City manager presents $1.7 billion FY2027 proposed budget, flags state-law risks to local finances
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Summary
City Manager Chris and Budget Director Jonathan Hobbs presented the City of Chesapeake's FY2027 proposed operating and capital budgets, combining city and school spending at just over $1.7 billion, highlighting public-safety investments, an expanded CIP funded in part by bond proposals, and potential future costs from pending state legislation.
City Manager Chris and Budget Director Jonathan Hobbs laid out the City of Chesapeake's proposed FY2027 spending plan during a March 24 work session, describing a combined City-and-Schools net operating budget "just over $1,700,000,000" and a city-side increase of about 4.1% driven largely by compensation and benefit costs.
Jonathan Hobbs, the city's budget director, told council the combined total is split roughly 47% to schools and 52% to the city, and that payroll and benefit costs account for the single largest share of expenditures. "Payroll and benefit costs are over 60.7%" of the combined budget, he said, and noted the City is budgeting additional funds for police vehicle replacement and step and market adjustments for sworn public safety.
Manager Chris framed the proposal with explicit guiding principles: maintain the existing real estate tax rate, add no new fees, and avoid automatically backfilling lost state or federal funds unless a council strategic priority justifies it. He said the police department requested continued funding for software previously supported by a state grant; staff recommend maintaining that funding because safety is a council priority.
On capital investments, Hobbs described a five-year capital improvement program that places education (about 24% of the CIP) and public utilities (about 21%) as the largest categories. He identified major school projects driving the education share s the replacement of Carver Intermediate School and an $81.5 million increase proposed for the Chesapeake Career Center nd listed new or expanded city projects including replacement of Fire Station 14 and the Fifth Police Precinct, an expanded police evidence storage facility, and a Freeman Avenue railroad overpass allocation.
The presentation described the city's High Priority One-Time account (HOPODA) and a conservative projection that, absent future additions, the account balance would decline from about $191 million to $19.9 million over five years. Hobbs said that projection is conservative and that past practice has been to add to the account when possible.
Manager Chris also warned council about several pieces of pending state legislation that could materially increase local costs: collective bargaining for public employees (which staff estimate could cost "tens of millions"), expansions of prevailing wage rules, and a paid family medical leave program (estimated by staff at more than $8 million annually). He said the city has added limited budget capacity to prepare administratively but lacks the resources to absorb all potential future fiscal impacts.
The manager and budget director closed by pointing council and the public to transparency tools (the OpenBook operating budget and CIP mapping tool) and a planned "Budget in Brief" summary for post-adoption public use. They said staff will return with additional details and cost estimates as council develops priorities ahead of budget adoption in May.
What happens next: staff will run cost estimates on council's requested pilot items and follow up on questions at scheduled budget work sessions leading to the May adoption process.