Fredericksburg City Manager Tim Baroody opened the presentation of his recommended Fiscal Year 2026 budget by quoting from city council’s updated 2050 vision.
“The city of Fredericksburg is a place that works for everyone, and a place that people want to be,” Baroody said.
But keeping Fredericksburg that kind of place requires revenue, and, to that end, Baroody’s budget includes a real-estate tax increase of 3 cents, bringing the overall rate to 80 cents per $100 of assessed value.
The budget Baroody proposed Tuesday night calls for a general fund balance of $136.75 million, a 6.9% increase from the FY 2025 budget city council ultimately adopted last year.
While Baroody noted several factors in the proposed increase, an additional $4 million going to Fredericksburg City Public Schools is the most notable driver.
“The balance of the funding is a strong acknowledgment that the schools require continued resources to remain competitive and retention of their highly-valued workforce,” Baroody said.
Superintendent Marci Catlett’s proposed budget, approved on March 4, calls for a 5% pay increase for all staff.
For public safety employees, the budget calls for a 2.5% pay increase, along with an increase to the city’s pay scales of 2.5%.
Another significant uptick is in funding for the Rappahannock Regional Jail. Baroody’s recommended budget includes nearly $5.2 million for the jail in FY 2026, an increase of $1.6 million from last year.
Baroody also touted the city’s bond ratings, which influence the terms of the municipal bonds it pursues to finance long-term projects. He noted that following an upgrade last year, the city is now one notch below the pinnacle AAA rating with all three major rating agencies.
“We maintain strong fund balances, and budget conservatively, all while building for the future,” Baroody said.
Among the major “legacy” projects mentioned in Baroody’s budget are upgrades and expansion for the city’s wastewater treatment plant, which was constructed in the 1950s and last upgraded in the 1990s, Baroody said. The project is “at 85% design and engineering and is still planned for construction this summer,” he added.
With anticipated outside funding of more than $100 million — including more than $56 million in three different awards from the state, Baroody described the upgrades as “the biggest project in the city’s history.”
A public hearing on the budget is set for April 15.
Federal cuts a factor
By nature, proposed budgets involve a certain amount of guesswork.
“The city must make assumptions about the economy 18 months in advance,” Baroody said.
This year, those assumptions are colored by major changes in funding at the federal level. Baroody cited “substantial direct federal support” for several programs in the city, including Head Start, school nutrition, community development block grants and FXBGo! public transit.
Beyond uncertainty at the federal level, inflation, rising interest rates and a “downward trend in consumer confidence” are being felt locally, Baroody said.
He outlined three “levers” the city can pull if revenues decline, for any reason. It can defer hiring new employees, set aside funds in a revenue stabilization reserve and appropriate only 90% of the approved budget funds pending a mid-year review.
