City manager proposes $1.27 billion FY2027 budget, including $3M boost for schools and $18 minimum wage

City Manager Alan presented the Newport News recommended FY2027 operating budget and outlined new resident-focused grants, staffing changes and revenue assumptions during a council work session.

"Additionally, this budget includes several new initiatives aimed at assisting residents and neighborhoods," Alan said as he introduced the plan, which the administration described as aligned to council priorities on people, place, culture and connection and engaged government.

Lisa Cipriano, the city's director of budget and evaluation, told council the budget totals $1,267,000,000 across the general fund, school operating fund and other funds. She said the administration recommends keeping the real estate tax rate at $1.18 per $100 of assessed value; because assessments rose on average about 3.56 percent, the city expects increased collections even without a rate change. Cipriano said the net new revenue from assessments and other changes is roughly $16.5 million, while growth in veterans tax relief will reduce some of those gains.

Cipriano described several notable proposals in the recommended budget: a $3,000,000 increase in school operating funding; a $1,000,000 residential façade improvement grant pilot for homeowners; a $500,000 neighborhood assistance grant program for small infrastructure projects; creation of a Department of Housing and Community Development (staffed from existing offices) including a new data analyst position; and the conversion of a pilot street homeless outreach team to three full-time city employees.

On compensation, the package includes a market adjustment (an average 9.7 percent shift within pay scales) plus the normal 2.5 percent step movement; Cipriano said the combined salary and fringe increase for FY2027 is about $26,000,000 and the general fund is expected to grow by about $35,000,000 (a 5.5 percent change). The recommended non-sworn salary adjustment is 3.5 percent effective in July, and the proposed city minimum wage would rise to $18 per hour.

The recommended budget also adds public safety staffing: 20 firefighter positions and eight police officer positions. Cipriano told the council the city continues to manage recruitment and retention pressures and noted the budget assumes continued use of overtime, part-time, and contractual workers to maintain services while filling vacancies.

On utilities, the administration proposed a one-time 25 percent Waterworks rate increase for the year. "Sounds like a lot, but it equates to 31¢ per day for an average household that uses 5,000 gallons per month," Cipriano said, a change the presentation linked to the system's regional scope and large ongoing infrastructure replacement needs (the transcript cites a $40,000,000-per-year figure for necessary infrastructure replacement under current inflationary costs).

Other budget details Cipriano cited included: a projected $21,000,000 in vacancy savings already factored into the plan; continued flat rates proposed for stormwater, wastewater and solid waste; and an ongoing commitment to fund the city's pension, step plan and debt service.

During questions, council members asked staff to prepare a concise per-category accounting of "unfunded mandates" from the state so the council can better quantify those obligations; the chair asked staff to coordinate with the manager and counsel on that item.

Votes at a glance - Allow Councilman Ealy to participate remotely (motion carried 5-0). - Adopt public hearing dates for the FY2027 budget (April 14 at City Council Chambers; April 16 at Denbigh Community Center) (motion carried 5-0). - Approve a $5,000 sponsorship/donation to the UNCF Mayor's Mask Ball (motion carried 5-0). - Approve the city's annual sponsorship for the 100 Black Men of the Virginia Peninsula (motion carried 5-0). - Motion to close the meeting under Virginia Code §2.2-3711(A) for candidate interviews and cybersecurity matters (motion carried 5-0). - Post-closed-session certification and ratification of appointments (motions carried 5-0).

The council was asked to adopt public hearing dates during the session and directed staff to advertise the budget, post materials online and continue public engagement tools such as the online "balancing act" and taxpayer receipt tools. The council then voted to meet in closed session to interview prospective candidates for city clerk and to discuss city cybersecurity vulnerabilities, certified the closed session, ratified appointments introduced earlier and adjourned.