City manager presents $1.27 billion FY2027 budget; council sets public hearings

City Manager Alan presented the recommended FY2027 operating budget to the Newport News City Council, saying the proposal ‘‘is based on maintaining the real estate tax rate of a dollar and 18 per 100 of assessed value.’’ The recommendation totals $1,267,000,000 and includes a $3,000,000 increase to the schools’ operating budget and several resident‑facing grant programs.

Lisa Cipriano, director of budget evaluation, told council the budget was built against a background of supply‑chain pressures, inflation and state unfunded mandates. She said the overall average real‑estate assessment increase this cycle is 3.56% and that maintaining the tax rate at $1.18 per $100 of assessed value would generate roughly $16.5 million in additional real‑estate revenue.

The proposal includes personnel investments and cost increases: a two‑part step pay plan with an average market adjustment of 9.7% within pay scales plus a typical 2.5% step movement, a 3.5% non‑sworn salary adjustment and a proposal to raise the city’s minimum wage to $18 an hour. Cipriano said the general fund is projected to increase by about $35,000,000 (5.5%), with roughly $26,000,000 of that budgeted for salaries and fringe benefits.

New initiatives highlighted in the presentation include a $1,000,000 residential façade improvement grant for homeowners, a pilot income‑based housing relief program planned to start January 2027, and a $500,000 neighborhood assistance grant program for small infrastructure and quality‑of‑life projects. The city also proposes adding 20 firefighter positions and eight police officer positions and transitioning a street homeless outreach pilot to three full‑time city employees.

On utilities, Cipriano described a one‑time ‘‘25’’ rate change for Water Works for the year (presented as ‘‘one time of 25 for this year only’’), which she said equates to about $0.31 per day for an average household using 5,000 gallons a month; she framed the increase as needed to help cover roughly $40,000,000 per year in regional water infrastructure replacement costs.

Council members pressed staff for clarifications on unfunded state mandates, the school‑funding formula and the temporary reassignment of eight sheriff positions to the police department. City staff said they would work with council and the superintendent to develop timing and revenue forecasts and noted additional discussions are scheduled this spring and summer.

At the end of the work session council voted to adopt public hearing dates for the FY2027 budget (April 14 in City Council Chambers and April 16 at Denbigh Community Center), approved several routine sponsorships and allocations, and authorized a closed meeting under a section of the Code of Virginia to interview prospective city clerk candidates and discuss cybersecurity vulnerabilities; those motions carried on roll calls 5–0. The council certified closed‑meeting compliance and ratified listed appointments before adjourning into the closed session.

Next steps: staff will publish budget documents and online engagement tools, distribute position papers in April, and hold the scheduled public hearings on the dates set by council.