Updates from Letty – April 12, 2024 – budget edition #2

Blog posts are the personal views of Letty Hardi and not official statements or records on behalf of the Falls Church City Council

Dear Friends,

Did you get to experience the eclipse on Monday? I’m grateful to have had the opportunity to share in the wonder from Cleveland, Ohio – a memorable human experience and momentary pause from all that is going on in the world.

Eclipse or not, city business – especially during budget season – marches on. As expected, we took our first reading vote on the budget which sets the ceiling tax rates. Because of Governor Youngkin’s budget amendments that were announced hours before our meeting, our local budget will now be more complicated, so I’ll explain more. We spent the majority of the meeting deep diving on the CIP (Capital Improvements Program) so I’ll also share highlights from that and my thoughts.

Remember – today at lunchtime, I’m hosting my April office hours as another Walk and Talk as part of the Fitness Challenge. Meet me at the Broad St entrance of Howard Herman Stream Valley Park at 12 pm for a spring stroll and share your input on the budget and priorities.


PS – One bit of good news from Richmond is that HB54, patroned by our own Delegate Simon, was signed by the Governor. HBH54 repeals the citizenship requirement to serve on our volunteer boards and commissions. We will now be able to adopt our own qualification rules and welcome more diverse voices to such boards tackling issues like housing and transportation that impact all residents of Falls Church, regardless of citizenship status.

What Happened This Week:

(1) Budget Curveball

In case you missed my first post about the FY25 budget last week, we are still early in the budget process. One of the first actions we take is to vote to advertise the maximum tax rate, which was to be a 1 penny reduction for real estate tax rate (and no change to the personal property tax rate and small increases in the stormwater and sewer fees to account for inflation) in the City Manager’s proposed budget.

However, on Monday – the Governor released amendments to the General Assembly budget, reducing the state funding to Metro despite messaging from the administration that Metro will be “fully funded.” In reality, it further shifts the burden to Northern Virginia localities. For Falls Church, we are already making sizable investments in Metro – increasing our contributions this year by $1M to $2.5M. Staff estimated the additional exposure would be $1M, or about 2 pennies on the real estate tax rate, in order to meet our Metro obligations. Given the late-breaking information, it was discussed whether we should actually *increase* the tax rate to account for this new risk. After discussion, we unanimously decided to proceed with voting to advertise a 1 penny tax rate reduction – from $1.23 to $1.22.

The General Assembly will reconvene next week and still has the opportunity to override the Governor’s amendments. You can contact Governor Youngkin to urge that he support additional funding for Metro.

Letty’s Thoughts:

It’s disappointing that the Governor is removing Metro funding from the budget. Clearly Metro benefits Northern Virginia and Virginia as a whole. Just when ridership is recovering post pandemic, we shouldn’t be abandoning Metro to make a political statement. Virginia should contribute our fair share at the state level just like Maryland and DC. That said, because we are in the unique position of having strong local revenue this year – 8% growth – the idea of raising taxes to pay for Metro costs is a non-starter for me. If the Governor’s budget amendments proceed without a General Assembly override, we will make tradeoffs in other areas of our local budget to make up for the shortfall, not ideal but that’s our job. If anything, I’m hopeful we can identify another penny reduction over the next month, going all the way down to $1.21.

(2) Capital Improvements Program – Deep Dive

The Capital improvements Program (CIP) is the other half the budget. CIP items are one-time expenditures that cost more than $150K and have a useful life in excess of 5 years that provide the community with an asset (new schools, playing fields, bridges, dump trucks, etc). The CIP got a whole lot of attention during my first few years on City Council, when we were trying to figure out how to afford, finance, and sequence a backlog of large capital needs, including a new high school, city hall, and library, which required a large voter-approved referendum to take out bonds and the West Falls economic development project to pay for all of it. As those capital projects completed, the CIP had a quieter period of less visible, but still important projects, especially in the areas of stormwater infrastructure and transportation.

And now it’s back! With a proposed $191M for CIP projects over the next 6 years, this is one of the biggest CIPs and one of the longest and most thorough discussions we’ve had on the CIP in recent years. The staff presentation is a good overview, and I’ll also share some highlights and my reactions.

  • Over 1/2 of the CIP is proposed for transportation projects, to respond to the community’s desire for more walkability, transportation safety, and aging public infrastructure
  • As proposed, nearly 1/3 of the CIP is grant funded, 1/3 would be debt financed, and the remainder would be paid for with cash – either from the annual operating budget (aka “pay-as-you-go” or “pay go”) or from capital reserves, which we had accumulated to hedge against the bonds of 2018 to finance the new high school. We had specifically directed staff last year in our budget guidance to begin drawing down capital reserves as we are coming out of the critical period of high debt and would come back in compliance with our debt policies.
  • While some of the projects are less visible infrastructure projects, the CIP projects the community can expect to see in the coming 12-18 months:
    • HAWK signals on Broad St
    • Widened and improved crossings on the W&OD
    • New sidewalks and crosswalks
    • S. Maple/Annandale roundabout
    • N. Washington/Columbia intersection improvements
    • Greenway Downs traffic calming
    • Geothermal HVAC at the Community Center
  • There are some also notable additions to the CIP – including a $30M new property yard (the public facility for our Public Works operations crews), a City Hall Annex, and a new police substation in the western part of the city.
An example CIP project – W&OD trail crossing work starting! Expect the new crossings to be stamped, colored concrete and new 4 way stops at most of the intersections and the best yet, no more yellow bollards artificially narrowing the dual trails on the W&OD. As planned, the project should wrap up by the fall.

Letty’s Thoughts:

I had a lot of thoughts and questions to the staff proposed CIP, especially having recent history in our last round of large public facilities planning and financing. There is a lot of good in the CIP, especially responsive to the top community request I hear to continue modernizing our car-centric infrastructure to be safer and pedestrian and bicyclist friendly. And I also appreciate the focus on execution and delivery of long-discussed projects – frankly, some of which have been delayed and backlogged for longer than we’d like. It’s also important to be taking full advantage of grants to deliver important generational projects and core public service needs like stormwater and sewer infrastructure. As a small jurisdiction, “free money” helps us deliver far more value to the community than we’re able to if we were doing it solely via taxpayers.

My biggest concern, as I expressed in our work session, is that upcoming facility needs should start with broader comprehensive planning. While I absolutely support updated facilities for our workforce, the $30M price tag for a new property yard (not to mention requests for a $300K police evidence garage, $375K buildout for a new City Hall Annex, annual rent for new office space, $125K for a police substation buildout) needs to be prefaced with revisiting the vision at Gordon Road triangle. We should be more creative and explore public-private opportunities where some low to medium density development could help offset that cost, a new or expanded homeless shelter, and more affordable housing. For one of the last public parcels of land, especially one that opens up to the W&OD on one side and across from West Falls/Metro on the other, we need to be far more strategic about how to site the new property yard and various other facility discussions should be folded into that planning. Also – as it relates to our growing workforce: I would expect to see a longitudinal staffing and seating plan (especially in the continued hybrid working environment) and multiple space options explored and presented first, such as reconfiguration of City Hall (which is only 4 years old), expansions to the existing City Hall footprint, other public buildings, and other options before we decide to build out and rent new office space.

The CIP represents important investments to improve the city for current and future residents and businesses and despite my concerns about facilities above – all in all, we are fortunate that these are good problems to have!

What’s Coming Up:

Friday, April 12 – Letty’s Walking Office Hours (12 pm, Howard Herman Trail entrance on Broad St)

Monday, April 15 – City Council Meeting – Budget Work Session*

Wednesday, April 24 – Budget Town Hall #2 (12 pm, City Hall & virtual)

Monday, April 29 – City Council Meeting – Budget Public Hearing #2 & Work Session*

Wednesday, May 1 – City Council Office Hours (9 am, City Hall)

Monday, May 6 – City Council Meeting – Budget Markup*

Friday, May 10 – Letty’s Walking Office Hours (9 am, Cherry Hill Park)

Monday, May 13 – City Council Meeting – Budget Adoption*

*Mondays (except 5th Mondays and holidays) at 7:30 pm. You can access the agenda and livestream here, including recordings of past meetings