Virginia Beach City Council Budget Retreat - January 27, 2026
Virginia Beach City Council Budget Retreat - January 27, 2026
On January 27, 2026, the Virginia Beach City Council convened a special budget retreat at the Virginia Beach Convention Center. The retreat focused on setting policy guidance for the FY2026-27 budget, addressing capital priorities, and discussing governance topics. Facilitators from Fountain Works led the council through vision-setting, budget presentations, and preliminary guidance discussions.
Discussion Items
Vision and Legacy Exercise
- Council members shared individual aspirations for the city, including housing affordability, sustainability, public safety, quality of life, balanced economic growth, and maintaining a low tax burden while investing in core services.
Budget Process and Format
- Council discussed the current budget presentation format and expressed a desire for more meaningful deliberation time. Consensus emerged to move toward executive summaries, SWOT analyses, and thematic portfolio-based discussions rather than lengthy PowerPoint presentations from each department. Staff will develop a revised proposal incorporating council feedback.
Revenue and Tax Diversification
- Staff presented revenue outlooks including the myth of the $2.8 billion budget, the myth of 700 vacancies, and comparisons of local tax rates. The hotel flat tax (per room vs. per bedroom) was discussed; council directed staff to continue community engagement and bring back options.
- A debate on real estate vs. personal property tax relief occurred. Some council members advocated for personal property tax cuts to reach renters, while others argued real estate tax relief is more equitable for homeowners who bear disproportionate burden. No final decision was made; staff will explore options.
State and Federal Funding Uncertainties
- Kevin detailed potential impacts of federal cuts on human services, SNAP, Medicaid, Section 8 housing, and the continuum of care. These are likely to affect FY2028 rather than the upcoming budget. The city’s current policy is not to supplant federal reductions with local funds without council discussion.
Health Insurance and VRS
- Health insurance costs are trending upward with an 8% annual increase assumption; staff is evaluating premium adjustments. The VRS rate reduction (saving ~$13 million) was noted as temporary and likely to reverse in future cycles. Council expressed interest in a policy to maintain parity in health benefits between city and school employees.
Capital Improvement Projects (CIP)
- Major Projects Fund: Recap of funding sources (0.3 cent real estate dedication, meals tax, TIF) and current allocations for LEDA, courthouse, Indian River Road, and VB Trail.
- Central Beach Financing Plan: Staff presented a conceptual plan with high infrastructure costs requiring decades of phased development and significant private investment. Council agreed to take incremental steps starting with the 19th Street parking deck RFP.
- Rec Center Modernization: Staff proposed a staggered modernization of Great Neck, Bayside, and Princess Anne rec centers using the Parks & Rec Special Revenue Fund with moderate fee adjustments. Council supported moving forward.
- Aquarium Modernization: Council requested more information from the Aquarium Foundation before committing funds. Some members supported setting aside a placeholder for planning, while others wanted a full referendum. No directive was given today.
- African American Cultural Center: Councilmember Ross Hammond requested $6.5 million in city funding as part of a public-private partnership; council acknowledged the request but took no formal action.
- Sports Tourism: Councilmember Henley asked for branding of the sportsplex/ITA area as a sports district and to move forward with low-hanging fruit like a cross-country track. Staff noted ongoing studies.
Priority Exercise
- Council completed a worksheet ranking priorities for potential new revenue. Average scores showed highest priority for taxpayer relief (7.5), followed by capital infrastructure investment (6.7), attracting/retaining workforce (6.5), and closing federal/state gaps (3.5). Additional priorities included the African American Cultural Center, sports tourism, and affordable housing.
Key Outcomes
- Budget guidance: If a revenue surplus materializes, council is open to considering taxpayer relief, though the mechanism (real estate vs. personal property) remains undecided. Staff will develop options for the March budget proposal.
- Rec center modernization: Council approves staff’s plan to proceed with the phased recapitalization of the three oldest rec centers via the Parks & Rec Special Revenue Fund.
- Hotel flat tax: Continue community engagement; no policy change at this time.
- VRS savings: $13 million ongoing savings noted, but council cautions against spending it as a permanent base due to potential future increases.
- Health benefits parity: Staff to prepare a policy option for council consideration regarding equal benefits for city and school employees.
- Dedications: Council directed staff to bring a detailed analysis of dedication fund balances and performance for discussion on Day 2 of the retreat.
- Budget presentation format: Staff to revise format to include executive summaries and thematic sessions, allowing more council discussion time.
- Aquarium: No immediate funding decision; council expects a joint presentation from staff and the Aquarium Foundation before next steps.
Meeting Transcript
CityCoom. 2-21 and by authority vessel to me as mayor of the city of Virginia Beach, I hereby call a special meeting for the Virginia Beach City Council on Monday, uh January 26, 2020 uh 26. And Tuesday, January 27th at uh 2026, beginning at 830 a.m. uh Virginia Beach Convention Center, 1019th Street, suite three. The purpose of the special meeting is to hold the uh to conduct uh city council retreat as listed in the attached and published agenda. The special meeting will be broadcast on cable TV, VB Virginia Beach.gov and Facebook. Sincerely yours truly, Bobby D. Bobby Dyer, Mayor. Okay. Do you want to start all right? So, Mr. Mayor, members of council. Um welcome. We avoided Snow Mageddon. It's always great to be in Virginia Beach. And looking forward to our budget retreat, as you know, this has become a regular cadence for us for the past three to four years, and it's always good and enlightening for us to hear from council and perspectives as we get ready to finalize the budget that we present to you all. Eager to hear your topics, as council knows we shared some updates as where we are from a revenue standpoint. You know, so there's going to be some opportunities for us to discuss how best to use those resources in a way that aligns with your policy positions. Good morning, Count Mayor, Mayor, Vice Mayor, members of council. Uh thank you for having us back. Um, as a reminder, I'm Julie Brennan with Fountain Works. I've got Laura Gomez Nichols with Fountain Works here with me also, and we are here as your facilitators today. I wanted to start by just orienting you to the plan for today and tomorrow. Um, we have an agenda on the wall over there, so you can do quick looks and reference it at any point. You also have binders um in front of you. You got all these materials electronically, but I'll just quickly orient you to the binders. You have your agenda, you have all the PowerPoint presentations, um, funding requests, benchmarking information, PISC information, dedications, and then um information for tomorrow as well on political signage. There's the school calendar, the focused action plan, council policies. So you've got a lot of materials in front of you, and with the PowerPoints, you can follow along. So our agenda today, we're gonna start by asking you to just think ahead. What are your aspirations as a council for um leaving a legacy for the community? After we do that, we're gonna get into the nitty-gritty and have a number of budget presentations. Your budget director is gonna be um sharing a lot of reminders of things that you have heard in the past, but we want it fresh in your mind as you enter the discussion today about the FY2627 budget. Um, so we'll we'll be doing a number of presentations during the presentations. Feel free to ask questions. After the presentations, we'll lead you through some discussions. Um we talked to you all ahead of time, and I started those uh conversations with all of you. We said this budget retreat is really about giving guidance to the manager and his team on how to balance the budget. And when you balance a budget, you either um adjust revenues or expenses, and you need them to match. So think of the um retreat as uh how do you want to invest in your community or reduce uh reduce the cost burden for you community? So it's really about balancing through investment or reductions. Um we'll conclude today with getting from you some of that preliminary budget guidance so the the manager and his team know how to develop the budget to bring back to you in March. The guidance that you're providing today isn't final because the budget will come back to you in March. It's just giving them enough guidance so that they can develop a budget that meets your needs. Tomorrow, we're gonna be um focusing on the roles of the governing body of all of you as well as governance discussion on particular issues that you all have raised. So today we're planning the focus to be budget tomorrow, um, which is a half day tomorrow, we'll be on governance. So that's setting the stage. Sound good? Sound like what we're all here for? Okay.
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