The newly constituted Charlottesville City Council took a birdseye view at the process of crafting its spending plan on Thursday.
The council held a budget retreat on Thursday, the first discussion on the spending plan for fiscal 2021 for newly elected Councilors Michael Payne, Sena Magill and Lloyd Snook.
The city is operating on a $188.8 million budget for fiscal year 2020, which started July 1. It includes one percentage-point increases to the meals and lodging taxes.
City staff’s presentation focused on potential revenues and increases in debt service. Based on an annual growth of 1.5%, the budget was projected at $191.7 million for fiscal 2021. That number could change in the coming weeks and months.
“We are still very preliminary with a lot of this stuff,” said Ryan Davidson, a senior city budget and management analyst.
City Manager Tarron Richardson also has proposed a $127.9 million Capital Improvement Program, which covers five years, including $35.8 million for fiscal 2021, which starts July 1, 2020.
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.
A large section of Thursday’s meeting focused on an expected jump in debt payments. The city has paid an average of $8.3 million a year in debt service over the past 10 budgets, but that figure is expected to grow to about $21.5 million a year over the next six years.
City staff discussed using part of the debt service fund to offset the increasing payments to lessen the impact on overall expenditures.
One major initiatives driving expenditures for next year is the school division appears poised to ask for an additional $4 million in operating funds above the current year’s allocation, according to Krisy Hammill, a senior city budget and management analyst. That would put the city’s contribution to the division at about $61 million.
In last year’s budget process, the school division asked for a $3.3 million increase over the prior year’s allocation.
Richardson said he is still reviewing the city’s organizational structure to ensure departments are operating efficiently and services aren’t being duplicated.
City staff members also gave a preliminary view of the changes to the way the city funds nonprofits. The city has been revising the Agency Budget Review Team process for more than a year.
Human Services Director Kaki Dimock said applications for funding have been ranked on how they accomplish goals within the city’s strategic plan and the impact of the proposed funding.
On March 2, the city and school division budgets will be presented to the City Council. Public hearings are planned for March 16 and April 6, with final approval planned for April 14.
The council will hold a joint budget work session with the city School Board on Tuesday.