City Council Holds First of Many Budget Work Sessions
Tax rates are part of the discussion.
by Adele Uphaus
MANAGING EDITOR AND CORRESPONDENT
Tax rates and the dormant rental inspection program were among the topics City Council discussed at a budget work session on Tuesday.
City Manager Tim Baroody presented his proposed $126.7 million general fund budget for fiscal year 2025, which begins July 1, last week, and Council has work sessions scheduled at least weekly through the end of May to delve further into it.
Baroody's budget proposes a real estate tax rate of $0.76 per $100 of assessed value. This represents a 4-cent increase over the equalized tax rate of $0.72. The equalized tax rate is the rate that would generate within 101% of the tax revenue of the previous fiscal year based on newly reassessed home values.
The proposed tax rate will generate an estimated $2.2 million in new revenue for the city, but staff and Council members said on Tuesday that there are a number of needs the budget doesn't fund.
Baroody's budget would increase the City's transfer to the school division by $1.65 million - but the school division has identified $4 million in unfunded needs.
"I am made nervous by the $3 million hole in the schools' budget," said Will Mackintosh, one of the two at-large representatives to City Council. "I’m concerned that we're going to have to have some conversations about the general fund appropriation for the schools."
Mayor Kerry Devine noted that Baroody's proposed budget cut some 30 new positions that were requested by City departments.
"I'm not saying no to a potential higher rate at this point," Devine said. "I do have some concerns about funding and the number of positions not funded. Our personnel needs are great right now."
Devine, who sits on the Board of Trustees of the Central Rappahannock Regional Library, said she's also worried about the City not fully funding the library Board's request.
Baroody's budget recommends about $1.6 million for the library, which is a 6.8% increase over last fiscal year but still $113,000 short of what the library requested.
Devine said it's important that the library be able to fulfill its mission of providing lifelong education to the entire Fredericksburg community.
Ward 3 representative Tim Duffy said he might be supportive of an advertised tax rate of $0.80, but no other numbers were suggested on Tuesday.
Council next month must vote on an advertised tax rate that will be subject to a public hearing on April 23. Council can lower the tax rate below the advertised rate when it adopts a final budget, but cannot raise the rate without readvertising and holding another public hearing.
Baroody's proposed budget introduces a fire levy that is equivalent to 1-cent per $100 of assessed real estate value. Funds from this tax will support the fire department's operational and capital maintenance needs.
The proposed budget recommends a 10% increase in water fees and a 5% increase in sewer fees. According to a chart shown at the work session, the new fees would result in between a $7 and $18 increase in combined water and sewer bills each cycle.
Council members said they are aware that raising taxes and fees will be difficult for some city residents, and also that the real estate reassessments will likely affect property that is less valued to a greater degree than more highly-valued property.
Council members also discussed reviving the rental inspection program, which was discontinued as a cost saving measure in 2008 during the recession. This issue came up last year during debates over whether the City should permit accessory dwelling units.
Duffy asked whether the program could be funded in next year's budget. Baroody said staff discussed it.
"It was on the list and made it through a couple of cuts, but didn't make it to the final [proposed budget]," he said.
He added that staff and the City Attorney will need to do "about six-to-eight months" of preparatory work before the program would be ready to launch.
Devine said that it will be important for Council to determine the goal of a rental inspection program.
"[Would it be concerned with rental] properties being subpar? Numbers of people [in rental properties]? Properties of a certain age?" she asked. "It sounds like we need more study on this and again, understanding that it's not going to happen this budget cycle, but need to take a look at it and plan for it."
Council will next discuss the budget at its work session and regular meeting on Tuesday, March 26. The work session begins at 5:30 p.m. and the regular meeting at 7:30 p.m.
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