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Budget Released

Excerpt from Justin's April Newsletter

On March 3rd, Acting City Manager Mark Jinks presented his proposed budget to the City Council. As always, the presentation is of two budgets, the proposed FY 2016 Operating Budget (July 1, 2015 - June 30, 2016) and the proposed FY 2016 - FY 2025 Capital Improvement Program.

The City Council is now several weeks into a furious schedule of budget worksessions and public hearings that culminates in the adoption of the budget on May 9th.

As I wrote last month, this budget was presented in the midst of a challenging environment both locally and regionally. While the residential real estate market experienced some growth, our commercial real estate tax base was battered again, and consumption-based tax revenue was anemic at best.

The Acting City Manager entered the process with little more than a half of a percent of new revenue. In the fall, when the City Council adopted guidance for the preparation of this budget, we voted 4-3 to give the City Manager the authority to propose a tax rate increase. While the City Manager had that authority, he chose not the exercise it.

Yet the City Manager did work to create additional revenues to help balance the budget. New fee increases have been proposed. The proposed budget leverages new revenues from Potomac Yard development. The proposed budget shifts the costs of some services from the General Fund to special funds generated by fees. In the end, the proposed budget relies on a paltry 1.7% increase in General Fund revenue.

As has been the case for much of the past decade, the budget also proposes significant reductions to ongoing City spending:

A net reduction of 3.8 full time equivalents. If approved, the City will have the smallest workforce in over a decade.

Elimination of a Deputy City Manager position

Elimination of the City Architect position

Renegotiation of the CIty's agreement with the Northern Virginia Juvenile Detention Home

Reduction to Alexandria Convention and Visitors Association (ACVA) advertising

Reduction of two part-time juvenile probation officer positions

Elimination of City funding of the Alexandria Law Library

Close Cora Kelly Recreation Center on holidays

Close William Ramsay Recreation Center on holidays and Sundays

Close Warwick Pool for the summer (renovation is now planned and funded in FY 2017)

Reduction of Chinquapin Recreation Center summer operating hours

Eliminate one refuse truck and two vacant driver positions

Full automation of the Union Street Parking Garage

While reductions were necessary, the proposed budget does suggest new investments to core areas of City operations:

To address rising student enrollment, $6 million of new operating dollars are proposed for the Alexandria City Public Schools. While this represents 55% of all new revenue available to the City, it is still $3.2 million less than the request approved by the School Board.

Over $4 million of new resources to fund the City's obligations to the Washington Metropolitan Area Transit Authority (WMATA)

Over $2 million to address long-standing pay inequities within the Alexandria Police Department

Expansion of Alexandria Fire Department career ladders

Funds to begin implementation of the City's recently adopted Youth Master Plan.

Early in our annual budget process, state law requires the Council to adopt a cap in the real estate tax rate that we might consider. Once the cap is adopted, the Council can ultimately lower the rate, but not increase it that year.

On March 17th, the Council voted unanimously to adopt a cap of $1.043, which is the current rate. The real estate rate will not increase this year, and any increases to City spending must be funded by alternate means.

With a large funding gap remaining for our Schools and challenges in our capital budget, the remaining budget process will be challenging to conclude.

As individual members of Council pose questions about the proposed budget, the answers are provided via budget memoranda. These can be reviewed on the City's website for insight into the changes the Council may be considering.

In April the Council will begin making suggestions for modifications to the proposed budget. Please let me know any thoughts you have on the budget that has been proposed.

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