Last night, Danville City Manager Ken Larking submitted to the City Council a proposed budget that continues the efforts in recent years to enhance job opportunities, reduce crime, and improve education, as well as revitalize neighborhoods and create additional housing options.

As a result of these strategic efforts, Larking said the city, for the first time in many years, is experiencing growth.

“Because we are an isolated city, we cannot rely on the expansion of a major metro area into Danville to bring growth and opportunity,” Larking stated in his budget message to the City Council. “We need to build it for ourselves with the help of key partnerships, creativity, tough decisions, and hard work.”

He added, “If we are to continue and accelerate the positive momentum, we need to continue to provide quality services, invest in our neighborhoods, support the school system, attract business development, build a skilled workforce, and keep our community safe.”

Though the city is experiencing growth, Larking said there are still residents who have not fully participated in the economic opportunities that have been brought to the city.

“We need to be intentional about encouraging more economic opportunities and providing pathways for people to have the skills and abilities to take advantage of these opportunities,” he said.

Also, in his presentation of the proposed budget to the City Council, Larking said the city needs to continue to take steps to create an environment that will encourage young people to stay in Danville or return one day.

“The theme of this year’s budget is in keeping with our brand that ‘Danville is home’ and ‘home is here,’” Larking said. “The investments that we have been making and will continue to make are helping to make it possible for our young people to have a good job, a home they can afford, and a quality of life that they seek. We are in a global competition for talent, and if we do not provide these things, then we are going to lose them. The best thing that we can do for our young people is make Danville a place they want to call home.”

Key budget numbers

The proposed budget provides for a 10-cent decrease in the personal property tax rate. Also, the recommended budget includes added elderly tax relief on real estate and mobile homes by increasing the threshold from $35,000 to $40,000.

As proposed, the real estate tax rate would remain at 84 cents per $100 value, which is the third-lowest rate among cities in Virginia.

No increase in utility rates and utility fees is proposed.

The budget includes the establishment of a short-term rental fee and increases in fees for Planning Commission and zoning, inspections, solid waste, and cemetery services.

The total recommended budget for the next fiscal year is nearly $347.8 million for operations, capital and debt service. This total is 7 percent or nearly $22.7 million more than the current fiscal year’s budget of $325.1 million.

The proposed budget is a working draft for the next fiscal year, which begins July 1. The City Council will hold public hearings in May and June prior to adopting a budget. Final adoption is scheduled for June 18, but must take place no later than June 30.

Revenue forecasts

Larking told the City Council that the proposed budget includes $25 million in gaming tax revenue from the casino. That figure is a $12 million increase from the current budget year. Caesars has been operating a temporary casino since May. The permanent Caesars Virginia casino resort project is expected to be completed in late 2024.

Other revenue forecasts also are favorable as compared to last year, Larking said. Those increases include:

• $3.2 million – real estate taxes
• $1.8 million – personal property taxes
• $1.2 million – interest earnings
• $842,000 – business licenses
• $701,000 – delinquent real estate and personal property tax revenue
• $700,000 – sales tax

Expenditure highlights

Of the $25 million expected gaming tax revenue from Caesars, $16.3 million is state-collected gaming tax revenue and $8.7 million is the local supplement that Caesars Virginia agreed to pay as part of the development agreement with the City. This agreement includes a minimum payment to the City equal to $5 million per year. Most of this guaranteed payment will go toward the cost of an average of 5 percent pay for performance increase for City employees, the local portion of pay increases for Danville Public School employees, and increased health insurance costs for both City and school system employees.

This budget recommends using the remaining $20 million of gaming tax revenues to pay for activities recommended in the 2024 Investing in Danville Committee report. This includes the following:

• $7.8 million for capital and special projects.
• $5.2 million for economic development initiatives.
• $2 million to put in reserve for a future balloon payment on an Industrial Development Authority loan, which was used to finance economic development projects in FY2022 and FY2023 in anticipation of future casino revenues.
• $1.5 million for lease and debt payments associated with the new police headquarters.
• $1.25 million to Danville Public Schools for school bus aids, elementary school security, and early tuition costs.
• $788,800 for the tourism marketing program.
• $700,000 for removal of blight.
• $526,630 to pay for gang prevention efforts previously funded mostly with grant funds.
• $91,350 to pay for a grant administrator.
• $97,916 to pay for new parks maintenance positions necessary to help maintain the Riverfront Park and three new splash pads.
• $40,000 for the summer internship program.

The recommended budget provides funding for school operations in the amount of $27.84 million – an increase of $2.48 million.

The proposed budget provides funds for the pay-for-performance system for employee raises, rising health care costs, and an increase in retirement contributions. As proposed, 11 new positions will be created, and seven existing positions will be reclassified. In addition, the budget funds a career development plan for the Juvenile Detention Center that will help with employee retention.