"Although Charlottesville city councilors unanimously approved a $141 million fiscal 2009 budget Tuesday afternoon, their work on the budget is far from over.

State funding for next fiscal year is expected to be cut this summer by about $500,000, and that means councilors and Charlottesville staff will have to find ways to plug that gap.

“Diminishing state money for programs is a reality and that will probably get worse for the next couple of years,” Councilor David Brown said. “We are going to have to be smart with what we are doing with our resources.”

The city will not know until August how much less it will get from the state, but officials are bracing for hefty reductions in money for foster-care services, the police department and the juvenile justice system, among others.

In response, the city could draw down the $250,000 contingency fund it holds in reserve or the half-million it has set aside in a fund to maintain the city’s stellar bond rating. Another possibility would be decreasing the amount of debt service the city pays off next year.

Ultimately, though, mandating that departments trim their budgets is “certainly” going to be part of the solution, said Leslie Beauregard, the city’s budget director.

After weeks of public hearings and work sessions, the council approved the budget Tuesday in a short meeting without fanfare. An overall increase of only 4.7 percent, the 2009 budget represents the smallest year-to-year jump in a decade.

“Certainly we haven’t been able to give everyone everything they wanted,” Mayor Dave Norris said. “But I think we’ve been able to put together a good budget. There’s not a whole lot of lard in this budget.”

Councilors kept the real-estate tax rate at 95 cents per $100 of assessed value, meaning the average tax bill in the city will jump by $110 to $2,599.

News of the state cuts arose late in the city’s budget process, and there was no public discussion of raising the tax rate.

The budget would fully fund the school system’s request for $39.8 million, a 3.8 percent jump. In the current budget, the schools received a 12.7 percent spike in funding from the city despite a drop in enrollment.

Two new routes will be added to the bus system at a cost of $380,000. One will run from downtown to Charlottesville High School via Park Street and the other would go from downtown to Kmart on Hydraulic Road via Preston Avenue.

“This budget improves the transit system, though we still have a long way to go,” Councilor Satyendra Huja said.

The budget includes a steep drop in funding for affordable housing — from $2.1 million to $1.4 million, drawing the ire of Norris and Councilor Holly Edwards. Councilors are considering using another $1 million from the city’s economic development fund on a future affordable housing project.

“We are going to have to be real strategic with the money that is available so that next year we can say, ‘This is what we were able to do and this is what we need to do even more,’” Edwards said.

Councilors also approved $24.4 million for capital projects, including $3 million to replace Onesty Pool, $3.5 million for a fire station in the Fontaine area and $1.5 million to begin overhauling the Downtown Mall.

The budget picture for 2010 looks gloomy, officials acknowledge. Unless the housing market and economy make dramatic comebacks, the city will face funding shortfalls and either be forced to roll back programs and reduce services, or raise taxes.

The city is projecting a $563,000 gap between expected revenue and expenditures that will have to be closed in 2010 and a $5.4 million gap in 2011.

“We will need to be clear what things are our most important priorities and what things we can let go of,” Councilor Brown said. “We are going to have some more difficult decisions in the next couple of years.”" (Seth Rosen, The Daily Progress, April 16, 2008)