Danville, VA Local Government News and Announcements

Posted on: May 17, 2017

City Council OKs school budget, three tax hikes

Photo of exterior of Municipal Building

City Council voted Tuesday night to adopt a school budget that included an increase of $1.6 million in local funding for school operations. Council also approved higher tax rates for real estate, personal property and lodging, but not meals and aircraft.

The school budget and tax rate increases are for the next fiscal year, which begins July 1.

Earlier this month, City Council held public hearings on the school budget and tax increases. The proposed school budget drew the most comments. Nine citizens, including schoolteachers, asked City Council to consider a bigger increase in local funding than the $1.4 million proposed for operation of Danville Public Schools.

Last night, City Council agreed to an additional $200,000. As a result, the school system will receive an increase of $1.6 million for operations for the next school year, bringing the total to $20.6 million or 8.42 percent over the current school year. The School Board had requested an increase of $2.1 million.

The public hearings earlier this month on the tax rates garnered fewer comments, with aircraft taxes drawing opposition. Last night, a motion to increase the proposed tax on aircraft failed due to lack of a second.

A proposal to increase the meals tax by one percentage point from 6 percent to 7 percent also failed. Five of the nine-member City Council voted for the increase, but six votes were required to adopt it.

City Council, however, did vote to adopt the following tax rate increases:

  • 7 cents in the real estate tax rate, from 73 cents to 80 cents per $100 in value.
  • 50 cents in the personal property tax rate, from $3 to $3.50 per $100 in value.
  • a one percentage-point increase in the hotel/motel lodging tax from 6 percent to 7 percent.

The increase in the real estate tax rate is the first since fiscal year 2003. The current tax rate of 73 cents is second only to Williamsburg for cities and 33 cents lower than the state average. Under the new 80-cent rate, a homeowner with a house valued at $75,000 will pay an additional $52.50 per year or $4.38 per month

The revenue generated by these increases will pay for the increase in school funding and initiatives to reduce violent crime and to grow Danville.

City Manager Ken Larking also is recommending that municipal services remain at current levels and funds be set aside for employee raises and increases in employee health insurance, employee retirement contributions and medical supplies for inmates at the City Jail.

However, the failure last night to approve increases in the meals and aircraft taxes leave a revenue shortfall of $1.2 million to meet these expenses. City Council will meet in a special work session on Tuesday, May 23, to address the budget gap.

City Council must adopt a budget no later than June 30. The final budget will serve as a framework for city operations from July 1, 2017, through June 30, 2018.

In other matters Tuesday night, City Council voted to:

  • Appoint W. Clarke Whitfield Jr. as deputy city clerk.
  • Transfer $186,199 in support of capital projects and blight removal projects. The City’s blight removal program was begun in 2012. This program works with owners on attempting to bring structures to minimum code standards. If the structures cannot be brought up to standards, they are demolished, either by the owners or by the City.
  • Vacate property on College Avenue. This property is an unimproved public alley of less than one-tenth of an acre.
  • Re-join Blue Ridge Power Agency.
  • Sell renewable energy credits. These renewable energy credits are associated with the generation at Schoolfield Hydro Plant , the Pinnacles hydro electric plant and the City’s share in the Kerr/Philpott generation.
  • Reduce the electric power cost adjustment (PCA) by $688,000. The money to reduce the balance would come from a restricted account dedicated toward the repayment of the AMPGS coal power plant liability.
  • Adopt an ordinance to reflect changes in the City’s personnel system.
  • Enter into a lease agreement that will allow the Registrar’s Office to occupy space on the first floor of the First Citizens Bank building at 530 Main St.

In addition to these votes, City Council held a first reading on two matters:

  • A grant of $183,611 for the victim witness assistance program operated by the Commonwealth Attorney’s Office.
  • A grant of $44,635 to be used to fund the salary of an attorney or victim’s advocate to work in the Juvenile & Domestic Relations Court dealing with victims of domestic violence.

A first reading is an introductory step required by City code before certain matters can be voted upon by City Council. This step serves to provide public notice of pending action. Council could not vote on the budget amendment last night. The earliest vote that can take place will be the June 6 City Council meeting.

Also in the business session, Mayor John Gilstrap presented a proclamation for “Business Appreciation Week.” He also presented a certification of recognition to the Averett University equestrian team for winning the international dressage competition championship.

Council’s meeting included a business session followed by a work session. In work sessions, Council reviews non-routine matters that may be voted upon in future business meetings.

During last night’s work session, reviewed the latest monthly financial reports and heard a presentation on the findings from a River District bike and pedestrian study and a Mount Cross Road intersection improvements study.

City Council also reviewed the findings of a due diligence analysis of the White Mill property. Last month, City Council set aside $1.5 million from reserve funds for use by the Industrial Development Authority (IDA) to purchase the White Mill property. The property consists of eight parcels, which are considered critical tracts of land for strategic redevelopment of the River District as a world class riverfront.

The IDA is scheduled to meet Thursday afternoon in a special session to review the findings of the due diligence.

Last night, City Council also held a closed meeting in the work session as allowed by state law to discuss a prospective business or industry and to discuss acquisition of real property or disposition of publicly held real property.

River City TV airs live all Council business sessions. The first rebroadcast will be at 8 p.m. Thursday. Watch it on cable (Comcast channel 10 and Gamewood channel 122). The taped broadcast is available now on River City TV’s Facebook page. the City’s YouTube channel -- DanvilleVAGov.

River City TV does not air work sessions, but they are open to the public.

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