Over the past months, Town Council has considered the Proposed Fiscal Year 2023 Fiscal Plan & Capital Improvement Program Fiscal Year 2023-2027 (“FY 2023 Budget”) (Attachment 1), which was prepared in accordance with Code of Virginia, Section 15.2-2503 and delivered to Town Council on March 16, 2022.  The Town Manager also posted the Proposed FY 2023 Budget on the Town’s website by March 16, 2022.  The Town advertised a brief synopsis of the FY 2023 Budget in the Loudoun Now on March 24, 2022 and March 31, 2022, and held a public hearing on April 12, 2022, all in accordance with state law.

During the review period, Town Council considered the FY 2023 Budget totaling $24.0 million as proposed by the Town Manager. Council and Town Manager directed a one-cent reduction in the Real Estate Tax Rate, a decrease of (1%) in Pay for Performance one-time incentive and certain line item changes resulting in a ($262,609) reduction to the total proposed budget.  A complete list of the changes directed by Town Council is attached to this Staff Report and titled Summary of Changes to the FY 2023 Budget (included with Attachment 2). 

The proposed Resolution Adopting the FY 2023 Budget (Attachment 2) adopts the FY 2023 Budget subject to the changes directed by Town Council, as shown in the Summary of Changes.

The Proposed FY 2023 Budget and associated documents can be found online at: http://www.purcellvilleva.gov/budget.

Under Section 15.2-2506 of the Code of Virginia (1950), as amended, the budget is a fiscal planning document and its adoption by Town Council does not authorize any expenditures.  In order for budgeted expenditures to be made in FY 2023, the Town Council must, in addition to adopting the Budget, adopt a resolution appropriating such funds.  Further, once funds are appropriated by Town Council, they must be spent within the same fiscal year they were appropriated, or the Town Council must re-appropriate those funds to be expended the following fiscal year.  Such re-appropriations are often necessary for capital improvement projects, which may take several years to complete.

Budget Resolution:

The Resolution Adopting the Fiscal Year 2023 Budget (Attachment 2) adopts the FY 2023 Budget subject to the changes directed by Town Council, as shown in the Summary of Changes.  To ensure efficient and effective Town operations, the Town Manager is given the authority and flexibility to execute the Town Council’s approved budget in a dynamic operating environment.  The proposed Resolution, Section III, authorizes and directs the Town Manager to take all appropriate administrative actions necessary and prudent to effectuate implementation of the adopted budget including, but not limited to, transferring money within and between funds, increasing the budget upon approval of Grants and donations funded by others, paying all short and long-term debt due, and establishing necessary encumbrances at fiscal year-end.  This authority is a standard practice and is similar to other local jurisdictions such as Leesburg and Loudoun County.

Appropriation Resolution:

The Resolution Appropriating Funds for Expenditure in FY 2023 (Attachment 3) appropriates for expenditure all funds budgeted in the FY 2023 Budget, as amended by the Summary of Changes to the FY 2023 Budget, and also re-appropriates for expenditure in FY 2023 the capital improvement project funds that were appropriated by Town Council in FY 2022 but were not spent within FY 2022.  Generally, operating funds encumbered in the prior fiscal year do not carry over to the new fiscal year and any remaining encumbrances are liquidated.  However, due to the timing associated with certain operating and ARPA projects as well as supply chain delays, they were not fully completed in FY 2022.  This resolution carries over the remaining funding to FY 2023.

Ordinance adopting and re-ordaining Town taxes and fees:

The proposed FY 2023 Budget reflects, in part, anticipated revenues generated by taxes and fees.  The proposed taxes and fees for Fiscal Year 2023 are reflected in the Tax and Fee Schedule Ordinance (Attachment 4). All increases to the Town’s current tax and fee schedule were advertised in the Loudoun Now on March 24^th and March 31^st and a Town Council Public Hearing was held on proposed changes to taxes and fees on April 12^th, 2022.

DEADLINE FOR ACTION:

Under Section 15.2-2503 of the Code of Virginia (1950), the governing body shall approve the budget and fix a tax rate for the budget year no later than the date on which the fiscal year begins.

1.      Budget Changes from the FY 2023 Proposed Budget: The staff report provided at the March 30, 2022 Special Town Council and April 12, 2022 Town Council meeting articulated each of the budget changes to the Operating and Capital Funds.  https://purcellvilleva.gov/AgendaCenter.  As shown in the Summary of Changes, the revised annual budget decreased ($125,507) from the Total level as the Town Manager proposed budget.  Although expenditures were reduced ($262,609), the change to the total budget is ($125,507) as the result of the methodology utilized to balance the budget and the Wastewater Surplus change of $137,102.

Vote Requirements:

1. Budget Resolution:  A simple majority vote of those present and voting is required to adopt a budget resolution.

2. Appropriation Resolution:  Four affirmative votes (a majority of all members elected to the governing body) is required to adopt a resolution appropriating funds for expenditure that exceed the sum of $500, pursuant to Article VII, Section 7 of the Virginia Constitution.

3. Ordinance of Taxes and Fees:  The Tax and Fee Ordinance must be adopted by a two-thirds’ majority vote of those present and voting.  Therefore, four affirmative votes are required to adopt the ordinance and the new fee and tax rates.

MOTIONS:

1. Adopting the Budget Resolution

"I move that Town Council adopt Resolution Number 22-04-01, adopting the FY 2023 Budget as amended by the selected Summary of Changes to the FY 2023 Budget and authorize the Town Manager to take all steps necessary and prudent to effectuate the implementation of the FY 2023 Budget."

2. Adopting the Appropriation Resolution

"I move that Town Council adopt Resolution Number 22-04-02, appropriating for expenditure in FY 2023 all funds contained in the FY 2023 Budget and re-appropriating for expenditure in FY 2022 the Capital Improvement Project Funds that were appropriated by Town Council in FY 2022 but were not spent within FY 2022, and re-appropriating the Operating and ARPA project expenditures in the General and Utility Operating Funds that were appropriated by Town Council in FY 2022 but not spent within FY 2022."

3. Adopting and Re-ordaining all Tax Rates, Fees and Fines for the Town the Appropriations Resolution

"I move that Town Council adopt Ordinance Number 22-04-01, adopting and re-ordaining the tax rates, fees and fines for the Town of Purcellville."