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Windsor Town Manager William Saunders’ fiscal year 2025 draft town budget includes a 2-cent increase in the real estate tax rate that helps eliminate Windsor’s use of American Rescue Plan Act funds for operations.

ARPA funds, which were a response to the COVID-19 pandemic, must be obligated by Dec. 31, 2024, and must be spent by Dec. 31, 2026.

Consequently, localities have to begin preparing for budgeting without the benefit of ARPA funding.

It was in a Tuesday, April 23, work session that Saunders gave the Windsor Town Council a look at drafts of the FY25 town budget and Capital Improvement Plan that he noted are nearing completion.

“Much of the relevant revenue and expense information for FY25 has been received; however, some has not,” he stated in an April 23 memo to the mayor and Town Council. “Also, at the beginning of May, we will have another month of revenue data to aid in our forecasts. At this work session, information about the current status of the budget and CIP drafts will be shared and discussed.”

He noted that the budget drafts shared with council members were balanced in the General Fund, the Water Fund, the Town Center Fund, and the Future Space Needs Fund. 

GENERAL FUND BUDGET

In reference to revenue, Saunders wrote, “While meals taxes are expected to increase, some other revenue sources will remain flat or decrease at the current tax rates. Isle of Wight County does not yet have personal property figures. This FY25 draft includes a 2-cent increase in the real estate tax rate, which is an increase in revenue of $57,026.14.”

A 2-cent increase in the town’s real estate tax rate would take it from 13 to 15 cents per $100 of assessed value.

Saunders explained that 2 cents on a $250,000 home equals $50.

“Basically, what the 2 cents does here is it gets the ARPA funds out of the items in operations that they’ve been in for the last two years,” he said at the April 23 meeting. “So basically what this reflects is operations without any ARPA funds in them. Any ARPA funds that are shown in this current budget are in the Duke Street and Virginia Avenue Water Project.”

In the memo, Saunders noted that overall, operations expenses are expected to increase due to inflation. 

“In the current draft, all operations expenses are supported by projected current-year revenue, none by ARPA funds or fund balance,” he stated.

In reference to personnel, he indicated that the current draft of the budget includes a 3.5% cost-of-living adjustment for town staff, except for field officers in the police department. 

“Most other localities in the region are moving forward with 3-4% COLA,” he wrote. “However, a few are planning for 4-5% COLA.” 

He stated that the pay of field officers in the Windsor Police Department was adjusted by means of a holiday pay plan requested by Chief Rodney “Dan” Riddle; this adjustment is the equivalent of a 5.38% increase.

“So the proposition from the chief is that we just pay them straight time, eight hours, for every pay period that has a holiday in it,” Saunders said during the meeting. “That takes those flex hours off the books, it gives them an adjustment in annual pay, and there wouldn’t be as much liability mid-year on paying out vacation time if an officer left mid-year.

“Now this is not an actual salary increase, so their amount of retirement does not increase based on this,” Saunders added. “It’s only an increase in pay.”

He wrote that the draft budget also includes a new part-time, certified patrol officer position requested by Riddle.

“This position will cover and enhance the evening shift, working primarily from (4 p.m. to midnight) three days a week,” Saunders said. “The officer will be scheduled for 24 hours of shift coverage a week, with six hours of additional time built into the budget for court and other related duties.”

Addressing the annual cost at 30 hours a week, Saunders said the max rate would be $42,120, not including Federal Insurance Contributions Act and other tax-related costs on the back end.

In reference to health insurance, Saunders stated that Local Choice (Cardinal) health care premium rates will increase 10% for FY25 with an increase of 6.3% overall.

“What that means is the rates are actually 10% for what the premium costs, but because of different staff coming and going, it changed,” he said. “Whether they’re a single coverage employee plus one dependent or family coverage changes the amount the town pays. So while the rates went up 10%, the increase overall is 6.3% because of different choices being made by employees.”

He noted that the same ratio of employee to employer costs from previous years has been maintained. 

In reference to the Emergency Communications Center, Saunders wrote that the cost of the ECC has increased by 5.9%, and that is in the Payments to Other Governments line item. 

“The primary drivers of this increase are inflation, salary/benefits increase for dispatchers and the new CAD/RMS system,” he stated. “Due to the true-ups being favorable to the town in FY23 and FY24, the budget amount on this was not adjusted.”

A true-up results when it is determined that either the town underpaid and is sent an invoice for the difference or the town overpaid and is sent a refund check.

“We’re still showing the same amount in the budget (for the ECC) this year, even though there’s a 5.9% increase, and we’re hopeful that at the true-up time, it’s going to account for that,” Saunders said.

In reference to Virginia Risk Sharing Association insurance, Saunders wrote, “We have not yet received the insurance premium amount for FY25; the amount currently programmed for FY25 is an estimate.”

WATER FUND

In reference to rates, Saunders stated that prior to FY21, the Town Council instituted a plan to increase water rates by 25 cents per 1,000 gallons every other year — odd fiscal years — until such time as the revenue/cost balance was appropriate. 

“A 25-cent increase is shown in the FY25 budget,” he noted.

In reference to personnel, he wrote that the FY25 budget reflects the conversion of a part-time maintenance technician position to a full-time position. 

“This is going to allow us to have assistance with maintenance more throughout the year as well as hopefully make that position easier to fill and keep someone in that position,” Saunders said. “Because of a couple of longtime employees leaving and younger employees coming in, that did not impact salaries to a great deal.”

In reference to depreciation, Saunders stated that the current draft of the budget showed depreciation funded at 89.5%, which is $73,585.08. 

CAPITAL IMPROVEMENT PLAN

Saunders provided council members with a CIP dated March 19, 2024, that was recommended for approval by the Windsor Planning Commission. He also provided versions of the plan dated April 18, 2024, that had minor revisions. 

He stated that primarily, the changes were to adjust prices or to roll projects forward to FY25 and FY26 that were not completed or undertaken in FY24. 

“Two examples of that are the potential grant match for the Windsor Woods sewer project of $100,000 and the potential grant match for broadband installation — (they) were both pushed forward from FY25 to FY26, which took them out of current FY25 funding,” Saunders said.

In reference to the General Fund, Saunders wrote that at this time, none of the CIP projects are to be funded by ARPA funds but are rather to be funded with fund balance — primarily from converted ARPA funds — and the rest from new revenue.

In reference to the Water Fund, Saunders stated that $75,000 of water projects are funded with ARPA funds, and the rest are funded with fund balance, primarily from converted ARPA funds.

SPACE NEEDS FUND

In reference to revenues, Saunders wrote that a transfer of $100,000 is shown from the General Fund, as in prior years, except for FY24, the current budget year, when it was $150,000.

“Of that $150,000 of funds that will go in this year, $52,022 of those would be ARPA funds to be included to cover the architectural design work that was contracted for the new municipal building,” Saunders said. “The architect anticipates us being invoiced about $15,000 this fiscal year on that, and currently we’re showing $25,000 in professional services for that work, and they anticipate we’ll be billed about $35,000 next year, so we’re showing expenditures (for) professional services (of) $40,000 for the balance of that work in the FY25 space needs budget.”

TOWN CENTER FUND

In reference to revenues, Saunders stated that expected rental fees are increased, General Fund infusion is increased, and fund balance is flat. 

“The general fund contribution for FY25 is from fund balance,” he said.

In reference to expenses, he wrote that more usage at the Windsor Town Center has increased operational costs. 

“An increase in utilities, supplies and staffing is included for FY25,” he stated.