Updates from Letty – Budget Edition #3 – April 1, 2016

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

No April Fools jokes here, folks. We have a lot of work ahead of us in the next 3 weeks until the budget is adopted on April 25th. This week’s update will be light on the Council meeting and instead I’ll cover more details on the budget (including why I voted for $1.34 and no on the CIP) and important takeaways from the Town Hall from Wednesday night about the GMHS/MEH campus development.

I haven’t had time to personally respond to everyone with thoughts on the budget, but I read every one of your emails and they are important to my decision-making. Please keep them coming!



What Happened This Week:

  • In recognition of Child Abuse Prevention month in April, there was a community event at the entrance of Cherry Hill Park on Monday night. We had a great turnout of community members who “planted” a Pinwheel Garden – a lovely symbolic gesture that our community supports the protection of children. I hope you’ll take the opportunity to stop by to see the garden and reflect on everyone’s role in preventing abuse. I’ll blog more about it next week, with my remarks from the event.
  • City Council Meeting
    • Proclamations – There were several proclamations and speakers in support of Child Abuse Prevention month, Sexual Assault Prevention Awareness month, Equal Pay Day, and Local Government Education Week. Interesting fact – April 12th is Equal Pay Day because it symbolizes the amount of time (from Jan 1 to April 12) a woman must work to earn as much as a man did in the previous calendar year! 
    • Winter Hill Parking – Most of the meeting was spent on the discussion about the 2nd reading (ie, final vote) for the Winter Hill parking restrictions, with high community turnout speaking in support of it. A separate issue that was discussed was the City’s request to reinstate permission to access the parking lots within Winter Hill to enforce City tax decal, inspection stickers, and state license tags. Ultimately, we voted 6-1 in favor of moving forward with granting the City Manager the ability to restrict parking via a separate permit. I believe we have a responsibility in protecting adjacent neighborhoods as development occurs in the City – whether that is traffic, transitioning building heights, or parking – so I voted in favor of the ordinance. I do look forward to a positive resolution of the parking lot access issue with Winter Hill – consistent decal enforcement is a benefit to taxpayers as a whole.
    • We also approved various resolutions and consent agenda items for transportation projects – including a partnership between Falls Church and Fairfax County on pedestrian and crosswalk improvements at Great Falls and N. West St. (a dangerous intersection that I’ve heard a lot about) and assorted paving projects.
    • FY17 Budget First Readings – important note before getting into the votes: like other ordinances, budget ordinances have a 1st and 2nd reading. After 1st reading is when we have to legally advertise the tax rate over the course of the month so the public has adequate notice to provide comments and attend hearings. After the 1st reading tax rate is voted on and advertised, it cannot be raised but it can be lowered at 2nd reading.
      • Real Estate Tax – the City Manager recommended a real estate tax rate of $1.36 – 2 cents above what it’s in the budget (budget built around $1.34 – which is a 2.5 cent increase from last year).  $1.36 failed with a 2-5 vote. Ultimately $1.34 moved forward with a 5-2 vote, and is what will be advertised.
      • CIP – passed by a 6-1 vote, with a no from me. See below on why I voted no.
      • Personal Property Tax Rate (ie, car tax) – increase of 17 cents from $4.84 to $5.00/$100 assessed value. $5.00 is the rate in Arlington and Alexandria, with Fairfax at $4.57. The increase is proposed to fund the WMATA transportation shortfall I wrote about previously. For the median car value, this would have an annual impact of $27 tax increase. This passed 7-0.
      • Cigarette Tax – voted to increase from $0.75/pack to $0.85/pack, again to fund the WMATA gap. Passed 7-0.
      • Sewer & Stormwater Utility Rates – increase of 1.4%and 2% respectively due to capital improvements  for EPA mandated plant upgrades and the continued stormwater rehab projects. The stormwater impact is about $5 for the average home. Both ordinances passed 7-0.
      • My thoughts on budget – why I supported $1.34 and voted no on the CIP:
        • As I said in my remarks during the meeting, I think $1.36 gives us too much room. Just like when you move from a small house to a bigger one – you never think you’ll fill it up and inevitably you do. While I am concerned about many important unfunded needs like Neighborhood Traffic Calming, sidewalks, and more teachers in critical areas like Gifted and Talented –  I think if we give ourselves room to build a budget around $1.36, we will fill that room very quickly and not force more prioritization. I would like to see further pressure to go down from $1.34 and after reading the budget book, CIP, and the school budget book from cover to cover the past 2 weeks, I believe we need to make tougher choices across the board.
        • We also have such ambitious capital needs ahead of us that I think we need to exercise more discipline on both the general government and school operating budgets in order to pay for those big projects responsibly.
        • I voted no on the CIP as it stands currently because I believe it needs more community discussion, prioritization, and transparency of tax rate implications. This year’s 5 year CIP is $152MM, with the addition of the GMHS/MEH campus project (school related debt shown in blue in the pie chart below). An observation and note – the community pays a lot of attention to the operating budget and real estate tax rate – the CIP has real implications on our taxes too. CIP projects do not come from free money! Debt service payments in FY17 are $6MM out of the proposed $87MM operating budget, an increase of $650K or so due to debt issued last year, which is about the equivalent of 2 cents of real estate tax.            IMG_20160331_091756
        • We need more discussion on tax rate implications for projects like City Hall, Library, and GMHS/MEH – and implications of not funding the basics like Neighborhood Traffic Calming, getting matching transportation dollars that would be available to us, or building a capital reserve for future needs. There is a common misconception that we’re getting a high school for free as part of the current PPEA process, while in fact – it’s not free (spoiler alert – 5 to 15 cents on the tax rate to fund the new high school in the best case scenarios, plus uncertainty for Mt Daniel and debt service). The Library and City Hall projects would also be an additional 2 cents on the tax rate each. There are implications for future tax rates and our ability to do other capital improvements that I have heard from the community that are ALSO important.
        • Finally, I want to true back to one of the core themes that is important to me that I’ve spoken about previously – affordability. We all know it’s expensive to live in the DC area, but especially in Falls Church City. Our tax rates are already higher than our neighbors, and people pay a premium by choosing to live or work here. I would like our government to run efficiently and be able to fund the the core needs that support our values, while making prudent investments for the long term. There is a lot more we can do with affordability, but the first step is to have tax rates that stay as low as possible so it’s not the only very wealthy who can afford to live here. Diversity in our population, workforce, and housing are all critical to the future health of the City.
    • GMHS/MEH Town Hall – the first town hall was on Wednesday night. It was a very informative session where the City Manager and Superintendent provided updates on the campus redevelopment; a brief summary:
      • The estimated school cost – $112MM
      • What the school program includes – TL;DR version: capacity for 1500 students, but no swimming pool
      • Financing options – based on separate studies by the Urban Land Institute, 1/2 to 2/3 of school cost could be covered by economic development via the land exchange and future tax revenue from the 10 acres available for development. 5 cents is best case scenario. Fully funding a new $112MM GMHS/MEH campus (striped bar on the bar chart) without economic development would double the debt service, an additional $6MM per year, about an additional 15 cents on the real estate tax rate. It’s also important to note that we would be exceeding our debt policies (shown in the blue line) – ie, debt service payments would be too high a proportion of our annual operating budget. And in order to start saving up for the project, we would need to increase the tax rate starting next spring to pre-fund the capital reserve.    IMG_20160331_091628
      • The City Council and School Boards’ next steps: consideration of the 2nd phase of the RFP on April 11th and 12th in order to proceed with the process, which would culminate with a November 2016 public referendum.
      • If you missed this week’s Town Hall, I encourage you to make time to attend the second Town Hall next Wednesday or share your thoughts with us before April 11th/12th. One of the most valuable parts of the meeting was Q&A; the meeting was recorded, so when that’s available, I’ll share so you can watch if you can’t attend next week’s.

What’s Coming Up:

  • City Council Work Session – Monday April 4 – it looks like it will be a long night ahead of us next Monday when we’ll have a work session focused on the budget, with deep dives on the school budget, general government operating budget, and CIP issues. We are also expected to cover the West Broad Area Plan and the W&OD Master Plan ahead of final votes on April 11. We also have additional work session time penciled in for Thursday April 7 for more budget discussion if needed.
  • The 2nd Town Hall on the Campus Redevelopment Project is on Wednesday, April 6 at 7PM in Council Chambers of City Hall (300 Park Avenue). City Manager and School Superintendent will provide updates on the high school and middle school campus redevelopment project.
  • City of Falls Church Focus E-Newsletter – if you don’t already subscribe to these weekly newsletters from the City, I’ll make another plug for them here. Now that spring has sprung, there are a bunch of other community happenings this weekend – tree plantings, recycling extravaganza. This week’s Focus on Falls Church and how you can subscribe to get in your inbox.