Committee recommends forwarding $5.8 million restitution appropriation after public hearing; council debate spotlights Affordable Housing Trust Fund

The committee voted to forward Ordinance 2025‑188, which would transfer $5,800,000 from the delinquent tax sale special fund to a new restitution payments line in the FY 2026 general fund budget for payment under Virginia Code §8.01‑195.13. The ordinance was introduced by administration as the recommended funding source to avoid drawing on general reserves and to preserve fiscal policy reserves.

A public speaker, Steve Salzberg, spoke in opposition on legal and enforcement grounds, arguing that the city has not followed the statute in prior years and urging compliance with the code for affordable housing funding. Council members then debated two distinct issues: the immediate obligation to fund a court‑ordered restitution and broader compliance and transparency questions about funds that by ordinance are directed to the Affordable Housing Trust Fund.

Council Member Gibson framed two issues separately: completing the restitution payment to an individual who was wrongfully incarcerated, and enforcement of city code that directs certain delinquent‑tax proceeds to affordable housing. Council Member Robertson and others described the case as a serious injustice and said the state and city share responsibility for restitution, but several members said they were uncomfortable diverting legislated affordable‑housing revenue without clearer authority or a longer review.

Chief Administrative Officer O'Donnell explained that the delinquent tax sale special fund had grown — and he identified the fund balance trajectory across recent fiscal years — and recommended using that special fund for the restitution payment so as not to access general‑fund reserves. He said the delinquent sale fund growth reflected proceeds and aged surplus deposits accumulated during the pandemic and subsequent years.

Council Member Trammell and others pressed administration for a detailed accounting of all roll‑off, tax‑rehabilitation and delinquent‑sale funds, rehab abatement receipts, and how prior budget choices and one‑time federal funds had been applied. Several members asked the administration to bring a corrective ordinance or amendments to clarify that delinquent‑sale proceeds and roll‑off receipts are dedicated to the Affordable Housing Trust Fund, and to supply a full report on the fund's current balance and history.

After debate, the committee voted to forward Ordinance 2025‑188 to the full council with a recommendation to approve. Roll‑call on the committee record: Ayes — Mr. Bridal, Miss Lynch, Miss Trammell, Miss Abubakar, Vice Chair Jordan, Chair Newbill; Nos — Miss Gibson, Miss Jones, Miss Robertson. The committee chair said she will convene administration and council representatives to draft an amended ordinance and schedule follow‑up work on the Affordable Housing Trust Fund and related code clarifications.

The city's administration recommended the delinquent tax sale special fund as the funding source in part because fiscal‑policy language limits use of fund balance and contingency reserves to extraordinary or catastrophic events. Members repeatedly requested more documentation and clearer monthly reporting on the Affordable Housing Trust Fund and related revenue sources before council final action.