Blog posts are the personal views of Letty Hardi and not official statements or records on behalf of the Falls Church City Council
Our work session this week was dedicated to the year end financial report of the city. We are now in the longest expansion period ever, so most experts believe we are due for a recession. As such, I think local metrics are good leading indicators of the broader economy and all the more important to pay attention locally. Overall good news, but read on for my take…
Tomorrow, come join me for a cup of coffee or breakfast at The Happy Tart at 9 am at my office hours. I’d love to hear from you about the high school project, the two proposals we’ve received for the 10 acre development, new businesses coming soon, and of course parking. Across the street, you can also check out the city’s inaugural PARK(ing) Day event. And on Sunday is the continuation of our regular Sunday Series town halls about the GMHS campus and economic development projects – 2 pm at the GMHS Cafeteria.
PS An annual family favorite is Farm Day on October 6. Rec and Parks is in need of scarecrow clothing for Farm Day, so if you have old clothes, drop ’em off at the Community Center. (Tip: the Hardi scarecrows have conveniently used our outgrown kid clothes and dress up box items. See ninja baby scarecrow below.)
What Happened This Week:
Our CFO presented the unaudited, year end financial report for FY18. In general, it’s a good news story – with a nearly $87M annual budget, we ended the fiscal year with a surplus of $760K that staff is recommending to be put in reserves given the capital projects already underway and about to begin, and unanticipated costs that could arise. A few specific call outs:
- While real estate property taxes are our largest source of revenue (61%), we usually don’t see much variance between budget and actuals because of the timing of the real estate assessment and budget process. (Note that these FY18 numbers don’t include the larger than usual prepayment of property taxes we saw at the end of 2017, made by those trying to claim larger deductions ahead of the federal tax changes.)
- Local taxes came in 3.5% higher than budget (and healthy growth over last year). Local taxes include personal property, sales, meals, and BPOL (BPOL = business, professional, and occupational licenses).
- Sales and meals taxes, which are generally good indicators of the health of economic activity in the city, were up 2.2% and 5.7% from FY17, respectively.
- More details on the FY18 data and the expenditure side of the budget in the presentation and report. Also note updated 3, 5, 7, and 10 year averages. 10 year averages offer a good reality check – it’s important to understand how the last recession impacted our local budget and how a future recession could dampen these growth numbers.
- Letty’s thoughts: A common question we get is how new retail and restaurants are doing and if they are cannibalizing existing businesses. Given the sales and meals tax growth from FY17, we believe the new businesses are helping “grow the pie”, ie bringing in new revenue. I believe an important trend to watch is BPOL and permit revenue. Permit revenues were down as expected due to the Founders Row delay since 2016. However, it would be prudent for us to keep an eye on BPOL which did grow from FY17, but at a more modest 1.3%. While consumers are still feeling good about the economy, businesses may be more cautious about the outlook ahead.
What’s Coming Up:
- TODAY, September 21 – Letty’s Office Hours (9 am, The Happy Tart)
- TODAY, September 21 – PARK(ing) Day
- Sunday, September 23 – Sunday Series Town Hall (2 pm, GMHS Cafeteria)
- Monday, September 24 – Joint City Council & School Board Dinner (7 pm)
- Friday, September 28 – Campus Coordination Committee (730 am, School Board Offices)
- Wednesday, October 3 – City Council Work Session (730 pm, Community Center)
- Tuesday, October 9 – City Council Meeting (730 pm, Community Center)