The City Council of Chesapeake held a work session at 5:15 PM followed by a regular meeting at 6:30 PM on August 11, 2026. The work session focused on final amendments to the FY 2027 budget, including significant school and city operating fund adjustments. The regular meeting included a public hearing item (withdrawn), approval of consent and regular agenda items, extensive public comments, and new business items. All votes were unanimous (8-0) except where noted. Council Member Les Smith Jr. was excused.
We want to welcome everyone to our City Council work session on August 11, 2026. I'll turn over to Mr. Manager to talk about our topic. Thank you, Mr. Mayor. This is sort of finalizing the FY27 budget process. As you know, we normally adopt the budget in May and do final amendments in June based on information that we have from the state budget and other sources of information this year since the state budget wasn't done until the end of June. This meeting is happening in August, and I'll turn it over to Jonathan Hobbs, our budget director, to go through the proposed amendments. Thank you, Chris. Good evening, Mayor West, Vice Mayor Ritter. So I am here, as Chris mentioned, to go through a few final amendments to the 27 budget based on the adopted state budget. Actually had fewer amendments than I anticipated. So I think that's probably a positive thing. Just quickly walking you through the agenda for this evening. First, we're going to go through the requested school amendments. Then I'm going to talk to you a little bit about some factors that are influencing our recommendations on the amendments to the city budget, and then finally go through those recommended amendments to the city's budget. So in terms of the amendments being requested by the school board, the first amendment is for the appropriation of about 10.6 million dollars of additional state revenue that they received that was allocated to them as part of the adopted state budget. An additional $350,000 for increased fuel cost, and then about $1.6 million of that in a transfer from their operating fund to the school's capital projects fund. The next amendment that's being requested by the school board is for the allocation of the unallocated portion of the revenue sharing uh dollars. When the budget is prepared, when we initially communicate the revenue sharing dollars to the schools, that is based on our preliminary revenue estimates due to the timing of when the superintendent has to present his budget. Then once we finalize our revenue estimates, sometimes the amount of the revenue share uh changes. Uh for fiscal year 27 that happened uh and there was an additional 1.6 million dollars. So when that number changes, what we do in the proposed budget is we place that in a reserve in the school's operating fund until the school board has an opportunity to determine how they would like to allocate those funds. Uh with the state budget not being adopted, typically what they would do is they would come back during final amendments and allocate those dollars or request to have those dollars allocated. But uh I believe what they were wanting to do is wait until they knew how much money they were receiving from the state before they made a final determination. So uh their request here is to allocate those funds from the reserve to a transfer from their operating fund to their capital projects fund. They also received uh just over $300,000 for their uh nutrition services fund. This again is state revenue. Uh and they are allocating that, as you see, just over $200,000 for personnel costs, some general expenses increases, and the total increase to the fund is just over $333,000. And then in the first two amendments from the schools, I mentioned that uh increase in the transfer to the Capital Projects Fund. This amendment is on the capital project side, so the transfer goes from the operating fund over to the capital projects fund, and they are requesting that it be put in their non-routine routine renewal and replacement project. This is for things like HVAC systems, roofs, other things uh that they need to replace from time to time. So they are requesting to increase that project by just over $3.2 million. Moving over to the city side, and again, before we go into the actual amendments that we're recommending, and we want to provide a little context for why we're making the recommendations that we're making. There's really two major factors that are influencing our recommendations, and both of them involve significant cost increase that as we prepared the FY27 budget, we did not anticipate while we anticipated increases in both. We did not anticipate the level of increase. So the first is electricity rates. In June, the Virginia Energy Purchasing Governmental Association, never heard of that one before, but that's a group that negotiates with Dominion Power on behalf of localities, and they agreed to a 24.9% increase in electric rates. Again, we we knew that there was going to be an increase, we knew it was going to be relatively significant. However, we did not anticipate an approximately 25% increase. That increase went into effect on July 1st, so those rates have increased. Again, as I mentioned, we did add funding for an increase in electric rates in the adopted budget. However, it was not to this level. This is going to be about a $2.5 million increase in costs. So that is something that we will need to incorporate as we develop the budget for fiscal year 28. The other factor that's influencing our recommendation is the increased costs in fuel. Fuel costs really began to increase nationwide back in February. Again, we did include funding when we initially began the preparation of the budget, and the budget that was adopted did have increased funding for fuel costs. However, these increased costs have persisted and based on our revised projections for the current fiscal year, we do not believe that there's enough funding in the budget for fuel. So we are going one of our recommendations is to add funding for fuel costs.