Lynchburg City Council on Tuesday night approved its fiscal year 2022 budget of $426.1 million, which represents about a $4.6 million increase from the budget proposed in March, with the change driven by a 5% across-the-board wage increase for all city employees that was approved in early May.
Notably, the budget also maintains the current real property tax rate, which could mean higher bills for some city residents following a recent reassessment that showed an increase in total taxable real estate values of about 7.5%.
Chief Financial Officer Donna Witt said the adopted real property tax revenue increase is about $4.8 million.
Last year, budget plans faltered at the onset of the COVID-19 pandemic, but staff reports that revenues are beginning to right themselves. Witt said there is a projected increase in city revenues for fiscal year 2022 of about $3.5 million more than originally proposed.
While the budget contains no tax rate increases and works to maintain current services, according to staff, members of city council were divided on the issue of the budget throughout the entirety of the process.
Ultimately, the general fund operating budget of about $204 million was approved in a 5-2 vote Tuesday night, with Ward III Councilman Jeff Helgeson and Ward IV Councilman Chris Faraldi opposing.
At-large Councilman Randy Nelson also voiced significant objections to the budget but said he would vote for it in the name of “compromise” and to support the other “stellar features” of the general fund he does approve of.
At the first budget reading May 25, Nelson said he would “hold my nose and vote ‘yes’” in spite of those objections. Among these, he said, was a lack of support for public safety and lack of rationale for the increase of tax revenues at a time when residents could not afford to take economic hits.
These were issues reiterated by Faraldi and Helgeson, who were adamant in their opposition to maintaining the current real estate tax rate at $1.11 per $100 of assessed value rather than equalizing or finding a middle ground.
“It is a rotten budget, and it is a rotten time to increase taxes on our citizens,” Helgeson said at the May 25 meeting. Again, on Tuesday, he said “this budget just completely blew it.”
While the budget does contain some improvements to public safety staffing — including the addition of three firefighter and EMT positions and three administrative support associates in the police department — Faraldi argued this was not enough in light of the needs of those departments, which have suffered from staffing shortages, high turnover rates and salary compression.
At a budget retreat in January, council identified improvements to public safety staffing and the implementation of the citywide salary study as two top priorities. Faraldi said neither of these were shown effective support in the adopted budget.
Despite these objections, the majority of the board said the adopted budget was the best move for the city.
At-large councilwoman Treney Tweedy said while no budget was perfect, this was something she believed in, a document that would advance Lynchburg forward.
“I, as a person, one vote, am supporting public education, supporting public safety increases and positions, and supporting our own city employees getting a 5% increase,” she said. “Complexity is in all the details, and when you’re not given all the information, other than soundbites, you don’t get the full complexity of craft in this budget.”
The budget also includes money meant to target other city priorities — such as $100,000 dedicated to create a full-time diversity, equity and inclusion strategist position, as well as provide funding for DEI-focused training and citywide initiatives; flat funding of $39.8 million for Lynchburg City Schools; and $64.8 million in fiscal year 2022 capital improvement program funds targeting a number of key infrastructure projects.
Vice Mayor Beau Wright said this was a budget he was proud to support, and one that made the biggest investment in public safety in the past several years.
“It’s often said that budgets tell a story about priorities and about values, and this budget tells a very clear story, I think, about Lynchburg,” Wright said at the first reading of the budget.
“That here in our city we care about the long term. That we believe employees are worth investing in, that public safety matters, that public education must be protected and that if we want a vibrant community decades in the future, we need to be making smart infrastructure decisions now.”
He said the 5% general wage increase was necessary to keep up with inflation and surrounding localities.
Totaling about $3.3 million, the 5% wage increase for all city employees was recommended by staff after the projected increase in city revenues for fiscal year 2022, and a 5% salary increase approved by the state for all state-funded city positions.
Some councilors argued this wage increase does not address salary compression, which historically has been a major issue for the city.
Tweedy said this was something that would not be solved in a single budget and would have to become a focus moving forward.
Interim City Manager Reid Wodicka said with the budget behind them, the city can pivot its attention to “bigger picture policy issues,” such as addressing compression and the long-term public utilities plan on the horizon.