Frederick County reviews FY26 budget scenarios, considers advertising tax-rate increase and capital priorities

Frederick County officials reviewed updated fiscal-year 2026 budget scenarios and capital priorities during a board workshop where staff presented revised revenue and expense estimates and potential policy options for covering projected shortfalls.

County Administrator Mike presented updated population and revenue assumptions and a draft set of administrator adjustments, telling the board, "This gives you an idea of where your revenues come from" and noting the materials distributed to supervisors included a draft of county administrator adjustments and a school capital asset plan.

The presentation laid out three headline planning points: revenue scenarios tied to different tax rates, a tightened capital fund balance if several large projects move forward, and department cost drivers including growth in fire staffing, school resource officers (SROs), and social services.

Why it matters: the board must decide whether to advertise a tax rate above the revenue-neutral rate next week to preserve options for FY26 spending. Advertising a higher rate would trigger a public hearing; staff said the advertised ad would go on March 4 with a public hearing following the ad schedule.

In the models shown, staff identified the revenue-neutral rate at $0.424 per $100 of assessed value (42.4¢) and the current rate at $0.51 (51¢). Using the draft expense and revenue figures, the county estimated a deficit of roughly $7.6 million at the revenue-neutral rate in the current scenario and an approximate $8.2 million surplus at the current tax rate; staff described those as model outputs that change as adjustments are made.

Administrators flagged several numeric drivers and potential adjustments: a population estimate of 98,977 (Weldon Cooper update), a proposed school capital ask of $14 million (down from prior requests near $19 million), a proposed transportation transfer of $7 million, a beginning capital fund balance shown at about $36.4 million with a conservative annual rollover projection of $9 million, and subscription/software costs that staff estimated at roughly $2.6 million. Mike noted a single potential Microsoft license cost of $309,000 that staff are reviewing for removal from the draft.

Staff described expense-growth drivers: the fire department staffing plan would add positions incrementally and—using a back-of-envelope example—adding about 97 career firefighters over many years at an estimated $90,000 cost per position would imply roughly $8.7 million in recurring salary cost (excluding equipment). Social services increases were shown as a major recurring pressure (staff cited a $1.4 million figure in the presentation). The sheriff's office SRO program was also discussed; staff said the county currently has about 22–23 SROs and that state legislation to mandate SROs was pending, which may not change the county's current staffing needs.

Board members and staff discussed capital planning and longer-term debt pressures tied to school construction (a fourth high school and related debt service). Staff noted school debt transfers in the model of about $19 million and warned that debt service for a new high school could increase school debt transfers substantially in later years, with operating impacts following as construction-financing moves to debt service.

The board debated options to sustain the capital fund and pay for long-term transportation projects such as the Route 37/Day Parkway concept. One supervisor said, "I think the Route 37 is important. It's a parkway we need to put money for," and urged the board to consider whether to set aside additional capital for that corridor. Suggestions to replenish capital included impact fees, a voter-approved one-percent meals/sales tax, or other revenue measures; supervisors also discussed prioritizing school capital requests by urgency.

Staff noted timing and one-time savings that temper first-year costs: hiring delays would reduce first-year staffing costs for some new positions (for example, new firefighters would not be on payroll for a full year), and carryover and one-time items in the FY25 budget reduce the immediate FY26 increase. Administrators repeatedly framed the budget models as working illustrations: "These are just pictures and guides to help you in your decision making," Mike said.

Votes at a glance: the board voted by voice to enter a closed session under Virginia Code 2.2-3711(A)(1) for discussion of a prospective county attorney candidate; the motion was made on the record and seconded, and the board moved into closed session after the chair called for the ayes.

Looking ahead: staff told the board that if supervisors want to consider a tax rate above the revenue-neutral figure they must advertise that option at next week's scheduled workshop in order to hold a statutory public hearing later. Staff said more concrete numbers (for personal property and other inputs) were expected next week and that comparable adjustments to the draft would continue as staff refines the administrator adjustments and capital assumptions.