City Manager’s Proposed FY 2025-26 Budget Presented to City Council

City Manager Patrick Duhaney presented his proposed FY 2025-26 budget  to City Council on March 25. The budget provides a sustainable path to preserve current City services, while addressing City Council’s priority needs and providing the flexibility to plan for future needs, Duhaney wrote in his letter to City Council. 

Operating Budget 

The total proposed operating budget of $2.8 billion represents a 4.74% increase over last year’s amended budget. The Virginia Beach City Public Schools (VBCPS) budget comprises $1.2 billion of that amount. 

The budget adds a net increase of 140.1 full-time equivalent (FTE) positions — 44.96 for VBCPS and 95.14 for the City. Of these additional City positions, 30 are firefighter recruits, as directed by the City Council in FY 2024-25. Except for these firefighter positions, each added City position is offset by either a reduction in staffing from another department or a dedicated funding source. Notable additional VBCPS positions include 15 security positions for elementary schools, 19.8 English as a second language assistants and 12 special education assistants, partially offset by the reduction of 32.5 vacant custodial positions. 

The proposed budget continues the Parks after Dark program in the Level Green and Green Run areas, also as requested by City Council in FY 2024-25.  

Based on the recent market salary study, the proposed budget includes $17 million for increasing salaries for prioritized public safety positions, as well as increasing the City’s minimum wage to around $16 per hour. The proposed budget also recommends a general pay increase of 3% for all other City employees. No salary adjustments are finalized until the budget is adopted on May 13. 

With rising healthcare costs, the proposed operating budget includes increased employer contribution of $2.5 million toward the City’s health insurance costs.  

Addressing another area of concern, the operating budget recommends an additional $1.5 million for the City’s vehicle replacement program, which is the primary source for all vehicle replacements, for a total of $7.5 million. The addition is meant to reduce the backlog of vehicles past their useful life and to make up for increased costs and previous budget cuts. 

Most of the budget increases are in programs that either had a dedicated revenue source or were offset by a corresponding reduction elsewhere in the budget, Duhaney’s letter stated. The proposed budget recommends establishing compassionate billing to support expanding Emergency Medical Services and providing reliable revenue for the Volunteer Rescue Squads.  

Fees for some programs and taxes will be adjusted to cover cost increases, including an additional $300 in the Short-Term Rental fee, modest increases in service fees for Parks and Recreation programs, reinstating the personal property tax for pleasure boats greater than 18 feet in length, and an increase of 8.9 cents daily in the Stormwater Enterprise Fund. In addition to ensuring stormwater remains compliant with its bond covenant, this adjustment will provide additional staffing and support to maintain the Flood Protection Program. 

Savings came from the City’s Risk Management fund, which created the opportunity to reduce annual contributions and saving the General Fund nearly $3 million. But the primary “balancing tool” was the growth in the general revenue, mostly from real estate. While the real estate tax rate remains the lowest in the region at 97 cents per $100 of assessed value, a reduction that was enacted last year, property assessments increased an average of 5.6% for the 2026 fiscal year.    

Caption: Pie chart illustrating FY 2025-26 Proposed Operating Budget Total Estimated Appropriations. 13.3% Planning/Public Works/Public Utilities; 4.5% Parks & Recreation, Libraries, Aquarium & Cultural Affairs; 7.6% Human Services/Health/Housing; 8.2% Financial/General Government; 4.3% City Capital Projects; 13.6% Public Safety; 2.0% Convention & Visitors, Economic Development; 2.5% City General Fund and Flood Protection Debt Service; 44.0% Education.

Capital Improvement Program 

Significant planning went into the proposed Capital Improvement Program (CIP), the City’s complex plan for future funding for large-scale projects. This includes implementing guidance from the City Council’s review of the CIP at its winter retreat in how to address challenges, such as project bids that continue to exceed estimates, accelerated timelines for projects and insufficient funding. The proposed budget uses debt service savings to help close gaps in identified needs and suggests developing a financing option, the Major Project Fund, from redirected funding and an increase of 0.5% in the meals tax (from 5.5% to 6%). 

The proposed CIP budget deletes four roadway projects and looks at five other roadway projects for possible changes in scope. It does not restore funding on the Beach Maintenance Facility, but it preserves $150 million in Charter Bond capacity for future programming and use, maintaining flexibility for future projects.  

Other highlighted changes in the proposed budget include:  

• Expansion and replacement of security cameras at parks and the Virginia Aquarium. 

• Adopting the Commonwealth of Virginia’s holidays and transitioning some City employees from the current Paid Time Off (PTO) structure to a dedicated sick and annual leave system. 

• Fully funding VB Trail Phase I. 

• Funding design of a replacement Law Enforcement Training Academy. 

The full budget is available for residents to view at public libraries, City Hall and online at VirginiaBeach.gov/ProposedBudget. 

The proposed budget will not be finalized until May 13. Before that, departments will present their proposed budgets to City Council, and residents are encouraged to provide input online or in person at public hearings scheduled on April 16 and 22. 

Share Your Thoughts at Two Public Hearings and Online  

Residents are encouraged to provide feedback about the proposed budget. Several options are available. If you have a specific budget question, send it to budget@vbgov.com. 

The City Council will hold two public hearings in April to gather resident input on the budget. Both meetings will be held at 6 p.m. and allow for in-person and virtual audiences. 

• Wednesday, April 16 – Virginia Beach Convention Center – WebEx 

• Tuesday, April 22 – Council Chamber, City Hall, Bldg. 1 – WebEx 

Residents wishing to make comments during the hearings must register with the City Clerk’s Office by calling 757-385-4303 prior to 5 p.m. on the day of the hearing. If participating virtually, please also register via WebEx. 

Input related to the budget also may be submitted via SpeakUpVB.com. Give your feedback online or leave a voicemail now through 11:59 p.m. on May 7.   

Next Steps in the FY 2025-26 Budget Process 

• April:  City Council hears from individual department heads on their departmental budgets. Two public hearings provide residents an opportunity to comment on the proposed budget. 

• May: The reconciliation workshop is a week before the state-mandated deadline of May 15 for the budget to be adopted. This workshop is for the City Council to finalize the budget. This year the budget is scheduled to be adopted on May 13, 2025.  

Learn more by visiting Budget.VirginiaBeach.gov. Watch the City Council meetings and be prepared to provide your input on the proposed budget in April.  Subscribe now to get updates on the City’s budget process and how you can provide your input before major decisions are made.

View the budget presentation (begins at 1:12).