Board of Supervisors Budget Work Session   3/12/2025

and Colt Orgurt.

Also here at the table, joining Mr. Richardson and our Trevor Henry, deputy county executive, local, and law deputy county executive, local, Kristy Shepard, chief operating officer, Jacob Sumner, chief financial officer, Andy Belman, assistant chief financial officer, all welcome.

Thank you for being here.

Again, thank you for your service today and every day we have the citizens of Albemarle County.

I want to remind everybody as we get started to speak towards the ceiling, which is where the microphones are, so I'm literally speaking.

And with that, I believe we can begin by turning it over to Mr. Bowman.

Good afternoon to the board and the chair, and thank you for the introduction.

Starting today, the second work session on the fiscal year 26 recommended budget, again, looking at the calendar we had ahead of us.

No action is requested by the Board of Supervisors today or Monday.

Again, as I said last Monday, on the 19th, the Board will be asked to take action to propose a budget and tax rate.

If you're just tuning in online, the significance of that is the Board will be able to adopt a tax rate with a advertised or less, but not exceed that.

Also next week, we'll be kicking off the seven town halls throughout the county over the following weeks in the effort that it goes with that.

So just another recap of the process.

Staff is going to present information at a summary level today.

I'll share it on Monday.

We spend a lot of time going in depth in a few chapters, really with those that were driving the tax rates.

There are a lot more chapters today, and there will be definitely times we slow down to talk about affordable housing and climate and the health fund and some other notable topics.

But some of the pace of the chapters will be quicker in staff's presentation than it was.

because there are more chapters, but the good news for the board is staff has less slides to present today by about 11, so that's always a good milestone.

As always, we're listening for the board for any questions or other potential adjustments the board may like to see in the budget.

And if you're tuning in, anything not answered in the meeting is posted on the website for transparency.

So with that, here's today's agenda, and we've shuffled this around a little bit in the order of the book, but actually the very first thing I want to do is to continue the conversation from the end of Monday's work session about the allocation of shared revenues and how that 3.2 cents for public safety works in the future.

So we've done some analysis of that to report back to the board and ask the board for a little bit of direction as we move forward.

We'll then move through the chapters.

If the board would like a break before we get to health and welfare, it would be the best spot.

And I'll share that we'll have at the end of the head of the table kind of a rotating cast of characters, Executive Director Bill Hoyers here, Kaki Demick and Emily Kilroy and Mr. Davidson will all take that seat at some point today.

I will share that there's a lot here and staff does not want to rush the board's deliberation.

So if all we get through in health and welfare is today, I would say that's okay.

We'll pick up the rest on either the 17th or 19th.

Those last three chapters don't drive the budget in the way that some of the earlier topics do.

So we have a lot to cover, but certainly this is awards time, and we will give that time for the discussion that the board needs to have.

So, I'll dive right into this, picking up where we left off on this allocation of shared revenue.

This is just a reference slide.

The board saw the exact same one on Monday that discussed when we have our shared revenue.

How do we share that with public school operations, county government operations, and the joint CIT event service programs?

And what we talked about is how that funding was going to be allocated in fiscal year 26 with 3.2 cents to public safety.

And we discussed in depth the cost of that this morning.

So where we left off on the discussion, and we'll bring back the new information today, is there's clarity that 3.2 cents would be for public safety in 26, and that would go into the base for future years.

But the question where we want to clarify, and this is really for the board's direction, is the change in that value of 3.2 cents as we head into fiscal year 27, how should that be calculated and considered in the future?

The board has the full ability to pick either option on this.

Staff does not have a recommendation on this.

Our intent is really to help the board give guidance to staff on their preference for the majority of the board.

So we have two options.

Option A is to take that change in 3.2 cents and split it by the normal funding split of 54 schools, 36 county government operations, 10 capital indent.

Option D would be for 100% of the public safety expenses to benefit from the growth in that 3.2 cents.

So that's the concept, but I'm going to show some math that we did not have on Monday.

So this is a lot of figures just for full transparency of how the math works, but this is a scenario to say that if revenues grew in fiscal year 27 by 4.9%, at least to shared revenues, that was the assumption we had in the five-year plan, it's just for illustrative purposes.

of how would that funding be split in option A during the normal allocation?

How would it be split during option B where the growth was dedicated to public safety?

A lot of information on this slide, but I'm going to draw attention to the far right column of option B compared to option A. And so what would happen?

I'll start with the purple line at the bottom.

If that's in option B, if that growth in the change of those 3.2 cents was dedicated

We would project to read about $300,000 additional compared to Option A that would be available for public safety.

That $300,000 would come from the revenue that would not be split to capital and debt, which is about $50,000 in schools, about $260,000.

I should clarify, that is not a cut to capital, that is not a cut to the public schools, that is less of an increase that they would receive otherwise in Option A.

So just again, the math, the actual amount will probably vary some, but that's a little bit of the order of the magnitude.

I was sure I thought of past dedications, where the value of a penny was less, and where the amount of pennies dedicated were not as great, and that would have not been as significant in the past.

But because we have those 3.2 pennies, and the value of a penny is now $3.1 million, that growth in the value of those is a little more of a factor this time.

So I appreciated the board's questions and really wanted to get an understanding about how we get some clarity for this in the future.

So before I turn it over to the board, we made a list from staff of potential considerations.

These are not all the considerations that the board could weigh.

But the first one I would say is just number one, both options are aligned with the county's financial management policies to have a guideline and for the split of revenues that is a construct owned by the board supervisors and no one else.

So either approach to the board ethics is fine by the financial policies.

The second consideration was thinking about this in long-term financial planning.

And the first point was, and I'll say lots of board members made points.

If I didn't capture someone's board members points, it's just because I had so much room with the slide.

One point was made that we heard in public safety we have a lot of needs and they're not all being addressed this year.

So in the future, whether they be additional police officers that may be required, additional support for the volunteer staffing, additional costs for our partner public safety agencies, option B provides the board a little more flexibility to address those in the future as the 3.2 remains, because there is that 300,000 that would be available.

The other long-term consideration, this is one where because the recommended CIP was developed on option A, there would be about that $50,000 over five years, about $250,000 in revenues less than would be in the CIP.

Now the board has not seen the CIP.

That'll be on Monday.

I would say that if the board were to say, let's just keep all projects equal, there is a reserve that the board maintains in the CIP that could absorb that and still let leave some to the board.

So if we'll continue this more on Monday, but that is not something to be, I think we'd necessarily be a deal breaker to say that CIP, we'd have to delay a project or cut a project to do that.

Number three is really about complexity.

And this is one where I appreciate the board recognizing as we talked about this Monday, they can tell the wheels were turning in my head and thinking through all the nuances and how we calculate this.

What was on my mind is prior to 2022, the board didn't change the policy, but they streamlined the math.

We used to have about a 17 to 20 step process.

So this is an additional step, but that is still a much easier calculation than it was prior to 2022.

Staff thought through that, the complexity, it's not something that would be a barrier to implementation, so we would have no concerns from that perspective.

Final consideration, and this was alluded to by a few board members one Monday, is really what is the simpler communication for budget board members as they communicate to the public, and this becomes a recommendation from the county executive to the board's proposed budget.

I was just an open-ended question for the board to reflect on.

These are certainly not all the potential considerations the Board could weigh.

But at this point, I would turn it back over to the Chair.

Thank you.

Ah, okay.

Excuse me, I'll interrupt for just a moment.

The Supervisor Pruitt has requested

Board Rules of Procedure, Rule Number 8B1D, Connected Personal Freedom of Information Act.

In order to do so, we have to have Supervisor Pruitt state the reason for his participation in his location and then a motion to, and a second to vote to let him in.

No.

I like an issue with the screen share.

There we go.

There you are.

All right.

Good background, right?

Yes, so I am away for work and was not able to get back in time.

Ms.

McKeel, Andrews, Galloway

We all look at this point, sorry, we are looking at getting board direction between the two options that are shown on the screen between the split 543610 or dedicating the 3.2 cents entirely for public safety expenses.

N8.

Yes, so my original reason for me for bringing this up is I wanted to know if the 3.2 could be allocated just for public safety as long as we're paying for the safer grant.

And so that's not in any kind of jeopardy because we have to pay for those amounts.

If that's the

Supervisor McKeel?

Yes.

My preference is option B, dedicated to public safety, because there's such a great need and it affects everyone in the community.

Having said that, I do want to just make a note that this in no way impacts the additional 1.2 million that we're giving schools.

That's great clarification.

None of this impacts the recommended 26 budget.

How's it going?

I'm not prepared to tell you what option I want to do yet.

I'm still thinking this through.

Is it safe to assume that the housing, the .4, I mean that 310 is about 10% of the 3.2 million, that the 3.9.9.

What's the max?

So as the county executive recommended budget was constructed, knowing that we had the water resources dedication earmarked, it contemplated that the growth and the value of that .4 would already be dedicated to housing.

But just from my understanding, if we had asked what those dedicated pennies met just like in this exercise, that 310, 262, and 48 would be much smaller for the .4.

I mean, the 310 is what I'm looking at.

Yeah, so as an example, the second line on this slide shows with the value that 0.4 dedicated or the growth in the point, the value 0.4 and the growth in the 0.4 dedicated to housing that would generate additional $60,000 in fiscal year 27.

So the reason I'm not ready to say yet or not

I'm not against it.

I mean, it was, I brought the idea up, right?

It was like, let's do this on the out years.

But, you know, I'd like to do it not to complicate it, but if we could get to what we would expect growth-wise for both departments of what we would need and try to tailor the dedication to what we think,

and the safer can be part of that because those could be the positions you have to pay for it.

It's really the way it would work is that 10 million now is part of the base.

And I was just sharing with the growth in public safety, if only just to maintain the public safety pay scale and keep up with compensation, barring some very dramatic thing.

But I'm not understanding the move forward on the dedicated amount.

So you're saying we're only gaining 3.10 every year because you're saying that if we dedicate the 3.2 and assessments grow by whatever number you said, 4.1, 4.9?

Yeah, 4.9.

Well, public safety would also have the benefit of all of the other changes in shared and non-shared revenues just as they would in any year.

So, for example, right now, the total amount of revenue available for county government, including public safety in this, would be $6.6 million.

Public safety, realistically, in the budget year, would have more of a share than $300,000 in that.

Yeah, see this is why I'm not ready to say for sure I gotta get my head wrapped around it.

So I'm not opposed to going with option B. I'm just saying I'm not ready to say I'm gonna vote for option B. I gotta take this through some more.

Plus I wanna hear what reactions we get when we go out to the public and things like that as well.

That's where I'm at.

Thank you.

Just to clarify, because I often think I understand things, and then it turns out I don't.

The $300,000 is additional on top of the growth beyond what the 3.2 cents is for fiscal year 26.

So we're talking about $9 million plus 310.

It's a substantial amount of money, just like the 1.2

or more, if we end up making more for the Fort Worth housing chunk, that is plus the $16,000.

Okay.

I'm still not ready.

It doesn't change my opinion.

I was walking in with that opinion today.

The board does not have to make a decision today, but I think this is one.

upon the 0.7 for water resources.

And the reception that the public had for that, because it was needed and essential, and they had confidence that it wasn't just going into an unnamed bucket of stuff.

And that is what I'm hanging on to for this.

I'm sort of horrified that it's four cents, frankly.

But I understand why it's being proposed at four cents.

So I get that, and how we got here, and the perfect storm of all the other things that I keep trying to explain to people.

I'm definitely in support, option B, and I'm holding back for, I didn't, will again be raising it whenever the appropriate time is about the rest of the split for the point eight, because I definitely have a different thought about that.

I think the whole thing, my proposal, I'll put it out here right now and people can think about it until later, that if the whole point eight goes to

The Affordable Housing Chunk, and it goes into building the principle from which we can then get the revenue in addition to that $3 million that's already proposed to do that.

All of a sudden, we're at something substantial enough to get a reasonable amount of revenue out and not deplete the principle because we are never going to get anywhere if we're just sending it all out the door the very first year.

And that's where the unfairness of taking

extra tax money from our lowest income taxpayers in order to be able to provide it for somebody else.

That's a problem that I want to make sure we're all in this together and we're trying to figure out a way to have it be sustainable.

So that's sort of my background on that.

But I'm definitely in favor of the option B right now.

So I appreciate that.

I've gotten a lot of clarity on this issue, I think, since when it came up kind of in our previous work session, because I know I was one of the few people who was seeking additional clarity kind of as to what this structure and the meaning of the dedication was moving forward.

And what I guess I would observe and like reflect to the board is that in both of these circumstances, right, where we're setting up a structure with a tail wax that

We're setting up a revenue expectation that we are then saying would drive our choices, rather than our choices of where to allocate, you know, service growth, rather than having our services reflect expressed community needs and then seeing how to address that in a bunch, right?

As in, the idea of endorsing option B creates a situation where we are

We are going to receive an additional surplus of revenues.

Public safety is almost entirely a salaries-driven line, and therefore, it would effectively dictate what we do with our budget next year, if they'd be saying, oh, well, we need to at least grow this amount.

I say that, but of course, that is what we do every week, without Chinook, right?

Every week, we have that same kind of tail-eye involvement.

Lisa, we are schools at our capital.

I think it is probably more coherent to me to have a single and consistent expectation throughout the budget of how that relationship will work.

And I don't know, I mean, all of this is a constant, right?

All of this is a constant that we impose on ourselves.

So I am finding it makes more sense for

that is consistent with the rest of the budget.

And if we find that our growth needs in public safety and how to script that, it is all a construct.

We can go back and say, well, it would actually be more appropriate if all 3.2 of those cents were allocated specifically to public safety.

And we have the ability to revisit that if we would fund ourselves in extremes.

But I think just the planning consideration for the budget team as they move into 2027, it seems more internally coherent for me

Thank you.

I'm leaning towards a budget agreement with Supervisor Pruitt on the simplicity of just recognizing this is how we've done our split, and we will approach that next year as the default, but it can be changed.

I also worry that

Can I ask a good question?

Sure.

Because I didn't want to stop interrupting.

Sure.

So probably the best go back to this slide here.

It really speaks to the dedications that take place in step two.

So really what we would do is right now, the next time we'd bring it back to the Board's financial policies, there would be added to Step 2, the designated transfer to affordable housing, which I've not heard any disagreement from the Board on that, assuming that it was also going to be adopted in the budget.

And then we would probably add an additional phrase, or they dedicated, you know, transfer to public safety, or for public safety services.

So that would be kind of the language in how that works.

I'll say in the past, before we simplified this, there were more things that were listed.

There's been less over time.

So really, whenever the board decides today, it will always be an option available for the board to attend.

Again, starting point that we have to inform everyone with those respective shares.

And again, I don't want to push the board to a decision they're not ready to make, but if there's anything we can provide to assist the board, additional follow-up, other analysis, we can put that together as we work through this budget process.

of Public School Analysis, because we've not had that requested by the board.

That impact would be much smaller because it is just the four tenths of a cent.

So the point four for schools could be dedicated funding.

The point four for affordable housing I'm hearing could be dedicated.

I want to understand more than just the dollar impact, the strategy impact.

To me, it's about trying to align maybe some dedicated funding that both the police, the fire, and the county executive can count on to meet the needs of public safety moving forward.

The fact that this year you pulled 3.2 out might not mean it needs to be a 3.2 dedicated downward.

And that's where I don't know if the report will help when it comes in, what the real growth factor is, what our own strategy is to not just keep pace but maybe get ahead of

So right now, that's why I'm having reluctance of saying I commit to it.

I want more strategic thinking involved in the decision.

Because otherwise, what I'm afraid of is if we lock off or dedicate too much, and maybe the growth factor or some other factor doesn't require it, then we're going to immediately limit, unless the board changes it in that out year, what we can do departmentally for other places.

as we don't get to, tend to be everything outside of public safety.

Parks and Rec, CDD, you know, that sort of thing.

So that's why I'm just, I like the idea.

I just don't know, is 3-2 the right number?

Maybe it's a lower number.

I don't know.

I'd like some more time to ponder that with a little bit more strategic thought behind it.

And it just, it might be helpful to gather what Ned's saying

Well, it will speak to from the supervisor Gallaway's question about needing to get ahead.

What more do we need?

That is, I think, what we're hoping from the study is that we'll have a strategic plan on the things that we need to do.

I hear a lot of things that I think are bigger than what I've had because, over the years, there have been many, many dedicated things that, when it changed, I mean, there was dedicated money for the ACE program for four or five years.

the way it was presented to us in the beginning and that's why I think that he's quick and I'm just not going to argue about it anymore but I think we're going down a rabbit hole here with that we'll dive into the content for today's work sessions and always with the strategic plan much of today's presentation is framed around how these changes in the budget contribute to the six strategic goals

We will start with the general fund expenditures, and in this chapter we're going to focus on two primary changes that really just appear in budgets across the county.

Just for perspective, this is the total general fund.

We discussed the calculation for the transfer of schools and capital, the bulk of the left half of this doughnut.

We talked about public safety, dark green, 16% piece.

Today the plan is to get as far as we can through the other pieces of this circle.

So in cross-departmental general fund expenditures, we want to spend some time talking about the market adjustment that is proposed, and also the transfer of the health fund, because in any budget, those are notable drivers.

Good afternoon.

So we're going to lay out the

All of the different ways in which we're addressing the salaries for the workforce.

And then the next slide will talk about the impact of some of this that we have seen.

So the compensation philosophy for Albemarle County is to attract and retain all the employees while maintaining internal equity and external market competitiveness.

County.

Compensation because we had just finished the comp and class study and we had submitted much recommendations for increasing the compensation based on market.

So we chose not to make a change and let those numbers go through.

So instead what we've done is through programmatic benchmarking we found that some positions, not all,

are a little below market and have included those increases in this FY26 budget.

So for FY26, we have information that the state-funded employees will be receiving a 3% increase.

And so you'll see that cost of living adjustment there effective for July 1 is in this recommended budget for all staff.

And then we

It will move, that will move our entire competitive market, that 3%.

And so that's the reason for that COLA.

And then we also are applying an increase in our public safety pay scale, and that's a 2% step increase that we do, that we've committed to for our public safety pay scales to actually work the way it's intended.

So starting pay for police officer and firefighters at entry level,

and this is just with no stipends or anything else is $53,040 right now and that will move to $54,631.

And I put that in knowing that that was something we all probably wanted to know.

So everyone on the step scale will move up one step.

And then the next item is the expansion of the

Police and Fire Rescue Pay Scale from 26 steps to 30 steps.

This was something that was actually recommended in our comp and class study from Gallagher that we had, but at the time we had so many other competing things that we needed to solve, we delayed that.

And so we are requesting the implementation of moving those scales this year in 26, from 26 steps to 30.

and this actually matches the current scales for our sheriff and ECC.

And then the last item on there is our career development plan for our fire rescue.

And that is just that we, this addresses the aging workforce and allows for succession planning for non-supervisory positions.

The firefighters are able to move to supervisory positions a year sooner.

So with that, I just wanted to share that the benchmarking work that has been done in that 1.3 was our HR department goes out every year part of the market compensation philosophy and benchmarks, positions in our organization.

So they reviewed 152 of our positions and that was affected 619 employees.

that's including our public safety.

And so not all of those will change, but we did want you to know that that menu was reviewed.

And so this 1.3 would allow for that market-based benchmarking and reclassification to occur.

So again, we're being more strategic about less across the board and more related to positions and market.

I'm ready, thank you.

Okay, so for the next one, this shows you, I think Mr. Gallaway, you had commented, so how are we doing?

So this is really one view of the comp and class implementation.

You heard, this board heard about significant challenges we had in turnover and filling positions in FY23.

and the capacity that we were giving to interview and selection processes and as you can see things are improving and we expect to see these numbers improve even more but this projection or

The average in FY24 just shows that this number fluctuates in our vacancies, but it doesn't mean that we saw these numbers going down all the way across FY24.

And then lastly, where we are today is a much improved turnover rate.

And so that is where we're aiming to stay below 10% because of the cost of turnover.

and our data in front of us does not include our retirement.

This number focuses on the organization's performance for unplanned and voluntary turnover.

And so today we have less than 40 vacancies currently.

Thanks.

I'll go through and talk through the impact of the health fund before we turn it over to the chair.

I was at the school board meeting two Thursdays ago to walk through this information with them, because, same information, this will be a slightly shorter presentation, just for the interest of time today, but I was there because we had a joint health fund with the public schools, with the county government, and many of our partner agencies, and part of the reason for that is the greater our numbers and we work together that helps ensure our risk in our self-funded model.

What it means to be self-funded is that we are entirely funded by the employee premiums and the employer contributions that then pay all of our health costs.

In a, I'll say, maybe more older, traditional model, you may have a smaller employer base and you would need to opt in to pay an insurance company to manage everything.

So you may not have flexibility in plan design.

You may not have the benefit where if you have a good year, you don't get that money back from the insurance company to retain for another year.

And of course, there's the other side of that, where if you have a bad year, then you're fully responsible for that risk and you need to have a reserve that covers that.

We are funded in this self-fund model, which is very common for employers of our size leveraging, again, our partnership with the schools and others.

From that fund, we pay our claims, any administrative cost.

A stop-loss insurance was a particular type where if we had very high-cost claimants, the county is only responsible for, in the current year, the first $400,000.

for additional insurance kicks in to cover and protect the county.

Also wellness programs.

And as we go through this, I want to recognize Laura Andrek, our Chief of Shared Service and Risk Management.

She's been with the county for four years now and has dove very deep into all of her health financials so far that I can even remember the right words.

But all the analysis and also she's supported the initiatives of the couple dozen staff who have implemented the new employee health clinic, which I'll speak about here as well.

So I'm spending a little more time on this this year because we have in the budget in plan year 26, which is also a calendar year if I use those terms interchangeably, an increase of 24% in those costs.

To put that in dollar amounts is about a $3 million increase in county government for health insurance from fiscal year 25 to fiscal year 26.

In addition, there is a $9 million one-time transfer to support the health fund.

and that is recommended to be provided by all the partners, but the county executives in his recommended budget as for county government to provide funding from the fund balance for the school share of $6.2 million.

That funding would be transferred to the schools for this purpose and then the schools would be provided in the health fund.

This is one of the several ways the county executives recommend to budget support the school division.

So to explain a little more detail with these significant numbers and why both of these strategies are needed, I want to walk through how the expenditures and the health fund changed, how the revenues changed that have come from employer-employer contributions, the fund balance in that fund, because for those who have been on the board or even prior to the school board may remember at one time this fund had a very strong fund balance, and also just talking a little more about the employee clinic.

So first on the expenditure side, for perspective, in Plan 224, for the more than 3,000 employees who are in the plan, and the more than 6,200 or so covered lives with their dependents and spouses, total health fund expenses were, sorry, slide behind, were $54 million.

And Ms.

Andrea reminds me regularly, when she joined the county about four or five years ago, that fund was in the low $30 million or so in terms of our annual experience.

What we have seen in the last 40 years is a significant increase where the average annual growth has been 16%.

But that is due, I'll say, we know inflation has been high and medical inflation tends to be quite high as well.

We know from our benefits consultant that our experience in the county tends to be worse than average.

in terms, I say worse in terms of how our costs have increased over those periods.

So again, the 16%, it's not one bad year and three good years.

It really is a pretty steady trend of high experience over each of those years.

One of the factors that contribute to this is high cost claimants.

And to give a little more detail, what I mean by that, those are those members who have cost greater than $75,000.

So, to put just some math behind how such a small fraction of your membership can contribute to your overall health plan, we pulled the data from plan year 24, and there were 16 members who had excess claims of $325,000.

Based on last year's deductibles for the county at stop-loss insurance, everything above $325,000 would be expected to be reimbursed, but just those 16 cases were a total of $5.2 million.

Beyond that, there were 53 members, between $100,000 and $325,000, as fully paid by the county.

There is no stop-loss insurance in there.

That total is just under $9 million.

Typically, in the world of health insurance, 100,000 is about a high cost claimant, but we looked in our team and said, what about right below that 100,000?

Is this really just a few people or a few bad cases or bad luck?

There's still another 33 folks who had experience of 75,000 to 100,000.

So in total, those 102 folks who were less than 2% of the overall plan contributed $17 million of those costs.

and that is one where, this is one of the reasons why we wouldn't have the reserve for those challenging years because it allows us to work through and maintain that and what that impact is and that's one where the county executive reminds me shortly after his time here, our benefits consultant said, many years ago you had a handful of high-cost claims and don't project that in the future.

We are seeing the opposite of that right now.

But also knowing that it's not just the high-cost claimants, this is not a few bad cases.

This is a lot of folks who are impacted in this.

and thank goodness they have health insurance right now.

The other thing I would add is that just the cost of health care, as that increases, more and more people are becoming high cost claimants in a way they may have not five years ago.

So this is just the cost of medical care too.

These high cost claims are a contributing factor, not the only factor.

So as we think about, as the expenditures are growing to 16%, what is happening on the revenue side for the employee contributions and the employer contributions?

So this slide shows how those have changed over time.

The first column goes to the plan year.

We can see that the employees, a kind of footnote here, actually all the way from back to 2018 through 2022 for five years, the employees did not have an increase in their employee health cost.

So in more recent years, that has been increasing to the 7, 10 of the 18, but not until the most recent year has that exceeded the 16% average that we've been in recent years.

The employer side has been providing a greater share over the years.

As we can see, their increases are greater than the employee increases in each year.

However, until the very most recent year, all of those changes were eating into the fund balance because they were below 16%.

And so every year that we were having revenues less than our 16% revenue growth, we would see a decline in fund balance.

So to show what that looks like, let's bring together the revenues and expenditures.

This next chart

is really shows of the last five years in each individual plan year, what was the actual revenue coming into the fund and all of the actual expenditures that went out to be paid for health insurance.

So in 2020, we see there was a green bar, there was a positive variance where our revenues exceeded our expenditures.

That was not because the county was an amazingly healthy organization and there was the pandemic that was taking place.

Either people could not buy choice or their doctor's choice to be able to receive the regular appointments, particular procedures and all of those events.

We've all moved through that.

So in 2021, we expected there would be a pretty big bounce back in terms of that experience, and that has taken place.

But it's notable that the decrease in 2021 was approaching $5 million.

That was greater than the $3 million favorable outcome that we had in 2020.

What we've seen is that was not a one-year event in 2022 and 2023 and 2024.

This fund has had expenditures that are exceeding the revenues.

So the fund balance and very strong reserve that was in place has drawn down over time.

So to speak of that fund balance, we have a policy to keep that fund balance between 17% and 33%.

That's between two and four months of expenditures.

Going back further in history, some of the board who were there at the time may recall the end of plan year 2019.

There was a balance of about $17 million or just over 50% of that plan year 2020 budget.

At that time, the county was advised with their benefits advisor to draw down, consider premium holidays, rate decisions, how old that played out.

So there was a method to some of those rates that were taking place in the earlier years.

But what we have seen as the last five years, how that fund balance has been drawn down, plan year 24 ended the fund balance with only $3 million or less than 5% of a reserve.

So that still is a margin of error, should there be another bad year, but that is a very slim margin of error and that is very far below the recommended fund balance that we would have.

So to look ahead, if the budget is adopted as recommended with the $9 million one-time transfer, the 24% rates and all of that,

We would project end plan year 25 in this fund with a 12% fund balance.

And I highlight that because staff has not recommended a one-year fix into this fund to get all the way back to a 17% fund balance.

This is to strike the right balance of providing one time and one going funding to be able to withstand another bad year, but also not to try and fix it because health can fluctuate over time.

But the one thing we do have working in our favor to help contribute to these costs is the clinic.

And the question I've gotten a few times is, how does that clinic factor into our rates?

I'll speak for a moment about the clinic.

There's really a kind of a two-pronged strategy.

One is providing benefits to the employees.

Right now, I'll share that, you know, I know many in the organization have the story where you've had an employee you've been able to recruit from out of the area and they cannot get established with a doctor.

Immediate benefit we can provide right now to remove a barrier for someone relocated.

Also the benefit access, I'll say hypothetically, if I'm someone I have to establish doctor, if I can't get in from that day, which doesn't happen, my options are likely go to urgent care or the ER.

Now I have a, I call a pressure release valve where I can go to the employee clinic.

That would be cheaper to me and it would be cheaper to the employer.

So that access to care is a benefit.

And what we've seen in our data from the first two months, the demand is there.

We would expect this would ramp over time, but we had 152 visits in the first month.

127 were employees, the others were their dependents and spouses.

Every Saturday spot that's been available for the first month has been filled.

So there was a question about whether those hours would pay off.

They are certainly to then there.

And we'll be tracking this data on a regular basis.

Ms.

Jessica Rice and her team, Chrissy Schifflett, Ms.

Andrew and I have about as this, as this first clinic continues and the second one's open later, how does this turn out?

So what we have had with the success is there is no impact to plan your 25 and 26 rates.

There were one-time startup costs, but they were provided with one-time funding from the employers who participate.

So that is not a contributor to the rates.

And we do know that it will take more than a year, but as that clinic is utilized, it is a proven model and those costs will guarantee they will decrease, but can help slow and flatten the rate of increase we have seen in recent years.

And so we do have that built in our long-term model, but that is not an immediate payoff.

And the more it is utilized, especially as the second clinic opens, the more successful we will be in doing something different.

So to recap this, kind of these four questions I started with about why we have that 24% increase for the employer and why we have an addition in runtime transfer.

Expenditures have been growing 16% on average the last four years, and that is impacted by high-cost claimants.

We see the revenues have not kept up at that same rate over time.

And so there's a correction that we're having to do on the revenue side with a one-time transfer and 26 rates.

That fund balance has been drawn down to a very low level beyond the recommended fund balance.

It's at less than 5%.

And the impact of the employee clinic, there is no short-term impact on rates.

We do have a long-term, more effective cost control.

And I should also add the benefit side.

That is an immediate benefit that is available right now.

I have no real questions regarding the health fund, I think, the way we're, the direction we're moving with the health fund.

I think that's very important, but actually, no, I do have a question.

If we, if we focused on

Certainly, there are things that we can't prevent, and I'll share, in that 102 people, there are people who are less than one year old under that list.

It really does impact people all throughout the entire spectrum.

There certainly is one of the strategies of the play to make sure that we are tracking what are those things we can prevent.

Police and everything.

We switched from 26 to 30 steps.

Are those steps in how many years they've been on or further education or both?

It's years of experience.

That's all.

Supervised interview.

And I'm going to ask this question.

I don't want to take us down too deep and away from our discussion.

But when we talk about incentives, I can remember being at the University of Virginia.

For example, we had an incentive to stop smoking or to not smoke.

Are we participating?

I don't know what our incentive program is like right now.

I've not seen that.

And it might be interesting.

We have a current incentive around doing the health assessment at the clinic and so that we can get that long-term health review that is done.

But yes, we do have incentives.

And then also to answer a previous question,

That's great to hear.

It shaped, our current experience shaped some of the offerings that we currently have, like physical therapy, nutrition, and things like that.

We've already put in place for that data that we see.

Just a clarification too, because I want to make sure when we're talking, because we were discussing the last presentation, school funding, schools, and I see, I know that

The recommended budget is providing that .4 cent or 1.2 million, an additional supplement to schools.

And then of course we also have, I just saw here and I've seen it before, but an additional we paid for the schools

County Government, which was the public schools.

So I think we don't want to lose track of some of these additional funds that we have through the recommendation provided to the schools.

And maybe those are the only two.

I wouldn't only like you to do that.

That's great.

Because we have a 6.2 here.

No questions either but I really appreciate all the work all of you have done to set all these things up.

I've heard from people how wonderful

and so on and so forth.

It's a huge amount of money, so I just, these are the kinds of things that really pop and it's three cents, two cents on the tax rate.

So that's something that has had a big impact and I guess had been healthy and so I was not paying attention that the deductibles

has gone up at some of the hospitals as well.

So everybody's in and up to their next step.

Supervisor Pruitt.

Thank you.

Just to have a few questions.

On slide 15, this is right there.

We talk about how we're adding four additional steps.

My understanding is this is just greater granularity, more gears on the bike.

Cola, across the board, what we have recommended as of July 1.

And then the benchmarking is in addition to that.

I must have misunderstood that.

Let me correct.

You are correct.

So to return to that, we're doing a 3% cost of living adjustment this year.

The functional equivalent is that we have done a 1.5 per year COLA.

On the next slide.

So, you know, there is no

Bay, and when you were talking about how we have strengthened our turnover rate, that is to say we reduced our turnover rate.

I have never been a business owner, other than, you know, some rental properties that I have, but it is my understanding that there is significant cost that is sunk in the turnover process, and we mentioned this briefly, and we talk about our coal and our co-states as things that are designed to

strength in our workforce, let us track talent.

From an accounting perspective, where and how in our kind of budget process would we be realizing the savings from reduced tournament?

Is it something we can actually quantify?

The first example comes from my mind where it's most clear is in performance rather than cost and I think it speaks to a lot of the public safety chiefs when they're here Monday.

Part of the both successes and the challenges they've had as they've been able to better recruit staff and the impact of their very long turnovers because they're impacted more than anyone else about those long lead times.

Yeah, I would say as a calculation, it's not as obvious.

There would be the cost savings and the salary

with the employee not being there receiving the funding.

However, to Mr. Benjamin's point, I think what then happens is the workload is picked up by other staff, possibly in the department.

understood, kind of turning to the health fund.

I want to begin by just saying I've shared this with Mr. Richardson, say this for the benefit of my peers on the board also, but I would be interested because it's been such a big part of how we contextualize and discuss the creation of the employee health plan.

I'd be interested to know when the earliest we can actually start evaluating whether or not it's delivering on this, like, you know, this externality that we're saying it's going to deliver on.

I'll give a raw reduced cost with the very care.

Because I want to make sure that's something we actually do follow up on.

I realize when we kind of

to say something will accomplish something, it's quite easy to not do that program evaluation or to do that program evaluation in a formal way, and then depending on how dramatic the results are, just file it to a filing cabinet somewhere.

So before we actually launched a clinic, we performed a feasibility study to understand

question and where we would see performance improvement.

And so we expect, as Mr. Bowman said, it may not always reduce the cost, but we do expect it to make an impact on costs increasing into the future.

And I think we, that said, you're two of our clinic, we would start to see those numbers change.

As a kind of last question, again to kind of showcase my own ignorance in this field, I think that way, that's the reason why people

who understands health care costs very well.

And I will also just share, you know, staff is, I think, deliberately a skill that they'll develop as professionals is being hard to read, right?

It is important to showcase a neutral perspective to the public.

I hear what you're telling me about our health care costs and the need for this one-time transfer.

And it does sound like, hey,

perhaps a growing and increasingly dire circumstance that we are trying smartly and with forethought to address.

Oh, I guess the question is how

Exactly how dire a circumstance is this.

How much of this is made in me do casting based on what you said?

Because it sounds kind of dire.

So Mr. Pruitt, being fully self-funded means that we own the performance of the health care fund.

And we're in a joint relationship with the Albemarle County School System.

They are precluded from carrying, but just a very minimal amount of fund balance.

Mr. Bowman can give us the details on that, but they're precluded from year to year, but to carry a very minimum level of fund balance.

And I would not use the words dire.

We've talked about our fund balance being at 10%, which I see is just a statutory minimum.

But then on top of that, we've built 2% for budget stabilization purposes, both internally and externally,

and we've talked about that and I believe that's around $11 million.

Separate from that, we do have other one-time pots of money that we lean into.

for sometimes unexpected purposes and sometimes for calculated strategic reasons.

In this circumstance, we've been tracking this very closely with our advisor.

We have an outside advisor that I believe manages over 100 accounts in their portfolio.

They've been judiciously watching this with us over the course of time.

and Diantha McKeel.

and to some degree, we saw a pent-up demand coming out of the pandemic from people, not being able or not being comfortable to go into the doctor and attacking some of the elective issues that maybe they put off.

So for all of that, we saw a surge and the surge has been about a three to four year surge.

So I think we're doing the right things.

I think we must move the money over to get the balance back into the 10 to 15% range.

We'll also be working and looking at plan design, working with our advisors, working with schools, and be looking at a two or three year strategy to gradually grow that back.

I think it's a very important move that we move the entire nine million dollars over for the reasons that Mr. Bowman has said.

and I believe, I'm certainly very confident that the clinic dad is going to bore out over time two things.

That it's going to become one of our employees' most valued benefits.

And number two, our advisors are going to show that it's saving money.

Sometimes it's cost avoidance versus cost savings.

But it's a necessary step.

We need to do it.

and I think we're being strategic.

Frankly, had it not been for the pandemic, I think we'd have had the health clinic about three years ago.

But coming through and out of the pandemic, it was very difficult to think about building this model when healthcare was in such a turbulent time.

The slide is open now.

and so on.

What's happening is that stop-loss insurance is applied here.

They're growing quite a bit, partly because of the county's high-claim experience.

Yeah, so actually that premium has grown 50% a year every year.

Of course, I kind of suspected that that would be the answer.

And then slide 22, just to make sure I understand this.

Okay.

Every year we evaluate the performance of the clinic, all of our other experience.

Certainly a lot of our services will be procured on a regular basis.

Thank you.

The other question that will be real fast.

When is our second health clinic supposed to open?

No, no.

Wonderful.

That's great.

Thank you.

Two final points, Mr. Chair.

For me, unless the board has questions or staff has points to make, one would be that even in a fully self-insured fund of our size with, as Mr. Bowman said, 6,200 covered lives.

The fund's about 54 million.

It is best practices to go out and buy the stock loss at a certain point.

We talk to our advisors every year.

and so on.

that we have a third-party administrator that administers our healthcare programs.

And so the county staff only sees data in aggregate.

We do not see anything regarding individuals.

So earlier, a board member asked about 16 high-cost climates.

or XYZ in terms of how the fund is performing.

County staff is totally blinded from any specific data by law.

That's by law because all of that data is covered under federal law.

So when Ms.

Schifflet talks about, we look at the data, that data helps inform us on

For example, the things that we carry at the health clinic, all of that is aggregate data and is in no way drilling down and violating employees' confidentiality and privacy.

That's important because when you study the success of a health clinic, and there is a ton of data out here nationally on health clinics, when you study the data, the number one

reason that people are concerned about an employer-based health clinic is privacy and confidentiality.

So while we're working in tandem with this clinic and with the company that runs the clinic as an employer, they know to set the appropriate safeguards up to where we never see anything and never look at anything that we're not supposed to know as an employer.

All right, with that, we'll move to the judicial chapter next.

And this is part of the, again, to order ourselves to these two donuts.

The one in gray is the general fund.

Judicial makes up 2% of that.

And in judicial, that is made up of the three elected constitutional officers and the operations of the courts.

I just have one slide on this to acknowledge the Commonwealth Attorney who recognizes here.

Thank you for being here, Mr. Angeli.

His request is fully funded operationally.

There is a reduction of FTE, and that is done at his request for part-time employee.

I'm looking to make sure there's no other constitutional officer I didn't see in the back, so I don't recognize someone, but Mr. Zugg's request is fully funded as well.

Sheriff Bryant.

Her funding request is funded operationally.

She did request two additional sheriff deputy positions and those are not included as part of the recommended budget.

It's part of all the FTE changes that we have discussed prior.

I'll highlight one other notable change for the public defender earlier this year.

The board approved and updated MOU.

That reflects the MOU, both provided in funding for an additional position added by the state in maintaining that same compensation increase for county employees.

That is 3% of the general fund, and that is primarily made up of facilities and environmental services.

Also, the largest partner we have there, originally, is the Rivanna Solid Waste Authority, making up 22% of that.

And we have some other public works agencies there as well.

The highlights of public works as we are beginning to see the court operations ramp up as the general district court opens and the prior building goes under its renovations for the next phase of that project.

The board heard earlier this year around the roadway litter pickup program that the Department of Facilities Environmental Services is implementing.

That is funded by the disposable plastic bag tax funding.

And I also wanted to take a moment to go a little bit deeper into climate action to clarify what is in the budget for climate action.

So this next slide that I'm going to talk through is really speaks to climate action and environmental sustainability to put all of that on one slide.

And this is a busy one, but I'll talk through it.

What I have in here are three columns that I'll talk through one at a time to show what is ongoing funding, what is one time funding, and what are capital projects.

what has been provided in the past in these efforts and then what is in the future.

So moving left to right, I'll start with ongoing funding.

We have in the facilities department, the Environmental Services Division.

That's a budget made up of the personnel and related operation costs of just a little over half a million a year.

I'll highlight a pretty significant portion of that funding is about 100,000 annually for them to have operational flexibility to support various climate initiatives on a year-to-year basis.

Under the umbrella of environmental sustainability, we have the operations of the Southern Convenience Center that is managed by the Venezuelan Waste Authority that opened in the recent past.

Also the ongoing operational costs for the street sweep were shown here.

Again, the disposable plastic bag tax as we collect those revenues that goes into outside of the general fund because it's legally restricted and now can be used and that is providing that service.

All of those amounts shown on the slide are the Fiscal Year 26 budget amendments and they are projected to, that is recommended to continue into Fiscal Year 26.

The middle column, I want to highlight the one-time revenues that we have.

The board has provided over the past one-time revenue from Fund Balance to support various initiatives in this area.

That has included housing weatherization, primarily in partnership with the Albemarle Housing Improvement Program, where they work with low-income groups as part of the climate strategy and just also helping weatherize their homes with the energy bills and everything else that goes with that.

Funding that has been used in partnership with the grant from Dominion to implement charging stations at the county office building currently located out in the parking lot and we also have the community climate action program that's been in place for two years.

It's been $100,000 each year where the county will receive applications from local groups to help those implement new climate strategies.

There is the Septic to Sewer program.

This is one of the board supervisors discussed.

This is one, there's a human services element, there's environmental sustainability, there's all parts of these programs that overlap.

To date, there's been $650,000 expended and that is also going to come back in next year's budget with a remaining $350,000.

The board may recall in September the direction was to reallocate that $350,000 in the current year and bring the Septic to Sewer program back to the budget.

The budget meets that intent.

There's currently about $200,000 in an unallocated climate reserve that provides flexibility for the environmental staff to continue to implement climate initiatives.

Finally, on the right, Capital Projects, which we'll talk about more on Monday, but we have the past projects of the Southern Convenience Center, the Street Sweeper, the County Office Building Weatherization and Window Replacement, and also the Baylor Facility, managed by RSWA.

We do have a Northern Convenience Center contemplated in the future CIP.

Now, there is one update that I do want to provide.

You're not shown on the slide related to our federal climate grants.

You may recall on Monday we were talking about risk in federal areas, and this is one we're watching very closely, and we actually learned just this morning that one of our grants awarded by the EPA is going to be rescinded by the federal government.

So, to explain a little more about what that is, this is actually something we previously received, the Board appropriated it.

and still learning and working through this, but it appears that any cost expended to date, we will be able to recover and get those reimbursed.

So there will not be a loss of funding the county has spent to date, but the remaining grant, which totaled $460,000, this was to support the work of the Climate Resilience Cohort.

This was the county's effort working with the several community based non-proper organizations who are

and so on.

I'm sure that the staff of Greg Harper and his team have not had a chance to reach out to all those nonprofits and communicate that yet.

Perhaps they have, I think it would work.

But we want to make sure the board has just the updated situation as we have all the climate funding, where that goes, and also monitoring our federal risk.

And so that is a recap of, really, for the climate action and environmental sustainability.

What's in here?

Maybe we should take this.

I'm sorry, we do have Mr. Moyer here.

Thank you, Mr. Mayor.

Thank you, Board.

Thank you, Mr. Richardson.

So today I wanted to propose an increase to the tipping fees at the Ivy Solid Waste and Recycling Center.

Some of the services that we provide out there

We have recycling that we manage at Ivy, at the Southern Center, and at McIntyre.

We also manage the closed six landfill cells at Ivy.

It's okay to point at the board with this.

Yeah, I'm a veteran at this.

And so, really, in the 2016 agreement with this board and the Rivanna board, it was agreed that Rivanna would design, build, construct, own, and operate this new transfer station, what we call the new transfer station.

And that was fully supported by this board.

And the agreement also says that if we want to change the tip fees, we need to come back to this board and get you a concurrence.

So that's what I'm here to do today.

We feel like a $2 tip fee to the municipal solid waste and the construction degree disposal costs that go through the transfer station that we can absorb $2.

We're currently at $58, the average from these six local

facilities averaged about 58-50, so we're slightly below the average locally, but we contract out the disposal, so we do a competitive bid, and Republic Services, they provide the trucks, we put the trash in the truck, and they take it where they want.

and so on.

This transfer station was doing 40 tons a day in 2018 before we built the new station.

Now it does well over 200 tons a day.

So the county's initiative and support to make this community amenity clearly has been successful.

We thank you for your support.

So that's what I'm here to ask for today.

with the market and support inflation and operational expenses.

And it generated about $130,000 that

will not be attributed to your allocation to support the landfill.

In general, our land costs about ten million dollars to operate our services there.

We bring in about five million dollars of revenue and the other five operates at a deficit.

The county contributes about four million and the city one million towards recycling.

So that's kind of the way the numbers.

Now, I'll turn it back to the Chair for any discussions about RSWA, Clive and Action, anything else public?

Yes, from the county office building.

Okay, that was part of that.

But there's additional weatherization we're doing.

Forgive me for not knowing what you mean by weatherization.

We can follow up, clarify the breakdown.

and I don't think I have any questions about the report itself.

I certainly support the additional activities.

I'm just teasing you.

I couldn't resist.

I do have one quick question.

Really sorry to hear about the federal grants.

I think we're going to see more of that, having said that.

Do we know what a clawback would be if you said that they're not going to require a clawback right now?

But do we know what that clawback would be if we had come up with that money?

Just wondering.

Because there seems to be chaos.

And so I just wanted to make sure we... This particular grant of $460,000 was in the relatively early stages.

Very little had been spent on that.

So again, as we understand now, we are fully expecting to get reimbursed.

Also confirmed that our FES team has already communicated to nonprofit partners.

So I apologize if I created any confusion of that.

Okay, that's great.

Thank you.

And that's all I had.

I would think for our community members' sake, we should start a little Fed grant cut tracker that's there that everybody can see.

So folks can see what... That's not really a budget item.

Where does the septic to sewer dollars show up in the budget book?

They appear under the Health and Welfare chapter with those agencies there as part of their

We did say the number that the grant was to the tune of $460,000.

And if this is something we can pump for later, that's fine.

We have a really water resources fund back up as the .7 cents and that supports primarily a lot of the operating costs but also contributes to capital projects.

As I see on 255 under that fund it says the 204673 in the water resources reserve which is available to be appropriated for future water resources

We have one page 280 of all of the capital projects under water resources Well here's what I'm getting at and we could tease it out later One was just so I could understand where it's at so I could go kind of track it down myself but with earlier there's been a few times in the past six months eight months with projects

I'm concerned about how stormwater moves through the development area and downstream effects of things that go beyond just the mapping of the piping and the failure of the infrastructure trying to get ahead of it, but trying to stop downstream costs for people, litter movement, other stuff.

And this scene, I just want to know, is this the area where, if one were to want to try to get some additional resources, is that 204 number that I'd be looking at?

A lot of times when you get to a point without adding revenue, you've got to move stuff around.

And I don't know exactly how that 204 is programmed, or if it's a reserve and it's as needed.

I'm not saying that's bad.

Ryan Davidson, deputy chief of budget.

So with that 204 that you're speaking of specifically, that funding is, it goes into a fund balance to come back to be programmed, asked to the board to be programmed to the highest and best use.

So if the board desires that could be one of those potential uses, there are other things that our environmental services and our award resources division have

Envisioned for some of that funding, and so it goes into that fund balance, and then should the board choose to move in that direction, they could, but I know they have those things planned out.

So I'm a little bit of a follow-up.

So this is Airpoint 7, that's water resources.

It does.

It would contribute to some of our partner agencies like the Thomas Jefferson's or the Water Conservation District.

Screen watch is part of that.

There's a little bit of debt service that it pays for.

And there are some costs for community development employees who are not covered by fees.

Got it.

because people do sometimes ask, you know, where are the pipes that we're paying for and so I want to make sure I have the right answer for them.

For the grants that were done, community action, climate action grants, will there be a report out at some point on what we

We've been offered $200,000 that was given out to various partner agencies.

If it's already been released and I missed it, I'm sorry.

But I think that's important also to when we have grants, we need to know what comes of that as we might have moved these issues along.

And for Mr. Boyer, just so I understand, the tipping fee, you mentioned the $58 a ton, that's for the big trucks who come with the commercial haulers.

Well, the new fee of $60 goes for anyone that goes through the transfer station.

Okay.

So it could be a big truck like GFL or it could be you with your car pick up from any tonnage that goes through the transfer station.

Now you know we have a big

Can before you go across the scale with the $2 bag where you can put your $2 tag on your bag and throw it on you and you don't go across the scale.

And they show their license or something to give you?

All right.

Thank you very much.

Thank you.

Supervisor Pratt.

I don't know that I have very much to add.

I have a favor of y'all raising your shipping fees to keep up at the market.

That does not seem to extraordinary, I think, for me.

So I don't think we need to dwell too much into the board.

Mr. Harper, keeping normal services, the grant from EPA did support the co-work?

Because I certainly, I hate to see this

to find an action plan.

And I see that there are a lot of ways in which that can occur within the budget that don't necessarily get reflected in a single fund.

I guess we're going to, you know, we've already discussed fire and rescue events and the resilience needed around those when those are weather related.

I believe some of this will come up again in parks and how we deal with certain issues in parks that are again related to

That said, my understanding is one of the positions that we lost is a climate position.

So it's not natural elimination.

Thank you.

Sorry, I did have one additional thought that I realized I forgot to voice.

On the climate action reserve, I saw that we have a scheduled future use to undertake that.

Okay, so this is basically carrying through

in the past the that amount was larger but it is funded a lot of those past uses and there's just $200,000 approximately that remains.

just asked for one more point of clarification.

The next slide is the proposed break.

Sorry, I'm going to step in for Mr. Vaman for a minute.

So to continue on with our presentation today, we're now looking at the health and welfare area.

areas in the Health and Welfare.

The Children's Services Act, we're looking at a slight increase there, and as well as a one-time contribution to help keep, maintain our fund balance obligations within that.

Our Emergency Assistance Fund, the ACERP Fund, as I think it's more commonly referred to in the board meetings, we're continuing our local support of roughly $260,000 for that program.

Housing Fund, which we will go into in more detail here in just a moment, $3 million in one time plus the $1.2 million in the dedicated ongoing funding source starting in FY26.

And then our Health and Welfare Agencies, which we also will have more detail on as we move through these slides, that contains $5.4 million, about $1.6 million in our Albemarle County Human Services Funding Process funds, as well as additional dollars for our

and the regional contractual partners in the health and welfare agency area.

As we've discussed before, we will be

The current budget proposes or, excuse me, recommends dedicating .4 cents of real estate equaling about $1.2 million to get it towards affordable housing and an additional $3.0 million one-time investment.

This does add to the overall $17 million in housing investments we've had over the past five years.

And to go into more detail, I'm going to turn this over to Ms.

Thank you.

Kaki Demick, Chief Human Services Officer, happy to join you for a couple of slides here.

Just a reminder that we do have affordable housing investment funds, which has been sometimes referred to as a housing fund and as a trust fund.

And there are some terms of art that are at play here.

There is certainly more that can be done to make this more formally a

Trust Fund, but it meets the baseline definition at the moment because it has a one dedicated source of funding for it, which is the housing proffers.

The purpose of the Housing Investment Fund is to support housing initiatives that are one-time costs and serve to support the county's strategic and housing goals, which change over time.

There is right now a prevailing fund, a prevailing

reports that identified the set of housing needs that we have.

It's being updated, which may change the direction that we are facing and allow for additional kinds of investments along the continuum of housing supports.

The funding sources for the fund at the moment include past one-time transfers from the general fund, affordable housing profits, as I suggested, and then with the fiscal year 26 proposed budget, there's an ongoing funding equivalent to four cents on the real estate tax rate.

Pass Uses include supporting Virginia Supportive Housing, which is the development at Premier Circle.

Many of you attended that groundbreaking, and we hope to have folks in there this time next year.

Habitat for Humanity, both phase one and phase two, the redevelopment process.

Ongoing and will be happening for many years to come.

Fiedmont Housing Alliance's Hickory Hope Apartments, which are deeply subsidized apartments located actually in the Southwood neighborhood, and Albemarle Housing Improvement Program's Rehabilitation and Energy Improvement Program, such as long-standing programs supported by the board over many years.

Right now, there's been many questions about how much money is actually in the housing fund at the moment.

It looks like there's $200,000 in the housing fund at the moment that are unallocated.

I think sometimes we have thought that that was just $80,000, but there was more there than expected.

The recommendation in this budget would increase that to $4.4 million.

Future options, of course, for the fund includes supporting

The entire housing and homelessness continuum from homelessness services like shelters all the way into workforce housing incentives and supports like that.

Next slide, please.

There's been a couple of questions about our total all-in contribution to housing and housing efforts over the last several years.

And so this is our attempt at doing that.

It reflects all of the ways in which we support housing, the housing continuum of care, again, starting with homelessness services, all the way into workforce development, housing, and other kinds of incentives for folks above 80% area median income.

So you can see from 2019 to 2025 that the county has either directly funded or facilitated the funding of $68 million into the housing continuum and in the proposed fiscal year 26 budget, there's a recommendation of $11 million of support.

This includes support, for example, that is cash money generally, and the Housing Investment Fund, but it also includes the substantial investments made with the money that came to us through the ARPA funds, which we directed into housing supports.

It includes the Emergency Relief Fund, because the vast majority of those funds go to support somebody with an eviction notice to help remain in their home.

So that's an important strategy along the housing continuum.

It also includes two sources of funding there that we facilitate.

So we facilitate community development block grant and home funds.

Those are not general fund monies, but money that we facilitate and are required participants in the allocation of.

It also includes money that is funded through two housing support services as part of our Human Services Funding Process, formerly the ABRT process.

That includes funding programs like the Haven, Pochum, Pima Housing Alliance, Shelter for Help and Emergency, Habitat for Humanity, and again, AHIP.

It also includes the Housing

is worthy of note because it sounds like it's cash money that comes directly to us for our choice, but it is the money that comes from the federal government to support our housing choice voucher program.

In addition, our original TIF for Southwood is included in that, and tax relief, again, this is funding designed to help people stay in their housing.

and then, importantly, the amount of money that we spend on staffing the Office of Housing and other housing-related staff folks.

So the average, if you look at that with some substantial sort of peaks and valleys over that period of time, particularly related to the ARPA funding, the average is about $11 million a year with a total, including fiscal year 26 of $79 million invested in housing all in.

and the rest of the state.

So there's been also a lot of questions reasonably about the sort of where we are on our affordable housing unit sort of tally.

The study from the Thomas Jefferson Planning District Commission on our housing needs identified that we need slightly more than 10,000 affordable units in order to meet the demand by 2040 that was with a growth rate that I think is different from the growth rate that was shared with us by Hamilton Lombard

and the Chamber of Commerce.

And so my guess is those numbers will change substantially when the new study comes out.

But that 10,000 unit is a reasonable target for us to continue to pursue.

Right now, we have created or there are 2,255 affordable housing units that are in and are already online and pipeline, which we often talk

25, slightly more than 2,500 units in the pipeline.

That is a best case scenario number because our experience is that many people get approved by the board to develop a number of like 500 units, but actually end up building 325.

And so that number really impacts the percentage of affordable housing

So I say this because sometimes it can sound like staff are being squirrely about the numbers and the pipeline, but the pipeline numbers are really just sort of best case scenario estimates.

What could possibly be developed?

And so our job is to create data that shows you what has been approved and what's actually been put on the ground and opened to the market.

And that's a harder, longer sort of process for us to get those numbers for you.

The next topic in Human Services will spend a little time with the agencies, which I can cover relatively quickly, unless the board would like to dive into housing right now.

The Human Services Funding Process is just a reference slide from the county executive's presentation where over the last two summers, the Board of Supervisors has set out a framework to make some revisions to this process.

This used to be known as the agency budget review team process.

It has been rebranded to be the Albemarle County Human Services Funding Process.

Back in June of 2023, Ms.

Demick was before the board presenting a human services needs assessment.

Really set in the stage to begin to really align the program for these non-profits to those that would most drive those needs and the human services needs assessment.

Really to align this funding process with the street you plan and put those dollars towards the agencies that would most likely drive the outcomes for those greatest areas of need.

After last year's budget process, it was sort of the first try at that, and we came back this summer and got some more direction from the board based on the experience of that first try.

There's just a few examples of some of the things we've changed.

There used to be rules around for new agencies how they could be funded.

There were some other areas we looked at, but a lot of this was really looking at as we have in this budget almost $400,000 of new funding for these agencies.

Rather than applying them and maybe more of the incremental approach in the past, this is more of a strategic approach to make sure that we are putting those dollars towards the highest tier programs, which I'll speak to in the next slide.

where they were grouped into tiers.

This is something in the budget document that is different this year.

Really focused on supporting the community safety net and then having other tiers at a lower priority.

And so if you were in a tier one and performing very well in your agency evaluation, that was the best outcome you could have in your funding.

After tier one, we then moved into tier two and then there was no funding for the programs below tier three.

So with this increased funding, there is more change year to year, but it is really driven by one, the performance of agencies and their application process, and two, really trying to align them to those outcomes and strategic plan that would generate those results and outcomes for the board.

County Human Services regarding affordable housing.

As I've mentioned, the highest tier on slide 40, I noticed we're not giving any money to Virginia Housing, but we did in the past.

The $5,000?

On the left-hand side, those are actually funding sources, not funding recipients from us on this particular slide.

I'm in favor of that.

Virginia Housing.

Can I bless you?

Okay.

The other one, the Housing Assistance Fund.

We said that's federal.

Yes ma'am, I think that we are anticipating programmatic changes around eligibility for those funds.

In addition, we have been instructed to not renew new vouchers, so as vouchers become

Open, we've been instructed not to renew them.

Well, going along the highest tier, it might be beneficial, at least it would be for me, to look at these programs, which ones are federally

Federal monies that are given to us, which may or may not remain so that we could then perhaps switch monies around to give it to the organizations that would have, that would give us the most household service.

Be it through a voucher or through rentals, maybe some combination.

I don't know if that's feasible or not, but I'm just thinking we don't know where this list is going and how much we'll be coming in.

Okay, so this may pivot

And that would be in addition, that would add into the current balance of $200 to make a total of 4.4.

Thank you.

I guess piggybacking on what Bea was saying, I was wondering the same thing as to which on page, or slide 40, page 20, which one of these were federal?

I mean, I can guess about some of them.

Going forwards, if we had this to do again, I might put

somehow or another flag those federal at risk.

That's the way I would put it or something like that.

Just so everybody who looks at this document knows, right?

And unfortunately, some of them are going to be added to the list that Ned suggested.

The other comment, this really is a great, these slides are really great, and I don't have a lot of concerns or questions about them.

I just have one more.

2,520 affordable housing units.

I'm on slide 41, page 21 of our handout.

So what we're seeing here is best case scenario in the pipeline, which when I talk to people trying to prove to them that we actually need affordable housing, we need more housing because of all they're seeing going up in the development area.

and they say we can't possibly need it anymore.

I'm just wondering if there's some asterisk again or some way that we can identify this as this is the best case and just because they're in Vipline, I don't know how you do that.

One of the things that I know we're already working on is identifying what kinds of units those are as well.

If we know the greatest need is four units below 60% AMI of the 2,520 approved units, how many of them will actually meet our highest need?

Right.

So there's a couple of different ways we can try to get there.

Yeah, just for clarity.

Because it's interesting, I had about a half an hour discussion with someone the other day who said she didn't understand why we were building

and so it's just how you perceive and what you I'm just so just trying to get clarity because some of this this really is not dependent as much on what the board is approving at 58% but really what is being built we're approving this but this is what's not is or is not being built

for RST, we had approved RST, and that one was not built at all.

And that's really all I have.

Of the $2,520, I don't know that.

That's all.

Great.

I think so.

I think there's going to be one set that's in there that has happened since

I think there's one in there.

I'll have to double check that.

Pipeline incorporates from the start of the process from the application all the way through here.

All right.

Check the other two, but one of them is definitely one of the unwinding positions that were granted by the Board during the COVID, sort of COVID benefit unwinding.

You all gave us permission for temporary positions to track that data.

And we made a promise that we would manage that through attrition.

And so this is the first of those positions to be eliminated through attrition.

You're largely, well, you are correct.

I would share that.

You are correct.

I think on those, sometimes with the re-engineering, a little bit more detail of how you arrived at the full FTE that is cut in regards to the department, I think.

I'll make two comments on the housing fund.

I'm not ready to get into a major discussion on this yet on this today, but I really do and have told folks that I'm

doesn't, in some ways, matter to me, which we can get done first.

But the trust fund discussion is important for out-years and how do we strategically use the money that was mentioned earlier that if you can get it in there and start using it differently.

It can maybe source itself.

That takes a different type of plan than just dropping one-time dollars or even ongoing dollars into a fund and then watch it all be spent by the time we get out of July 31.

So I'm just saying, one, that discussion, now that we've seen ongoing dollars go in there, is important, I think, for this board to take up.

I know that Ann just made a suggested idea.

I'm still looking as we go through the review so I may have some thoughts on how to

In addition to maybe Ann's idea, but I guess I'm just calling out the need for a list item that we're probably going to have a conversation about maybe some ways to get more money into that housing fund in this budget.

We would want to bring those back as a package on the 19th when the board is proposing tax rate.

So I would say knowing the board is still working through this, but if there's information or even potential options staff can be prepared for, that will allow us to support the board on the 19th.

Thank you.

Let's see.

You talked about the eviction program.

And those are short-term.

For only for eviction notices or for shut off those.

But it's not something where somebody gets this for years.

I do not have an answer for that, because I believe this reflects a new affordable housing, not existing.

I know that certainly during the Crozet Master Plan, there was a great interest in doing it.

I think those will be very hard for us to capture as part of that number.

Well, I think it's going to take interns going around looking at maps and driving around here.

Anyway, or volunteers or something.

Thank you.

So in other words, they're not in here.

Yes, I think.

As of March 2025, but I don't know how far back it goes to capture those numbers.

I know that the 15% business preceded me, but there was also that $16,000 buyout.

Right.

That were which they escaped, putting up a $200,000 unit, which never really made sense to me.

But hey.

Oh.

and so on and so forth.

So I will not go through all that right now.

Thank you.

And one thing that struck me that I will just put out there for thinking about, one of the changes in policy was that a percentage of the request was one of the determining factors in the amount that somebody got.

And if that is made public to the applicants, that's a real concern.

Because they're going to say, oh, well, you know, I'm going to put in $200,000 and maybe I'll get out of it.

Because the one thing I noticed is that the numbers jumped dramatically for some of these.

There's more information.

This was a much shorter homework package.

I will just put that out there.

Thank you very much.

Supervisor Pruitt.

Thank you.

On the previous slide that we've been lingering on for a bit, I'm just going to say that, yes, I'm going to say the thing that I think is

and so on and so forth.

I'm going to start with a question, which is, are pipeline proffer units seem really disproportionately high compared to how much of our actual inventory?

It seems like we're generating new units primarily through profits on their inclusion in the zoning policy, but our existing inventory is mostly subsidized units, I'm assuming that would be on this entire way through the ITAS.

I don't know the answer to that, and I can certainly find it.

My guess would be, in large part, the affordable housing unit column on the left that the subsidized rental units will likely include all of the housing assistance fund vouchers.

No, sir.

No, sir, both.

Oh, okay.

But I just want to draw the board and the public's attention to what I think is one of the most important things that is happening in Albemarle County right now.

We're not really talking about it, which is that we are kind of in a very high stakes game of chicken with the developer community.

And I think it's kind of important that we acknowledge that, which is our current posture relies so heavily on developer proffers at a pretty high rate.

Franklin with a level of funding.

That is the main way we're treating Fort Wileson.

It is high enough that developers seem to not have an appetite for it, and they seem to not want to kill until we claim that we think it was chilling development too much.

And I say this again with chicken, because at some point I think one of us

on this.

But I think naming that in a public setting is probably appropriate.

We have not seen, kind of before this board or even before the planning commission, a single project under the new standard.

And I think we should appreciate that fact for what it's indicated about where we currently stand.

Moving on, I want to just say very briefly that I indicated this last year when the changes were being announced.

But I'm really pleased with the changes that have gone into the ADRT system.

It seems like it is more responsive to this kind of strategic priorities and more responsive to the communities.

And so I appreciate that.

I want to briefly kind of touch on, and if we could go to the types of spending chart.

and so on.

counting for that as a county budget expense is missing.

I understand the reasons why we like to do it, but I think it gives this board a misapprehension of what we are actually taking action.

Speaking to Supervisor LePisto-Kirtley's kind of concern about the possibility of clawback on the Housing Choice Boundary Program, the possibility of a reduced appetite from the federal government on the Housing Choice Boundary Fund moving forward, whether or not that is something we will have to step into the breach for.

Something you mentioned, Supervisor, was just weighing

The amount of money we're spending to the amount of people we're serving.

And I would just call attention to how the gross vouchers are a deep subsidy, not a wide one, meaning if you're concerned about helping people we're serving, it would not be the most prudent use of a budget dollar to plow that into a voucher program.

Because voucher programs are really helping very

and Crossroads for quite a while now.

Generally speaking, the housing trust fund, ATIF, would be a shallow, wide settlement.

So if that is the goal, then I mean, I'm all about creating local voucher.

but I want us to be thoughtful about what these subsidies are.

A HIF is a shallow wide and housing vouchers are a deep narrow subsidy.

I've said before, I think we all, it always gets thrown into, I think, pretty sharply when all of us independently talk about a housing trust fund and force

I see the main line in the same as being when we are funding it enough per annum that we are able to have a competitive grant process as in a competitive application process.

We advertise annually ANOFA and we get competitive applications that we're able to choose between, which is not currently quite how that works.

It's more of a rolling process with the bank.

I've initially indicated this, I think, different beliefs on this board about how a trust fund could be self-perpetuating or self-watering.

I know some people have suggested that we reserve a principal so that it generates its own income.

I don't know that that is necessary.

Extraordinary to be able to generate an income that's actually sustained kind of activity that we'd love this fund to do.

And I've suggested previously that I personally have an appetite for rather than grant-solve programs, things that are zero interest funds.

Developers I talk to seem to be basically saying that for the purposes of their leverage with private capital, a zero interest fund is very similar to everything.

So that would be something that we could rewater rather than fund it.

I say all that, but the question that I actually want to use this to lead into is any one of these alternatives, something just being big enough that's doing a competitive funding application, something that has, you know, that is basically issuing debt and, you know, accounting for that debt, reclaiming it, or something that is managing an investment portfolio.

Those are like three different

and Tony's other visions of what a housing trust fund can do.

Those are all complicated.

I don't think we're there yet because we haven't had the conversation around what the structure of a trust fund should be yet.

I appreciate that.

I'm trying to once again read my own notes.

So, yeah, this actually leads into that point.

When we were talking about the way to just spring, Supervisor Gallaway mentioned that there were questions he wanted to revisit specifically on how we fund housing.

I would also want to read this and have like maybe a couple more fulsome discussion when we have time for in the next 28 minutes.

what was discussed was, oh, we can bring this on the 19th, which is the day we're advertising tax wage.

Recognizing that we crowd ourselves into a box and we advertise, I guess I would just ask, to what degree is our advertising date an internal forcing function, and to what degree is it being externally forced?

Because I don't claim these laws are complicated.

So is it fair to say that we really need

I would say that, you know, we never prepare our budget for the worst case scenario if there were to be a big ice storm on March 19th, but I believe we would be too late on the next work schedule, scheduled on the 24th or 26th, if I remember correctly.

And thank you for the team who's not in their heads confirming behind me.

I would say that to the board.

If there's anything we can do prior to the 19th,

And I would like to suggest that I view us being like an extremist on this, but it sounds like there are unanswered questions and there is a plan to revisit unanswered questions that they were adopting.

That is manageable, but that is tight.

And so I just want to raise the question.

I would just say it comes as no surprise, and it sounds like maybe we talked about this in further depth.

In addition to, it is my personal belief that our contribution to AHF is easy and adequate this year.

I think we can aspire to greater, and I think it would benefit, especially when we look kind of, again, at the position of chicken we are in.

with funding and funding that has a GUS fund and creation of affordable units.

When we're in this position of chicken, I think it is especially for us to invest in the Cleveland this year.

And further, we heard this from the thorough leaners, but I do not think 260,000 is the best we can do on Acer.

And I would further just,

raised up to this board that these dollars go very far.

I'm not going to sit here and say, oh, we need 10 million.

I'm not even going to sit here and say one million or half a million.

But I would just suggest an additional change.

Every $1,000 is a life alter on Acer.

I think we can easily cap that up just an extra digit.

It's a significant light-altering change to many of our residents.

I, as some of you know, I was in eviction court earlier today, and I watched, this is in New York County, I watched about a dozen people literally get evicted like this, name, person doesn't show up, stamp, name, person doesn't show up, stamp.

And that is what happens to people.

And that doesn't happen if we are able to put forward

$1,000 to help them catch up with me.

I find that to be a really high value, and it has not gone savings elsewhere in the county by reducing other burdens on social services, reducing burdens on health care for people who are put on the street, making sure these residences stay

D.C.

Rays, the Vector, the Remedies, right?

They are not on savings when we make it, so that people are not being made homeless by us, and that's just fundamentally cruel.

Sturgeoning Trust Fund, and I would like an assessment of their credibility.

Obviously, Supervisor Pruitt talked about programs that are either deep and narrow or wide and shallow, and I guess leveraging is a preferred term for me to think that we would want to invest in programs and leverage even within the human services funding process.

I hope that we're looking to

The next slide.

Very quick.

Zoom is also in the previous column.

No, I think that that doesn't reflect that, because the decision hadn't been made in the creation of this chart.

OK, yeah, I would like to know where that comes in.

This is significant.

And I appreciate that.

Our investments may take forms that aren't necessarily just going to go into that one fund, but go into other places as well.

Just to confirm, that $3 million is reflected in the $13 million in the... I would have thought, just hadn't been expended and therefore can be carried over since it's a fiscal year 25.

The next slide, if you will.

and so on.

and so some of those maybe just in the pipeline, but some of those may have been approved and I just don't know whether we're seeing something that's normal or something that's anomalous, that's suggestive, that the conditions aren't right for builders.

I mean one of the things that we get concerned about here is that yes, we want to approve more affordable housing

of addressing this issue.

So I just appreciate as much information as you can as to whether these are normal times, whether it's due to the process that we're doing, or whether it's the interest rates or other things that are driving us, if it's not normal, where we are.

Thank you.

My other questions were more on the funding process.

I really do.

Oh, I have one question further on.

This is in the budget book.

and so on.

that both the federal government and the state have continued to provide additional requirements for local departments and social services that are initially reimbursed at a rate that incentivizes compliance and that over time that rate reduces while the mandate remains.

Yes, yes.

I applaud the emphasis in the human services funding process.

I think that's the right way to go.

I just, because there have been questions raised by some entities would like to base

Ranking.

Do the applicants in any way decide what tier they're proposing their program to be in, or are those tiers completely established by the review process and not dependent upon the program's identification?

I can hear that there were two technical assistance trainings that were offered each of slightly more than an hour long in which they were advertised as changes coming, changes happening related to prioritization.

County,

and

and so on and so forth.

and so on.

and so on and so forth.

Clunky and Blunt, and we need a little more nuance in that.

I'm hearing is maybe some more nuance in our applications for next year.

in the split, you know, with schools and... What I would hear in the intent of that is the board is seeking to designate something for housing, in which case that would not be in the split.

Whether or not to make it part of the split.

Yes.

Okay.

And my understanding is the March 19th deadline for announcing the tax rate, you can't go above that, so the only reason

would you be any reason other than raising the tax rate to not approve it on the 19th or propose tax right now?

I'm not sure we're asking.

I'm not sure we're asking.

We have to do that on the 19th.

I just wanted to clarify the clarification there.

Thank you.

or we, the units that we're approving, the ones that are not being built as we approve them, is that something that goes with the land or is that something that we can change or hold someone accountable for that?

There's clearly a lot for us to research around what constitutes the pipeline and also what is required once an approval is provided.

I don't think we're prepared to answer all those questions.

Now, one of the questions will be, is an approval a requirement?

Or are you providing an approval that allows for someone to build up to that

We always like it when our money can leverage money from other people.

This time we have 15 minutes left and I will, I will suggest, if the board is agreeable to, as we move to the community building.

Director Emily Kilroy is here and maybe speaking specifically about economic development.

And, you know, assuming the board is aiming to end about six, having a discussion on that specific item also goes on our transit.

Park folks have just arrived.

In case we're not realistically able to get to them, just so they can plan their evenings.

But I'll look to the chair and have the meeting proceed.

I'll set aside the Parks and Community Development, or Department, and Transit, and I'll turn it over to Ms.

So just to be clear, so we're going to talk economic development and transportation and transit.

Thank you God.

Good evening.

Thank you for having me here this evening that goes through the Economic Development Fund.

So this slide really zooms into the fund, which is separate from the operating budget.

The purpose is to have funds available, much like the Housing Fund, to leverage and catalyze investments in the community.

And all with a goal for creating jobs, attracting capital investments,

The funding sources for this fund are past one-time transfers from the general fund so there's no dedicated ongoing revenue stream into this fund and it's been several fiscal years since we've had a transfer into this fund.

St., Fund Balance.

Past uses, this board is familiar with hopefully many of the projects that are listed on here, some infrastructure and redevelopment projects, such as the Wollin Mills Redevelopment Project that was both a redevelopment of the old mill site, as well as some place making

Richmond.

The Barnes-Lumber redevelopment project has not broken ground, but has been in discussion.

It's the board has supported that for several years.

That will create a public plaza, a new road connection through Thursday that will connect a lot of the historic residential

and

Governor's Announcements for Commonwealth Opportunity Funds that follow large-scale investments, expansions by businesses, and the large is defined by both a level of capital investment as well as job creation, as well as the Go Virginia program, the Virginia Job Incentive Program,

There's another one that serves agricultural or ag businesses, agricultural infrastructure investment program, AFID, and then site readiness.

So really the primary site readiness project that the county has is the Rivanna Futures project.

We also helped partner with the University Foundation over the past several years on some site readiness work at the North Fork Discovery Park.

Currently, there's $3.3 million and unplanned on allocated funding for the Economic Development Fund.

And the recommendation that's in the budget before the board over the next several weeks would bring that balance up to $4.3 million.

On the next slide.

I understand there's been some discussion by board members about a spend plan for the Economic Development Fund.

And what I'll share is that it's really a challenge for us to say, you know, here's how we plan to spend the funds in the fund in any given fiscal year.

One is that without an ongoing revenue source, we're always having to make judgments about how much can we support this, understanding the

and so on.

and so on.

through the Go Virginia program to advance our site readiness design work.

And one of the things that's really stood out as we go through these state processes is the level of investment and the speed with which the county has really taken this project forward from, if you think about that tier system, Rivanna Futures was a tier one site in May of 2023.

and as of September 2024, we're up to tier three, which doesn't sound like huge movement, but is huge movement when you really look at what all that entails.

And so through these strategic investments, we've been able to really gain some momentum that's being recognized by the Commonwealth, which we're really excited about.

and then some partnership opportunities, a wine industry scale-up grant that will be helping to support.

There's a lot of capacity at the area wineries to produce more wine with the equipment and the staffing that they have and so this implementation grant will over the next year or so look at opportunities to expand access to markets.

and then there's this burgeoning concept of an innovation corridor that really again tries to look at opportunities in biotech, national security, as well as digital technologies.

That's a regional vision and so we're participating with a cash match through that fund and we're able to do that because we have those funds available.

Really leveraging partners coming to the table together.

We even have some private sector investment in this project which we're really excited about.

My next and last slide is just a couple of ideas on things that could be on the horizon in fiscal year 26.

Again, it's always a challenge for us to know exactly what those opportunities are going to look like.

The fund is really a wonderful tool for us to know that we have funds available to make decisions and be

of Business, which often is asking us to be able to commit to things on a fairly rapid timeline and in competition with other communities at times.

So looking at redevelopment opportunities, the Home Depot Project is an example of a redevelopment opportunity where we helped sort of bridge the gap between a green field site and a redevelopment site, site readiness work,

We're so excited about all the momentum and the work that we've done to increase

that'll bring us to two Tier 4 sites in the county, but we really need to start looking at the Tier 3 and Tier 2 sites that we have and what does it look like to continue to get those to sort of move up that scale as well.

So that once you land, the next one is attraction, once you land a project on a Tier 4 site, you need to make sure that you have more Tier 4 sites sort of getting ready to go.

So on attraction, working to, again, with the focus on the sectors that we have filled those tier four sites with jobs and investment.

I talked a little bit about the Innovation Corridor.

That grant is a planning study to build a sort of a roadmap.

And, you know, as that work wraps in fiscal year 26, there may be some real tangible

things that we can help support to really bring that innovation corridor to life.

What those are, we'll find out over the next several months.

and then workforce development.

There's a grant that we're supporting this year with the Siebel Biohub that is really looking at between the afton scientific announcement of several hundred jobs and the Manning Institute that the University of Virginia is building at the Fontaine Research Park.

That's going to have a

College Labs, those will be run by 100 principal investigators and they will all have a small team of folks working in their lab.

And those jobs are not PhD jobs.

They're not even necessarily four-year degree jobs.

They can really be lab tech, advanced manufacturing, clean room type experience.

and so that that grant is studying right now what are the gaps that we have to be able to ensure that the high schools, PVCC, the university can help ensure that we've got the right programs in place to have our community be ready to fill those jobs as those jobs come online and again workforce development that study may illuminate some opportunities that we have to make some equipment investments or some space upfin

and so on.

New Economic Development Strategic Plan late summer, which we're really excited about.

That will help give us some focus, that the board will be a huge part in driving forward with us.

And so that will help guide, I think, what some of the decisions ahead would be.

And then, you know, the Rivanna Futures, again, we're so excited about the Go Virginia grant.

And we'll continue to have to sort of make decisions about what the next opportunities are, how can we make sure we maximize the county's return on investment for that project.

Thank you.

We'll go through our order with questions, comments.

I have no questions.

Supervisor McKeel.

I think this looks great.

I'm all in favor.

I just had one question.

Workforce development funding.

Yeah, so we partnered with the local economic development groups as well as Siebel Biohub as the lead to get a Virginia grant, so state funding.

And those grants are great.

It's a two-to-one match, so they give you two and if you put in one.

So with that, all I would say is

Communication and working with and reaching out to public schools, PVCC are going to really be critical.

Thank you.

Yeah.

Thank you.

Well done, as always.

Just on 49, I was doing some math as you were speaking.

The 10 to 1.

and so on.

and publishing papers and stuff like that.

So it is a great career ladder job.

And now, of course, the certificates to this are far better prepared than I am with the basic quality degree.

So we've made so much progress.

Thank you.

So with what's on the screen and by

I mean, these are individual disbursements that the development fund has made.

Sure.

So, you know, between going back five or so years, it's ranged, you know, it's different year to year, but anywhere between half a million and 1.5 million dollars, I think sometimes past performance is a great predictor of future need.

In this case, you know, again, we're so excited about the more focused path forward that we think we're going to get through the economic development strategic plan.

and so I'm hopeful that we'll be able to with this more regional thinking through the innovation corridor work and the strategic plan as well as just some of the investments private sector

and the National Security Data and Policy Center at UVA.

Mr. Chair.

Mr. Handman, I'd like to have a comment to add.

If I could just add to that, Ms.

Kilroy mentioned the Project Naval 2.0 work.

We had our consultants here a couple of weeks ago, county executive talked about the need for us to be diversifying our tax base.

talked about where we are at the commercial level.

This fund, existing and what's planned, you know, what's proposed in the County's ex-budget, gives us the opportunity to be able to react.

And I do think the alignment of the property acquisition at Rivanna Futures, all the work on the biotech, there's a lot of alignment to signal in the community growth.

and so on.

that the incredible work that the economic development team is doing is now at all a lost something.

I think it's very much the secret weapon that we have as a locality that lets us outperform our peers.

And it obviously benefits us.

It obviously benefits my district specifically, right?

Like the incredible value out of action scientific is tremendous.

I am not so

Fundamentally, government funding is a zero-sum game.

Every dollar we spend comes from our citizens, and every dollar we allocate towards one thing in the budget means it is not going to something else in the budget.

Knowing that in our highest recent year draw, it would still be half the value

Poster, Rockwood, Opt for the fully drawdownly existing fund.

And even if we were so lucky that those number of opportunities existed, I would suggest that there are other ways that that opportunity could be funded in a pinch, right?

We do have a reserve for contingencies.

And having such a high value, we've only felt an opportunity sounds like a contingency.

We also, I mean, we can fund

and my understanding of how we actually acquired Rivanna futures.

So it seems to me that we have enough other problems in our Swiss army knife that I am not sold on the necessity of such a large investment to an already sufficiently amount for this year.

I think I can also count noses, but I wanted to just end it for the record.

and

So there's funding available through this fund that's been set aside for Rivanna futures related expenses.

We never budget, we never plan to get grant money because if we get it, that's wonderful, but if we don't, that's not a solid plan.

Every dollar that we're able to get from the Commonwealth or from other funding entities over the next several years, if we're lucky, is a dollar that we didn't have to spend locally.

So there's nothing that we're hoping to do at Rivanna Futures and sort of our master plan that we don't intend to do.

We're able to move a lot faster with state and federal dollars.

Harris, coming into the project.

This funding, specifically the $613,000 from GoVirginia, is going to fund site design, road design, utility design, the MESMPs, stormwater, erosion and sediment control design plans that we hope tease up what will be funding from another state grant program that we hope to have a notice

This funding is design funding that would allow us to really hit the ground running with construction if we were successful in that next program.

Those designs need to be done no matter what.

And we had been talking about locally funding that design work to get ahead of and ready for what we get and what we hope is a successful grant application through the Virginia Business Recites Program.

And we've been talking about locally funding it.

and so on.

It's work that we need to do no matter what.

And so the continued investments that the county has been making, again, fiscal year 25, it's $61,000.

If you looked at fiscal year 24, it'd be a higher number.

But to drive that conceptual engineering work that we did that has gotten people excited about the project and helped people across the Commonwealth see that the county is serious about bringing this project to life, that has been the value of those dollars.

And so we're working really hard

Exactly.

Thank you.

My reluctance to draw down the fund very far because I was worried about drawing down the health insurance fund five, six, eight, ten, you know, it's come up over number ten for this very reason that it's going to go bang and then we won't be ready.

So I think this is good.

Thank you.

March 17th, when the school board will be here and we'll discuss the CIP.

If time allows, there's just a few areas of the budget that they're not the largest drivers.

I want to thank the board because it's not lost to me that we can go tonight.

Y'all had a very late night and we had two very in-depth discussions this week.

So again, I appreciate all the questions.

We'll continue to get those out before the next work session.

And I will share that on March 19th, the biggest item in terms of the adjustment of the budget I've heard from some board members is really that housing number and how that may be addressed.

But if there's other thoughts, we'll continue that on March 17th.

But again, thank you, board.

I did think of one more thing, if you don't mind.

This type of thing for the next meeting is if we can get that by email ahead of time to be able to read it rather than trying to squint at small print as I'm trying to listen and write questions down.

It would be very helpful.

Even if you change it a little bit, when you get in the room, I'll okay with that.

I appreciate how well-prepared you are, but I recognize that you're also going from meeting to meeting and being prepared on time.

Yeah, Miss Mallek makes a great point, and I'll just say that for this one, we received the final draft at 11.36 p.m.

last night.

So, we're, uh, we're at the margins sometimes, just like the board.

But I understand Ms.

Mallek asking that question.

Just to let you know, and I will send you the link.

I just received my planning commissioner.

They have released the

Billions Medicaid cuts by the House that have been passed haven't gone to the Senate yet.

We all know this is in flux, but you can look it up now by congressional districts, which is very informative.