Warren County supervisors review tight FY2026 budget, staff warn revenue limits

Warren County officials reviewed the proposed fiscal 2026 budget at a board workshop in May, where county staff told supervisors the county is “pretty much locked into the maximums” of available revenue and must adopt a budget by the scheduled June hearing and adoption dates.

The warning came as staff walked supervisors through departmental revenue and expenditure forecasts and highlighted several areas of concern: sales-tax estimates that could fall short, a projected drop in federal pandemic-related funding, and a shortfall between recreation fees and the recreation program’s operating requests.

“We are pretty much locked into the maximums. This is all the money there is. And so you can reduce or you can move, but not necessarily increase,” a county finance staff member told the board. Staff said a public hearing is scheduled for June 10 and the board must adopt a budget by June 24 for administrative reasons tied to payroll timing.

Why it matters: the workshop signaled limited flexibility in the draft budget and highlighted specific cost pressures that would be borne by the general fund if revenue forecasts weaken. Staff urged supervisors to watch sales-tax receipts during the coming year and to expect lower federal revenue as pandemic-era funds are exhausted.

Key figures and program impacts - Staff said the difference between the FY2025 amended and the FY2026 proposed totals is roughly $650,000. - Sales-tax estimates cited in the presentation included a line item of about $6,400,000; staff said they will monitor collections during the fiscal year. - Federal revenue was shown dropping by about $1.7 million from FY2025 to FY2026 as ARPA and similar pandemic-era funds were used; a staff member said, “So you paid the last of your ARPA money out… the first half of ’25.” - Parks and recreation: presenters noted proposed FY2026 recreation expenditures of about $948,786 with fee revenue forecasted at roughly $275,000; staff and supervisors observed that the gap—about $673,000—would be covered from the general fund unless revenue or expenses change.

Staff also identified line-item and accounting changes to watch: economic development administration (EDA) “recovered cost” reimbursements moved between funds and subtotals that caused apparent large drops on summary lines; staff said they would send line-item detail to supervisors after the meeting.

Operational details and constraints County staff described several operational constraints and clarifications raised during the review: - The county moved certain services (CSA and DSS) into separate funds; that change shifts revenue and spending between fund statements and affects general-fund subtotals. - Fire and rescue overtime was explained in the context of the Fair Labor Standards Act: a fire department representative explained that the department’s overtime calculations are based on a 50-hour standard for shift work rather than 40 hours, and that the budget separates holiday overtime, FLSA overtime and other overtime categories. - Several departments showed year-to-year swings driven by one-time grant/ reimbursement activity. Staff explained that “miscellaneous” budget lines often reflect grant reimbursements that increase when new grants are approved and corresponding expenses are recorded.

Capital and debt notes Supervisors discussed capital requests and debt service. Staff noted a recently added $126,000 line for payment to the Town of Front Royal related to wastewater treatment, which will be reported as “services from other governments.” They also described roughly $1.2 million in outstanding receivables tied to county projects (about $600,000 at Leech Run and a similar amount at the police station, described as approximate).

Next steps and staff directions No formal budget votes were taken at the workshop. Staff said they will: - Provide detailed line-item backup for EDA recoveries and other subtotals requested by supervisors; - Monitor sales-tax receipts and report material deviations as they occur; - Present a request to use last year’s debt-service surplus to cover two near-term items (an approximately $250,000 increase in the regional jail contribution and an estimated $103,000 pool resurfacing) at a regular meeting before June 30. Staff explained the county drew on reserves to respond to a late FY2025 CSA request and that using recent debt-service savings is the proposed funding source for the jail/pool items.

The board scheduled the public hearing on the proposed budget for June 10 and must adopt a budget by June 24 to meet payroll and other timing constraints noted by staff.