Blog posts are the personal views of Letty Hardi and not official statements or records on behalf of the Falls Church City Council
I hope your summers are off to a good start. Congrats to fellow school parents for making it to the finish line.
Before getting to business – the big news this week actually happened after the City Council meeting. On Wednesday, we received a detailed memo from Virginia on our allocation under the $1.9T American Recovery Plan Act (ARPA). Larger cities and counties received their funds directly from the federal government already, but amounts for smaller localities haven’t been finalized til now. Now official: the city expects to receive $7.58M in two tranches, in addition to $1.45M we’re receiving directly in two tranches from the federal government. In total, the city’s share of ARPA funding will be $18M. As context – the annual operating budget we adopted in April is $106M. $18M is huge.
Before anyone thinks we’re embarking on a spending spree – there are rules on how and when the money can be deployed as it relates to pandemic impact and recovery. Read on for preliminary info and our regular City business I’ll spotlight.
My next office hours will be on Monday, June 21 (I’d welcome your thoughts on ARPA), and then I plan to take an extended blogging break for the rest of the summer. City Council will continue meeting weekly until our two week summer recess in August, so you can follow my Facebook page for more regular doses of city news.
PS – Students leading the way: in case you haven’t seen this, our local students are organizing a Unity Rally & March tomorrow (Saturday 6/12) at noon at Cherry Hill Park.
What Happened This Week:
(1) Social Equity & Racial Justice
A big thanks to our volunteer boards and commissions for their recent equity reviews and providing us their recommendations,. We began our initial discussion of their memos to us this week. While many Council priorities underway already seek to improve equity (affordable housing, accessible sidewalks and crossings, etc) – there were many new ideas: expanded scholarships at Aurora House, multilingual agendas & forms, more diverse representation in public art, allowing non US citizens to join our boards and commissions, equitable investments in parks. Expect continued ongoing discussions as this should not be a “one and done” effort.
(2) Financial Update
As COVID cases continue to decrease (it’s been nearly a month since Falls Church has had a positive case!), vaccinations increase, and business are reopening – economic recovery is on its way. Our local economy is improving, although we’re still below pre-COVID performance and certain sectors continue to be down. From the Q3 financial update:
- Revenues are currently projected to exceed the (revised) budget target by roughly $1.8M, or 1.9% of budget.
- Underspending in departmental expenditures is currently estimated at approximately $1.54M, or 1.6% under budget.
- Local revenues that dropped most significantly due to COVID-19 pandemic are hotel tax, cigarette tax, charges for services (recreation and athletic program fees), investment earnings, and fines & forfeitures. The City is starting to see recovery in some of these revenue streams. These revenue declines were partially offset by increases in sales tax from grocery and online sales activity, business license tax, and property taxes.
- Based on these trends, we believe the forecasts used in the upcoming FY22 budget are sound.
(3) American Rescue Plan Act (ARPA)
As mentioned above, Falls Church is expected to receive $18M this summer and next year combined, as part of the federal government’s COVID recovery package. The City will have until December 2024 to encumber the
funds and December 2026 to spend the funds. There are also rules attached to the $18M on how they can be used across 4 categories, with #3 below being the most flexible, but still some technicalities to work out.
- Response to public health emergency and negative economic impacts;
- Premium pay for eligible workers;
- Provision of government services to the extent of revenue reduction; and
- Investment in water, sewer, and broadband infrastructure
The funds represent a significant opportunity to help the city, our residents, and businesses recover. We must deploy the funds smartly and equitably in the near term, but also provide recurring value and invest for growth and prosperity in the future. For example, while we’re not allowed to pay off old debt on the books already, ARPA dollars can help us avoid issuing new debt for upcoming projects like stormwater and therefore benefit taxpayers down the road. As a starting point, here are guiding principles we’re establishing:
- Provide tangible relief to the community (i.e. residents, businesses, schools, employees).
- Invest in long-held city priorities consistent with adopted Vision and Work Plan (i.e. housing, walkability, stormwater).
- Create lasting, transformational impact with long-term recurring investment, if permissible under U.S Treasury guidance.
- Incorporate community, school and department input.
- Expenditures related to the ARPA funding should be spread over the qualifying period (through December 31, 2024) to enhance budgetary and financial stability.
- Use of ARPA funds to cover operating deficits caused by COVID-19 should be considered temporary and ensure structural balance in future budgets.
The staff report has a list of preliminary uses identified by category. I expect much more discussion and community input this summer and fall before any allocation decisions are made. I would also welcome your input – you can email us or speak at an upcoming meeting.
What’s Coming Up:
Monday, June 21 at 9 am: Letty’s office hours (Mr. Brown’s Park)
City Council Meetings every Monday (except 5th Mondays) at 730 pm: current draft schedule of meetings and agenda items
You can access the agenda and livestream here, including recordings of past meetings