A draft spending plan for capital projects in Charlottesville would nix funding for the West Main streetscape project, put money toward the school division’s reconfiguration project and fund some of Council’s other priorities.
The draft five-year capital improvement program would fund a range of City Council’s priorities, including earmarking $50 million for the schools reconfiguration project that’s still in the initial design phase. The plan would cost $160.5 million, more than double what the city planned to spend in fiscal year 2016.
“There’s no way this current draft is affordable without significant revenue enhancements,” Krisy Hammill, a senior budget and management analyst, told councilors during a work session Wednesday.
That draft does not fund the West Main streetscape project, and councilors didn’t seem inclined to change that during the work session, given the other projects they want to fund.
“We’re used to being the best at everything and we’re not big enough,” said councilor Sena Magill.
Whether to shelve the West Main project, which has been in the works since 2013, will be discussed at council’s Feb. 16 meeting.
“I don’t think we ought to walk away from it at a work session without getting everyone proper notice that it’s on the table,” councilor Lloyd Snook said.
Capital improvement programs are plans, not a budget, but the first year of the plan is the city’s capital budget.
One way to pay for all the projects is a 10-cent tax increase over the course of five years. City staff and councilors said the tax hike is just one option.
Mayor Nikuyah Walker said she wanted to get a better understanding of how capital dollars have been used previously and how the city can do better.
“It’s just so much that there’s so much to every piece of this, and I think not continuing to do whatever we’ve been doing that hasn’t necessarily worked and align pieces so that we can see some results is a big part of this equation,” she said.
The city is operating on a $191.2 million budget for Fiscal 2021, which started July 1.
For the coming fiscal year, city budget staff members said they have an initial budget gap of $4.5 million but they are working to balance the spending plan by Feb. 9. The budget gap doesn’t include a tax rate increase, the use of economic reserve funding, increases for employee compensation or $4.9 million in new requests from city departments
Council and the city planning commission will hold a public hearing on the draft CIP at 6 p.m. Feb. 9.
“We’ve been very intentional to put this out as a draft,” Hammill said. “… Again, we’re putting this in front of you to try it on for size, to see if we’ve made the mark, missed the mark, and to get some feedback from you.”
Under the current funding scenario, including the tax increase, the city will max out its credit limit as early as 2028.
“And your credit card is going to have to go in your pocket for a while before you can pull it back out,” Hammill, said referring to an analogy about the city’s debt capacity, not an actual credit card.
The draft CIP includes $15.89 million for the Friendship Court renovation, $13.5 million to redevelop CHRA properties and $8 million for the Seventh Street Parking Garage, which has been a point of contention for more than a year. The city committed to the garage as part of an agreement with Albemarle County to keep its courts downtown.
Councilor Michael Payne and others have questioned the parking garage project.
In a change from previous discussions, Snook said he would be willing to have a conversation about the parking garage, something he wasn’t willing to do six months ago.
“We don’t have a demand for parking right now,” Snook said. “Admittedly things are slow, but we don’t know when things are going to come back.”
City staffers said they would need to know sooner rather than later about plans for the parking garage.
One of the highest price tags in the plan is the $50 million for the reconfiguration project, which is just a placeholder amount until a project estimate is determined. That figure is expected to be the minimum possible cost.
To pay for that project, Hammill said the council could have to adjust the funding formula for the school division’s operating budget. Historically, the school system has received at least 40% of new real estate revenue, though the School Board typically requests additional funding.
Councilors want to have a broader discussion with the School Board about the reconfiguration project and other capital needs and mentioned the need to have more joint meetings on the topic. Currently, the panels meet once a year.
During Thursday’s School Board meeting, board member Jennifer McKeever also mentioned the need to have more frequent meetings with City Council.
No funding for the project is included until fiscal year 2025, but figuring out the financing needs to happen before then.
“I think something we have to be realistic about too is that a $50 million placeholder for school reconfiguration, we feel pretty comfortable is on the low end and it could get up to 100 million,” Payne said. “So even in this proposed scenario for cutting West Main Street, doing a 10-cent over time increase in the real estate tax rate, reexamining the general fund contributions to schools, if it’s $50 million on top of that placeholder, we’re still nowhere near close.” Payne said.
Councilor Heather Hill said that putting in the placeholder figure has shifted council’s thinking about everything else.
“I don’t know that number is going to get us there, but I also recognize the statement of observations that the infrastructure in our schools and in our city and in our transportation systems is just not where it should be,” she said.
The city’s contribution to the school division makes up about 30% of its budget while local funds comprise about 66% of the school system’s operating budget.
Since 2011, the city schools have been exploring the reconfiguration project, which would put sixth-grade at Buford Middle School, send fifth-grade back to the elementary schools and turn Walker Upper Elementary into a centralized preschool center. The School Board decided in December 2018 to move forward with that idea and request funding from the City Council, which controls the capital budget.
In fiscal year 2020, $3 million was allocated for design work, which would be the first step in determining how much the project would cost. Once that estimate is known, Council and the School Board will discuss how to move forward.
The city has requested proposals from firms to complete the design work but the contract has been in limbo for the last year. As of Wednesday, the contract has not been finalized.
“This process has been hindered due to current circumstances, as well as the procurement complexity for this type and size of a project,” city spokesman Brian Wheeler said.
He said the goal is to have a completed contract ready in early March or sooner.