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‘Hard decisions’ await City Council on tax rate and schools project

Charlottesville’s City Council faces a tough decision in its next budget—whether to raise the real estate tax rate to fund a long-discussed $75 million school project, or delay yet again a middle school project that has been under discussion for 13 years.

Councilors voted in support of the project in October, though that vote did not include funding the project. And since that time, much has changed.

After a season of contentious leadership transitions, the city’s government is trying to get back on its feet and balance a range of competing priorities. A sales tax bill that would have provided a significant amount of the funding was killed in the legislature. Inflation is rising, and home assessments are going up, hurting taxpayers’ pocketbooks. That leaves the proposed renovation of Buford Middle School, part of a major middle school makeover project called reconfiguration, hanging in the balance. And, to hear leaders from Charlottesville City Schools tell it, it also leaves hundreds of school children who deserve a better school out in the cold — and sometimes heat — once again.

“We need reconfiguration, but also people are terrified that we’re gonna cave on the schools and not have any money for affordable housing. And the thing is, City Council has to look at all of it,” councilor Sena Magill said.

Death of a sales tax bill

For most of the last year, City Council banked on a potential sales tax increase to pay for the Buford project. That increase was expected to bring in up to $12 million a year for school construction projects.

But things changed. Gov. Glenn Youngkin was elected, and Republicans took control of the House of Delegates. Four Republicans recently rejected the sales tax bill.

In interviews before the bill’s final defeat, councilors declined to say outright if the project would move forward without the sales tax increase.

“With the sales tax increase, all of these concerns become moot. Without it, we have serious trouble in the rest of our budget for the next decade. When we gave a nod in October to the $75 million project, it was frankly with the hope and expectation of a more favorable House of Delegates and Governor than we now have,” Mayor Lloyd Snook wrote in a Feb. 3 email to school board members. The email was acquired by The Daily Progress via public records request.

Without the local sales tax option to pay for schools, the project’s funding source must now come from the city, largely through real estate taxes. City leaders are considering raising the real estate tax rate 10 cents from 95 cents to $1.05 per $100 of assessed value in order to pay for the project. City Council will make a final decision on the rate in April.

Although the 10-cent increase is on the table, some councilors are less than enthusiastic about it, especially after real estate assessments in Charlottesville have increased by an average 11.69%. That means property tax bills are already going up.

“I have said for years that I think Charlottesville is under taxing, as far as the real estate tax goes,” Snook said at a recent City Council meeting. “The catch is, I think that raising rates in any significant way on top of an [almost] 12% reassessment increase is, to a lot of people, going to seem ludicrous.”

Tax Rate IncreaseAt current rates, the owner of a $375,000 single-family home pays $3,562.50 in property taxes — a bill split into two payments a year. A 10-cent tax rate increase would mean that homeowner would pay $375 more per year.

Big project, high hopes

The project, known in the city as reconfiguration, has been a top priority for the Charlottesville School Board for a decade. The most expensive factor in the project is the expansion and renovation of Buford, which is currently estimated to cost about $75 million, though cheaper options have been presented.

The project would be the most expensive capital project the city has undertaken in years.

City Council needs to decide this month whether to keep the proposed renovation and expansion of Buford moving. Ground would be broken on the project in the summer of 2023.

In October, City Council unanimously decided to swap out a $50 million placeholder for the project in the city’s five-year capital improvement program with a $75 million budget. The price tag increased following a months-long design process that involved parents, teachers and other community members.

The project would remodel and expand Buford in order to put sixth, seventh and eighth graders at Buford, return fifth graders to their elementary schools and build an early childhood center on the current Walker Upper Elementary School campus.

As a funding decision looms, some councilors are asking more questions. And, some are skeptical if the project is necessary.

The city already has publicly advertised the 10-cent increase to the tax rate, half of which would go toward the school project. However, that advertisement gives the council the option to raise the rate up to 10 cents. Councilors can decide not to go that high. Other increases to other city taxes could be on the table.

Council will hold a public hearing on the tax rate March 21. On Monday, City Council will get its first glimpse at the first draft of the budget, which will include the city’s capital improvement program. Funding for capital projects such as the Buford renovation and expansion is part of the capital improvement program — the first year of which is the capital budget.

After Monday’s meeting, councilors will discuss the spending plan over the course of several work sessions. They will hold the final vote on the budget and tax rate April 12.

One thing already is certain, though: If the city does not raise taxes, it cannot complete all the capital projects in its $158.6 million five-year capital improvement program and afford Buford’s planned renovation and expansion, city budget staff have repeatedly said.

The school board and district strongly support the project, but they are not the ones with funding authority. The city is. And financial support for the project has long taken a back seat to other city priorities over the years.

Now, as the project has been delayed for years, funding the entire project could freeze the city’s ability to fund other capital projects for a decade, city budget officials have said.

Vice Mayor Juandiego Wade, a former school board member, has been part of the conversations since 2009. But even Wade, a strong supporter of schools, says funding the entire $75 million project is tough in view of other needs.

“We have some priorities. We have to make hard decisions, but I believe that the reconfiguration has to be a major player in that. It’s an equity issue,” Wade said. “Inflation plays a part in it, but if we had maybe done these improvements several years ago, maybe we’d be talking about $60 or 65 million instead of $70 or 80 million. At some point we as a community are going to have to make the decision.”

Waxing and waning support

Since serious planning for reconfiguration began in 2017 with a school capacity study, the city has had six city managers.

And in the months since the City Council voted in October, a city government that was already in turmoil saw major leadership transitions. City Manager Chip Boyles resigned a week after the vote. Former Mayor Nikuyah Walker and former councilor Heather Hill, who served on the reconfiguration working group, chose not to seek reelection. And the city does not have a permanent city manager.

City Council now has the task of deciding whether to fund and prioritize several pivotal long term projects while under the leadership of an interim city manager who started the job in February. Michael C. Rogers was hired to perform city manager duties on behalf of the Robert Bobb Group, LLC, a firm hired to run the city until City Council can hire a permanent city manager.

School capital projects make up 55% of the city’s proposed five-year capital improvement program, which was presented late last year. In addition to the school projects, the city wants to spend nearly $22 million on affordable housing projects and programs; almost $16 million on transportation and access; and $12 million on public housing redevelopment projects.

The city’s Capital Improvement Program has steadily increased in cost since 2018 as long-awaited projects started nearing construction. In fiscal year 2017, the five-year plan totaled $76 million.

Other expensive projects are on the horizon. City Council will receive a report on the Albemarle-Charlottesville Regional Jail renovation project Monday. The Charlottesville Fire Department has asked council to look into renovations for the Ridge Street Fire Station.

Magill said she believes that the jail renovation has to happen, as do the fire station improvements.

“There are cracks in the walls,” Magill said of the Ridge Street Fire Station.

Often, conversations during City Council meetings have stacked reconfiguration and affordable housing against each other, but councilors don’t like that framing. The community has continued to call on City Council to address Charlottesville’s affordable housing crisis in addition to the schools project.

“It’s almost seemed like I’m against affordable housing to some people,” Wade said. “I have been supportive of affordable housing, but we, Charlottesville, can’t do it alone.”

Payne is particularly concerned about funding the project on top of affordable housing.

“We can have a luxury, beautiful building, but public housing is in disrepair,” Payne said. “People are pushed out of Charlottesville and their families can’t afford to live here. There’s food insecurity. And when we just zoom out to that bigger picture, what are those tradeoffs?”

Schools Superintendent Royal Gurley Jr. said the same students who need affordable housing also deserve a better learning environment. Those students, he said, are primarily Black and brown students. In Gurley’s view, it’s less about funding a luxury building and more about funding an equitable building.

“These students deserve better,” Gurley said. “Can we get the minimum requirement? Can we get an ADA-compliant gym? I just don’t feel like we’re meeting the basic hierarchy of needs at this point.”

The school division plans to call on City Council and the School Board to collaborate and address both the schools issue and the affordable housing issues during its budget presentation to the City Council on Monday, according to a draft of the slides.

Funding capital projects

Even without school reconfiguration, the city seems to lack the money to pay for all of its priorities. City officials have said at least a partial tax rate increase may be needed to fund these.

Payne said in an interview that, based on city staff projections, funding the Buford project could be the biggest budget decision council has made in decades.

“Freezing the ability to make new investments, and the practical impact that would have in terms of not having money to fund Piedmont Housing Alliance’s apartments on Park Street, future phases of redevelopment of public housing, CAT expansion, Climate Action Planning process,” he said. “It impacts not only our tax rate, which is every homeowner in the city, but also every priority in the city.”

Councilor Brian Pinkston, who joined council earlier this year, supported the Buford project during his campaign last year, and said he was surprised by the skepticism of some councilors.

“I ran on a platform of getting this done because I thought that was pretty much the consensus of the community that this needed to happen. What I’ve been trying to do is to try to find something that is hopefully workable in terms of compromise,” Pinkston said.

In recent weeks, Pinkston has been vocal about shifting support to an alternative plan for Buford that would cost between $65 to $68 million.

Other councilors have said they want more information about how the project went from $50 to $75 million, and want to figure out a way to get the cost down. This includes potentially shifting the project from a full-scale reconfiguration of grades to just a renovation of Buford.

Payne said he continues to be skeptical that moving the grades around is necessary.

In February, Payne asked the School Board for peer-reviewed research on how the changes would affect achievement gaps in the schools.

“There’s no reason to think that reconfiguration would have any impact on the achievement gap,” Payne said. “There’s also not really strong evidence that improving the building will help the achievement gap, but it will clearly have other benefits.”

Payne said the school’s renovation needs are established.

“I think we need to disentangle renovating and modernizing Buford, the achievement gap and school capacity from reconfiguration, and evaluate reconfiguration in and of itself on its own terms,” he said.

Snook wasn’t available for an interview before print deadline. In the Feb. 3 email to School Board members, he said the main issue he hears from voters in about the school division’s achievement gaps, rather than “the need for a spiffed up middle school.”

Magill said she wants the community to be well-informed before a decision.

“Because it’s going to impact people for 10 to 20 years,” she said. “People need to make an informed decision, and this community needs to know how this is going to affect them.”

Reporter Katherine Knott contributed to this report.

Source: www.dailyprogress.com

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