City manager presents $2.264 billion FY26 budget with no tax-rate change; proposes $4.9 million increase for schools

City Manager Sam Sanders delivered a proposed FY26 budget to Charlottesville City Council on March 4 that totals $2,264,474,183 across all funds and proposes no change to local tax rates. The proposal includes a $4.9 million increase in operating support for Charlottesville City Schools, expanded affordable‑housing investments, and a set of priorities councilors asked the manager to reflect in the budget.

Key numbers and priorities

- Total budget (all funds): $2,264,474,183 (proposed FY26). The city manager presented the plan as balanced and based on current revenue projections. - General fund context: the manager said the current-year general fund is approximately $252 million and total managed funds including utilities and transit total roughly $607 million. - Schools: proposed increase of $4.9 million in ongoing operating support to Charlottesville City Schools to cover negotiated collective‑bargaining costs and other priorities; the manager also recommended increasing annual school priority CIP investments to $1.4 million and ongoing maintenance funding to $1.3 million. - Affordable housing: the budget proposes $12.7 million in investments over the coming year and the next five years for housing initiatives, including allocations tied to projects discussed at the meeting (for example, as staff further develops requests for 501 Cherry, West Haven redevelopment and other programs). - Transportation and sidewalks: the budget fully funds a multi‑year sidewalk program and commits $5.4 million to implement a three‑tier strategy across FY26–30, plus funding for related park planning and Riverview Park parking‑lot design work. - Organizational and personnel: the manager proposed additional staffing in areas tied to collective bargaining implementation, labor relations support, and reclassification changes from a recent compensation study; recurring health‑insurance and other standard operating increases were included. - Surplus and contingency: the manager reported an FY24 surplus of about $22 million and proposed holding the bulk of that in CIP contingency while prioritizing a subset of one‑time critical expenditures; he emphasized caution in spending because of federal uncertainty.

School presentation (separate agenda item)

Charlottesville City Schools’ School Board Chair Emily Dooley and Superintendent Dr. Gurley presented the school division’s FY26 request earlier in the meeting. The school board’s priorities aligned with the city manager’s proposal: increasing staff compensation (the school board reported a negotiated teacher contract with a 5.5% annual increase composed of a 1.5% step and 4% raise plus a 3% raise for other staff), adding readers and math specialists deployed where student data indicate greatest need, more bilingual/English‑learner teacher capacity, and additional social‑emotional supports. The schools’ operating changes the board described amount to an increase of approximately $4.9 million in FY26 (the same figure the city manager included in his proposal).

Manager’s framing and fiscal outlook

The city manager said the budget reflects council’s strategic priorities — schools, transportation, affordable housing, organizational excellence — and is framed with a posture of caution given federal fiscal uncertainty. He said the budget assumes no tax-rate increase and that the surplus provides short‑term flexibility for one‑time needs. The manager also flagged a separate discretionary “Council Strategic Initiatives Fund” and a $500,000 “vibrant community” pot for events and visitor‑attraction initiatives, which he said he would steward with council.

Next steps and council questions

Councilors asked about timing for surplus allocations, funding for homelessness response and a low‑barrier shelter, and how the city will approach long‑term school funding and capital needs (Walker Pre‑K, Charlottesville Middle School completion and other CIP items). The manager said he prefers to hold most of the surplus in CIP contingency until federal uncertainty clarifies but will return with recommendations for prioritizing one‑time expenditures. The budget schedule and required public hearings were not completed at the meeting; council and staff planned upcoming work sessions to review details.

Who presented and participated

- Sam Sanders, City Manager — presented the FY26 proposed budget and fiscal outlook. - Chrissy Hamill, Budget Director — noted for her role in revenue and expenditure work; Deputy leads were named in the presentation (Ashley Marshall, Eden Ratliff, James Friess). - Emily Dooley, Chair, Charlottesville City School Board, and Dr. Gurley, School Superintendent — presented the school division’s FY26 operating and capital priorities and discussed the negotiated teacher contract and student supports.

Why it matters

The proposed FY26 budget sets the city’s spending priorities for the next fiscal year without raising property tax rates, while directing new operating support to schools and committing additional resources to sidewalks, affordable housing and internal capacity building. Council’s decisions in the coming weeks will determine whether the proposal is adopted as presented, amended, or rebalanced ahead of the fiscal-year start.