Charlottesville Tomorrow Blog

County government operations to get external review

 The Albemarle County Board of Supervisors has agreed in principle to hire a consultant to conduct an efficiency study of government operations. On May 7, 2008, the Board directed County staff to prepare a scope of work for such a study, which will be similar to a resource utilization study conducted by the County’s school system last year.

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Assistant County Executive Tom Foley

Assistant County Executive Tom Foley said the need for an external study has been triggered in part because of a decline in County tax revenues. He spent several minutes reviewing the ways County staff currently review their performance and effectiveness.  For example, four departments are currently pursuing independent evaluation of their performance under what are known as the Baldrige National Quality Program criteria, which Foley said could lead to efficiency plans for each department.  Foley pointed to the County’s AAA bond-rating as one tangible measure of the County’s financial health, and lauded the Board’s transition to a five-year financial plan, and said the County’s Program and Service Review is paying dividends.

“That has actually resulted in almost $800,000 worth of savings right away this year,” Foley said. “Not as a result of an outside study but [as a result of] this internal review.”

However, Foley said staff was fully supportive of an external review, and presented two alternatives to the Board. First, the County could conduct a one-time study similar to what County schools. The other option would be to conduct a “more-focused” review of the work processes of individual departments. The staff report lists the options as follows:

1)       A one-time general overview of all County operations: Such a one-time study would closely resemble the school division’s 2007 Resource Utilization Study by broadly examining how the County utilizes its dollars, people and facilities to achieve results. This type of review would best capture improvements or savings associated with inter-departmental processes and costs. However, because of the broad nature of this study and the County’s wide range of provided services, this type of review will likely not examine detailed department specific processes, though it may assist in identifying departments that could benefit the most from an external evaluation conducted exclusively within a department or function. Finally, it is worth noting such a study is unlikely to be completed as quickly as the school division's review, again due to the County’s more diverse mission and group of departments.

        2)  An ongoing review process focused on individual functional areas or departments: As an alternative, the Board could utilize an approach similar to what certain localities in Northern Virginia have recently begun where a few departments are selected each year for a more detailed external review. Only a few departments per year are reviewed due to the studies’ more complex and unique scopes of work and to allow for the management capacity required to implement each study’s recommendations. To accommodate this, studies are staggered over time. While this study would not provide an informative review of inter-departmental processes and costs, it better addresses improvements in departments’ specialized day-to-day operations.

Foley recommended the one-time broad overview while the continuing the County’s internal  review process, and said his staff would next prepare a scope of work to be approved by the Board. 
However, Supervisor David Slutzky (Rio) was adamant that he wanted the external review to provide guidance on how to align the County’s goals with its available resources.

“The question shouldn’t just be what are we doing inefficiently and where can we save money,” Slutzky said. “It should also be where are we failing to deliver services and other things that are within not just the wishlist of what we might-could do but rather what we ought to be doing and we’re not.”

Chairman Ken Boyd (Rivanna) said the consultant should not get involved in policy decisions.  Supervisor Dennis Rooker (Jack Jouett) also opposed Slutzky’s request.

“The amount of services that are being delivered is a policy issue that I don’t think an outside expert is going to comment on,” Rooker said. Foley said the consultant might recommend “more effective” ways of delivering a particular service, but would likely not comment on the validity of one service over another.
But Slutzky said his concern is that the Board has allocated the County’s financial resources across a wide range of activities, and an external review of those allocations might be beneficial.

“There may well be things that an outside party could say we should be doing instead of some of the things we’re choosing to do,” Slutzky said. “If we ask the consultant to merely tell us how to most cost effectively deliver within the shackles of what we’ve chosen to address, they’re going to miss out on some trade-offs.”
For instance, Slutzky suggested a consultant might recommend downzoning as a more cost-effective way of meeting the County’s comprehensive plan goal of protecting the rural areas.

The suggestion prompted Rooker to make a motion that would limit any external review to what staff had recommended. “I don’t think we want to retain an efficiency firm to come in and tell us what roads should be built in the County, whether or not we should have expanded library service… those are policy decisions.”
Slutzky sought to make a competing motion to give the consultant the flexibility to make policy decisions, but could not find a second. Rooker’s motion to direct staff to prepare a scope of work carried 6-0.

Supervisor Lindsay Dorrier (Scottsville) said more should be done to encourage county employees to make suggestions to improve the process.  Supervisor Ann Mallek (White Hall) said the consultant should be expected to make policy recommendations.  Boyd said he would like to see the County eventually develop its own internal audit department, but did not seek to make that part of the external review process.
Foley told Charlottesville Tomorrow he hoped to bring the scope of work back to the Board no later than their first meeting in July.

Sean Tubbs

City Council adopts budget for FY2009

The Charlottesville City Council has adopted a budget for the fiscal year beginning July 1, 2008. The real property tax rate for homeowners will continue to be $0.95 per $100 of assessed value.

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Council’s action came during a special meeting held in a crowded second floor conference room in City Hall, rather than Council Chambers. Councilors acted on three motions: to adopt the tax rate, the budget, and a motion reaffirming the City’s commitment to the Personal Property Tax Relief Act of 1998.  The meeting lasted just under six minutes.

Council more or less adopted City Manager Gary O’Connell’s $140,992,521 operating budget, with only minor changes made throughout the budget review process. Council’s amendments can be read in the budget resolution.

Most notably, Council reallocated $75,000 from the City-County Revenue Sharing fund to the operating budget from the Capital Improvement Program fund to pay for various outside agencies that were originally not funded in the FY2009 operating budget. That includes a $29,275 increase in spending to cover a Council-requested increase in the Homeowners Tax Grant program.

Other programs that received last-minute funding:

$2,600 - Children, Youth and Family Services – Real Dads Program
$7,500 - African American Teaching Fellows
$8,960 - Thomas Jefferson Soil and Water Conservation District
$10,000 - Streamwatch             
$1,661 - JABA/Mountainside Assisted Living

Another change was the decision to reserve $125,000 in the budget’s capital fund contingency account to pay for a proposed Energy Conservation Grant / Loan Program. The idea was introduced by Councilor Satyendra Huja at Council’s April 7 public hearing, when the budget was officially read for the first time.  The program would provide incentives for low-income homeowners to install energy efficient heating and cooling systems.  It has not yet been reviewed by the Council’s Citizens’ Commission on Environmental Sustainability.

Councilor David Brown said this year’s budget process went smoothly, and thanked Mayor Dave Norris for his work in shepherding the process. Councilor Holly Edwards, serving in her first term, said the process was overwhelming, but that she would be prepared for next year’s budget cycle.

“How we spend our money really does make a moral statement about what’s important to us,” Edwards said.

Huja said he appreciated the input from citizens. Councilor Julian Taliaferro thanked staff for their work in coming up with what he called “a good budget.”

“No budget is going to please 100% of the people 100% of the time, and I’d venture that none of us around this table are 100% pleased with everything in this budget, but it’s a process of working through different priority and needs,” said Mayor Norris.

However, adoption is not the end of the story for the FY2009 budget. In August, Council will have to approve cuts to various social service programs that are funded by the state.

According to Budget Director Leslie Beauregard, the City will have to make a decision on what programs will be cut back due to a reduction in state funding. On April 4, the state Department of Planning and Budget released a draft list outlining necessary reductions for Charlottesville of over $500,000. City officials will get to choose where the cuts will come, but not until 30 days after the state budget becomes law.

Sean Tubbs

Supervisors adopt budget and tax rate

At their meeting April 9, 2008, the Albemarle County Board of Supervisors approved the County’s FY 2009 budget and set the 2008 real estate property tax rate.  The FY 2009 operational budget of $270,165,297 is a 2.6% increase over last year.  The total County budget is $334,656,795 after revenue sharing with the City, the capital budget, and a new reserve fund are all included.  That reflects a 9.6% increase over last year.

While the budget and tax rate were the first items on their agenda, it took four and one-half hours for the Board to reach an agreement.  The Board was split 3-3 for much of the day with half the board favoring a 70 cent tax rate (Boyd, Dorrier, Rooker) and the other half favoring 71 cents (Mallek, Slutzky, Thomas).

In 2007, the Albemarle County real estate property tax rate was 68 cents.  At 71 cents, the median home will pay an additional $93 in taxes annually in 2008.  Charlottesville Tomorrow calculates this by using the 2007 Charlottesville Area Association of Realtors (CAAR) year-end median sales price for a home in Albemarle County ($310,000) and calculates the difference between a $0.68 tax rate and a $0.71 tax rate on that home.  The value of the home is held constant.   Figures cited by the Daily Progress and provided by Albemarle County use, as a benchmark, a home with a starting value of $250,000 in 2003 and an ending value of $384,529 in 2008.  It includes a downward adjustment of home value based on 2008’s average reassessments (-1.56% for this benchmark home).  Using that methodology, the annual taxes paid will increase by $73.92.

In the end, the Board adopted, by a 4-2 vote, a 71 cent tax rate with the stipulation that one cent of tax revenues ($1.614 million) be set aside and only used if projected revenues are less than budgeted during the next fiscal year.  Any funds not utilized for revenue shortfalls will be returned to the Capital Improvements Program (CIP) budget at the end of the year.

Supervisors Ken Boyd (Rivanna) and Lindsay Dorrier (Scottsville) voted against the tax rate increase, though both were willing at one point in the meeting to consider an effective rate of 70.5 cents as a compromise.  That compromise was initially ruled out when County staff told the Board that their computer system could not handle a fractional tax rate without significant modifications. The tax rate had to be a round number.

After an early break in the negotiations, Supervisor David Slutzky (Rio) returned to the meeting and proposed that the rate be set at 71 cents with the funds generated by a half a penny being protected in a “lock box” for use in the event of unanticipated revenue shortfalls.  The Board discussed the merits of the “lock box” approach, but the compromise was not sufficient to move the Board off their stalemate.

At about 5:00 in the afternoon, the Board recessed to allow staff time to explore the feasibility of having two rates, 70 cents for the first half of the year and 71 cents for the second half.  After that break, County Executive Bob Tucker told the Board that staff would not have enough time to implement a “split rate” proposal.  

County Assessor Bruce Woodzell said a lot of manual work would be required to prepare tax bills because of the County’s inflexible financial information systems.  He said that their schedule for mailing tax notices would not allow for such a change.  County Attorney Larry Davis pointed out that when a split rate was last utilized in FY 2002, the Board had that approach as an early assumption in the budget process giving staff time to prepare the computer systems for the change.

Supervisor David Slutzky (Rio) and Ken Boyd (Rivanna)

Boyd, Dorrier, Rooker reiterated their belief that a 70 cent rate would adequately fund the County budget.  Rooker expressed concern about funding new or frozen positions because of the obligation that would place on future budgets.  Sally Thomas (Samuel Miller), Ann Mallek (White Hall), and Slutzky lobbied for additional funds to support initiatives including the filling of frozen positions in the Community Development Department, for the hiring of additional police officers, and for affordable housing initiatives related to the request from the IMPACT organization.  

Balancing the County’s strategic planning goals against the available revenues was a common theme in the discussions.  Board members favoring the higher tax rate pointed to data the Board had received about the backlog of warrants that the police department is unable to serve as justification for supporting the hiring of additional officers.  They linked this to the staffing goals in the Board’s strategic plan which were driving the County Executive’s budget.

Rooker said that staffing goals should not be the ultimate test for support.  “The test of whether you are providing good police services, for example, is not the number of police officers.  It’s whether or not the job is being done, “ said Rooker. “Our surveys have consistently indicated that our police force does an excellent job.  So I don’t necessarily think that we have to, every year, be adding 4 or 5 police officers.”

“Strategic plans are just forecasts, you’ve got to live with the realities with which you are faced with,” said Boyd.

Supervisor Dennis Rooker (Jack Jouett)

With “split rates” and “lock boxes” unable to break the logjam, the Board recessed for dinner.  When the Board reconvened, it was Rooker that proposed the final compromise for a 71 cent rate with the stipulation that one cent of tax revenues be set aside and only used to cover revenue shortfalls.  Rooker favored having any unused funds return to the budget for capital needs.  As part of the budget, the Supervisors had already reduced their funding of the capital budget and this adjustment to the “lock box” concept won the support of Mallek, Slutzky and Thomas.  

Boyd said he could not support a rate beyond 70 cents.  “I’ve actually come up [from 68 cents] to go to the 70 cents and I think that’s about as far as I’m willing to go,” said Boyd.  Dorrier also said 71 cents was not a rate he could support. “I think if we go up two cents, we are already increasing the  budget…the extra cent is going to break the bank,” said Dorrier. “We’ve got people on fixed incomes in the County struggling to make ends meet.”

Brian Wheeler

Sharing of revenues… Are some paying Charlottesville by mistake?

Visit the Henrico County website and you will see a prominent plea for its County taxpayers… “Keep your tax dollars in Henrico.”  At first glance, you might assume it was an effort to support local businesses.  Actually, local businesses and local shoppers can be part of the problem when they mistakenly pay their taxes to the neighboring City of Richmond.

“Each year, thousands of Henrico County residents and businesses inadvertently pay their taxes to the City of Richmond…resulting in an estimated $5 million loss in tax revenue…” according to the Henrico County website.

The source of the confusion is apparently the fact that there are many “Richmond, VA” mailing addresses in Henrico County.  Henrico wants to eliminate their Richmond mailing addresses in favor of “Henrico, VA” to ensure they receive their share of tax revenues.  Next month, the U.S. Postal Service is sending out a survey asking Henrico residents, at least those without overlapping zip codes, if they support the address change.

Links related to this story

• Examples of How a Tax can be Incorrectly Paid to Another Locality
• Background on Henrico's campaign to change mailing addresses
• Richmond Times-Dispatch Editorial--"Going Postal"

Does tax confusion exist in Charlottesville-Albemarle?

“Sixty percent of our households have Charlottesville addresses,” said Robert Walters, Albemarle County’s Chief of Administration/Taxation.  “It has cost us a lot of money in the past, some of which is irreversible.”  Just like in Henrico, officials here say address confusion and overlapping zip codes exist in the City of Charlottesville and in Albemarle County.  Payments can be mistakenly sent in both directions.  Walters’ counterpart in the City is Lee Richards, Charlottesville’s elected Commissioner of Revenue.  Richards says he works closely with Walters to reconcile the books and ensure each locality gets the tax revenues it deserves.

The problem is not with local real estate property taxes.  That is an asset that doesn’t move around.  The challenge is on items like personal property taxes, business sales taxes, business license taxes, and consumer utility taxes.  “Some taxpayers legitimately don’t know if they live in the City or the County,” said Walters, who believes the biggest source of lost revenue is in personal property taxes.

The Department of Motor Vehicles might track an incorrect location for a vehicle thus generating a bill for personal property taxes from the wrong locality.  While long time County residents would likely be surprised by a tax bill from the City of Charlottesville.  People leasing property or living in the community on a short term basis sometimes do even know which locality they live in.  Walters says Albemarle has not yet quantified the potential loss of revenues in this area.

Misdirected sales tax payments

The County’s second biggest area of concern relates to sales taxes.  In 2006, Walters identified about $100,000 in revenues that were paid to the City and needed to be returned.  The state provides each locality with monthly reports on sales tax revenues.  Reviewing these reports line by line is a very time consuming process for both City and County staff.  “It is a manually intensive problem to keep track,” said Walters who told Charlottesville Tomorrow that this investigative work is harder to complete in a Finance Department with two staff positions frozen and one recently eliminated.

Richards says the City of Charlottesville also has to devote resources to this problem.  He has one full-time employee reviewing sales tax reports for errors and another helping businesses in the City file their monthly sales tax payments.  “Businesses are often confused about all the taxes and we work with them,” Richards told Charlottesville Tomorrow.  “They come in here and we actually do the sales tax return that goes to Richmond.  We take their check and directly ship it to Richmond. The business people leave here knowing their taxes are done correctly.”  Charlottesville, as a result, is certain it will get the tax proceeds.

Richards says the City takes a very proactive approach, but he acknowledged that the County of Albemarle had a much greater potential to benefit from the catching of mistakes.  In some cases, sales taxes are paid to the Virginia Department of Taxation and earmarked for the wrong locality by a multi-location retailer, a national contractor, or a Internet retailer. 

For example, an office supply company with stores in both localities might make an accounting decision at its national or regional office with little knowledge that a Charlottesville mailing address on a store might be related to taxable activity in Albemarle County.  Charlottesville could then be the recipient of the 1% local share of the State’s 5% sales tax.

Walters and Richards both said they are as vigilant as possible with the resources they have available.  The County’s Walters says he has been in touch with Henrico and that he intends to pursue improvements in Albemarle’s collection efforts.  “Like Henrico, we have a number of shared zip codes, and that is part of our problem.”

From the state’s perspective, businesses are on their honor to report and pay their taxes accurately by jurisdiction.  “We count on businesses to police themselves,” said Joel Davidson, Public Relations Manager for the Virginia Department of Taxation. 

According to Davidson, it tends to only be a significant problem around big cities like Richmond.  “Whenever we are made aware of misallocated revenues, and both localities agree, the tax department corrects the problem,” Davidson told Charlottesville Tomorrow.

At this point, nobody is calling for the post office to create a postmark for “Albemarle, VA,” but the exact size of the problem has not been fully quantified.  According to Henrico’s website, it took them a decade of “unfruitful” negotiations to reach the breaking point.  Now they are explaining to taxpayers that they might get $5 million from Richmond if they change their mailing address.

Brian Wheeler

Supervisor Sally Thomas on WINA's Government Day

Albemarle County Supervisor Sally Thomas (Samuel Miller) joined Jane Foy and Rick Daniels this morning on WINA's Charlottesville Live as part of the program’s Government Day.  With the third and final public hearing on the County’s budget scheduled for tomorrow night, Thomas answers questions about what citizens can expect, and how they can participate. So far, her e-mail inbox has been full. In particular, Thomas says the Board has been responsive to people who want the growth of the County Budget to not out-pace the cost of living and population growth.

“Our proposed budget… with the 71 cents [rate increase]… is a 3.2%  increase in last year’s budget,” Thomas said, adding that the budget is “very modest” and does not provide funding for a lot of new initiatives.

“There are lots of ideas always in this community and people would like to see us doing more things in the schools, more projects for the environment, for the rural areas. There are just many things that we’ve talked about over the last year or more that are not going to be in this budget because we’re aware that people’s incomes are not going up this year very much.”

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TIMELINE FOR PODCAST

• 1:44 – Thomas talks about the input she has been receiving via e-mail, and how can people can get in touch with the whole Board
• 3:16 – Thomas explains that this year’s budget increase with the 71 cent tax rate will be in line with the cost of living increases
• 4:42 – Thomas says certain new initiatives will not be funded in this budget
• 6:22 – Thomas says that there are 16 frozen positions in County government because of the revenue shortfall
• 11:37 – Thomas talks about her expectations for the public hearing
• 12:22 – Thomas describes what the Board will hear during its day meeting beginning at 9:00 AM
• 15:31 – Thomas gives tips to people who would like to speak at the public hearing

Sean Tubbs

City Councilor Huja discusses water supply on WINA

City Councilor Satyendra Huja appeared this morning on WINA's Charlottesville Live with Rick Daniels and Jane Foy as part of the program’s monthly Government Day. Huja reviewed his first three months on the job, and talked about how he is making the transition to elected office after 31 years working for as a planner for the City of Charlottesville. Topics include the City budget, new routes for the Charlottesville Transit Service and the Community Water Supply Plan.

“This is a fifty-year plan, and not a plan for the next two or three years,” Huja said. “Water is one of the most important amenities a government can provide for our future and our present.” Huja also countered concerns  that the plan would only rely on one reservoir, and told Jane Foy that the South Fork Rivanna Reservoir would continue to be used. He said he supports expanding the Ragged Mountain Reservoir in one phase in order to save money overall.

“The fact is, the existing situation is not meeting our needs and as a steward of public interest we need to think about the need for our future citizens,” Huja said.

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TIMELINE FOR PODCAST

• 1:23 - Huja describes how is adjusting to life on Council
• 3:19 – Huja says the City Budget for this year is “much tighter than usual” with a 4.7 increase in the operating budget
• 4:14 – Huja says the FY2009 budget provides money for two new transit routes, fulfilling one of his campaign promises to increase public transportation service
• 8:09 – Huja describes youth initiatives in the FY2009 budget
• 9:03 – Huja outlines his philosophy on providing affordable living choices, including grants for low-income families to help pay their property taxes
• 10:39 - Huja explains why he supports the 50 year Community Water Supply plan as adopted by City Council and the Board of Supervisors

Sean Tubbs

Council reviews funding for outside agencies

Mayor Dave Norris opens up City Council's March 18 budget work session

On March 18, 2008, The Charlottesville City Council held their third work session on City Manager Gary O’Connell’s proposed budget for FY2009. This time, Budget Director Leslie Beauregard presented details of funding for outside agencies, and an update on how state funding will affect the budget.

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“What we do know is that the general assembly has once again passed the pain on to the localities,” Beauregard said. “What they’re saying is that they’re going to look for $50 million in savings and ask localities to actually choose how we want to realize what our portion of the savings is.”

However, Beauregard said the details are not yet known, but when the Virginia Department of Planning and Budget issues its formal request later this year, the City will have to select where it will save money in late summer. “We definitely have more questions than answers, and we don’t have any details on anything, and as soon as we do we’ll come back to Council with an action plan.”

Beauregard said the City will be asked to choose from a list of programs currently funded by the state. O’Connell said his understanding was that the list would not be presented until August.

Councilor David Brown

Councilors also heard details on how outside agencies receive funding from the City. An Agency Budget Review Team holds work sessions to determine what social services proposals will be funded by the City.

A second process involves a team consisting of both City and County budget staff examine what arts, cultural and educational programs will receive funding, as well as any contractual obligations for shared ventures between the two localities such as the Emergency Communications Center and the regional jail.

Councilor Holly Edwards did not attend, but submitted questions in writing. She observed that the process by which agencies are funded is too complex and should be simplified. Councilor David Brown said Council should discuss that process at another time.

Councilors also suggested they would not need to hold the fourth work session, currently scheduled for April 1 at 5:00 PM. However, they left open the possibility of holding the session should conditions change.

Timeline for podcast:

• 1:00 - Mayor Norris opens the work session
• 1:40 – Beauregard describes how state funding reductions will be required later in the year, but that the exact areas to be cut are not yet known
• 4:06 – Mayor Norris asks how the City can prepare for the cuts
• 4:49 – Beauregard moves discussion to funding for outside agencies
• 6:09 – Councilor Huja relays Councilor Edwards’ questions about the process, including how new agencies can compete for funding
• 8:30 – Beauregard describes how City and County staff jointly examine proposals for arts, cultural and educational proposals, as well as any contractual obligations for shared ventures between the two localities such as the Emergency Communications Center and the regional jail
• 9:00 – Beauregard describes new programs and ventures in the budget, and Councilors ask specific questions about each program.
• 12:14 – Councilor Huja asks who makes the decision on what proposals get funded during the year from the $40,000 balance, and Beauregard says that is generally a staff decision
• 20:33 - Beauregard begins discussion of programs aimed at serving children, youth and families. Councilors discuss fully funding the “Real Dads” program
• 25:37 – Councilors discuss funding to help the Dogwood Festival, and Parks and Recreation Director Mike Svetz. The Dogwood Festival is run by a non-profit agency, and has requested that the bill they must pay to the City be capped at $8,000. Council discusses the issue, and possible changes to next year
• 36:30 – Councilor Brown questions funding for Charlottesville Municipal Band – City Manager Gary O’Connell answers, having entered the meeting
• 40:55 – Mayor Norris asks about a teaching program that was not funded, and Beauregard explains why, followed by Huja asking about funding for the Thomas Jefferson Soil and Water Conservation District
• 43:43 – Discussion moves to funding for arts programs, with questions about the McGuffey Center and the Ashlawn-Highland Summer Festival
• 47:20 – Discussion moves to public safety issues such as the regional jail, the Emergency Communications Center and the SPCA.
• 51:57 – Discussion moves to miscellaneous agencies such as JAUNT
• 53:20 – Discussion moves to City’s organizational memberships, including social services programs such as the Workforce One Stop Center as well as entities such as the Thomas Jefferson Soil and Water Conservation District. Huja questions the basis for ongoing funding for the latter.
• 1:10:55 – Councilor Brown asks how the City Manager’s performance is evaluated. Beauregard explains how Charlottesville is part of the Virginia Performance Consortium, a program run in part by the International City Management Association. Brown asks for a work session or a presentation to Council to evaluate this evaluation process
• 1:15:40 – O’Connell describes this evaluation process
• 1:17:04 – Public Works Director Judy Mueller describes how her department is beginning to sort its work program by neighborhood in order to show each City community how it is being served
• 1:21:40 – Mayor Norris asks for more information on the African-American Teaching Fellows program which did not receive $7,500 it requested in the budget.
• 1:22:31 – Discussion moves to Council questions on the budget, beginning with a further discussion on the tax relief grant for city homeowners. Huja questions if the program is reaching enough people. Council decides to raise the amount of money in the grant
• 1:29:31 – Discussion returns to state funding issues, with City Manager O’Connell answering questions.

Sean Tubbs

Councilors review $24.4 million CIP budget for FY2009

The proposed Capital Improvement Plan for FY2009 totals $24.4 million (Source: City of Charlottesville)

The Charlottesville City Council reviewed the budget for City Manager Gary O’Connell’s proposed Capital Improvement Program at its work session on March 13, 2008. O’Connell began his review of the Capital Improvement Budget by calling attention to two major items - $5 million from last year’s budget surplus for a new Smith pool and his recommendation for a $63.1 million bond issue. 

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The five-year CIP has projects totaling $99.4 million, with $24.4 million to be spent during FY2009. The bond issue will be spread across the whole of the five-year period. O’Connell suggested a few times throughout the discussion, that the CIP will be among the first items cut if the City does have a revenue shortfall next fall.

The Parks and Recreation Department will receive just over a third of the CIP budget for this year. The increase is due in part due to Smith Pool, which is funded by a carryover from last year’s budget surplus. $3 million will be spent on the replacement of Onesty Pool in Meade Park.

Councilor Satyendra Huja asked why the agency was the primary beneficiary of the CIP this year, and asked if that accurately reflected Council’s priorities. Councilor David Brown reminded Huja that the City’s capital needs change each year. O’Connell said until recently the school system was the primary recipient of the CIP.

“Our parks and [recreation] system has gone to pot,” O’Connell said. “If the schools were sitting here with a $10 million school renovation project, I suspect that would get a high priority but they don’t have that need.”
Huja also asked about a $500,000 line item projected in FY2013 for renovations for the Central Library on Market Street. O’Connell said the money was being placed there as a projected need, but that the full project would likely cost over $20 million. He said a discussion about how to share the costs with the County would be needed in the coming years.

A more immediate project is the $9.7 million Ivy Road/Fontaine Area Fire Station, which O’Connell said is currently being designed and planned. “We’re in the midst of some architectural work, we’re in the midst of detailed discussions with UVa at the Fontaine Research park,” O’Connell said. Part of the cost estimate includes an access to Fontaine Road, and the City Manager said may end up being cheaper than initially suggested.

Councilors spent some discussing the ongoing mall renovation project, and O’Connell said there was a need to speed the project up given that growing business concern about how the repairs will affect their trade. Brown said the City could save money on the project by limiting it to the mall rather than the side streets. Jim Tolbert, Director of Neighborhood Services, said the $7.5 million project focuses on the mall, but that two projects are in the works.

“Contractually we are obligated to do some improvements on 5th Street E in association with the Holsinger building. We’ve held off until the decision [on the second Mall crossing] has been made, and we’ve agreed to do 2nd Street by the new [Landmark] hotel between it and Live Arts. Those two we have to do, and they’re in there,” Tolbert said.

Councilor Huja said he did not support spending $750,000 on a “way-finding” initiative, and Mayor Dave Norris agreed. O’Connell defended the program and asked Council to give him a chance to present it to them. He said he’s like to take Council to Staunton to show them how that community improved its signage to help tourists and citizens.

Councilor Brown sounded surprised that the item was still in the budget. “We talked last year about cutting it, but we never talked affirmatively about why it should be in the budget again,” he said. After some discussion, Council agreed to keep the item in the budget in principal, subject to approval when O’Connell does present the initiative later this year.

City Manager defends economic development fund

On the heels of recent scrutiny by the Daily Progress into the City’s $4.3 million economic development fund, City Manager Gary O’Connell told Council they would soon be asked to consider formal guidelines for its usage.

“We think it’s important that City Council review and formally approve guidelines for expenditures,” O’Connell said.  “We won’t spend a dime out of it until we get your approval.” O’Connell said the fund was started over ten years ago to help the City give incentives to firms that wanted to invest here.  Recent expenditures from the fund include $160,000 for the Water Street design competition, $200,000 for a study of the Water Street garage and $45,000 for an ongoing study of parking in downtown Charlottesville.

O’Connell he thought the fund would be useful in the near future to help the City weather a downturn, perhaps by investing in a workforce housing program.  O’Connell asked Council if he they wanted to discuss this project during their forthcoming work session on how to use the City’s Affordable Housing Fund. Norris said he would prefer to hold two separate work sessions, and wanted more information on the guidelines. 

Mayor Norris questioned whether the City should continue contributing to the fund, given that it currently has a balance of over $4 million. O’Connell said he could see the fund being depleted in the next three years, and hinted that the Planning Commission will soon see a project that he said would use some of the money.

Timeline for podcast:

00:37 – Gary O’Connell defends the City’s $4.3 million economic development fund, and says Council will soon review and approve guidelines for expenditure.
08:40 – Discussion moved to the CIP budget
13:40 - Councilor Satyendra Huja asked if the percentage amounts being spent in each area reflected the priorities of City Council, prompting a discussion about what those priorities should be
18:03 - O'Connell reviews education projects in the CIP
19:40- O'Connell reviews facility improvement projects in the CIP, and is asked by Huja about the Central Library improvement project
19:54 - Mayor Dave Norris says the discussion should focus on CIP projects for FY2009
20:24 - O'Connell reviews public safety projects in the CIP, including a $9.7 million Ivy Road / Fontaine Area replacement  project
23:47 - Discussion enters into the Mall renovation project enters
25:39 - Councilor David Brown asks if the Mall renovation project includes the side streets, and he is answered by Jim Tolbert of Neighborhood Development Services.
27:47 - Councilor Julian Taliaferro asks if the city can save money by using local brick, and is answered by Tolbert.
29:40 - Huja asks about the $1.75 million West Main Streetscape project
30:32 - Huja asks about the $3 million project to improve Old Lynchburg Road
32:57 - Norris asks about the $309,000 to be spent in FY2009 on sidewalk repair
34:29 - Norris asks where funding to implement recommendations from the Pedestrian Safety Committee would come from
35:43 - Discussion moves to bondable projects for Parks and Recreation Department
38:37 - Mayor Norris questions whether City should continue contributing to the Economic Development (Strategic) Initiatives
40:02 - Discussion moves to the $120,000 in Neighborhood CIP funds - funds the City grants to neighborhood associations for projects they initiate and oversee
41:15 - Councilor Huja says he is opposed to a $750,000 way-finding initiative
45:09 - Discussion moves to non-bondable projects for Parks and Recreation
48:09 - Huja calls for some way to help the City acquire more land for parkland, prompting discussion that eventually leads to talk of remediation for the land in the Ragged Mountain Natural Area. O'Connell gets Council to agree in principal on dedicating money from the Rivanna Water and Sewer Authority to pay for this land.
53:07 - Norris asks where money for sustainability initiatives are reflected in the budget
54:47 - Brown asks if CIP reflects Council's recent discussions of creating a stormwater fee

Sean Tubbs

County Supervisors set 71 cent tax rate for advertisement

At their budget work session on March 17, 2008, the Albemarle County Board of Supervisors decided to advertise a 2008 real estate property tax rate of $0.71 per $100 of assessed property value.  If adopted, this would be a 3 cent rate increase over the 2007 tax rate of $0.68.  The vote was 5-1 with Supervisor David Slutzky (Rio) voting against.  Slutzky tried to get support for a rate of $0.72.  A motion by Ken Boyd for a $0.70 tax rate failed on a 2-4 vote with Supervisor Lindsay Dorrier (Scottsville) being the only other vote supporting a 2 cent increase for advertisement.

The advertised rate sets the ceiling for the potential tax rate in 2008.  The Board of Supervisors will hold a public hearing on this tax rate on April 2nd.  The Board can adopt that rate, or a lower rate, after the public hearing, as they finalize their budget in April.  Any rate that is adopted will be retroactive to January 1, 2008. 

The Board received an assessment of the “funding shortfalls” in County Executive Bob Tucker’s budget, based on current revenue and expense assumptions.  At the beginning of his report to the Board, Tucker reported that the local government budget for FY 2009 (excluding schools) faced a $900,000 deficit and staff are projecting a $3.5 million deficit for FY 2010.  Revenues raised by a tax rate increase would be split 60:40 with the school division with local government receiving 40% of new revenues.  Several Supervisors identified programs and initiatives that would require additional funding in the budget.

At one point in their discussion, the deficit reached $3.035 million for the current budget as Supervisors added new items for consideration, including the $500,000 requested by IMPACT last week for unspecified affordable housing initiatives.  The Supervisors were told this would require an additional 5 cents on the property tax rate to fully fund all the items.  Four initiatives were flagged for future consideration in the budget process: the cost of an additional social worker; additional funds for affordable housing; a 1 cent transfer being restored for the capital budget; and funding of unspecified frozen positions on local government staff. 

The last time the tax rate was increased in 2000, the Board of Supervisors was caught by surprise by the retroactive nature of the adjustment as it provided 6 months of unanticipated revenue in the amount of about $1.2 million [see Attorney General's opinion on this matter].  The tax rate follows a calendar year whereas the County’s fiscal year begins July 1st.  The increase in tax rate in April 2000 was from $0.72 to $0.76.  Tucker told the Board that each penny increase in the tax rate would add $300,000 to the current fiscal year.  Thus a three cent tax increase would generate an additional $900,000 for the local government’s 2007-08 revenues.

Because the County’s 2008 real estate reassessments were negative overall (-0.25%), the tax rate advertisement printed in the newspaper will not include what is known as the “lowered tax rate.”  When assessments increase by 1% or more, a locality has to advertise a rate that would essentially level fund government.  With virtually level assessments, that tax rate this year would be the same as last year, thus these details are not required in the advertisement according to County staff.

Brian Wheeler

Council reviews EMS and transit initiatives at budget work session

The Charlottesville City Council has held a second work session on City Manager Gary O’Connell’s proposed budget for FY 2009. On March 13, 2008,  O’Connell took Council through the major initiatives in the operating budget as well as the Capital Improvement Program (CIP).

Podcast produced by Charlottesville Tomorrow * Player by Odeo

Listen using player above or download the podcast: Download 20080313-CC-BudgetWS2a.mp3

O’Connell provides update on EMS Billing

Gary O’Connell provided Council with a brief update on the status of negotiations on EMS Revenue Recovery billing currently ongoing between the City and the Charlottesville-Albemarle Rescue Squad  (CARS).  O’Connell says CARS will be on board with EMS billing, but added the organization is waiting to see what will happen with the County’s negotiations with its rescue squads on how the revenues will be allocated to public safety.

O’Connell reminded Council that it allocated money  to the EMS program in last year’s budget, but the program has not been implemented.  Under the current budget proposal, the new Fire Department’s  EMS employees  will begin work in August. EMS Revenue Recovery Billing would begin in October, pending Council approval of the practice. 

Under EMS billing, people who require ambulance service will have their insurance billed. If they do not have coverage, a scholarship or compassionate billing service would allow them to receive service anyway. O’Connell said the new system would require a “big public education effort” to let people know that no one will be denied service. Council wanted more information on how “compassionate billing” works in other jurisdictions.  Fire Chief Charles Werner said that most people with insurance pay a premium for ambulance service whether they use it or not.

“What this becomes is a user fee, a revenue source that is outside the normal real estate [tax],” Werner said, adding that between $3 and $4 million of revenue recover y could be “captured” each year in both the City and County to help offset the cost of the new ambulance service.  Werner also said that CARS would be expected to receive between $400,000 and $600,000 from EMS billing.

Councilor Satyendra Huja asked what agency would be responsible for coordinating the billing, and Werner responded that the City and County have the desire to have both localities bill from the same location.

Mayor Dave Norris asked O’Connell if he wanted Council’s approval at the work session. O’Connell said he would be back in early summer with a formal proposal. Norris pointed out if the current budget proposal is adopted, that will imply Council approval.

Watterson explains new CTS routes

CTS Director Bill Watterson answers questions about major transit initiatives in the budget

Bill Watterson, Director of the Charlottesville Transit Service, briefed Council on how an additional $380,000 in increased funding would be spent.  In short, Route6B will be reconfigured as the new Route 8, which will now connect downtown with K-Mart and Seminole Square Shopping Center via the Barracks Road Shopping Center and Preston Avenue. The Route will also now be routed through Angus Road to avoid using the stretch of US 29 between Hydraulic Road and the 250 Bypass, meaning the bus will no longer stop in front of the Kentucky Fried Chicken. That area will eventually be the location of an additional lane on Route 29, and Watterson said CTS is moving the line now in anticipation of that construction.

Route 3A (serving Belmont) will be renamed Route 3, and extra funding will go to operate more buses during peak service times.  Route 3B will be reconfigured to include additional service to Charlottesville High School. Watterson said this new service would connect the University with the Tenth and Page neighborhood.

Night service on Route 5 will go forward if CTS gets a grant from the federal government. The $70,000 local-funding match for the grant will be provided by the County.

Councilor Huja questioned whether the County was putting enough new funding into the system.  O’Connell said the City’s new investment pays for new service in the City where the County’s new dollars pay for new service there. Watterson said the system is currently has an informal 80-20 split in terms of funding, and the County’s additional funding is consistent with that formula. Councilor David Brown said the County should be commended for raising their funding for transit for a second year in a row, especially while negotiating a tight budget.

Affordable housing programs discussed

The Capital Improvement Program includes $1,400,000 for the Charlottesville Affordable Housing Investment Program in the next fiscal year, and assumes $1 million for the next five years after that. O’Connell is suggesting Council hold a work session to determine how to use the money. The work session will come after the joint City-County Task Force on Affordable Housing makes it report later this year.
Brown suggested asking the public for specific proposals, and then basing funding on that, rather than specifying the amount of funding first. Norris said this year the fund had requests totaling $2.3 million for $1 million of funding. O’Connell suggested that Council put a priority on programs that allow the leveraging of dollars.

The ceiling for the Charlottesville Housing Affordability Tax Grant has been raised to $365,000, opening the program to more residents. However, Norris wonders why funding for the program has been reduced. Budget analyst Leslie Beauregard said that’s because the City did not fully spend last year’s allocation of $588,767. Under the program, homeowners with an income less than $50,000 can apply for a grant to help cover some of the cost of property taxes. Huja suggested the program needed to be better publicized. Only 16 percent of eligible homeowners took advantage of the program last year.

Timeline for podcast:

• 0:48 – Mayor Norris introduces the work session
• 1:02 – City Manager Gary O’Connell begins the process
• 1:55 – Review begins with discussion of $380,000 in additional funding for CTS for new service
• 3:18 – CTS Director Bill Watterson explains what new service this additional funding will bring
• 9:28 – Councilor Julian Taliaferro asks if additional service can be provided to CHS, but Watterson said he’s constrained by resources and does not want to over-commit at this time. Huja follows up with a second question on the CHS issue
• 13:48 – Councilor Holly Edwards asks how long a time period CTS will use to determine if these new routes are successful. Watterson replies that a methodology to assess service will be developed as the Regional Transit Authority discussion continues, but says that regular updates will be made to the MPO Policy Board
• 15:48 - Councilor Huja calls for a radical shake-up of the CTS system to make it more responsive to customers. Norris says the City-County Regional Transit Authority will provide a venue to take that “hard look” at the system.  Huja says he doesn’t think the County is putting in enough new money into transit this year.
• 20:43 – Edwards repeats her call for accountability on ridership numbers, prompting a discussion of how CTS defines what it means to be “on time”
• 24:59 – Discussion moves to affordable housing programs
• 33:25 – Norris asks why funding for the Charlottesville Housing Affordability Tax Grant is lower than this year.
• 36:52 – Discussion moves to youth and recreation programs. A proposed new initiative would increase the number of programs by using money saved in the consolidation of Crow and Smith Pools.  Parks and Recreation Director Mike Svetz describes what some of these would be like, and is asked questions by Councilor Taliaferro, Councilor Edwards , and Councilor Huja
• 46:00 – Discussion moves to the expansion of the Summer Youth Internship, which has run as a pilot program for the past two years. If Council agrees to the $63,242 in funding, sixty Charlottesville teens will get the chance to work in various City departments
• 51:13 – Discussion moves to the City Fire Department’s addition of EMS Service.
• 56:59 – O’Connell explains how EMS Revenue Recovery billing works
• 58:23 – Edwards asks for examples of how “compassionate billing” in other communities, and is answered by Fire Chief Charles Werner.
• 59:24 – Werner explains the financial benefits of EMS billing
• 1:01:39 – Norris asks when O’Connell wants an approval on EMS billing
• 1:02:44 – Brown, a chiropractor by trade, says as a health care provider, he’s not allow by insurance to simply write off someone’s  debt. He calls for specific examples of how “compassionate billing” works
• 1:04:03 – Huja asks for confirmation that additional funding for Fire Department salaries will go to pay for six full-time EMS medics
• 1:04:11 – Norris asks how the carryover money from last year’s budget has been allocated. O’Connell says the money from last year will pay for the operating budget for EMS in FY2009.
• 1:05:18 – Brown lists two implications of moving to billing

Sean Tubbs