Charlottesville staff report $774,263 in new revenues; council weighs allocations and process for strategic fund

City staff told Charlottesville City Council members at a work session that revised revenue estimates add $774,263 to the proposed fiscal year budget, and presented options for allocating that money to council discretionary priorities.

Chrissy Hamlin, a city budget staff member, said the revisions include changes to personal property tax, vehicle rental and a downward revision to the plastic bag tax; business and professional license (BPOL) receipts were higher than projected, producing most of the supplemental revenue. "We do have supplemental revenue over and above the proposed budget of $774,263," Hamlin said.

Todd Divers, Commissioner of the Revenue, told councilors BPOL revenues are difficult to forecast because large taxpayers can swing totals: "The nature of BPOL is that it rolls in at one time. It's due on March 1," Divers said, noting the city waited for collections before revising estimates.

Staff proposed using part of the additional revenue to restore or add one-time allocations and to correct an administrative omission that excluded the Jefferson School African American Heritage Center from the city's "fundamental" nonprofit list this year. Hamlin said that omission was an oversight tied to the agency not submitting a required ZoomGrants application and that the requested support is intended for the organization's operations, not exclusively to cover rent.

Council staff also recommended increasing budgeted tax relief for elderly and disabled homeowners after receiving more applications than in prior years. "We've found that we've got a lot more applicants than we've had in the past," an unidentified staff member said in explanation of the $250,000 adjustment to the relief program.

Councilors debated several off-cycle requests that staff said had come up recently: a request from United Way's Prosper program for roughly $16,000 to partially make up for a smaller award through the city's Vibrant Community Fund (VCF) process, and a request from the community concert league (referred to in the meeting as the "Tonsor/Tonsilor league") for $25,000 to $30,000 to support the summer season after anticipated state funding was vetoed. Council members said they were sympathetic but split on whether to approve such allocations now or require organizations to use the established VCF/competitive processes.

Several councilors urged caution. Councilor Lloyd (surname not specified in the transcript) objected on process grounds to approving off-cycle allocations without fuller examination, saying the council's strategic initiatives fund was designed to allow deliberation: "Coming up with, at literally the last minute, another $16,000 for something to put into the budget without council as a whole having examined it critically... I object from a process standpoint." Other councilors said the amounts were small relative to the council fund and argued organizations could return with formal requests if needed.

Hamlin and other staff proposed options: (1) hold the supplemental revenue as part of the council strategic initiatives fund and bring off-cycle requests to council as agenda items with supporting materials, or (2) approve a small number of immediate allocations and tighten criteria for what constitutes a "strategic initiative" going forward. Several councilors asked staff to organize a retreat or work session to define criteria and process for the discretionary fund.

Staff noted a technical revision to earlier fund accounting after discovering CDBG (Community Development Block Grant) money could not be repurposed for some of the items on the council's list because of federal program rules; removing CDBG reduced a previously assembled discretionary pool from $1,002,001 to $915,620.

No final binding budget votes were taken at the work session. Staff outlined the formal next steps: the council is scheduled to vote on the budget at its regular meeting on Monday; a public hearing on real property tax rates will be held April 21; and a special meeting to conclude property tax consideration will be advertised and held April 24. Staff said the April 24 special meeting was planned for 6 p.m.

Ending: Staff advised councilors to be deliberate about spending one-time revenue and warned that federal funding changes and higher costs for debt service and construction could shrink future surpluses. Hamlin said staff would bring fuller documentation and recommended that off-cycle requests be submitted and processed so the council can consider them with supporting materials at a future meeting.