Charlottesville City Council is increasing funding for Charlottesville schools to cover unavoidable expenses in the upcoming fiscal year.
The council agreed to give the division $1.3 million over the amount provided in fiscal 2020 during a virtual budget work session on Wednesday.
The city’s total contribution would be about $58.6 million of the division’s $88.85 million total budget.
The extra money will go toward the division’s projected $2.5 million deficit and comes from money the city is holding in reserve to cover its own revenue shortfalls from the coronavirus pandemic.
To make up the rest of the gap, the division is planning $1.1 million in cuts, though schools Superintendent Rosa Atkins did not provide details on what those will entail. She’ll discuss the cuts with the School Board in a virtual meeting at 5 p.m. Thursday.
Atkins said she wants to use attrition to reduce personnel costs and move employees around school buildings to keep them employed. Employees affected could be notified as soon as Monday, depending on what the School Board decides.
The School Board’s initial funding request totaled $91.7 million and relied on $61.2 million from council — a $3.4 million increase from the current operating budget. Much of the division’s new spending was allocated for staff raises and overhead cost increases.
City schools staff have trimmed that request back to only include a $1.9 million increase in non-discretionary or critical expenses compared to the current budget. That includes increases in health insurance and retirement contributions as well as four more teachers related to enrollment changes. Officials are also projecting a $505,000 drop in revenues.
The division is expecting $1.2 million in federal stimulus money, but Atkins said those funds will go toward offsetting losses in sales tax and lottery revenue and other one-time costs related to the pandemic. If the board uses federal dollars to balance its budget, Atkins said she would expect to start the new fiscal year in the hole.
The council’s work session on Wednesday focused on the impact of the coronavirus pandemic on the spending plan for fiscal 2021, which begins July 1.
City officials have said they are expecting a loss of revenue of at least $8.4 million over the current and next fiscal year from the pandemic, but the number could be a conservative estimate. Other governments are expecting revenue shortfalls of around 5% to 6% and Albemarle County is projecting a loss of 7.2%, but the city’s proposal projects only a 2.7% loss of revenue.
The city is hoping to keep funding at nearly the same level as the adopted fiscal 2020 budget. The revised proposal is $191.2 million, a decrease of $5.4 million from City Manager Tarron Richardson’s original plan. Officials also expect about $3 million in losses in the current fiscal year.
The newest information highlighted in Wednesday’s meeting concerned the Capital Improvement Program.
Most projects will be delayed because the city is proposing to cut all but $900,000 of the roughly $7.3 million transfer to the program from the general fund. That money, plus $1.6 million in other budget cuts, would be set aside for any unplanned expenses caused by the pandemic.
The $124.1 million CIP, which covers five years, includes $25.7 million for fiscal 2021. The council approves a five-year capital spending plan each year, but only dedicates funding for one year at a time. Further years are included as projections.
The revised proposal cuts the fiscal 2021 allocation by about $10 million. A majority of that funding has been shifted to the fiscal 2022 CIP, which would increase by about $7 million over original projections.
One of the biggest changes is the redistribution of funding for a downtown parking garage required under an agreement with Albemarle County to keep county courts downtown.
The estimated $10 million cost was originally split about evenly between the next two fiscal years. The revised proposal places $2 million in fiscal 2021 and $8 million in fiscal 2022.
It’s unclear if the city will still be able to make deadlines required under the agreement.
The garage will be constructed at Seventh and Market streets on property currently home to the Lucky 7 convenience store and a Guadalajara Mexican restaurant.
The proposed structure would have 300 parking spaces and 12,000 square feet of retail on the ground level. The preliminary cost estimates for construction is $8.5 million.
The city is required to start construction no later than May 1, 2022, and have the spots available by Nov. 30, 2023.
If the city doesn’t meet construction deadlines, according to the agreement, it must provide 100 dedicated spaces in the existing Market Street Parking Garage or return ownership of Albemarle’s half of the purchased parcel to the county, pay the county the other half of the appraisal value and give the county sole control of the whole property.
Councilors Michael Payne and Sena Magill expressed concerns and opposition to the garage, which has been a point of contention for several months among activists who want the city to explore other options.
“I think this is a project not driven by serious planning considerations, but by a political deal,” Payne said.
Mayor Nikuyah Walker and Councilors Heather Hill and Lloyd Snook supported the garage plan as presented.
“We are not in 2020 or even in 2022 going to be a car-free city and for us to think that we are is ludicrous,” Snook said. “I just don’t think it’s a realistic thing to say that we’re not going to build the parking garage.”
Another big change is the roughly $6 million contribution to the renovation of the county’s district court building, which was originally spread across the next two fiscal years, but would almost entirely be funded in fiscal 2022 in the revised proposal.
Other capital casualties of the pandemic would be $500,000 for affordable housing rehabilitation; $400,000 in parks projects such as tree planting and playground renovations; $601,000 in transportation improvements; $392,000 in replacement radios for public safety and $377,553 for a replacement emergency vehicle.
The planned $394,241 allocation for Piedmont Housing Alliance’s redevelopment of Friendship Court would be pushed back to fiscal 2022.
The council is operating under a new budget timeline that requires the spending plan to be approved by June 30. A public hearing and first reading will be held at the council’s May 18 and final approval is expected at the council’s June 1 meeting.