Updates from Letty – Budget Edition #1 – March 18, 2016
Blog posts are the personal views of Letty Hardi and not official statements or records on behalf of the Falls Church City Council
Falls Church, it’s budget season!
Our marathon meeting of 5 1/2 hours on Monday night included our first look at the City Manager’s proposed budget for FY17. Between now and April 25, when the budget is adopted, my weekly updates will change slightly. We have an ambitious schedule of meetings ahead to keep City business on track while the budget work is in process, so I’ll still provide a recap and preview of key topics (albeit briefer) and take the opportunity to also share budget highlights.
I hope you’ll stay tuned – besides dollars and tax rates, budget season is also a good opportunity for lots of public input on priorities for the City. The more informed the community is, the better we can engage on where our tax dollars should go, so I’ll attempt to do my part at sharing what I learn in an easy to understand, digestible format.
What Happened This Week:
- Several proclamations, including one for Earth Hour – this Saturday night from 830-930 pm, join the rest of the US in unplugging and shutting down non-essential lighting and electronics and reflect on ways you can reduce your carbon footprint.
- We heard many public comments on the W&OD Master Park Plan, specifically concerns from Gresham Place residents with the proposal to re-route the W&OD through Crossman Park to address the dangerous crossing at Rt 29. I expect City Staff to continue working on the draft plan with updates ready for us to discuss again in April.
- We heard many heartfelt public comments in support of the Miller House, the group home for adults with disabilities. My colleagues and I spoke favorably in support of the project. We will review a draft Comprehensive Agreement for the construction of the home in April after the required public comment period of 30 days.
- The City Manager presented the FY17 operating budget and CIP overview and School Board Chair presented the School Board budget request. More details in the new budget section below.
- We passed 7-0 the list of proposed multimodal projects to be submitted in response to VDOT’s first call for transportation projects for the Transform I-66 project. As a quick recap, the proposed toll revenue from I-66 is to fund transportation projects that would move more people through the I-66 corridor and benefit toll payers. Staff recommended these projects, which we voted in concurrence: bike share funding, increase frequency of the 2A and 28A Metro Bus lines that support Falls Church, and a second entrance at East Falls Church metro. More to come as we hear how these projects get prioritized by the NVTC (Northern Virginia Transportation Commission) who administers the toll funds. I remain concerned about the impact of tolls, lane widening, and fall out traffic on our local roads, but hopefully the toll revenue will generate good transportation improvements for inside the Beltway.
- We also granted first reading 7-0 for amending City code to allow the City Manager to administer parking restrictions via a separate parking permit. The most immediate residential parking restriction plan is proposed at Winter Hill, which I wrote about last week.
- We then went into a joint closed session with the School Board to discuss the GMHS/MEH campus project.
On Monday night, the City Manager presented the proposed $87 MM budget, which represents a 5.1% increase from last year, and we each received a spiral bound budget book of about 300 pages. I have personally spent a lot of time so far this week going through the line items to make sure I understand significant year over year changes and comparisons with neighboring jurisdictions, and still have a lot more reading ahead! This week, I’ll provide a top of the house summary and in the coming weeks, I’ll go deeper in specific areas.
- Year in Review – There were significant investments in 2015 – new public safety equipment, park and stormwater improvements, and new construction of private investments. In fact, development projects are contributing significantly in assessed value – new construction has contributed $122 MM increase in assessed value in the past year (86% of the total growth in AV), with the Harris Teeter and Tinner Hill projects representing $87 MM. This reflects the efforts by the City to continue growing the commercial tax base.
- How much money can we spend? We are projecting we’ll have 4.3% organic tax revenue growth ($2.9 MM), with 3.2% available ($2.2 MM) for budget growth after current debt service obligations.
- What is the gap?
- The General Government request is +1.2% ($440K) and the School Board request is +5.4% ($2 MM). As an aside, if you didn’t know – the City Manager is required by law to pass on the School Budget request as is, which is different from some governments.
- The surprise that came this year is a $600K in WMATA (Metro) funding requirement, a regional issue that many localities in the area are facing due to lower gas prices – good news for consumers but unfortunately also lowers gax tax revenues that we have to make up. So as a result of the increase in operating budgets and the WMATA requirement, the revenue gap is $1.1 MM.
- We just found out this week that health insurance premiums are rising, so there is risk that the gap may be bigger than $1.1 MM.
- High-level – what’s increasing in the general government and school budgets?
- The driver of of the general government increase of $440K is merit increases for staff and step increases for police, with no new FTEs.
- School Board Chair shared that of the $2 MM increase in School request, about $1 MM is to fund 9 new FTEs, $650K for mandates, and $650K in salary increases as year 3 of the 4 year plan to be within 3-5% of Arlington County’s teacher pay.
- How do we make up the difference?
- The City Manager is proposing to increase the personal property tax (also known as the car tax) to $5.00/$100 of assessed value and cigarette tax to $0.85/pack to plug the WMATA funding gap. Then an increase of $2.5 cents on the real estate tax rate, bringing the rate to $1.34 to fund the Schools request.
- Capital Improvements (Long Term Debt) – The existing debt for the City is about $55 MM, and the CIP includes a list of ambitious projects totaling $152 MM over 5 years – public facilities include City Hall, Library, and GMHS being the largest component at $122 MM and transportation projects for $24 MM that are mostly funded via federal dollars with local matching. For FY17, there is also $1 MM for improvements at Big Chimneys Park, $250K for Cherry Hill and other parks, $250K for fire station improvements. New to the FY17 part of the CIP is $550K granted by the EDA for the downtown pocket park/public plaza I wrote about previously and $4 MM earmarked for land acquisition funds.
- Short Term Debt – The City Manager is also recommending a list of capital items of $650K to be short term debt financed – such as police cars, public works trucks, etc. that don’t fall in the CIP.
- There is a long list of items that currently didn’t make the cut. Sidewalk maintenance, traffic calming projects, and no “pay as you go” capital reserve (for small capital items that we could save up to buy vs short term finance as above) are the ones that so far spark concern for me and merit a tradeoff discussion. Likewise, there is also a long list of unmet needs from the Schools.
What’s Coming Up:
- This Saturday, March 19 from 10 am-12 pm – Budget Town Hall – the first of several town halls on the FY17 budget in an open house format, where citizens will be able to go from station to station to understand each department’s budgets and priorities.
- Here is your one stop shop for the budget– you can review the same budget documents I have and see the schedule for town halls and other opportunities to ask questions and provide comments: http://www.fallschurchva.gov/1501/Budget-Capital-Projects
- Support our local Falls Church restaurants with the wrap up of Falls Church Restaurant Week – now through Sunday night.
- During the month of March, there is school supply drive for Syrian refugees. Our community was so generous over the winter with over 1,000 coats and blankets donated that were distributed to Turkey a few weeks ago. Syrian refugee children need school supplies, especially pencils and composition/notebooks. You can drop off school supplies at boxes located at the Community Center, Art & Frame, and Welsh’s Printing.
- Next week’s City Council work session topics include: Tradition Place (proposed development project at S. Spring and Broad St.), City Hall expansion plans, and work session on the CIP.
In the coming weeks, as I continue reading, learning, and meeting about the budget – I’ll post quick highlights on my Facebook page and try to cover deeper dives on revenue, general government operating budget, school operating budget, and CIP and short term debt via my weekly updates. Let me know if you have particular areas of interest or questions.
I look forward to hearing from you!