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,

Thank you for the kind notes the past week. I read a poignant tweet that we know we’re returning to “normal” when the mass shootings have also returned to the headlines. While it’s unlikely national gun reform will happen anytime soon, I’m glad we exercised the limited authority granted by the General Assembly last summer and we now have a consistent, regional ban on firearms in public places across Northern Virginia. As a country, we should do more.

Three main topics this week:

(1) We had our “first reading” votes on the FY22 budget. For those new to the annual process, I’ll explain what this initial vote means vs the final vote when we adopt the budget at the end of April.
(2) We also had the Health Department join our meeting this week – I know the information on vaccines changes quickly, so I’ll include the newest on eligibility changes, COVID gathering rules, and links to register when you’re eligible.
(3) Finally, an important economic development update: new businesses opening + the latest fiscal analysis on all of our mixed use projects to date. Read on to better understand the dollars and cents behind re-development in the city. It should also dispel some common myths out there.

Next week is a 5th Monday, which means we get a week off and I’ll also take a blogging break. We’ll be back the first week of April with a busy work session on the budget, continued review of the West Falls, aka the 10 acre project, and our first look at the “One City Center” project at the southwestern corner of Broad and Washington.

Take care,
Letty

What Happened This Week:

(1) FY22 Budget

Resources: Besides the budget book and CIP, another helpful resource is the running list of questions and answers from our budget work sessions. We will also have a second virtual town hall on April 15 where you can learn about the budget and ask questions.

First vs second reading: The federal American Rescue Plan remains the big wild card – we will receive two ARP disbursements and we have until 2024 to spend all the funds, but we’re still awaiting final details on total amount and rules for deploying the money. As such, most of our debate this week was spent on setting a reasonable upper bound for the real estate tax rate (currently $1.355 per $100 assessed value) and stormwater fee at first reading, without more information on the ARP. Once the tax rate is voted on at first reading, the tax rate can go lower, but it can’t go higher at the second reading vote/final budget adoption.

How much will I pay: The City Manager’s proposed budget proposed a reduction of 1 penny, from $1.355 to $1.345. But because of increased assessments, a $1.345 rate would still mean the average homeowner’s bill would increase by $291. By a 6-1 vote, the City Council lowered it another half penny to $1.34 at first reading, with the expectation that this would be the upper bound and forthcoming plans to use ARP dollars would give us room to lower the rate while funding critical services and needs.

(2) COVID Updates

While vaccinations are increasing daily and our positivity rate is nearly as low as it was in the fall, it’s important to remember we’re not completely out of the woods yet. Just last week, we had our 10th death due to COVID-19 in the city. The hope is that the vaccinations will outpace the more contagious variants and help us achieve herd immunity. And vaccination equity is a concern of mine – we are seeing disparities in vaccination rates due to various barriers and access issues. I believe it’s is a responsibility of local leaders to ensure we’re doing targeted outreach to the communities in greatest need and vulnerability.

• New rules, effective April 1: the Governor announced changes on some COVID safety rules, including relaxing some limits on outdoor gatherings (from 25 to 100) and indoor gatherings (from 10 to 50), effective April 1.
• Additional groups eligible for vaccines: the Fairfax Health Department also announced two more groups within Phase 1b to be eligible for vaccines, with only three groups in 1b not yet eligible. From our discussion with the Health Department this week, with vaccine supplies increasing – they expect we’ll be able to move to future phases including Phase 2 (general population) before the May 1 goal set by President Biden.
• How to get a vaccine: besides registering with the Health Department when you are eligible (no pre-registrations for now), the federal supply of vaccines going straight to pharmacies continues to expand. Many pharmacies have opened up registration to anyone in Phase 1b, including Giant, CVS, Harris Teeter, and Safeway with their own online scheduling system. It’s worth checking those pharmacies for an appointment if you’re still waiting for a shot from the Health Department.

(3) Economic Development Update – mixed use financials & new business openings

It’s fitting to review our mixed use projects as we also discuss budgets – the city’s 8 mixed use projects contribute about 1/10th of the city’s overall annual revenues ($10.8M in 2020, where 9 months of the year was impacted by COVID). In net revenue terms, these 8 projects have delivered $4M after all service costs, which is the equivalent of about 9 cents on the real estate property tax rate. Restated differently: the current $1.355 tax rate would be closer to $1.445 if it weren’t for the mixed use projects that started in 2004. Other highlights from the report:

• The redevelopment sites were previously under-utilized: compared to the current $10.8M gross revenue in 2020, these 8 sites previously yielded $571K per year in gross tax revenue.
• Developers contributed voluntarily over $7M in cash to the school capital fund and have provided 69 affordable dwelling units, as well as 9 teacher workforce housing units, across the 8 projects, among other community benefits.
• As of March 2021, nearly 94% of the commercial space in the 8 buildings is occupied – compared the the region, a 6% vacancy rate is extremely low. While we certainly have some prominent vacant spaces, it’s a misconception that the commercial spaces in the new developments aren’t being filled. (Coming soon: I also requested the latest figures on the city’s overall commercial vacancy rate.)
• Unit mix matters – Pearson Square continues to the outlier in generating a disproportionate share of expenses compared to other buildings. Pearson was built originally as condos with large floor plans and converted to apartments during the Great Recession.
• Besides the significant fiscal benefits, what’s not reflected in the numbers is the spinoff economic impact and additional spending power that comes from new residents who add to the vibrancy of the city and become new patrons of our businesses. And given the large undertaking in capital projects the past 5 years, economic development has helped to pay for those new facilities with minimal tax rate increases, fund key city services, and keep our school system nationally ranked.

We also reviewed status of our ground floor commercial space across the city, with exciting (and delicious) additions coming in the next few months.

What’s Coming Up:

Current draft schedule of meetings and agenda items

FY22 Budget Meeting Schedule

City Council Meetings start at 730 pm, unless otherwise specified. You can access the agenda and livestream here, including recordings of past meetings