Fauquier County presents FY2026 proposed budget, schedules March public hearing; Davenport outlines debt capacity and TIF options

Fauquier County staff presented the fiscal year 2026 proposed budget and a multi-year capital improvement program at a board work session, highlighting modest revenue growth, a lineup of one-time reserve requests and an expected rise in debt service in later years.

County budget staff recommended a $441.5 million proposed budget, an increase of about $27.3 million from the prior year, and a 3-cent increase to the real-estate tax rate (raising the proposed overall rate to 0.973 from 0.943). The presentation also showed a proposed general fund of $234.7 million and an operating transfer to the school division of $106.1 million. A public hearing on the budget is scheduled for March 20 at 7 p.m. at the Fauquier High School auditorium, with markup planned for March 25 and adoption currently scheduled for March 28.

Why it matters: the proposal front-loads funding for schools, public safety equipment and asset replacement while asking the board to consider limited tax-rate increases and one-time uses of reserves that would affect capital reserve balances. The public hearing and subsequent markup sessions will determine whether the advertised changes and the recommended tax-rate adjustments move forward to adoption.

Key revenue and tax items - County staff told the board the county's real-estate base is projected to grow by 0.91 percent, producing roughly $1 million in new general-fund real-estate revenue. Personal-property revenue and sales tax projections were each raised by about $1 million and $0.5 million respectively; projected interest income was increased by about $1.4 million. - The presentation recommends a 3¢ real-estate tax increase, producing an advertised rate of 0.973 (from 0.943). Staff noted the advertised tax rate includes flexibility for an additional 2.5¢ in the process; the increase was advertised as 1.5¢ to the general rate and 1¢ to the fire-rescue levy.

School funding and health insurance - The county's transfer to the school division was presented as $106.1 million, which the presenter said includes $20 million dedicated to the school health-insurance fund. Staff said $2 million of that health funding is recurring and replaces previously one-time funds, a change the presenter described as part of a multi-year strategy to stabilize the health-insurance fund. - The board and staff scheduled a joint work session with the school division for March 20 to review the school division's detailed budget requests.

Public safety and asset replacement - The asset replacement fund is proposed to increase by about $14 million, largely debt-funded, to cover replacement of public-safety radios and SCBAs (self-contained breathing apparatus). Staff said the county will cash-fund a portion of the public-safety radio program (half of the cash contribution split between the sheriff's office and fire/rescue) and fund one ambulance replacement this year (the fire/rescue request had been for three ambulances). - Staff identified several one-time capital-reserve requests to avoid increasing the operating budget: a 9-1-1 CPE refresh ($320,000), the sheriff's half of the radio cash contribution ($492,000), registrar electronic pull-book replacements ($95,000) and a Parks & Recreation one-time cost for Central Sports Complex Phase 2 ($74,000). Staff said capital reserve balances were about $9 million currently and would be a little over $8 million if those transfers proceed; the fire-rescue reserve would fall from $4.8 million to about $3.8 million under the recommended transfers.

One-time items and service-district questions - Staff raised a potential one-time partnership with WSA to extend water service on Whiting Road at an estimated cost of about $1.5 million. Board members asked for more information and said they would like additional discussion before deciding whether to withdraw from reserves and fund the work outside the normal budget process. - The board asked staff to return with cost estimates and timing for related water/sewer connections and service-district ideas (including potential transfers of oversight of certain sewer districts).

Capital improvement program and projects - The proposed CIP totals roughly $151.1 million and includes $40.4 million for school projects and the judicial center construction (the judicial center figure remains fluid while the county's master facility plan is completed). Staff said some projects from the earlier strategic planning list were removed and others pushed to future years; the CIP retains near-term work on library projects (including the Vint Hill site), fire/rescue station planning, and school facility planning and maintenance. - Staff described the Vint Hill branch project as requiring about $300,000 in new staffing and an estimated first-year operating cost of $447,000 (ongoing about $426,000); planners proposed shared branch management and reduced hours at Marshall to control operating costs.

Debt, capacity and Davenport's review - Financial advisors Davenport presented an analysis of the county's debt profile and the projected impact of CIP borrowing. Kyle Alex of Davenport said the county has a strong multi-year financial record and that, "Everything we see right now in the budget and the CIP, we have no concerns about that." Davenport noted recent borrowing produced favorable interest rates and that the county's AAA credit rating and fund balance policy have improved debt affordability. - Davenport's planning scenarios assume roughly $149 million to $150 million of future borrowing over a multi-year CIP window; using conservative planning rates (about 5 percent for modeling), the firm showed no required increase to debt-service budget in FY2026 but projected increased debt-service pressure beginning in FY2027 (a roughly $2.6 million increase by Davenport's illustration, equal to about 1.7 pennies on the real-estate tax rate in their model). Davenport emphasized the county remains within its debt-policy thresholds, including debt-service-to-revenues, debt-to-assessed-value and fixed-cost limits.

TIFs, special-service districts and financing options - Davenport and staff briefed the board on tax increment financing (TIF) and special-service districts as tools to pay for infrastructure tied to targeted development. The advisors described TIFs as using incremental taxes generated by new development to repay borrowing for public infrastructure, and special-service districts as a means to levy a dedicated local tax for a defined area that can be used to repay borrowing or reimburse cash contributions. - Board members asked how TIFs and service districts might be combined and how risk and backstops would be structured; advisors said both mechanisms are facts-and-circumstances-specific and often used in combination when needed.

Concerns raised, next steps and public process - Supervisors raised questions about PFAS/PFOA water-treatment obligations reported by service districts (staff and elected members noted a WSA projection that New Baltimore alone could see a $45 million estimate and that statewide or federal rules could change). Board members requested a work session with WSA and other service districts to understand countywide exposure and potential funding approaches. - The board scheduled additional budget work sessions on March 13 (1:30 p.m.), a joint work session with the school division March 20 (5 p.m.), the public hearing March 20 (7 p.m.), markup March 25 and budget adoption March 28.

Votes at a glance - Motion to adjourn: passed 4-0 with 1 member absent.

Ending: County staff and Davenport will return with follow-up materials and scenario testing for specific CIP projects, and the board will consider public comment at the March 20 hearing before markup and final adoption.