Updates from Letty – April 28, 2017 – final budget edition

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,

And with that, we wrapped up the FY18 budget this week. The quick headline is that by a 4-3 vote, we raised the real estate tax rate by 1.5 cents which will generate $600K towards the capital reserve, important for the GMHS project. For the average homeowner (average home value in FC is $700K), 1.5 cents is approximately an increase of $100/year. A tax rate increase is not something I take lightly – more below on my thoughts. Overall, I think it required pragmatism and compromises from everyone, and no one got all that they wanted or needed. Compromise seems rare in government these days, so I appreciated how the Little City budget came together this year with an eye towards the future. I valued hearing your input during the budget process, so do let me know what you think now that we’ve taken our final votes.

So with the budget done, we resume all of the other work of the Little City, including the campus project with the school construction and economic development workstreams happening in parallel and some interesting development proposals on the horizon. Next Monday’s work session will start as a Walking Tour of a proposed cottage housing development on Railroad Ave (off the W&OD) at 7 pm. The neighborhood and public are invited to join us! We’ll convene our regular work session back at City Hall at 8 pm.

Finally, mark your calendars. Today is the first day of in person, absentee voting for the primaries for the Virginia gubernatorial election. Primary voting day will be Tuesday, June 13 and remember that Virginia is an open primary state, meaning you do not have to be registered with either party to vote in that primary. More info for voters here. See the calendar below for a June town hall about GMHS.



What Happened This Week:

Budget Adoption – Highlights:

  • As I wrote about last week, we reached consensus in our final work session on keeping the general government and school operating budgets funded without requiring a tax rate increase. The City Manager originally proposed a 1 cent increase for operating budgets and 3 cents for capital reserves. By a 4-3 vote, we did vote to replenish the capital reserves with a tax rate increase of 1.5 cents, bringing the tax rate from $1.315 to $1.33 per $100 in assessed value. The 1.5 cents would generate $600K annual revenue, dedicated toward the GMHS project.
  • The capital reserve currently has a balance of $9.9M from the water sale proceeds, with about $700K spent to date on campus planning and another $500K in expected costs coming.
  • Compared to FY17, the general government (excluding Metro funding) budget is essentially flat; Metro contributions will grow nearly 50%; the school transfer will grow by 3.3% (original request was 3.7%) which is an increase of $1.3M. From our discussions with Dr. Schiller and Chairman Webb – the additional $250K over and above the original budget guidance will be sufficient to fund the instructional staff needed to maintain class sizes below policy, which is a high priority I share.
  • We also voted to increase the transient occupancy tax (hotel tax) from 7 to 8% which would generate approximately $60K in new revenue per year, dedicated to business district improvements such as tree lighting, flower baskets, improvement signage, benches to continue to attract commercial revenue.
  • We voted to adopt the CIP as proposed, however it contained several placeholder/TBD amounts for GMHS and the new school expansion needed at TJ. I expect we’ll need to revisit the CIP in June when have clarity on those other needs and their costs and have a frank discussion on whether a little city of our size can afford and take on all of those capital projects at once. I think we’ll need to make some tough prioritization calls on what’s truly critical so that we don’t put the city in undue financial risk.
  • Letty’s thoughts on the 1.5 cents tax rate increase – for those long time readers, you’ll recall that I voted for no tax rate increase last year. In general, I am sensitive to our already high tax rate; it’s important that we apply the highest scrutiny to all expenses in every budget. Given the sobering outlook for Metro and capital needs, I’d like to keep operating budgets as lean as possible, which I believe is part of our responsibility to balance short and long term needs. I appreciate the diligent work from City Staff and the School Board to bring forward pragmatic budget options where the skyrocketing Metro costs and the higher than expected 6% student enrollment growth needs were absorbed with tradeoffs made elsewhere. So while I’m not thrilled with the compromises we had to make, I believe that fiscal restraint is necessary as we take on an ambitious capital agenda. I supported the compromise option of 1.5 cents to go into capital reserves as an important step in our commitment to the future. I can see both perspectives on whether or not to pre-fund the capital reserves. At the onset, I believed that 3 cents right now would be too aggressive, especially before the current feasibility and market studies are complete which we expect will give us more refined cost estimates and economic development levers for the GMHS site. However, I don’t believe that any of that work will result in a free school or that the rest of our capital needs will disappear. Those costs are coming, and I believe making the tough choice now will put us in a better position in the long run.

What’s Coming Up:

  • Today, Friday April 28 – Campus Economic Working Group (730 am, Dogwood)
  • Tuesday, May 2 – VDOT public meeting on W&OD Trail Pedestrian and Bicycle Bridge over Rt 29 (6 pm, Yorktown HS)
  • Monday, May 8 – City Council Regular Meeting
  • Monday, May 15 – City Council Work Session
  • Monday, May 22 – City Council Regular Meeting
  • Monday, June 5 – joint City Council and School Board work session on GMHS; Broad & Washington project
  • Saturday, June 10 – Town Hall on GMHS