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Status of Charlottesville City Schools project in flux as City Council debates funding options, potential meals tax increase

As Charlottesville’s City Council assesses the proposed Fiscal Year 2023 budget, the city’s staff is asking for direction from City Council and City Council asking for direction from city staff.

Councilors, hesitant to the raise real estate tax rate on top of an already expected rise in taxes, are trying to find a path forward in the face of the need to raise revenue to fund major projects. That’s made the renovation and expansion of Buford Middle School and changes to which grades are taught in the building a major sticking point.

“There are lots of financing options and options we can weigh, but we need to know where we’re headed for the product itself. And finally, we need to know about next steps. What do we do in terms of the design? Do we keep going? Do we look at something else? We’re there. We need that decision,” Krisy Hammill, city budget analyst for the city, said at a budget work session this week.

City Council has advertised a proposed real estate tax rate hike of up to 10 cents to help fund the $75 million Buford project. However, councilors are less than enthusiastic about raising the rate that much after real estate assessments in Charlottesville increased by an average 11.69%, which will result in higher property tax bills.

At a Thursday work session, councilors discussed the potential of raising the real estate tax rate in phases as opposed to raising it significantly at once.

“I think it would be easier if we did two cents this year and two cents next year, versus four or five cents next year,” Councilor Sena Magill said.

City Council is also looking at raising the meals tax as a potential source of funding for the project. That tax income could take pressure off the need to significantly raise the real estate tax.

City Council decided Thursday that it will advertise a potential 0.5% increase in the meals tax, which would give the city an estimated $1.2 million boost in revenue, according to staff predictions. Councilors could vote to give the added money to the schools project, interim city manager Michael C. Rogers said.

While councilors generally support the schools project, the price tag continues to be a source of contention and skepticism.

“When people say ‘hey, you promised us you were going to support school reconfiguration, my response is yeah, when I thought it was going to be $50 million,” Mayor Lloyd Snook said.

In October, the council, including Snook, Magill and Michael Payne, voted unanimously to back the $75 million plan proposed by the school board.

“We’re all in for the schools,” Snook said at the time. “I’m all in favor of it. Go for it.”

Snook also expressed support in October for supported spending over $70 million on the project to include geothermal heat and solar panels, among other upgrades. At the time, the council was banking on legislative approval of a potential sales tax increase in the city 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. Republican Gov. Glenn Youngkin was elected and Republicans took control of the House of Delegates. Four recently elected Republicans recently rejected the sales tax bill, leaving the city looking for traditional ways to fund the project, now estimated to cost $76.8 million.

Councilors may consider other options. For $68.8 million, the city could renovate one of Buford’s four buildings but would need to delay work on another building as well as change the designs and materials used. Expanding, but not renovating the school would cost $51.8 million.

Councilor Brian Pinkston has consistently endorsed the $68 million option, and called on councilors Thursday to start taking tangible steps toward a decision.

“At some point, we’re going to have to say if we’re going to do this or not. We just can’t stay in this position much longer,” Pinkston said.

At Pinkston’s request, city staff will run numbers and provide City Council with information on the reconfiguration scenarios and options that are financially possible at the next budget work session on March 17.

The first public hearing on the proposed budget and tax rate increases will be held March 21. City Council is set to approve the budget and any tax increases April 12.

Source: www.dailyprogress.com

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