Council is set to hold two special meetings Monday morning, at 9:30 a.m. and at 10 a.m. Both will take place in the council chamber at city hall, 900 Church St.
The 9:30 meeting agenda states simply that topics will be the real estate tax rate and a second reading of the new fiscal year budget proposal.
Topics for the 10 a.m. agenda include the second reading on the adoption of the budget, a proposed personal property tax rate on vehicles of $3 per $100 of value, a vote on setting the personal property tax relief rate at 40.25%, adoption of operating fund budgets and adopting a new five-year capital improvements plan.
You can find meeting documents at https://lynchburgva.portal.civicclerk.com/event/2988/files/agenda/2295 and at https://lynchburgva.portal.civicclerk.com/event/2987/files/agenda/2291.
The meetings were called by separate factions on council, which often splits votes 4-3. Frequently, Mayor Larry Taylor and members Sterling Wilder, Chris Faraldi and Stephanie Reed go in one direction, while Vice Mayor Curt Diemer and members Martin Misjuns and Jacqueline Timmer go in another direction.
The latter three members often assert that the city imposes excessively high taxes on citizens and spends too much on programs, services and initiatives they consider unnecessary or secondary to critical needs. The other four members often assert that what the group of three considers secondary needs or unnecessary spending are actually critical to the quality of life in the city.
Council remains divided on budget specifics and tax rates going into Monday’s meetings after thrashing through more than seven hours of debate June 24 — first in a roughly two and one-half hour afternoon work session, then in a regular meeting that lasted nearly five hours.
Several income and spending proposals were debated, with some of them involving possible closure of public facilities, along with possible elimination of both filled city staff jobs and vacant positions.
Ongoing debate
Last week’s budget and tax public meeting discussions began June 23, when council was set to receive public comments on a proposal introduced June 10.
The current real estate tax rate is 89 cents per $100 of assessed value. But a property reassessment increased real estate values by an average of 20 percent — meaning that keeping the tax rate the same would increase actual tax bills.
To keep tax bills roughly the same, council would need to lower the rate to 76.7 cents per $100 of value — referred to in council debate as the “equalization” rate.
The June 23 public hearing was on a proposal by Faraldi to raise the real estate tax rate to $1.025 per $100 of value while eliminating the personal property tax on vehicles for many residents.
But that meeting lasted less than two minutes. Faraldi said he had learned there would not be enough votes to pass his proposal, so he called for adjournment. Debate ensued when the mayor declared it adjourned without a council vote to do so. Citizens who attended did not get an opportunity to speak.
At the June 24 work session, council was presented with four scenarios:
— The city manager’s proposal, which would keep the 89-cent current real estate tax rate; maintain current services; spend more than $5.2 million on a 3% cost-of-living raise for city workers and school employees along with a pay progression plan for public safety workers; and increase tax relief for the elderly and disabled by $500,000.
— An 86-cent real estate tax rate. It would reduce tax revenue by more than $2.7 million, but reassessment would add more than $785,000 of income. The additional elderly and disabled tax relief would not happen. This plan projected about $1 million in spending cuts ranging from the court system and the city manager’s office to public safety agencies, economic development and more, although staffing levels would not change.
— An 83-cent real estate tax rate. It would cut that tax revenue stream by about $5.4 million, but the reassessment income of more than $785,000 would still be in the mix. The elderly and disabled tax relief increase would not happen. This plan projected elimination of 32 job positions.
— The “equalization” tax rate of 76.7 cents. This plan included eliminating the cost-of-living raises, cutting more than $4 million from the city’s departmental budget and eliminating those 32 positions. Staff cautioned that adopting the plan could “potentially break contractual agreements and promises to retirees.”
Diemer noted that the “equalization” tax rate, while offsetting additional income from property reassessment to some extent, historically ends up bringing in more revenue through new construction that is not factored into the budget numbers early on.
Council debated the budget scenarios at length, touching on tax rate options and several specific proposed spending changes.
Timmer suggested setting the real estate tax rate at 83 cents while creating an audit committee tasked with looking for ways to cut spending.
After extended debate about removing or restoring specific line items, council was told it would need a rate closer to 84 cents to make the numbers work. At one point, Misjuns suggested having the employee raise take effect in January, halfway through the next fiscal year, to keep it closer to 83 cents. There also was discussion of making it a 2 percent raise for the whole year, but Wilder and Reed favored 3 percent for the entire year.
The regular council meeting that night began with debate about allowing citizens who could not speak at the June 23 hearing to make comments. Ultimately, five citizens who had been there were allowed to speak. Two people supported Faraldi’s plan to eliminate most people’s car taxes. One man called for eliminating the car tax and reducing the real estate tax. One man criticized council for not letting people speak June 23. One woman accused council of using the city manager as a scapegoat and allowing citizens to defame him.
Also, Faraldi claimed that after the June 23 meeting broke up, Diemer, Misjuns and Timmer conducted a meeting that had not been properly called or advertised. Diemer countered that official business was not discussed and that they simply listened to citizens’ concerns informally.
During budget discussions, Wilder expressed concern about proposed cuts that would harm the downtown library branch, the Templeton Senior Center and the Jackson Heights art studio.
Debate continued around whether members could support a real estate tax rate of 83 or 84 cents, and whether formation of an audit committee would be included. Then came proposals involving a real estate rate of 82, 83 or 84 cents paired with a car tax rate of $3 per $100 of value.
