"What a difference a year makes.

Last February, Charlottesville’s city manager, Gary O’Connell, presented a budget with the largest year-to-year increase in more than 15 years. Flash forward 12 months, and his proposal for the upcoming fiscal 2009 budget represents the smallest year-to-year increase in a decade - 4.7 percent.

Bowing to a slowdown in the real-estate market, O’Connell unveiled on Wednesday a $141 million 2009 budget that lacks any of the new big-ticket initiatives that have characterized recent budgets. Additionally, O’Connell signaled that unless the economy and the housing market make quick and unexpected recoveries, the city would have to cut some programs or rollback services in the 2010 budget.

“I am pretty confident we are presenting a budget that will hold up in the economy,” O’Connell said. “We’ve been planning for that. But I think there will be some major scaling back next year.”

O’Connell recommends that the City Council retain the current real-estate tax rate of 95 cents per $100 of assessed value. With the average assessment of existing houses increasing by 4.2 percent, many homeowners will see a slight hike in their real-estate tax bill, while others will see no change or a small decrease.

If the tax rate stays the same, the average tax bill in the city would jump by $106 to $2,628; last year the average tax bill spiked by $260.

Mayor Dave Norris said that councilors are unlikely to change the tax rate, though there’s been no formal discussion to date.

“I don’t suspect you’ll see any talk to increase the tax rate,” Norris said. “And given the fact that it’s the lowest proposed increase in 10 years - it’s pretty modest - I don’t predict you’ll see a big push to lower the tax rate.”

O’Connell’s proposal would fully fund the Charlottesville school system’s request for $39.8 million, a 3.8 percent jump. Last year the school system saw a 12.7 percent spike in funding from the city despite a drop in enrollment.

Fully funding the school system’s request “is always the top priority,” O’Connell said. But doing so means there would be less funding to dedicate to other city goals, such as increasing the stock of affordable housing or improving the transit system.

“This has been a hard year to do it because of the reduced revenues and slowdown in the real-estate market,” O’Connell said.

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

Eliminating bus fares, discussed this fall by some councilors, is not part of O’Connell’s budget. That would cost the city an additional $500,000.

“I think the priority is on improving the current system,” O’Connell said.

O’Connell is also recommending that the upcoming budget include a steep drop in funding for affordable housing - from $2.1 million to $1.4 million.

Mayor Norris said he will push his fellow councilors to add more money to the budget for affordable housing programs, but he is not sure if he will have the necessary votes to make it happen.

Homeowners who earn less than $25,000 would still be eligible for a $500 tax rebate and those earning between $25,000 and $50,000 would be able to receive a $350 grant. The property value ceiling for the tax grant would jump from $350,000 to $365,000.

One of the other big expenditures in the upcoming budget would be Smith Pool. The city is planning to use $5 million of the fiscal 2007 surplus to replace the aging pool facility at Buford Middle School, which would allow the city to shutter Crow Pool.

Additionally, O’Connell is pushing for a $24.4 million capital projects budget, which would include $3 million to replace Onesty Pool, $3.5 million for a new fire station in the Fontaine area and $1.5 million to begin overhauling the Downtown Mall. Of the $24.4 million, $13.7 million would come from bonds.

Other major items in the budget:

l a 4 percent salary increase for city employees, at a cost of $1.44 million;

l a $1.5 million increase for environmental remediation of the Ivy landfill;

l $6.15 million for debt service;

l and nearly $100,000 for new youth summer programs." (Seth Rosen, The Daily Progress, February 14, 2008)