Lynchburg council weighs using one‑time reserves to extend vehicle and trash fee waivers; schools seek one‑time funding

Council members and finance staff spent the work session exploring how to keep two citizen fees waived for another year while protecting core services. Donna Witt, the finance staff lead, told the committee that the motor vehicle license fee generates about $1,550,000 annually and that the city had identified roughly $650,000 in additional recurring state revenue that is not included in the FY27 proposed budget. "If we're gonna continue this, we really need to replace it with recurring revenue," Witt said.

Witt outlined two recurring options and several one‑time options. One recurring option would be to free up roughly $900,000 now transferred into the fleet fund by replacing prepayment of fire vehicles with a line of credit; that would be a recurring shift that would have to be repaid later. For the trash fee — which brings in about $2,480,000 annually — Witt said the city has no clear recurring source and would likely need to rely on one‑time funds such as the debt service reserve (about $1.7 million currently) and reductions in PAYGO capital projects to cover the remainder for a single year. "There's the one‑time debt service reserve that's out there that you could utilize and then make it up with PAYGo projects," Witt said.

Council members questioned whether using one‑time reserves simply delays a problem. "My concern is what's gonna happen next year," one member said, warning that repeated waivers could create a growing shortfall. Others urged finding funding sources that shift costs to non‑residents, such as modest hotel‑tax increases, before taxing local households further.

The trash and motor‑vehicle fee conversation was linked to a broader schools funding discussion. Staff presented two lists of school requests that include roughly $1,645,222 in PAYGO capital items and about $1,200,000 in operating one‑time requests. Witt said $1,600,000 previously set aside for school‑closure reserves is available for PAYGO capital; she recommended asking the superintendent how the district would prioritize those one‑time funds. Several council members supported giving schools the option to allocate that $1.6 million across the capital and operating lists, but others cautioned against shifting money from projects already planned — for example, the library renovation — if that would prevent intended uses.

Council did not adopt a final funding decision at the work session. Staff said the motor vehicle and trash fee questions would be part of the budget process and that several items will return to the full council and public hearing for final votes.