Blog posts are the personal views of Letty Hardi and not official statements or records on behalf of the Falls Church City Council
I realize I may say this every week, but we had an important meeting with topics for everyone (so this is a lengthier than typical post) – year-end finances, our environment strategy, big capital projects, with updates on the new high school construction and the library. And save the date for new town hall meetings as we look ahead to the 10 acre project’s next plan submissions. When I talk about how local government really matters – this week’s topics underscore my point. Every one of those topics touches our everyday lives.
As always, I’m looking for your input, so do read on. For new readers – while my votes may not please everyone everytime, my goal is to bring thoughtful, forward-thinking perspective to the discussion. To do that, I try to reach a broad base of citizens. I’d love to hear from you via email or at my next office hours on Monday, Sept 30 at 9 am, Rare Bird Coffee.
PS – as we wrap up Welcome Week in Falls Church, I offered a guest commentary to the FCNP on why I believe our goal of being “welcoming to all” should start with education and housing. (The final title of the commentary was not my choosing, as I think it is more sensational than I’d intend!) Thoughts and reactions welcome too.
PS #2 – today marks the first day of in person absentee voting. Check out all the different reasons why you may qualify and stop by City Hall to take care of your civic duty early.
What Happened This Week:
(1) FY19 Year End Financial Report
With the fiscal year ending over the summer, we received good news about where our financials ended up. You may have read the headline about a large $2.4M surplus, but as always the details matter. I’ll break it down – what the numbers mean, my takeaways, and where you can offer input:
- Local revenues ended up 4% higher than forecasted
- Of the local revenues, sales tax was 11.7% higher than budget and meals tax was 7.4% higher than expected. Also important to note is how these local revenues are growing year over year. Sales tax is 10% higher than last year, with the 3 year average of 7% growth; meals tax is 5.4% higher than last year, with 3 year average of 6.6% growth; BPOL (business and professional taxes) is 9% higher than last year, with 3 year average of 4.7% growth.
- Of the $2.4M surplus is $550K of underspending by departments, ie – they didn’t spend all the money allocated in the budget.
- Two cautionary metrics: personal property taxes (cars and business equipment/investment) and hotel taxes both came in below expectations.
- This City Council’s strategy to build and diversify our commercial tax base is working. The local taxes that we can most directly control – sales, meals, and BPOL – with our economic development strategy is showing very strong year over year gains.
- Buying local matters! While real estate taxes still are the largest chunk of our revenues, local taxes like sales, meals, and BPOL make up nearly $18M of a $90M annual budget. That is real money.
- We should pay attention to potential early signs of a recession. Besides the global trade wars and macro-uncertainty in the economy (and the current inverted yield curve being a precursor to most recessions), we have our own warnings locally. Usually, big purchases like cars, business equipment, and travel start to slow down as consumers and businesses’ confidence decreases and the FY19 year end results are showing those signs.
- Operating budget discipline remains important especially as we prepare to take on the largest debt ever in the coming year. Debt service will make up nearly 15% of our total budget.
Here’s where we need your input:
- We’ll be discussing later this fall what to do with the revenue surplus. It won’t be as large as the $2.4M, especially if we replenish the permit fee reserve that we’ve dipped into – in order to have inspectors ready to go for the large constructions projects underway across the city.
- Revenue sharing with FCCPS – we did not formally ink a revenue sharing agreement with the schools in the last budget cycle, but this could be a good opportunity to test out the spirit of the agreement. The general, simplified premise is that instead of contested annual budget deliberations, the general government and schools would split annual revenue. If we end the year with a revenue surplus due to a better than expected economy, a revenue sharing agreement would also dictate sharing that surplus. Keep in mind that I believe revenue sharing applies in both good times and in bad times. So if we were to face an economic downturn and have budget shortfall instead of a surplus, we would also need to split the shortfall.
- Capital project shortfalls – staff is recommending that some of the surplus go towards capital projects with escalating costs, including City Hall which will needs an additional $1M+ and the Library project which is currently $2.4M over budget (more on that below). Capital projects are typically paid with bond financing after a voter approved referendum, like GMHS. Because we’ve taken on so many projects, we have limited capacity to take on any more debt to cover new escalating costs – but using operating budget surplus to cover issues with capital projects is a transparency issue for me.
- Citizen priorities – I’d like to make sure that some surplus is deployed to issues we regularly hear about like traffic calming, walkability, and stormwater management. While we have some budget allocated to those needs already, if we are in good times (for now), we need to be responsive to the top citizen priorities and create more and faster tangible improvements on the ground.
- The risk-averse part of me would like us to be cautious with any of the spending ahead – we need to keep in mind the big picture. We are about to undertake the largest debt in the city’s history ($126M); there is likely a recession on the way which means consumer spending, confidence, and property values won’t grow at the rates we’ve seen; and remember the impact of the federal tax code change on limiting SALT deductions.
(2) Environment Strategies + Composting!
The Comprehensive Plan’s (Comp Plan, for short – ie, the city’s strategic plan) environment chapter is being updated and we discussed the latest iteration. Much like the housing chapter we updated recently, all of the goals and projects are worthy and laudable. There is no shortage of work we could do! For those interested, the chapter includes strategies for Climate & Air, Stormwater, Urban Forest, and Waste Reduction*. Take a look at the strategies and let us know what environmental issues are most important to you and initiatives you’d like to see us tackle.
One of the common concerns I hear about redevelopment is stormwater impacts. We often hear from citizens that new commercial development projects should have green space, replacement trees, stormwater detention – and indeed, those are among many of the voluntary concessions we negotiate. What about residential redevelopment? From the chapter: “Between 2000 and 2015, commercial area redevelopment and retrofits affected a total of 34 acres, about 2.3 acres per year…Redevelopment within the City also impacts residential areas. For the five‐year period of 2013 to 2017, 129 single‐family homes were constructed, affecting an estimated 5.5 acres of land per year.”
Since residential redevelopment actually impacts more acreage than commercial development and most residential projects are done by-right (ie, we don’t get voluntary concessions) – I believe we should emphasize projects and potential code changes to manage stormwater impacts from residential redevelopment if we want to get serious about flood mitigation.
*This is a good time to remind new residents/readers about compost options in the city. We offer curbside composting, drop off composting, and for DIYers – there’s a free backyard composting class coming up this weekend.
(3) Capital Project Updates
- GMHS construction is still on track for Dec 2020/Jan 2021 opening which means students would be able to attend the new high school after Winter Break 2020/2021. The old/current GMHS would be demolished, making way for the 10 acre development at the corner of Haycock and Rt 7. Completion of the GMHS fields will take through summer 2021.
- Live camera feeds of the construction are available anytime you want to take a peek!
- One of the most common FAQs I’ve heard is about parking at GMHS/MEH. Dr. Noonan confirmed that 400 parking spaces are available at the campus, which is more than there were prior to construction, albeit in new locations.
- Recall that the Library project referendum in 2016 authorized up to $8.7M to be spent on renovating and expanding the library, with $300K for bond fees and $8.4M for design and construction costs. The design involves adding 3100 square feet of footprint to the existing footprint of 9800 square feet, moves the childrens library to the lower level, moves the local history room and all of the adult areas to the main/upper level, and updates accessibility and systems.
- In previous updates during the design phase, we received news that costs have been escalating. About a year ago, we heard the project would cost $500K more and then this past spring, as the design was further refined, we learned that the project would be $1.25M more. This week, we learned that the project is estimated to be $10.8M, or $2.46M over budget – with more work to go before we can arrive at a final price, the GMP (guaranteed maximum price). One of the Founders Row voluntary concessions is $300K to be used for the library, which can be applied to the shortfall, but we’ll still be left with a $2.1M gap.
- We expressed frustration at the continued escalating costs and personally, I am concerned that we haven’t seen the final price given the many escalations to date. Our options include de-scoping some items, like LEED certification (which I would oppose as I believe it’s important for us to lead by example. If we expect our private new development buildings to be environmentally friendly, our public ones should meet the same bar); using the revenue surplus or additional funds to cover the deficit so it proceeds at the higher cost; or deferring the project until we have more capacity to do it well.
What’s Coming Up:
*Note two new town halls (Oct 16, Dec 12) have been scheduled in preparation for the submission of the site plan for the West Falls Church project. If you are paying attention to the project that will be adjacent to the new high school, the town halls are a good opportunity to share your ideas before the site plan is submitted at the end of 2019.
- Monday, September 23 – City Council Meeting (730 pm, City Hall)
- Monday, September 30 – Letty’s Office Hours (9 am, Rare Bird Coffee)
- Tuesday, October 15 – City Council Meeting (730 pm, City Hall)
- Wednesday, October 16 – West Falls Church Economic Development Town Hall
- Monday October 21 – City Council Work Session (730 pm, City Hall)
- Sunday, October 27 – Letty’s Office Hours (9 am, Cafe Kindred)
- Monday, October 28 – City Council Meeting (730 pm, City Hall)
- Tuesday, November 5 – Election Day
Campaign Info: If you’re interested in attending campaign debates and learning about the other candidates, note some new events and a date change for the CBC candidate forum: https://www.lettyhardi.org/events/