City advertises tax rates for $141 million City budget

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The City of Charlottesville has publicly advertised its proposed 2008 property tax rates and City Manager Gary O’Connell has offered the public its first opportunity to review the fiscal year 2009 City budget. 

The advertisement, which was published in the February 15, 2008 edition of the Daily Progress, is a legally required notification of the effective six cent  property tax increase, even though the City is proposing continuing its tax rate of $.95 per $100 of assessed property values. Council directed staff in November to keep the same tax rate.

According to the ad, the total assessed value of property in Charlottesville increased by 6.94%. The average residential assessment increased 4.2%, according to City Manager Gary O’Connell. He said that’s the lowest rate he’s seen in the last ten years, citing the downturn in the economy.

Maintaining the existing tax rate translates into $50.3 million in real estate tax revenue. In FY2008, property taxes brought in $47.7 million. The City is required by law to publish what the tax rate would be in order to keep the funding level at $47.7 million. The figure for FY2009 is $.89 per $100 of assessed value, a difference of six cents.

The total City Budget for FY2009 is close to $141 million, an increase of 4.7% from the previous year. That includes $13.6 million dollars from Albemarle County as part of the 1982 revenue sharing agreement. The operating budget is $127 million, an increase of 4.21% over last year.  That met a Council goal to keep the budget increase below 5%.

The City was able to avoid making any major cuts, and the budget is balanced. O’Connell said the City is so far withstanding the downturn, but he is looking ahead to next year.

“We are starting to think about what I’ll call the storm on the horizon of a year from now, what’s the economy going to be like, what are things that we should be doing now?” O’Connell said. He said this year’s budget represented a significant investment in capital projects, and that would be an area that could be scaled back.

As for the amount of fund balance, or unexpended dollars in the budget, for the current year, O’Connell says it is too early to tell, but he is hopeful.

“Revenue-wise, the major revenues that have generated the surplus in the last couple of years were right on target, so I’m not expecting anything out of that. Our departments have been pretty good the last few years of watching their budgets pretty closely and being under budget, so I would expect that to continue.”

Debt service represents 4.83% of the operating budget. The summary of this section predicts that the amount of funds used for debt service will need to grow in order to pay for the City’s capital needs.

Council will adopt the budget in April after a series of work sessions and public hearings. There are many opportunities to get involved with the process. City Manager O’Connell will formally introduce the budget at the March 3rd City Council meeting. A public hearing will be held two weeks later.

Expenditure highlights from the $127 million operating budget:

• 4% salary increase for City employees, with $350,000 set aside for market rate adjustments
• Budget fully funds $39.7 request from School Board
• Raises the house value ceiling for the Charlottesville Housing Affordability Tax Grant program to $365,000 (up $15,000).
• $380,000 for a new transit route to travel along Preston Avenue to Barracks Road, via K-Mart
• A new building inspector to be paid for by increased building permit fees
• A council reserve of $25,000
• $50,000 in Green City Initiatives, a series of programs formerly budgeted out of the CIP
• $25,000 in new funding for

Highlights from $24.4 million Capital Improvement Program budget

• $3 million for replacement project for the Onesty pool at Meade Park
• $5 million for Smith Pool replacement
• $3.5 million for Ivy Road/Fontaine Avenue fire station
• $1.5 million for the major Downtown Mall renovation project
• $250,000 for way-finding initiatives
• $120,000 for Intelligent Transportation System work (traffic synchronization)
• $250,000 for City Wide traffic improvements
• $100,000 for sidewalk improvements to comply with ADA
• $1.4 million to the Charlottesville Affordable Housing Investment Program
• $500,000 for bridge repair and replacement

Schedule of meetings:

• March 3, 2008: Budget formally presented to City Council
• March 6, 2008: Council Budget Work Session
• March 13, 2008: Council Budget Work Session
• March 15, 2008: Community Budget Forum
• March 17, 2008: First Public Hearing on Proposed Budget
• March 18, 2008: Council Budget Work Session
• April 1, 2008: Council Budget Work Session
• April 7, 2008: Second Public Hearing and First Reading of Budget
• April 15, 2008: Second Reading and Council Adoption of Budget

Sean Tubbs