Proposed Budget Nears Landing
Excerpt from Justin's May Newsletter
The budget that was presented by the City Manager in March was a continuation of a pattern that has persisted for much of the last decade. Anemic revenue growth, coupled with significant pressure on the expenditure side, resulted in a budget that presented new cuts, but left many unmet needs.
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 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 to exercise it.
Yet the City Manager worked 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 also 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 headcount equivalents. If approved, the City will have the smallest workforce in over a decade.
Elimination of a Deputy City Manager position
Elimination of a 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.
Over the past two months, the Council has asked a series of questions designed to dig through every corner of the $800+ million budget.
We have now reached the critical part of the budget process as the Council begins to formulate a consensus around changes that must be made. At this point in the process, the City Manager typically provides the Council with a series of revenue and expenditure re-estimates. These changes reflect new information learned since the budget was proposed.
Fortunately this year, these changes have provided the Council with some additional breathing room to address issues that have been raised by the public during the process.
The Council is trying a new system than has previously been used to manage the Add/Delete process. In the past, each individual member would submit a list of proposed "adds" with offset "deletes," and we would gather and attempt to reconcile each list.
The new process requires that all additions or deletions to the proposed budget have at least 3 identified supporters, staff analysis, and alignment with the City's Strategic Plan.
On Tuesday evening, the Council gathered to review the proposed add/deletes that are pending, and reconciled that list into a potential consensus version to be discussed further. You can watch that discussion online.
At this point, the major items of consensus appear to be:
An additional appropriation of $1 million to the Alexandria City Public Schools (this narrows, but does not eliminate the gap between the School Board and City Manager's proposed budget).
Funding for the staffing necessary to provide fire suppression at the newly opened Fire Station 210 (more detail later in this newsletter)
Funding to integrate the Alexandria Law Library into the Alexandria Library
Restoration of a portion of the City's Transportation Improvement Program (utilizing a lower than expected WMATA subsidy request)
Providing some funding to support an existing community partnership to make improvements at Maury Elementary School
There may still be other changes as Council finalizes its decisions in advance of the May 7th budget adoption.