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Investing in Our Infrastructure

Excerpt from Justin's June Newsletter

The most important decision the City Council makes each year is the adoption of the annual operating budget and capital improvement program. The operating budget generally funds the ongoing costs of government (primarily personnel), while the capital budget funds one-time expenditures that provide the community with an asset (new schools, new roads, new playing fields, transit buses, etc.), or renovate an existing asset.

In late February, the City Manager presented his proposed Fiscal Year 2017 budgets to the City Council and our budget process began.

Last month, the City Council adopted our budget and we have now concluded the process.

The adopted general fund operating budget is $678.5 million, an increase of 4.5% from Fiscal Year 2016.

The Council held its first Public Hearing on the proposed budget on March 14th. We took four hours of testimony from residents around our City. A day later, we made the first critical decision of the budget process.

State law requires that early in the budget process, we "advertise" the highest real estate tax rate that we might adopt. When we adopt the budget, we are able to go lower than the "advertised" rate, but we cannot go above it.

On March 15th, the Council unanimously voted to advertise a real estate tax rate of $1.073, a three cent increase.With the adopted rate, the average residential homeowner will pay $275 more than they did in 2015 ($119 due to increase in assessments and $156 due to the increase in the rate).

In March, I wrote about the significant deficiencies in a variety of municipal facilities. Just getting these facilities up to a passable condition could cost over $100 million over the next decade.

I also wrote about our road paving plan. Due to years of underinvestment, our roads are in dismal condition and we have tripled our road maintenance budget to play catch-up around the City.

In January, I wrote about the daunting infrastructure needs that face the Alexandria City Public Schools. Years of underinvestment and robust student growth over the past decade have left us with little choice but a rapid investment in new capacity.

A year ago, I wrote about the scarcity of funding for new transportation infrastructure and how increased needs to sustain the Washington Metropolitan Area Transit Authority (WMATA) were crowding out local investments for transportation.

Collectively, we have a basic infrastructure crisis. Deferring this work increases costs on future taxpayers and chokes off investment.

In advertising the rate increase in March, the City Council requested that the City Manager prepare a package of recommended capital initiatives to direct the additional two cents. In April, the City Manager provided his suggested capital investments.

After required contributions to our fund balance, the additional two cents will provide $10.2 million of additional revenue in Fiscal Year 2017 for investment. The City Manager recommended:

$730,000 for additional "Complete Streets" efforts to improve safety of all users of our streets

$2.3 million for renovations and HVAC replacement at the Alexandria Courthouse

$1.4 million for additional DASH Bus purchases

$450,000 for energy retrofits of City facilities

$996,000 for facility repairs at Gadsby's and Apothecary Museums

$570,000 for additional road resurfacing and repair

$400,000 for additional resources to support the Municipal Broadband Initiative

$3.4 million for Alexandria City Public Schools capacity initiatives

This addition of two cents will also annually provide $7.6 million of cash capital funding to our Capital Improvement Program. This reduces planned borrowing, advances capital investment, and ultimately reduces taxpayer obligations in the future.

While this is a significant tax rate increase, I believe that the Council has adopted a package of infrastructure investments that will reduce taxation in the future and help improve the basic infrastructure that our government relies on.

 

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