Roanoke City Manager Valmarie Turner on Monday will present next year’s proposed budget to the Roanoke City Council — which could include a hiring freeze for over 100 positions, a delay of capital projects and $75 million in debt being issued for the next fiscal year.
The past year has been marked by budget cuts and difficult conversations relating to the city’s financial status, as Turner began her role with the city two months before proposing an extremely tight budget.
Last March, Turner introduced a budget that included across-the-board cuts, an increase in the meals tax and flat funding for Roanoke City Public Schools, meaning the division would receive the same revenue contribution as the year before. These measures were taken in order to allow the city to raise employee compensation — with an end goal of all employees making an annual salary of at least $42,000 — and to address backlogged maintenance to city buildings, which city officials said had been deferred for years.
The fiscal year 2026 budget totaled just under $750 million in revenues and expenditures.
“Stabilizing the budget is not a one-time task,” Turner said during the budget process last year. “We will continue to monitor and adjust the budget over the next five years.”
This year, based on three budget presentations the council has seen in recent months, it seems cuts will continue.
Turner was recently invited to a Greater Deyerle Neighborhood Association meeting for what the group called a “fireside chat.” Turner answered previously agreed-upon questions that were sent by neighbors ahead of the meeting.
During one part of the discussion, Teresa Mastrangelo asked Turner a series of questions and requested one-word answers. Three questions in a row — What does Roanoke need more of? What’s Roanoke’s biggest challenge? What is exciting about Roanoke’s future? —- all solicited the same response from Turner: “Money.”
Turner told the Deyerle group that her main priority is “stabilizing the organization.” The city has seen a contraction in its revenue growth in the last five years, she said, and while the city’s financial advisor has stated that the city is in “good financial standing,” it is still debt dependent.
In an email to Cardinal News on March 3, Turner said she has worked to assemble a team that can maintain the city’s “healthy” 13% unassigned fund balance and 3.5% budget stabilization fund, and pay off debts despite “less than moderate revenue growth projections.”
“Careful planning that began last year has enabled us to reduce the projected $18.9 million budget gap to $5.1 million without increases in tax rates,” Turner said.
City council members have repeatedly said that they are apprehensive about raising personal property or real estate tax rates. The city council voted to raise the meals tax 0.5% last year, with a sunset after two years, and to raise the city’s fire-EMS fees.
“The City works hard to ensure our priorities are fiscally responsible, fair, equitable and responsive to the needs of everyone who calls Roanoke home,” Turner wrote.
Changes to how the city funds its schools in the past year
Tensions have been high between the school division and the city for a few years, coming to a head last year with the proposal of the flat budget, as well as changes to the city’s school funding policy.
“We have worked extremely hard to manage the impacts of less than moderate revenue growth for the City, including reviewing the RCPS funding formula that was adjusted and approved by Council,” Turner said in the March 3 email.
Turner wrote that she has met with individuals and groups involved in the last year and has “responded to as many individual requests as possible” to hear school advocates’ concerns.
Last week, the school board approved their preliminary budget, which totaled around $269 million, or $16 million less than the division’s needs-based budget for the year. The division is considering cuts to programs and about 150 positions from its staff.
When the city approves its final budget in May, the school division’s budget will be a piece of that budget package.
“I want you to know that none of the budgetary decisions I’ve had to make were taken lightly,” Turner wrote. “We’ve proposed significant City reductions and worked hard to minimize the impact on schools, public safety, and essential services.”
What to expect from this year’s budget
During a budget briefing to the city council on March 2, Turner told residents that the city is seeing “moderate or less-than-moderate” revenue growth and economic uncertainty, with the sunset of the meals tax adding to that uncertainty.
Trinity Kaseke, budget manager with the city, said real estate tax revenues have begun to decline when compared to the last three to five years.
The total increase for general property and other local taxes has been high year over year, reflecting post-pandemic economic growth: an increase of $17 million in fiscal 2023, $22 million in fiscal 2024, $13 million in fiscal 2025 and $21 million in fiscal 2026.
In fiscal year 2027, the city expects a revenue increase of just $5 million.
Kaseke said the city will also be shifting base pay adjustments for city employees from 3% to 2%.
At that same meeting, Tanya Catron, the city’s capital improvement finance manager, walked the city council through more than $50 million in projects that staff has proposed removing from the city’s capital improvement plan for fiscal years 2027 to 2031.
These projects include expanding the Belmont Branch Library; completing park projects; renovating Fishburn Mansion, the Fallon Park Pool and the downtown pedestrian bridge; and rehabilitating the Mill Mountain Star.
Even with the recommended revisions to the capital plan, a “significant challenge remains” with a required level of incremental debt service over the next five years, Turner said at the meeting.
Catron said the city’s bond anticipated notes, or short-term funding that is issued until long-term bonds can be issued, total $92 million over the course of the next five years. In fiscal year 2027, the city is looking at issuing debt of $75 million, which she said is usually about three years of debt, issued in one year. According to the slide deck presented to the council, about $58 million of that debt will go toward converting short-term debt into long-term bonds. Another $23 million would go toward capital improvements.
Turner said the city will freeze hiring for 110 to 115 positions for the next two years, focusing on positions that are already vacant.
She said the city will also not fund $4.3 million in “new personnel” requests, which will impact the commonwealth’s attorney’s office, libraries, fire and EMS, and parks and recreation.
“This is probably the hardest budget I’ve seen, and I’ve been with the city 45 years,” councilwoman Evelyn Powers said during the March 2 meeting. “I think this is honestly the hardest.”
Two community meetings are on the schedule for residents to share concerns or ask questions about the proposed budget:
- April 9: Williamson Road Library
- April 16: South Roanoke United Methodist Church
Following those meetings, the council will hold a budget study on May 4 before adopting the final budget on May 11.
The presentation of the recommended budget is the only item on the agenda for Monday’s 2 p.m. council session. The full agenda for Monday’s meeting is available here. The meeting will be held in the City Council Chamber, at 215 Church Ave. S.W. in Roanoke.