Updates from Letty – Budget Edition #4 – April 21, 2016

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,

My weekly update is a day early this week as I’ll be on my 1st grader’s field trip tomorrow. We are in the final stretch of budget season, with the budget adoption by City Council 4 days away. This week’s City Council meeting was heavily focused on the final “mark up” of the budget, where we got into the nitty-gritty of various open items from previous sessions and resolved them ahead of Monday’s vote. There were some key decisions that we made including the much-discussed and popular Neighborhood Traffic Calming Program and an allocation method on budget reductions to maintain the current real estate tax rate. I also attended the School Board work session on Tuesday night to hear their budget deliberations, where I was heartened to hear the importance of maintaining class sizes and teacher compensation. To say both meetings were tough would be an understatement, with no easy choices considered by either body.

Again, this is a pretty lengthy update because I believe all of these topics are important and don’t get much broad coverage otherwise. I hope this gives you a view into the thoughtful deliberation that goes on and the tough tradeoffs we’re making. I encourage you to set aside 30 minutes to read, digest, and send me thoughts and questions.

I will aim for brevity post budget season! 🙂

(As a side note – if you find these updates valuable, please keep sharing with your friends and neighbors and have them be added to my distribution list. Emails seems to be the most reliable way to get these updates given Facebook’s filtering algorithms. Anyone interested can send me an email to be added or sign up at the bottom of my webpage: www.lettyhardi.org)



What Happened This Week:

(1) Monday night – City Council Work Session & Budget Mark Up

We spent the majority of time going through 6 items in the Budget Mark Up Worksheet. As I shared last week and publicly in previous meetings, in order to pay for upcoming large and expensive capital projects, I believe the responsible route is to be disciplined with operating budgets now and hold the tax rate steady, and a majority of Council share that view. As such, most of the meeting was spent on discussing options to achieve a flat tax rate and allocation methods on how to share the reduction between General Government and School budgets (#6 below).

For the budget hawks out there, there is also the latest round of budget Q&A we posed to the City Manager last week, including rationale behind the 17% unassigned fund balance policy and why our financial advisers don’t recommend dipping into the fund balance to pay for operating budgets, which is a FAQ I have been receiving.

The Mark Up Worksheet and what we decided:

  1. GMHS/MEH CIP – The Superintendent and School Board Chair requested that we add a new $1MM to the FY17 CIP to be used immediately after the GMHS referendum in May 2017 (before the end of the fiscal year in 2017). The $1MM would be spent on design and planning that would come out of capital reserves.
    • Should we have a referendum and should it pass, I absolutely believe we should proceed with the planning and construction of the campus. However, given that current deliberations by City Council and School Board are on hold until the budget is done (even putting aside my own concerns with moving forward with Phase 2 of the PPEA process), we are over 9 months away from any sort of finalized deal. I have reservations about appropriating $1MM with uncertainty in the outcome of the PPEA process and would want to have detailed plans on paper before we earmark money.
    • A majority concurred and preferred funding in FY18 or a FY17 budget amendment in late winter. By that time, an interim agreement with the selected bidder would be finalized and information made public so citizens could be informed ahead of a May 2017 referendum.
  2. Downtown Public Plaza – we proceeded with the City Manager’s recommendation to appropriate $550K of the EDA funds in FY17
  3. Land Acquisition – we debated whether to label the $4MM allocated as “Land Acquisition” or “School Land Acquisition”, which was discussed as a contingency plan for Mt. Daniel. To be clear, this is an allocation, not authorizing a bond purchase. Given that we don’t want to constrain ourselves on how the money may be used, City Council opted to proceed with the Planning Commission’s recommendation to keep it as “Land Acquisition.” If we issue the bond, it’s important to note this has an annual debt service cost of $340K, about 1 penny on the tax rate.
  4. Neighborhood Traffic Calming Program – We discussed a combination of options outlined in the markup work sheet to fund the NTC program.
    • There is $45K that will be unspent in the current year that will be moved to FY17 for use and current and upcoming requests in the queue will be bundled for grants in FY18. Separate from the NTC program, there were proceeds from the the sale of the Podolnick (old post office) building, $1MM  was designated for transportation needs and Big Chimneys Park in Winter Hill. The City Manager recommend a split of $100K out of the $1MM to be used in the immediate vicinity, in anticipation of traffic calming needs when the Harris Teeter development fully opens this summer.
    • Later in the meeting, there was also strong commitment from City Council to pass ordinances in May to assess higher Public Works development fees and a new revenue option called “super penalties” proposed by the City Treasurer, structured similarly as Arlington and Fairfax’s super penalities for late payments on personal property bills. The revenue from both would go towards funding NTC in FY17 and potentially be an ongoing revenue source ($60-80K year).
    • While I would have loved to see more funding for NTC in the operating budget, this is an example of one of the tough choices we are making. I am hopeful that the grant funding and the super penalties will be able to fund NTC, albeit at a reduced level from what the CACT requested and having to ask neighborhoods in the NTC queue to wait a year longer.
  5. Health Care Costs – premium increases in the General Government and Schools health care plan require an additional $100K and $245K, respectively, that was not planned for in operating budgets. On the General Government side, the City Manager recommended delaying several capital purchases (police cars and backhoe for snow removal) for a year to plug that hole, and we didn’t hear options on Monday on how the School Board would deal with their gap.
  6. Flat Tax Rate methodologies and options – for those of you who already follow my page on Facebook or my online blog, you may have already read my more in-depth recap on this portion of the meeting here: https://www.lettyhardi.org/tough-choices-recap-from-last-budget-work-session/. If you are interested in the different allocation methodologies we considered on how to share the budget reductions between the General Government and Schools, I encourage you to read this separate post.
    • The quick summary is that the allocation is about a $900K reduction in the School’s request and a $400K reduction to the General Government budget.
    • To be clear – if this plan moves forward, no budgets are shrinking. The school budget transfer amount would increase about $1.4MM compared to last year (3.6% increase) for a total school budget of $47.7MM and the general government budget would increase about $865K (2.4% increase) to $37.4MM, not counting debt service.
    • The City Manager proposed a list of options to close the gap on the General Government side – such as the deferral of the bond for police cars and trucks mentioned above, forgoing replacement of computers and IT servers, targeted overtime reductions, not backfilling, closing open reqs, or reducing staff at Public Works, FCC-TV. Court Services, reduction in training,  and ending the Youth Mentoring program.

(2) Tuesday night – School Board Work Session

As I wanted to understand the implications of what the $900K reduction would mean to the School’s budget, I attended the School Board work session on Tuesday night. At the City Council work session on Monday night, the Superintendent and SB Chair had stated the reduction would both impact class ratios and teacher compensation, which I have heard from the community, are core to our schools’ excellence. Wearing my parent hat of three FCCPS students, I also share the sentiment that small class sizes and competitive teacher pay are quite important.

On Tuesday night, I heard those priorities reiterated; I was encouraged to see that $630K worth of reductions were identified that don’t touch either teacher salary or class sizes. The list of $630K reductions weren’t easy either and will have impacts on various pockets of the school program. That said, the School Board made no decision on which items will be reduced and there still is a gap to the reach the total amount of $900K.

If you are interested in seeing the list of what was discussed by the School Board – you can find it in the last 2 pages of the SB’s budget packet posted online. I’ll caveat that the commentary provided in the meeting offered important context on the list. So the list, as it stands, may not be easily understood without that context – for example: the “Remove Central Office Project Assistant” was a new FTE proposed in this budget cycle so a current position is not being eliminated, “Reduce Textbooks” doesn’t mean we’re taking students’ textbooks away but deferring the next refresh, “Remove 1.0 Computer Science Teacher” was previously proposed in order to add an equivalent headcount for a MYP Coordinator position. There were also several items that our generous PTAs, the Falls Church Education Foundation, and parents had previously funded such as the Elementary Strings Program, Pre-K Music, and library books.

(I have heard there is a new list of 3 schools budget scenarios that shows how to achieve the full $900K reduction that has been made public and shared with FCCPS staff. As I haven’t had the chance to understand those scenarios and it wasn’t covered in the Tuesday night meeting I attended, I don’t feel it would be fair for me to comment on those at the risk of misrepresenting the scenarios.)

I believe the School Board will not be convening again before City Council adopts the budget next Monday, as they have 2 more weeks to finalize the school budget. While City Council only approves a transfer amount and we have no authority on what gets funded within FCCPS, my hope as a parent is that my SB colleagues will continue to prioritize class sizes and teachers, take the opportunity to think holistically about the non-monetary drivers of teacher satisfaction, and hear creative ideas from staff and the public to really challenge the entire budget.

What’s Coming Up:

Monday, April 25 – City Council Meeting – FY17 budget and CIP adoption, 730 pm – City Council Chambers

Monday, May 2 – City Council Work Session – Believe it or not, there is life after budget season. We are planning to resume the discussions on the GMHS/MEH campus project in early May.

Later in May, we also expect to approve the charter on the Streetscape Design Task Force, who will be charged with updating our streetscape standards. Council reiterated the need to move quickly, ideally ahead of Mason Row’s site plan which is estimated to be this summer, so we can put the new standards to use immediately.