PETERSBURG — City Council is in the middle of approving a new budget that could include a lowered real estate tax rate for the first time in several years. The city also has a long list of capital improvement projects that are buoyed by American Rescue Plan Act funds. This proposed budget will be finalized before the end of April.
The $104 million total operating budget comes in a little over $300,000 more than the previous fiscal year. The city’s highest adopted budget over the past six years was $108 million in FY 2020 and its lowest was $91 million in FY 2017.
Chief Financial Officer Stacey Jordan told city council at a workshop meeting that the budget had been prepared to “build up departments” and “meet current and future needs,” prioritizing police, fire, neighborhood services and economic development.
The budget document itself says the goals of these departments are hoping to impact traffic enforcement, job creation, developing business wealth in the community, tourism, improved code and building inspections, permitting, street cleaning and maintenance, grounds facilities maintenance and field upgrades for parks and recreation.
“These are the areas that will produce the most immediate and long-term improvements,” Jordan said.
Those objectives largely align with the priorities of previous years. Correcting the city’s overwhelming number of blighted structures, furthering economic development and increasing tourism have been priorities for the past several years.
In this preliminary budget, about 23 cents of every tax dollar is spent on public safety, 20 cents on social services, 13 cents on the schools, 10 cents for general government, seven cents on constitutional officers, six cents on public works and the remaining 21 cents on things like the courts, community affairs, debt and non-departmental spending.
The current budget was balanced using a lowered tax rate of $1.27. Petersburg has long had one of the highest tax rates in the state, most recently at $1.35 per $100 of assessed value. With property values increased 13% across the city this past year, Petersburg is considering a lower tax rate.
Localities can only collect 1% more revenue in real estate taxes over the previous year, per state law. The city could still petition to collect more than 1% before the end of this budgeting process.
Should the tax rate remain at $1.27, yearly savings on the average assessed home value of $102,000 would be about $82 per year. Houses assessed at $250,000 would be about $150 per year.
The current draft budget shows positions for 40 fewer full-time employees than the previous year, for a total of 613 full-time employees. Part-time employees also drop from 76 to 68.
Departments scheduled to have the largest number of losses are Streets (-14 employees), Utilities (-12 employees), and Neighborhood Services (-5 employees). The library is earmarked for the highest numerical gain with 10 part-time positions budgeted. Transit is noted to get eight more employees and the circuit court is gaining five employees.
Some of the existing employees are being shifted around. The City Manager’s Office lost two employees plus some funding. Those positions and money are planned for redistribution into economic development, plus a new Communications and Tourism department.
Annual city spending for schools
Petersburg City Public Schools had asked the city to increase its schools spending to $11 million. For the past two budgeting cycles, the city has spent $10 million on education. Superintendent Dr. Maria Pitre-Martin said the money could be used to help with staff raises. The schools ran a survey and asked what could be done to help with staff retention.
“In asking our staff the question regarding retention, number one thing they said is the need is compensation,” Pitre-Martin said. “And compensation that is equal to what they are seeing in other schools nearby.”
The governor’s preliminary budget includes a 5% pay raise for teachers across the state. The schools are planning an additional 1% pay raise for teachers with less than 10 years of experience, and an additional 2% for teachers with more than 10 years of experience.
PCPS has been told by city staff that the expected transfer amount is going to be $10 million. The Schools are budgeting for about $10 million more in spending for FY2023 (total expenditures $58 million).
Its overall revenues have increased by over $33 million, in part due to pandemic-related Elementary and Secondary School Emergency Relief Funds that are $22.5 million higher than they were in FY2022. PCPS has a hefty capital improvement plan over the next five years, which ideally includes a new school construction for at least $26 million, though construction costs have likely ballooned since that cost was first quoted.
Capital improvement schedule
Capital upgrades are a serious need in the city. Last year’s budget was the first to include a plan for capital improvement projects. Petersburg has implemented a policy to dedicate $500,000 into its capital improvement budget every year. That cumulative amount will be $1 million for FY2023.
Several major facilities and equipment projects have been funded for FY2023. Many of these are helped along by the first installment of American Rescue Plan Act funds.
Major projects to be funded:
$1.2 million – rehabilitation of the former Social Services Building at 400 Farmer Street – Funded through ARPA
$1.4 million – Rehabilitation funds towards the Southside Depot rehabilitation – Funded through ARPA
$200,000 – City-wide Master Plan – funded through ARPA
$306,000 – Parks rehabilitation through Parks and Recreation – Funded through ARPA
$450,000 – City Hall and City Hall Annex Renovations – Funded through capital reserve
$1 million – Motorola radio systems upgrade used by first responders – funded through capital reserve
The city is also putting $750,000 away per year in order to pay a $3 million price tag to fix its court buildings which are in desperate need of repair.
In total there are 42 projects planned for FY2023 totaling $18.8 million, all with dedicated funding sources. ARPA accounts for $6.9 million of that amount.
The proposed budget and list of capital improvement items are still subject to change if city council opts for any adjustments.
The FY2023 budget will go to a public hearing on April 19. The budget is scheduled to go to a vote that evening alongside the new tax rate.
This article originally appeared on The Progress-Index: Petersburg’s proposed FY2023 budget includes lower real estate tax rate