Updates from Letty – March 16, 2018 – budget edition #1
Blog posts are the personal views of Letty Hardi and not official statements or records on behalf of the Falls Church City Council
This week, the City Council started our annual 6 week process on budget review and approval. Budget season, more than any other time, brings out *everyone* that we don’t typically hear from throughout the year. Having done this only twice, I will caveat that I am far from an expert. But as these “Updates from Letty” grow in reach, indulge me to consider two requests – as friends, constituents, and readers – before I get into the nitty-gritty of this week’s update.
1) If you care about the City’s finances and the future of the City, try to pay attention to more than just these 6 weeks. After I was elected, it was eye-opening to see all of the other important decisions, ones that are probably even more consequential than one annual budget, that happen the rest of the year. I expect that as we navigate this huge debt, undertake building a new high school, and develop the adjacent land – ie, more risk – that upcoming decisions will be even harder. I hope we can rely on the collective expertise and experiences of our citizenry to pay attention, not just when it’s budget time or in your backyard.
2) Ask questions and show up. Show up at the polls, show up at PTA and board meetings, show up to town halls to learn and ask questions. If you can’t attend, read up offline and make your voices heard via email. Our community is what partly insulates us day-to-day from the dysfunction at the national level, but we have to invest in it and get involved. Without fail, we hear from the perennial budget watchers; the “fund the schools at all costs” supporters and the “taxes are way too high” hawks are the primary voices. Having knocked on 3000+ doors two years ago and listened to you at office hours, bus stops, and more – I know there are more diverse thoughts out there than those form emails or headlines. Falls Church simply isn’t so black and white.
As always, I believe I approach budget season with an open mind and a genuine desire to learn, ask tough questions, and responsibly take care of the entire’s City’s needs, rooted in our community values, for this fiscal year and for the future. It’s the School Board’s job to advocate for their needs, and despite the splashy headlines about my colleagues “defying Council’s guidance” that just pit us against each other, I believe they are simply trying to do the best for the schools. It is my job to do the best for the entire City and that balance is never easy, especially when my own children have many years ahead in the same schools I’m impacting. So I hope we all approach the next 6 weeks with sincerity and grace.
I hope my preamble doesn’t dissuade you from reading on, sending me an email, or stopping by office hours. (Two years later, I still try to respond to every email!) Hearing thoughtful, informed perspectives and questions are very valuable, so I look forward to hearing from you.
PS – Two weekend call outs – you can attend the next Sunday Series Town Hall on Sunday, at 2 pm – Community Center and learn and ask questions about the GMHS project, West Falls Church development, and budget. Also, immediately following the town hall – join us in celebrating and recognizing some awesome women in our history and in the present at the second Women’s History Walk from 4 -5:30 pm, also at the Community Center – remember, March is Women’s History Month. See here for a sneak peak of the 2018 route and honorees.
What Happened This Week:
(1) City Manager Presents FY19 Budget
For all things budget, you can find the full proposed operating budget, CIP, and calendar (same schedule as below) here: http://www.fallschurchva.gov/1501/Budget-Capital-Projects
City Manager’s presentation: http://fallschurch-va.granicus.com/MetaViewer.php?view_id=2&clip_id=910&meta_id=71844
School Board Chair’s presentation: http://fallschurch-va.granicus.com/MetaViewer.php?view_id=2&clip_id=910&meta_id=71846
- TL;DR headline: the City Manager is proposing a 5.5 cents real estate tax increase for the coming year. Couple the 5.5 cents with the increased property assessments every homeowner and property owner received last month that went up 3.4% on average – for the median homeowner with property value of $676K, the tax impact is about $634 more taxes per year.
- In any other year – this would be a good news story. Out of the 5.5 cents, 6 cents, which is what has been projected for 9 months now, is needed for the full CIP (GMHS, Library, City Hall, Larry Graves turf, and other smaller projects) that we adopted last summer; we have a 2.5 cents placeholder for funding WMATA; but we’re saving 3 cents in operating budgets because revenues have been quite strong (page 8). 6 cents + 2.5 cents – 3 cents = 5.5 cents.
- Flashback – why 6 cents for the CIP? The reason why we need 6 cents is that this is the first year of the planned financial plan to accomplish the full CIP – the debt service will go from $6.5M to $9,5M, going from 7% to 10% of the budget this coming year. Spoiler alert – this is even before the large second and third tranches of the $120M bond will be taken out – which will then push our debt service to nearly 15% of our total budget in the next few years, exceeding our own policy of 12% (page 35).
- WMATA will be a big wildcard – while the state has reached agreement on a funding solution for Virginia to pitch in their share of WMATA funding – a good sign that Richmond understands the importance of a well functional metro system to our region and the entire state – that current funding solution requires a lot of local money. As a result, the City Manager is putting into our budget the “worst case” scenario – 2.5 cents or about $2.3M from our budget to go towards WMATA. If the Governor were to propose an amendment to the WMATA bill that gives us some partial relief, the timing of that decision may NOT sync up to our budget adoption timeline, so it’s currently unclear how we’ll align any Richmond decisions to our budget.
- Budget Guidance for general government and schools – every year, we issue guidance based on latest forecasts from the CFO in December for the following budget cycle. By a 5-2 vote, the Council supported a 2% operating budget increase in the guidance. You can reference my December blog post on why I supported 2%. The general government’s FY19 operating budget came in at 1.7% and the schools at 2.8% (page 3). Had the school request come in at 2% ($350K less than requested), the proposed tax increase would be 4.5 cents.
- School impacts if the budget of 2.8% is not approved: slide 11 details out possible options/impacts – reducing the across the board COLA proposed to 2.3%, eliminating 4 teacher positions, and/or not funding one or more of the new priorities/positions listed – psychologist, special ed specialist, JTP clerical support, PYP coordinator, band instrument replacement.
- Letty’s thoughts:
- Some good news:
- Two priorities that I’ve talked about before are currently in the proposed budget, although more discussion needs to happen to understand if they’ll accomplish enough: we’re slightly expanding the property tax relief program for seniors by expanding eligibility requirements and funding Neighborhood Traffic Calming while we wait for grant funding in FY20. As I’ve said before, I believe traffic calming is a clear obligation to the community, especially when we are continuing development nearby so this is shared priority on Council. Keep in mind that the WMATA wildcard could reduce traffic calming funding, so if that happens, I’d like to see us help minimize that impact.
- There was some consolidation and efficiencies gained behind the scenes in both general government and the schools, although I still think opportunities across the entire City have merit. Knowing the general government positions better, one example I’ve seen is merging Economic Development and Planning department heads into a single Community Planning and Development Services department (page 12). The school realignments and positions added through reallocation are on page 9 of the School Board Chair presentation.
- Some initial disappointments:
- Affordable housing – one of the big contrasts was the amount of time the entire Council discussed diversity and affordability in our retreat in February vs the actions we’ve taken to date (I’m guilty of the same as I reflect on my record, two years in) and the budgets we’ve passed. It’s unaffordable to live in this region, but especially Falls Church. Our main strategy for affordable housing is getting 6% of units in new development buildings, but that’s not doing enough. As The Fields, one of the local apartment complexes in town, approaches its affordability expiration, we’ll have an opportunity to preserve those units which means it would need budget funding. If budgets are meant to reflect our values as a community, here is a place where we are currently not living our values.
- Sidewalks and parks – having just outgrown the stroller age, I know we still have a lot of opportunities to make our sidewalks and other pedestrian facilities more friendly for everyone. Walkability has been a priority of this Council – both bringing more destinations we can all walk/bike/etc to and making a more vibrant downtown with standard streetscape, but I think we still have a lot of opportunity. If one of our selling points is a small, easy access community in 2.2 square miles, I’d love to see more investment in our neighborhood streets and sidewalks, so that neighbors of all ages can safely get around and leave their car behind if they choose. Similarly, I saw and felt the excitement of the soft opening of the revamped Cherry Hill – our parks really do serve a wide range of ages and needs. Our outdoor green spaces, fields, and parks need to be improved (like Big Chimneys project), and parks maintenance is one of the $4.2M in unfunded needs.
- Many of my questions from Monday night were centered on understanding how our budget details compare vs our neighbors and over time. In general, I’m a big fan of benchmarking and looking at data beyond the surface – while it helps ensure we’re both competitive on salaries with our “competitor” counties, we should also use benchmarking to understand how our real estate tax rates, tax abatement strategies, commercial taxes, etc and other metrics compare. We can’t have it both ways. When we compare our salaries against Arlington’s – which I personally believe is a game we’ll never win (and our #2 position in teacher salaries in Virginia is really, really good – #perspective), likewise, I want to ensure our staff ratios across the entire city make sense so that we’re providing the right level of service across the community, whether that is school psychologists as currently proposed by the School Board or our police officers and other first responders. Also – by benchmarking, we gain perspective on trends in the broader economy that we are not immune too, so we can be prepared for the inevitable economic slowdown and recession.
- Some good news:
As we start our work sessions and I continue reading the “big ol budget book”, I expect I’ll have more thoughts/questions, but these are my first blush reactions from this week.
(2) West Falls Church Economic Development Project’s “Industry Day” occurred this week
If you don’t follow me on Facebook yet, you might have missed the pre-bidders meeting “Industry Day” held with interested developers and architects. We had a full house, so I was glad see so many highly qualified firms gathering, in response to the RFP for the 10 acre development opportunity released a few weeks ago. If you haven’t yet, I encourage you to check out the online marketing presence we’ve established to attract many and creative proposals to the RFP.
What’s Coming Up:
- Sunday, March 18 – “Sunday Series” Town Hall Meeting (GMHS/WFC + FY19 Budget) at 2 pm
- Sunday, March 18 – Women’s History Walk at 4 pm
- Monday, March 19 – City Council Work Session at 730 pm – work plan & budget
- Monday, March 26 – Letty’s Office Hours (8 am – if you’re in town for spring break, I’m setting up office hours earlier than normal to accommodate work schedules), Rare Bird
- Monday, March 26 – Annual Pinwheel Garden Planting to recognize Child Abuse Prevention Month at 7 pm, Cherry Hill Park
- Monday, March 26 – City Council Meeting at 730 pm (vote on maximum tax rate)
- April 2 – City Council Work Session
- April 8 – “Sunday Series” Town Hall Meeting (GMHS/WFC + FY19 Budget)
- April 9 – City Council Meeting
- April 16 – Letty’s Office Hours (9 am) – The Happy Tart
- April 16 – City Council Work Session
- April 23 – City Council Meeting (final budget adoption)