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Poquoson staff review FY25 finances as groundwork for FY26 budget
Summary
City staff reviewed the adopted FY25 general fund revenues and expenditures, highlighted real estate taxes as the largest revenue source, and outlined key items and dates for FY26 budget development, including a reassessment year and school budget timing.
Poquoson City staff presented a review of the fiscal year 2025 budget and laid out the schedule and major issues the city will use to develop the FY26 budget.
The fiscal review was given by Tara Woodruff, director of finance, and framed by City Manager Randy Wheeler as a pre-budget work session to remind council and the public how FY25 was constructed before discussing FY26. Woodruff said the city will walk through general fund revenues and expenses, how the adopted school budget fits into the total, and then take questions.
The presentation showed that general property taxes are the largest single revenue source, accounting for roughly 73.2% of general fund revenue. Woodruff said new residential development and a 3¢ tax increase contributed to growth in FY25; she also noted that tax relief and deferral programs—particularly for disabled veterans and elderly households—are a growing component of property-tax-related expenditures. “Our general property taxes, are our largest revenue source,” Woodruff said.
Woodruff and Wheeler described other revenue drivers: state revenues (about 11% of the general fund), including personal property tax relief and DMV reimbursements; local sales tax receipts (the city retains 1% of sales tax collected within the city, including online sales collections); communications sales and use tax; meals taxes (budgeted at just over $1,000,000 and described as coming in strong so far this year); permits and licenses tied to building activity; and interest income that has been elevated in recent years while ARPA and other balances were invested.
On the expenditure side, education remains the single-largest function. Woodruff said the operating transfer to schools is $12,268,000 (about 31.9% of general fund expenditures), and that the general fund also transfers additional amounts to school debt and capital projects so that combined school-related spending equals about 40% of general fund expenditures. City personnel costs (147.85 authorized FTEs) were shown as a large line item, representing roughly 39% of the whole budget and about 79% of departmental (non-regional/non-education) spending.
Staff flagged items likely to affect FY26 budgeting: FY26 is a reassessment year for real estate; the state biennial budget and the General Assembly’s actions will determine part of school funding; health insurance renewal is expected and may be volatile; the city must address an adopted public safety pay plan and operating costs for a new public safety building; and the schools are conducting a compensation study. Woodruff said VRS contribution rates will not increase for FY26.
Council and staff discussed tax-relief program accounting and whether there is overlap between elderly and disabled-veteran deferral or relief categories. Regina from the commissioner’s office confirmed there is no double count between disabled-veteran and elderly tax relief, though individual households might participate in multiple programs.
Wheeler summarized the FY26 schedule presented by staff: the pre-budget public hearing occurred at the meeting; staff expect to deliver recommended budgets in mid-April, hold a public hearing and tax-rate hearing April 28, and adopt the budget in May. Wheeler also said the council typically holds a joint meeting with the school board at the April 28 session. Wheeler and Woodruff said monthly revenue and expense updates will continue so staff can respond promptly if trends shift.
Why it matters: property-tax revenues and school funding drive Poquoson’s budget and decisions this year. Reassessment results, insurance renewals, and school enrollment (average daily membership) will materially affect revenue and expenditure forecasts as the city moves toward a May adoption.
Council asked clarifying questions about operating costs for the city’s older municipal and police buildings as the new public safety building comes online; Wheeler said staff are still working on reuse options for the older police facility and that proposals from community organizations could be brought to council for consideration. He described access and ADA limitations at the existing police building and said staff hope to present a reuse plan in coming months.
The meeting was designated a pre-budget public hearing so members of the public could speak; that hearing is covered separately.
