Petersburg council holds FY26 budget hearings, keeps real estate tax rate at $1.27 amid debate over casino revenue and public safety

At a May 2025 meeting, the Petersburg City Council held public hearings on the proposed FY2026 operating budget, approved the Petersburg City Public Schools FY2026 spending authority and a $71,863 amendment to the FY25 grants fund, approved a $300,000 draw from the budget stabilization fund to shore up a failing wall behind City Hall, and voted to keep the city's real estate tax rate unchanged at $1.27 per $100 of assessed value. Council deferred final adoption of the full city operating budget to a special meeting scheduled for June 3.

Budget manager Gary Cozier presented the proposed FY2026 budget as a balanced plan across all funds totaling $144,338,153, with a general fund of $106,000,000. Cozier said the proposal includes $3,000,000 to implement a recently completed classification and compensation study, an increase in general fund-supported debt service to about $7.3 million driven by a December 2024 general obligation bond, and a modest overall general fund increase of roughly 10.7% compared with FY25. He described revenue assumptions and line-item details for public safety, social services, schools and transfers to enterprise and special funds.

The Petersburg City Public Schools spending authority for FY26 was listed at $89,018,327, including a city contribution of $12,977,018. Cozier said the schools had requested an additional $211,100, which the city budgeted as part of the local contribution. Council voted to approve the schools' spending authority during this meeting.

Council also approved a requested amendment to the FY25 grants fund totaling $71,863 for two grants received through the Library of Virginia for the clerk of circuit court (records preservation/conservation). That item passed after a public hearing in which no one spoke.

A significant portion of public comment and council discussion focused on revenue projections tied to the planned Cordish casino. City Manager Altman clarified the developer's contractual payment schedule: the developer agreed to $15 million in incentive payments in the first year (with $2 million due 30 days after the referendum and the remaining $13 million contingent on state approvals and issuance of a gaming license), then recurring $15 million payments on each anniversary for a defined period and additional payments later in the agreement. Altman said, “Currently, we do not know when the $13,000,000 will be received.” He and other staff argued the large upfront incentive is a one-time payment and urged caution about counting it as recurring operating revenue; Altman said he intended to reserve one-time payments for capital investments rather than ongoing operating costs.

Several public speakers urged either more school funding or use of casino money to lower property taxes. Barb Rudolph, a local resident, urged larger local investments in schools than the division requested. Other commenters pressed council to use casino-related funds for infrastructure and public safety. One resident described a delayed EMS response in a personal emergency and urged the city to reconsider relying on an outsourced regional rescue service.

On the tax rate, council held a separate public hearing and took a roll-call vote on an ordinance to adopt the FY26 tax rate. After debate and a failed substitute motion to lower the rate by two cents, council adopted no change to the tax rate, keeping it at $1.27 per $100 of assessed value. The council also set a special meeting for June 3 to adopt the operating budget formally once outstanding questions are settled.

Council approved use of $300,000 from the budget stabilization fund to repair a failing retaining wall behind City Hall. During the roll call that approved the stabilization-fund transfer one councilor recorded an abstention because of a stated conflict (related to the hotel). The council then voted to adopt a FY25 schools budget amendment ordinance that consolidated previously approved amendments into one document, and it approved two appointments to the Petersburg Arts Council.

Discussion points recorded during the meeting included requests for greater transparency in vacancy savings and position rosters, calls for a clearer plan for any casino incentive or recurring gaming revenue, questions about implementing the class-and-comp increases by department, and public suggestions for participatory budgeting and neighborhood-targeted projects.

The council's next formal step on the city operating budget is a special meeting on June 3 for budget adoption and any needed appropriation amendments once revenues tied to timing (including any casino-related receipts) are better understood.