With an estimated $20.3 million more than originally projected in revenue coming in this fiscal year, Albemarle County plans to give raises, address work backlogs and fund additional capital projects.
On Wednesday, the Albemarle County Board of Supervisors will vote on a mid-year budget amendment and other appropriations that could bring its overall budget to more than $550.1 million for the current fiscal year 2022 budget, which ends in June.
The county also has approximately $13.2 million leftover from last fiscal year, which the board will discuss at its Dec. 15 meeting.
Albemarle will use the additional revenue — which is mostly coming from local sources — to give a 6% raise to full- and part-time county employees, add 16 new positions, give $10.3 million to the school division and have $6.6 million in cash for capital projects.
County staff say this can be done because of higher-than-projected real estate tax collection rates; higher consumer-driven taxes, such as sales, meals and transient occupancy and increases in new construction.
“We’re looking back after artificially lowering our budgets and we’re seeing trends that suggest our economic recovery here in our area has more than come back before we thought it would,” County Executive Jeff Richardson said.
If approved by the board, the raises will become effective immediately.
“The 6% is predicated on the performance of our budget and is recognizing that in the world of workforce stabilization right now, we need to address employee pay in order to remain competitive,” Richardson said.
Retirements have gone up 60% compared to the previous five years, he said, which does not surprise county staff. According to a state and local government workforce 2021 trends survey by MissionSquare Research Institute, more retirement-eligible employees are accelerating their retirement date.
“But as these people leave with full service retirement, we have to fill these positions either through promotion and at entry level coming in the door, or through being able to compete for talent with other jurisdictions,” Richardson said. “We have to be mindful of what the market is for the jobs that are out there, and we think this is a necessary move to keep us competitive at what I believe is a really critical time.”
The recommended amendment also includes $150,000 for a compensation study to review the county government’s classified pay scale. And in addition to the raises, the county government’s classified pay scale will increase by 3% and police, fire rescue and the Sheriff’s Office salaries on the county’s public safety pay scale will increase consistent with the salary increase.
Recommended new positions include four police officer positions; three positions in the Community Development Department for building division support; an additional assistant county attorney position; three positions in the Department of Social Services to the support the Child Protective Services program; three positions in the Department of Finance and Budget for accounting, procurement and contract management; a management analyst position in the Economic Development Office; and a help desk support position in the Department of Information and Technology.
“We have worked load capacity issues that are playing out every day in our community with permitting and community development functions, but it’s also in other areas too,” Richardson said. “It’s in social services. It’s in the police department. It’s in our level of responsiveness to growing demand for services.”
The county also wants position changes that it says will have no net budget impact — convert a part-time assistant attorney position to a full time paralegal position; add three part-time positions in the Department of Finance and Budget; add one regular part-time position for performance and strategic planning; approve four overhire positions in both the Fire Rescue Department and Police Department; approve two overhire positions in the Social Services Department; and authorize the hiring of at most 15 county government positions anticipated to begin after July 1 in the current fiscal year that will assist with a planned separation of the county’s Human Resources Department into separate schools and government departments.
About $2.4 million is going into the capital budget by a formula that the county typically uses for new revenue, and about $4.3 million is recommended as a one-time transfer to the capital budget.
“We shouldn’t spend all of our funds to put us in the hole next year, and so we’re using half of that money as a one-time hit into the capital budget to help offset the essentially the cash needs that we have in the capital plan in order to in order to do the things that we need to do on the capital side,” Albemarle’s CFO Nelsie Birch said.
The $10.3 million dollars going to the school division is based on the funding formula for revenue that the county typically uses. Earlier this year, the School Board adopted an operating budget of $211.2 million.
At the beginning of the pandemic, the county cut back spending at the end of fiscal year 2020: It froze positions, paused capital projects and asked departments to cut about 10% of their operating budgets, in addition to modifying its fiscal year 2021 budget. At the time the fiscal year 2022 budget was proposed, the county was not overly aggressive with its revenue estimates, staff said.
When Albemarle staff worked on the budget for the current fiscal year, revenues for the final quarter of the 2021 fiscal year weren’t known, and at that point, higher than anticipated revenues started coming in, Birch said.
The county had lowered projected collection rates for real estate taxes for both fiscal year 2021 and fiscal year 2022, as it did not know how long the pandemic was going to last.
“That did not prove to be a correct assumption,” she said. “Our collection rate showed no change at all from pre-pandemic years, and so that was the biggest growth in that revenue the fourth quarter was the realization that that actually didn’t happen.”
Sales, meals and transient occupancy tax revenues were down 12.1% in July 2020 to February 2021 compared with the same period pre-pandemic, according to a staff report. Then, in March through June of this year, those revenues were 5.6% greater compared to the same period before the pandemic.
Into the current fiscal year, those revenue collections have remained above pre-pandemic levels — local sales and use tax collected by the county in July through September of this year was up 21.5% compared with pre-pandemic revenue collected during those three months, according to numbers provided by the county. Meals tax revenue was up 3.7%, while transient occupancy tax was up 2.5% compared with pre-pandemic revenue collected in those three months.
“Once it becomes known, then you’re faced with a reckoning of what do you do with this information,” Birch said. “This is pretty dramatically improved, so when you take the projections and the formula that we work through to look at our revenue structure, it is absolutely prudent that we amend the budget.”
Richardson is scheduled to discuss the revenue update after 3:50 p.m. Wednesday, and the board is scheduled to hold a public hearing on the budget amendment after 6 p.m.