Charlottesville is planning to put about $3.9 million in leftover funds toward future capital projects.
The City Council conducted a first reading Monday of the appropriation of its surplus from fiscal 2020, which ended June 30.
The money would go toward a contingency reserve of the Capital Improvement Program.
The city is operating on a $191.2 million budget for fiscal 2021, which started July 1. The spending plan is largely in line with the fiscal 2020 budget as officials had to cut back on plans because of the coronavirus pandemic.
The budget includes the first year of the city’s five-year CIP, which sits at about $124.1 million. It includes $25.8 million for the current fiscal year, which was significantly reduced because of the pandemic.
Finance Director Chris Cullinan said the city’s revenues were down $1.8 million from fiscal 2019, but the decline was anticipated as the pandemic hit in the final quarter of fiscal 2020.
Cullinan said the city has a policy of holding 17% of its revenues in a fund balance. The $3.9 million discussed Monday is money beyond that policy.
Cullinan said a portion of the extra funds is typically carried into the CIP for one-time expenses because the dollar amount cannot be guaranteed from year to year.
“Any sort of surplus we treat as a one-time event and we can put it to a one-time use,” he said.
At the beginning of the pandemic, the council decided not to put part of the money it received from Albemarle County through a revenue-sharing agreement toward the CIP. Cullinan said adding more cash to the program cuts down on the debt the city must take on through bond issuances.
Krisy Hammil, a senior budget and management analyst, said the council will have to approve any expenditure of the CIP contingency reserve. If the city later needs to keep the money for operating expenses in the next budget, the council would be able to take that action at a later date.
The council is in the early stages of developing its budget for fiscal 2022, which starts July 1.
Big-ticket items expected in the budget are the school division’s reconfiguration project and a planned downtown parking garage, which is part of an agreement with the county to keep Albemarle courts downtown and to construct a new co-located General District Court.
Mayor Nikuyah Walker said the council needs to consider setting aside funds for specific projects, such as the schools reconfiguration.
Councilor Michael Payne said he was “pessimistic” about the prospect of further economic stimulus from the federal government and supported putting the money into the CIP.
The council will hold a public hearing on the surplus funds at its Dec. 21 meeting.