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,

It’s been a big week in the Little City after our 3 week summer recess: welcoming Seth, celebrating Wyatt, and talking taxes. If you have school-age kids, I hope they’ve had a great first week back in school.

On Monday night, City Council unanimously voted to appoint Seth Hendler-Voss as our next City Manager. Yesterday, we gathered with friends from across the region, former colleagues, elected officials, and City employees to celebrate Wyatt Shields and his extraordinary 23 years of service to Falls Church. And in between all of that, we had a pretty substantive conversation in work session about a potential Commercial & Industrial (C&I) tax to fund transportation.

This coming Monday night, it will be Wyatt’s last City Council meeting if you missed yesterday’s celebration. We would also welcome public comment if you’ve missed us for the past few weeks. I know Virginia Village is top of mind for some – the city received 3 proposals whose executive summaries have been posted online. Our evaluation committee is hard at work and will be sharing their recommendations with Council in closed session with us later in September. If you prefer more informal settings, I also had office hours this past Wednesday night – read on for the schedule for my monthly office hours this fall to see me in person or you can always reach me by email.

So, a lot to catch up on!

Best,
Letty

PS – Remember, it’s the last few days of Summer Restaurant Week and there are some delicious deals!

What Happened This Week:

(1) Welcoming Seth

On Monday, we voted to hire Seth Hendler-Voss as our next City Manager. The City Manager is one of the most important positions in Falls Church. This is the person who leads our professional staff, manages our day-to-day operations, helps turn Council’s priorities into action, and ultimately has an enormous impact on the quality of life in our Little City. So finding the right person for this job was a big responsibility – and I think we did that. We had a thorough national search, and a lot of input from our staff, our community and this Council. And Seth Hendler-Voss really stood out. We’re looking forward to the community getting to know Seth when he joins us on September 14.

(2) Celebrating Wyatt

Of course, welcoming a new City Manager also means saying goodbye to the only City Manager many of us have ever known.
Yesterday we celebrated Wyatt Shields. My comments from yesterday are here – a tough one to write and an even tougher one to deliver.

You’ll be really missed, Wyatt!

(3) Commercial & Industrial Tax (C&I Tax)

At our work session Monday, Council had an initial discussion about whether Falls Church should consider adopting a Commercial & Industrial (C&I) tax to fund transportation improvements.

Quick summary:

• This isn’t a new idea. We’ve discussed it during the budget process, and the City already sets aside money for transportation in lieu of imposing this tax.
• Under Virginia law, the City can levy up to 12.5 cents per $100 of assessed value on commercial and industrial property, with the money restricted to certain transportation purposes. Staff estimates that each penny would generate approximately $113K per year. The full 12.5-cent tax would therefore generate roughly $1.4M annually.
• And while it’s a commercial tax – it’s important to understand who would pay it (commercial triple-net leases often pass the tax to the tenants who are often small businesses).
• Several Northern Virginia jurisdictions already have a C&I tax, including Arlington, Fairfax County and Fairfax City.

There have been two reasons discussed for a C&I tax:

1/ Transportation needs as we continue making the city more multimodal – we have transportation projects that could be eligible for use with C&I tax revenue, we are revisitng this conversation now ahead of the next budget season to discuss the possibility of this tax to fund projects such as: Metro capital obligations, sidewalks, bikeshare operating expenses, bike lanes, bus shelters. By using C&I for those projects, that frees up money for other priorities.

2/ The “tax burden” issue – our residential assessments have increased significantly over the past few years (because Falls Church has been such a desirable place to live and with limited ownership housing supply – house prices do go up. On the rental side – we’ve actually seen rents flat.). And while we’ve reduced the tax rate over 17 cents the past 5 years, residential tax bills have still gone up. But commercial tax revenues, which haven’t seen as large of an appreciation, have stayed flat.

Letty’s Initial Thoughts: While there is a reasonable question about whether the tax burden should be shared somewhat differently, I am not sold yet. I don’t think the answer to every difficult budget problem should be “find another source of revenue.” We need to continue looking hard at our costs, prioritize what is truly essential. That doesn’t mean we should never raise revenue. It means we should be disciplined about when and why we do it especially if we have no new commercial projects coming online in the next few years (the blue bar above will be smaller), we should be way more critical on costs first and should keep revenue levers available when we truly need it.

If we are going to ask businesses to pay more, we should make sure we share the rationale with our business community, what that money would fund, and why those projects matter to their businesses and the city. And with WMATA funding being a big regional priority this coming year, we should also keep in mind that big priority we’ll need to cover.

More discussions and business engagement to come this fall after the follow ups we discussed with staff.

What’s Coming Up:

Monday, August 31 – City Council Meeting*

Wednesday, September 2 – Ask the Council Office Hours (9 am, City Hall)

Tuesday, September 8 – City Council Work Session*

Monday, September 14 – City Council Meeting*

Monday, September 22 – City Council Work Session*

Monday, September 28 – City Council Meeeting*

Letty’s Fall Office Hours:

Tuesday, September 15 – 630-8 pm (Dogwood Tavern)

Tuesday, October 20 – 630-8 pm (The Cheese Cartel)

Wednesday, November 18 – 630-8 pm (Lucky Thai)