schools.
• School Resource Officers: Supervisor McKeel expressed support. School board explained that SROs complement existing school safety coaches; the pilot at Albemarle High School has been successful. The proposed addition would place an SRO at each comprehensive high school under a formal MOU with the police department.
• Special Education Expansion: The Intensive Support Center (ISC) at Ivy Creek will be converted to a fully ACPS-run program, reducing costly external placements (some $150,000 per student per year). The move will also free space for the Center for Learning and Growth.
• Homeless Student Support: Supervisor McKeel noted the high number (353 K-12 homeless students) and asked about transportation stability. ACPS provides transport to base schools to maintain educational continuity.
• Capital Needs: School board requested $189.6 million in CIP funding over five years, but only 33.9% of their request is currently funded. Additional funding is needed for the Northern Feeder Pattern elementary school (capacity increase of 100 students) and school renovations.

Capital Improvement Program & Debt Management

Andy Bowman and Ryan Davidson presented the county government CIP:

• Total CIP: $128.5 million over five years, primarily funded by borrowed proceeds (72%) and cash equity (22%).
• Key Projects: Courts facility addition, transportation leveraging program ($28M), Northern Convenience Center (design in FY26, construction in FY27), Central Library renovation (joint with city), Biscuit Run park phase 1, urban park planning ($1.5M), workplace renovations, and community nonprofit capital (only Loaves & Fishes at $40,000).
• Debt Capacity: The county maintains a AAA bond rating with headroom under policy limits. Going to 9% debt service ratio would provide $72 million in additional capacity, which would require $3.6 million in cash (5% pay-as-you-go) and annual debt service of ~$6 million for 20 years.
• Advancing Strategic Priorities Reserve: $1.9 million in unallocated cash is available for one-time uses (e.g., affordable housing, capital needs).
• Transportation Funding: Supervisor Gallaway noted that only one of seven Smart Scale projects (Pantops) was approved in the current cycle; other projects (Fifth Street, Greenbrier) were not funded. The next cycle is two years away.

Key Outcomes

• No formal action was taken; the session was informational.
• The Board will consider the proposed budget and tax rates for advertisement at the March 19, 2025 work session (1:00 PM, Lane Auditorium).
• Staff will prepare options for the board, including potential adjustments to the affordable housing investment fund and technical adjustments (e.g., SRO funding).
• The school board's funding gap of $750,000 (or $1.7 million true gap) will be part of the tax rate discussion.
• The next meeting will also cover remaining items from prior work sessions: community development, transit, and position changes.
• The county's $1.9 million strategic reserve could be used for one-time needs, such as affordable housing or capital items.
• The board noted the need for future discussions on manufactured home ordinances and the housing trust fund's purpose.