Fredericksburg City Council Approves First Read of Budget, 4-Cent Tax Increase
Among budget drivers are increasing needs of kids supported by the Children's Services Act, which supports vulnerable youth and families in the city.
By Adele Uphaus
MANAGING EDITOR AND CORRESPONDENT
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Fredericksburg City Council on Tuesday unanimously approved on first read an $0.84 cent real estate tax rate for next fiscal year, a 4-cent increase over the current rate.
Charlie Frye, Ward 4 representative, acknowledged that this is the second year in the row of 4-cent tax increases.
“I just want to comment that there is a clear understanding of what real estate taxes do,” Frye said. “This comes with a lot of dialogue. For myself, there is a huge understanding that folks have been continuously priced out of the city. But if we did everything that was asked [of us in the budget], the increase would be higher.”
Council also approved a first read of the budget for fiscal year 2027, which begins July 1. The total general fund budget is $141.5 million, and it supports a 4% pay scale increase for city employees; nine new full-time positions; and $750,000 in new funding for the school division.
Since City Manager Tim Baroody presented his recommended budget in March, Council members and staff have added several items to the budget and capital improvement plan, including $100,000 to install security cameras at city parks and $250,000 over two years for “pedestrian safety improvements.”
Some of the drivers identified during budget work sessions this spring include flat real estate tax projections for next fiscal year due to tax relief programs, the construction of a new fire station and major upgrades to the wastewater treatment plant, and the increasing need for services provided by the Children’s Services Act (CSA).
The budget includes $224,285 in new funding for the CSA, which serves children in foster care through the Department of Social Services, as well children requiring placement in private day schools and children who at risk for out-of-home placement due to extreme needs and behaviors.
At a presentation given to Council at a work session earlier on Tuesday, Kristin Shores, the CSA program coordinator, said there are 80 children in foster care in the city, double the number in 2022. Private school placements—which can cost $400 per day—have increased from 20 to 28, and placements in residential or group homes for children who “are not able to remain safely with their families” are up from six to 19.
For the current fiscal year—fiscal year 2026—the CSA program has an approved allocation of $4.1 million ($1.5 million from the city) and is expecting to spend $5 million, Shores said.
“So we are in need of some more money,” she said. “The children we are serving are way more complex than they were five to 10 years ago, in terms of the traumas they have experienced. The services haven’t caught up to the needs.”
Fredericksburg City isn’t alone in seeing more need, Shores said. The statewide Office of Children’s Services, which provides the rest of the funding for local CSA programs, had to request more money from the General Assembly for the current fiscal year and has increased its ask for next fiscal year, she said.
Assistant City Manager Mark Whitley said staff will be asking Council to approve an amendment to the fiscal year 2026 budget to provide “a significant amount of funds” for the CSA program.
“We are still working on a plan to fund that,” Whitley said. “And fiscal year 2027 does have an increase in funding, both in the local transfer and overall. We hope it’s enough. Trend lines are spiking at the moment.”
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