Charlottesville City Council is in the process of amending City Manager Gary O'Connell's fiscal year 2011 budget proposal of about $140.8 million, which is about $1.7 million lower than the fiscal year 2010 budget.
"Much of the challenge in developing the FY 2011 Proposed Budget was balancing revenues and expenditures given the decreases in local revenues and state funding, and the needs to maintain quality services," according to the proposal.
Leslie Beauregard, director of Budget and Performance Management, said the city must cut some expenditures because several revenue sources have declined. For example, revenue from intergovernmental sources - which includes funds from state agencies - fell by about $680,000, according to the introduction to the proposed budget. Revenue from city services like parking garages also decreased in late 2009 and early 2010 because of the snowstorms that reduced residents and visitors' desire to go downtown or visit the University.
"Just like around the nation, people in Charlottesville aren't shopping as much, they aren't going out, and as a result, real estate, sales, meals and lodging revenue have decreased," Beauregard said.\nBut not all of the proposal's spending reductions will impact resident services negatively.
"The operating budget is the budget citizens care about the most because it affects services like trash collection, the police, firefighters and public works," Beauregard explained.
Though some local residents have asked for a decrease in the percentage value of the real estate tax, the current budget proposal does not include any such decline, Beauregard said, because the city needs to tighten spending and maintain revenue streams. The proposed real estate tax remains at 95 cents per $100 of assessed real estate value.
Because average values for existing residential properties in the city declined by 2.19 percent, though, about 54 percent of Charlottesville residential property owners will see their real estate taxes decline, she said. Forty percent of residents, meanwhile, will see no change in the amount paid, she said.
The decision, though, still faces opposition from residents.
"Not only is it not time to raise the tax rate, but it would be welcome to lower it," said Colette Hall, president of the North Downtown Residents Association, to Council last week. "I wanted to remind Council members that a third option existed - lowering the tax rate - as opposed to raising it or keeping it the same."
Council likely will finish amending its fiscal year 2011 proposal by next week, Beauregard said. Thus far, officials have made only major amendments to the Capital Improvement Program.
"The Council has moved some project money around to increase affordable housing," Beauregard said, adding that "they took $110,000 from plans for current transit enhancements to use for future unknown transit enhancements."
Council members will hold the next public hearing and first reading of the budget April 5. They will then vote April 12 to adopt a final version.
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