City Manager’s Proposed FY 2022 Operating and Capital Improvement Budget March 4, 2021 BUDGET WORK SESSION #1 OVERVIEW/REVENUES/EXPENDITURES 1 Proposed FY 2022 Operating & Capital Improvement Budget Agenda 1. General Fund Revenues 2. General Fund Expenditure 3. Wrap Up and Staff Follow Up 4. Public Comment budget@charlottesville.gov Office of Budget and www.charlottesville.gov/budget Performance Management 2 Proposed FY 2022 Operating & Capital Improvement Budget Revenue Drivers Taxes FY 2022 Operating Revenue Changes (Adopted Budget FY 2021 to Proposed Budget FY 2022) Local Taxes Real Estate Tax $1,924,172 Transient Occupancy (Lodging) Tax (1,282,721) Sales and Use Tax 495,669 Personal Property Tax (Local Portion) (59,000) Meals Tax (1,142,493) Utility Services Consumer Tax (524,112) Other Local Taxes (106,502) Public Service Corporation Tax 83,541 Cigarette Tax (25,000) Virginia Communications Sales and Use Tax (200,000) More information on the City’s FY 2022 Proposed revenues can be found in the City Manager’s Proposed FY 2022 Operating Budget on pages: B‐1; B‐5 to B‐12; and C‐1 to C‐2 budget@charlottesville.gov Office of Budget and www.charlottesville.gov/budget Performance Management 3 Proposed FY 2022 Operating & Capital Improvement Budget Revenue Drivers FY 2022 Operating Revenue Changes (Adopted Budget FY 2021 to Proposed Budget FY 2022) Licenses and Permits Business, Professional, Occupational License Fee ($175,000) Building and Other Permits 414,500 Vehicle Licenses (10,000) Dog Licenses (4,000) Intergovernmental Revenue State Highway Assistance ($27,670) State Aid for Police Protection 160,884 Reimbursement for Constitutional Officers 62,549 School Resource Officers (301,231) Misc. Intergovernmental Revenue 39,918 Charges for Services Emergency Medical Services (Ambulance) Revenue Recovery ($300,000) PILOT: Utilities Funds 46,191 Other Charges for Services 24,000 Internal City Services (Fees from Non General Funds) (27,846) Parks and Recreation Revenue 330,035 Court Revenue (100,000) budget@charlottesville.gov Office of Budget and www.charlottesville.gov/budget Performance Management 4 Proposed FY 2022 Operating & Capital Improvement Budget Revenue Drivers FY 2022 Operating Revenue Changes (Adopted Budget FY 2021 to Proposed Budget FY 2022) Misc. Revenue Interest Earned ($126,000) Rent (19,956) Other Miscellaneous Revenue (150,000) Transfers from Other Funds Risk Management Fund $250,000 Health Care Fund 250,000 Landfill Reserve Fund (250,000) Enterprise Parking Fund (450,000) City/County Revenue Sharing Operating Budget Portion ($5,213,320) Net Operating Revenue Changes ($6,413,392) budget@charlottesville.gov Office of Budget and www.charlottesville.gov/budget Performance Management 5 Proposed FY 2022 Operating & Capital Improvement Budget Revenue Drivers FY 2022 Designated Revenue Changes (Adopted Budget FY 2021 to Proposed Budget FY 2022) City/County Revenue Sharing: Transfer to Capital Improvement Program $6,235,841 Transfer to Capital Improvement Program - Mall Vendor Fees (15,750) Contracted Services with City Schools 199,838 (Building Maintenance and Pupil Transportation) Meals Tax Revenue: Transfer to Debt Service (312,571) Transfer to Facilities Repair Fund (200,000) Net Designated Revenue Changes 5,907,358 Total General Fund Revenue Changes ($506,034) budget@charlottesville.gov Office of Budget and www.charlottesville.gov/budget Performance Management 6 Proposed FY 2022 Operating & Capital Improvement Budget Proposed FY 2022 Operating Budget FY 2022 Proposed General Fund Budget Revenues $190,689,839 Expenditures $190,689,839 Budget GAP $0 budget@charlottesville.gov Office of Budget and www.charlottesville.gov/budget Performance Management 7 Proposed FY 2022 Operating & Capital Improvement Budget Investments in Council Budget Priorities • Affordable Housing – Tax and Rent Relief Programs (CHAP and RE Tax Relief) = $1,840,000 • Racial Equity – Fully fund additional Deputy City Manager for Race, Equity, Diversity, and Inclusion; Home to Hope; and Food Equity Initiative; Office of Human Rights; City’s Minority Business Program activities. • Safety and Security – Police Civilian Review Board; Fire SAFER Grant funded positions • Workforces & Economic Development – Downtown Job Center; GO workforce development programs • Investment in Employees – Living Wage remain at $15.00 per hour; Health Care Premium Holiday; Redesigned Gyms Subsidy Program budget@charlottesville.gov Office of Budget and www.charlottesville.gov/budget Performance Management 8 Proposed FY 2022 Operating & Capital Improvement Budget What’s Not in the FY 2022 Expenditure Budget At this point any addition from the below items would result in a decrease from somewhere else in the proposed budget. • Increase for Employee Compensation - 2% COLA would be ൎ $1,040,000 • Departmental New Requests ൎ $4.9M • Economic Reserve Funding • Increase in General Fund Contribution to Debt Service • Unfunded CIP Projects ൎ $123.3M • Other City Council Initiative and Additions budget@charlottesville.gov Office of Budget and www.charlottesville.gov/budget Performance Management 9 Proposed FY 2022 Operating & Capital Improvement Budget Funding for City Schools • At the School’s request providing level funding of school operations, a total contribution of $58.7 million. • School’s will be using one-time CARES Act funding to cover ongoing operating budget increases for FY22, and are projecting a $4.5M increase in the City’s FY23 contribution will be necessary. • Increase in School’s budget is largely driven by the addition of 14.5 FTE’s and a raise for teachers and staff of on average 5% Schools Contribution Schools Contribution Increase $65.0 Target Per Formula vs. Actual Contribution 63.2 $5.0 $4.5 $60.0 58.7 58.7 $4.0 57.4 $3.4 54.0 $55.0 $3.0 $2.7 ($ in millions) ($ in millions) 51.3 $2.0 $2.0 49.3 $1.6 $50.0 $2.0 $1.6 47.3 $1.3 45.7 $1.0 $3.1 44.1 $45.0 54.8 $1.0 $1.6 $2.3 53.0 53.8 $1.4 $2.2 $1.1 $0.7 $1.0 40% 48.5 $0.8 47.0 50.8 $0.3 $40.0 43.8 $0.0 41.7 42.4 $- 40.6 $35.0 -$1.0 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21 FY 22 FY23 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21 FY 22 FY23 Target contribution Actual contribution 40% of Change in RE and PPT Revenue Change in Actual Contribution budget@charlottesville.gov Office of Budget and www.charlottesville.gov/budget Performance Management 10 Proposed FY 2022 Operating & Capital Improvement Budget Funding Options for City Schools Option 1 - Adopt the School’s Proposal as submitted for FY22 and FY23  City Contribution level funded for FY 22  Increase of $4.5M is added to City Contribution and becomes the new base projected for FY 23  Similar scenario to Gifted Teacher Program - FY 20 Budget to FY 21 Budget Option 2 - Reduce the FY 22 School Contribution and use the savings to fund items removed to balance City Budget  2% COLA for City Employees - $1.04 million  Add funding for unfunded City positions - $640k  Add funding for Facilities Repair - $200k  Add funding for Equipment Replacement - $400k Option 3 - Adopt the School’s Proposal as submitted for FY22 only  No assumed increase to the base budget for FY 23. Begin FY 23 with $58,709,623 as the base.  FY 22 School Operational increases using one-time CARES funding would have to be reconsidered as part of FY 23 budget process. budget@charlottesville.gov Office of Budget and www.charlottesville.gov/budget Performance Management 11 Proposed FY 2022 Operating & Capital Improvement Budget Wrap-up and Staff Follow-up budget@charlottesville.gov Office of Budget and www.charlottesville.gov/budget Performance Management 12 Proposed FY 2022 Operating & Capital Improvement Budget Budget Calendar March 11: Work Session, 6pm – 8pm, Zoom Webinar, Outside and Non Profit Agencies – Public invited. Opportunity for Council discussion with staff. Public comment at end. March 15: Public Hearings, 6:30pm, Zoom Webinar – Tax Rates and Proposed Budget – Smaller presentation with opportunity for public feedback and Council discussion March 17: Community Budget Forum, 6pm, Zoom Webinar – Opportunity for public to speak one on one with City Council and staff after short presentation by the Interim City Manager. March 25: Work Session, 6pm – 8pm, Zoom Webinar, Capital Improvement Program – Public invited. Opportunity for Council discussion with staff. Public comment at end. budget@charlottesville.gov Office of Budget and www.charlottesville.gov/budget Performance Management 13 Proposed FY 2022 Operating & Capital Improvement Budget Budget Calendar April 5: Second Public Hearing on Budget/First Reading, 6:30pm, Zoom Webinar – Smaller presentation with opportunity for Public feedback and Council discussion TENTATIVE - April 8: Work Session, 6pm – 8pm, Zoom Webinar, Remaining budget issues and wrap up – Public invited. Opportunity for Council discussion with staff. Public comment at end. April 13: Budget Approval by City Council, 5:30pm, Zoom Webinar budget@charlottesville.gov Office of Budget and www.charlottesville.gov/budget Performance Management 14 Proposed FY 2022 Operating & Capital Improvement Budget Budget Information www.charlottesville.gov/budget Copies of FY 2022 Proposed Budget City Manager’s Office, City Hall, 8:00-5:00 PM M-F Central and Gordon Ave. Library Branches budget@charlottesville.gov Office of Budget and www.charlottesville.gov/budget Performance Management 15