Interim town manager unveils Purcellville’s $35.9 million FY2026 budget, holds tax and utility rates steady

Interim Town Manager presented Purcellville’s proposed fiscal year 2026 budget on the evening the council convened, outlining a $35.9 million fiscal plan that holds the real-estate tax rate steady and proposes no increases to water or sewer rates.

The manager said the FY2026 operating plan totals $26,400,000, a $2.2 million increase from FY2025, and the full fiscal plan including the capital improvement plan reaches $35,900,000. “At 26,400,000, our fiscal year 20 26 operating plan reflects a $2,200,000 increase from fiscal year 20 25,” the manager said. The proposed CIP for FY2026 is $9,500,000, described as a roughly $3.1 million (48%) increase from the prior year to address infrastructure needs.

The manager summarized how the plan is allocated across five core funds, reporting the general fund at $15,900,000, water at $3,800,000, wastewater at $5,000,000 and parks and recreation at $805,000. He said 60% of operating spending is general fund and wastewater accounts for a substantial share of utility costs.

On revenue and rates, the presentation said the real-estate tax rate would remain at 20.5 cents per $100 of assessed value and that utility fees would not increase in FY2026. The manager projected meals tax revenues at $3.6 million and proposed transferring 50% of that (about $1.8 million) to support utility and other funds, adding $616,000 to the water fund and $1,140,000 to wastewater.

Staff-proposed enhancements total $527,000 and were identified by department: merit increases ($139,000), wastewater enhancements ($130,000), public works ($79,500), parks and rec and a water EPA project (~$25,000). The manager described a proposed merit-based increase of up to 3% for performing employees and explicitly said there would be no COLA in the plan.

Officials reviewed reserves and debt. The manager said the general fund remains strong but would use a $1.6 million draw on reserves related to the meals-tax transfer, leaving about $8.3 million in reserve—roughly $4.1 million above the town’s stated policy level. Finance staff member Liz corrected a slide error during the presentation, noting the slide should show a $61,000 surplus rather than a deficit and explaining fiscal-policy targets and acceptable temporary reserve levels while rates are adjusted.

The presentation reviewed multi-year capital needs—estimates included roughly $28.6 million for the water system and about $4.7 million for wastewater over a 3–5 year horizon—and discussed debt-management strategies, including past restructurings and plans to reduce outstanding debt over the coming decade unless the town takes on new projects.

Looking ahead, the manager outlined four objectives—strengthen fiscal resilience, ensure sustainable infrastructure investments, enhance workforce efficiency and retention, and drive innovation—and discussed workforce pipeline work, apprenticeship ideas and a potential partnership with Johns Hopkins University for research and grant opportunities. He also provided a calendar of next steps: a budget work session March 19, a regular council meeting March 25 (tax adoption consideration), further work sessions, a public hearing April 8 and a planned adoption on April 22 (fallback May 13). He asked council members to submit questions to Diana Hayes for staff to compile and answer.

After the presentation the mayor thanked staff, called for a motion to adjourn which was made, seconded (not identified), and carried by a vocal 'Aye.' The council’s formal deliberations and any final votes on the FY2026 budget will occur in the subsequent scheduled meetings.