Preliminary FY27 budget preview: slower residential growth, data center revenue and staffing requests highlighted

Town finance staff presented a fiscal‑year 2027 budget preview to the Leesburg Town Council on Oct. 6 that outlined recent revenue results, reserve uses, economic indicators and anticipated staffing requests for the coming budget cycle.

Tamara Kiesecker, the town’s management and budget officer, summarized FY25 and FY26 budget actions and current forecasts. She said the FY25 adopted budget used a combination of reserves (including about $4.2 million of a debt service reserve and $300,000 of a revenue stabilization reserve) and that preliminary unaudited results suggest the town will need fewer reserves than previously budgeted. Kiesecker noted a $3.4 million data‑center equipment tax receipt in FY25; the council previously used $120,000 of that revenue to restore stormwater funding and placed the balance in a reserve for future council priorities.

Economic and revenue outlook Kiesecker told council the regional economic outlook shows cooling inflation (regional inflation near 2 percent as of July 2025) and slowing employment growth compared with earlier years; housing-market indicators show active listings and sales rising but average sale-price growth moderating from prior double‑digit growth. She said slower residential assessment growth is likely to reduce the town’s property‑tax base growth in FY27, and that commercial growth — principally data centers, which comprised about one‑third of the town’s commercial portfolio in 2025 — will be the main driver of assessed‑value growth.

Expenditure pressures and budget calendar Staff highlighted several known expenditure pressures to factor into FY27 planning: contract increases (including trash/recycling, where a FY26 gap of about $300,000 exists), rising health‑insurance costs, mandated retirement contribution increases and planned compensation actions. The FY27 process timeline includes additional work sessions, department presentations and audits; staff asked council for guidance on priorities and any budget direction.

Strategic staffing preview A related presentation on staffing showed Leesburg’s current staffing ratios are lean relative to many peer Northern Virginia localities. Staff presented regional comparisons and said turnover has moderated after a 2022 peak; the town averages roughly six retirements per year. The staff forecast anticipates 15–25 new position requests in FY27 across departments, with a salary-and‑benefits estimate of roughly $3–$4 million total. Long‑term needs flagged by staff include public‑safety sworn positions (staff noted the Department of Justice staffing benchmark would require about 30 additional sworn officers to meet that specific benchmark), engineering and information‑technology staff, and administrative support for FOIA and recordkeeping.

Council reaction and next steps Council members asked for a clearer accounting of known additional expenditures (for example the trash/recycling contract and restored stormwater funding) and the town manager’s office confirmed staff will return with refined departmental requests during the budget process. The finance team will vet department submittals and the town manager will present recommended budget priorities in the manager’s FY27 proposal.

Ending Staff will return with departmental requests refined into the manager’s recommended FY27 budget and with additional detail on the known contractual and mandated increases the council asked to see.