Staunton proposes $164 million FY2026 budget, highlights tunnel repairs and school increase

Staunton’s city manager presented a $164 million proposed budget for fiscal year 2026 to the city council, saying it balances larger local school contributions, a 3% cost-of-living increase for city employees and a newly earmarked infrastructure fund to begin addressing structural problems in tunnels beneath downtown.

"This is probably one of the most difficult budgets I've done," the city manager said, noting the proposed budget begins July 1 and represents a $15.4 million overall increase from FY2025. The general fund is proposed at $79.6 million, an increase of $6.1 million over the prior year.

Why it matters: the proposal both funds recurring costs — including a planned 3% pay increase for full- and part-time employees and higher health insurance costs split evenly between the city and employees — and adds one-time and capital resources that the city says are needed to respond to newly identified risks under the downtown business district.

The presentation broke down drivers of the 10.4% ordinance increase. About half of that change is tied to capital spending in utility funds, 2.2 percentage points reflect the local transfer to the school budget (counted across funds), roughly 2 percentage points come from state and federal restricted programs (largely VDOT reimbursements), and the remainder covers operating increases.

Education and courts: the budget would transfer $18.9 million to city schools, equal to 23.7% of the general fund. Per the city manager, $1,647,852 is added to the local school contribution under a funding formula adopted in prior years. The new, city-only juvenile and domestic relations district (J&DR) courthouse is reflected in the FY26 budget with $372,770 for operations and personnel including deputies and custodial staffing and roughly $96,785 in operating costs (largely utilities).

Infrastructure and the downtown tunnels: the manager highlighted results from a structural evaluation of downtown tunnels funded with ARPA money. The survey, the manager said, revealed integrity issues that prompted partial closure of part of the Wharf parking lot. To create capacity for response, the proposal sets aside two cents of the advertised 91-cent tax rate — about $757,030 — for an infrastructure CIP account focused first on the tunnels. "Recent events have demonstrated that those additional funds are more critical than ever," the manager said, adding that exact repair costs are not yet known.

Public safety, services and outside agencies: the budget includes several public safety items, including a K9 replacement and funding for forensic digital evidence software previously covered by asset-forfeiture funds. Outside agency and regional partnership funding would increase by nearly $982,000, with the largest portion (about $715,000) tied to the Department of Social Services and the Children's Services Act (CSA); the city's share of CSA is approximately $281,000 after state and federal grant offsets. Animal-shelter costs for the city rise about 68% (roughly $119,400) because of higher usage and the pending move to a new Verona facility.

Parks and capital projects: the manager said Gypsy Hill Pool House has structural issues; after a 65% design, the construction budget is estimated at $2.5 million, about 67% of which the city expects to cover with interest earned on existing CIP and ARPA funds. An Edgewood sidewalk project saw costs jump from roughly $1.1 million to VDOT estimates of $4.0–$4.7 million; the council previously canceled two Augusta Street projects and would draw on sidewalk reserves to cover shortfalls.

Refuse and landfill planning: utility fees are unchanged in FY26, but the manager warned fees will need review to meet future capital needs. The city's share of the Augusta Regional Landfill five‑year capital plan is estimated at $5 million spread over multiple years; the schedule includes a bigger payment when phase six opens. The budget also funds continuing rollout of refuse modernization, with technology in trucks, monthly yard‑waste pickup and twice‑yearly bulky-item collection to reduce landfill volumes.

Budget tradeoffs and next steps: the city cited $430,000 in operating reductions or realignments used to fund new requests; many department requests remain unfunded. Materials will be posted online; the manager said there are budget work sessions April 3, 10 and 24, that the council held a public hearing on the real estate tax rate that evening, and that the overall budget ordinance public hearing and the scheduled adoption are in April.

The presentation included multiple figures and clarifications provided by the manager: the advertised 91-cent tax rate is meant to give council flexibility; the health-insurance estimate assumes a 10% increase split equally between city and employees; and some capital costs remain unknown pending engineering and bids. The manager said the city will provide more precise figures as they are available and return to council in scheduled work sessions.