Poquoson officials present FY2026 recommended budget: $40 million, stable tax rate, $600K proposed school transfer

City Manager Randy Wheeler and Finance Director Tara Woodruff presented Poquoson’s recommended fiscal year 2026 general-fund budget during the work session, describing a plan that keeps the city’s property-tax rates unchanged while absorbing reassessment growth and funding pay adjustments for employees.

Summary of key figures: Finance Director Tara Woodruff said the recommended FY2026 general fund totals just over $40 million, an increase of roughly $1.6 million (4.19%) over the FY2025 adopted budget. General property taxes remain the primary revenue source (about $29.6 million, or 74% of general-fund revenue). The budget assumes an average reassessment increase of 7.6% and recommends no change to the real-estate or personal-property tax rates. The real-estate reassessment is expected to generate about $1.5 million in additional revenue; separate property-tax relief programs (elderly/disabled) were projected at about $1.8 million and represent roughly eight cents of the tax rate in FY2026.

Schools and personnel: the school division requested an additional local contribution of roughly $1.5 million; staff recommended a $600,000 increase this year and noted the final state and governor budget work could reduce the local funding gap. The recommended city budget includes a 3% pay adjustment for all permanent full-time and part-time employees and provides full-year funding for recent public-safety pay-plan changes plus step increases for eligible public-safety employees. City staff reported no new general-fund positions in FY2026 and stressed the budget funds retention/compensation priorities while avoiding significant new recurring commitments.

Other highlights and capital: two relatively small new initiatives were included (annual membership in the Colonial Soil & Water Conservation District approximately $13,000 and a $10,000 contribution toward Child Development Resources’ capital campaign). Transfers to the capital projects fund increase by $169,000 (police vehicle replacements and a facility-condition assessment) and the budget supports issuing debt for a roughly $2.6 million Pecoson High School roof replacement project (in CIP). Staff said no use of general-fund balance is planned; the fiscal stability reserve remains at about $1.2 million and the city’s bond rating remains unchanged.

Costs and assumptions: staff noted higher health-insurance costs, regional shared-service cost changes (animal control and other contracts), and continuing uncertainty tied to federal and state policy. The budget reflects the city’s fiscal guidelines: stable rates, limited new initiatives, focus on existing programs, and adherence to reserves. Budget adoption was scheduled for May 12, with a public hearing and a council vote forthcoming.

Why it matters: the budget funds pay increases for city employees and partial additional support for schools while preserving reserves and the city’s bond rating. Council members asked about the potential affects of reassessment-driven tax relief and the mechanics of tax-exemption programs for elderly and disabled residents; staff said some growth in those programs is expected after a state referendum that expands eligibility.

Next steps: the public hearing on the budget and proposed tax rate will be held at a future meeting; the recommended adoption date is May 12. Staff offered hard-copy budgets at City Hall and the library and will post the full budget and supporting documents on the city website.

Speakers quoted: City Manager Randy Wheeler and Finance Director Tara Woodruff presented the figures and answered council questions about reassessment, school transfers, the staffing outlook and capital projects.