Based on 20 years on the Falls Church City Council, there has never been an “easy” budget, and this year is no exception. There are several fundamental reasons why. We are a small, full-service city without the ability to grow geographically (and we begin with the smallest land area of any city in the United States). The state and federal governments return comparatively little in direct and indirect support to our locality, compared to what our citizens and businesses pay in income and sales taxes. Our citizens expect high-quality schools and government services. We are surrounded by large commercial zones, such as Tyson’s Corner, Ballston, and now Merrifield.
We have received great citizen input and ideas and expect more over the next couple of weeks. After listening, the Council’s role is to connect the data points and pass a budget, and at the same time, plan for the future and assure the city’s long-term sustainability.
So, what are some of the key data points for this year’s budget?
First, the city and schools are growing. The city’s population increased 18% from 2000 to 2010 and is now 13,315, an increase of 983 people since the 2010 census was taken. Meanwhile, the schools grew 6.1% last year, far higher than our neighbors. We also have 17% of our population in the schools, again higher than our neighbors. This means more service costs.
Second, we live in a highly competitive and relatively high cost labor market. This means we are challenged to stay competitive with our neighbors in terms of salaries and benefits if we want to attract and hold on to people who are good at what they do.
Third, both the city and schools are relatively efficient and effective in fulfilling their roles. As to efficiency, the schools received a very good report from an outside efficiency analyst, and city staff is down nearly 20% since its pre-financial crisis levels. As to effectiveness, both the schools and city government have earned many awards for quality service.
Fourth, without Council action, the combination of real estate assessment increases, the proposed tax rate increase, and the storm water fee will suddenly impose on taxpayers what appears to many to be surprisingly high.
How about planning for the future and assuring the city’s sustainability?
We have approved and are reviewing a half-dozen development projects that, while they will add to service costs, should be significantly net positive. And we have begun planning how best to use the real estate near George Mason High School (GMHS) that we now control with the goal of maximizing its revenue yield to the city.
The city’s fund balance (17% of the budget) is at the minimum level recommended by our chief financial officer and generally by municipal finance officers for a city our size. Its purpose is to assure the city’s continued ability to provide safety and other services in the event of natural and manmade disasters and financial downturns such as we experienced during the 2008-2009 financial crisis. This ability to take care of ourselves in tough times, in turn, also helps us maintain a favorable bond rating needed to reduce long-term debt service costs.
As a result of the water system sale, we have one-time proceeds of more than $14 million and the ability to zone more than 10 acres of land. We also have the prospect of increased revenue from several major projects that are coming on line.
For the long term, the city is addressing a wide range of infrastructure needs by expanding Mt. Daniel school, planning for library enhancements, providing better transportation and storm water infrastructure, assuring a more user friendly city hall and beginning the planning for a new GMHS and the revenue to build it.
Connecting these data points not only to provide for today, but also assure a sustainable future is our collective community and Council challenge. Here are some of my proposals to accomplish our near and long-term goals:
• We should not tax at the rate proposed and need not, even as we maintain the necessary reserves. At the same time, deep cuts in either the city or school requests will significantly degrade services, not something I will support.
• So how do we reduce the proposed tax rate and still maintain quality? Use some of the water proceeds to pay for some portion of the storm water and other capital items figured into the proposed tax rate, thereby both prudently using the money generated by the sale of one capital facility (water system) for new capital facilities (e.g. storm water). The remainder of the proceeds should be invested so as to receive the highest prudent rate of return to provide resources for future capital expenditures.
• Another part of the answer is to step up the commercial revenue generation by supporting existing businesses and attracting more, with a minimum of new residential costs.
In my view, our future community will build on high-quality schools, public services, our location and transportation options and the unique business, cultural and historic resources and community life that distinguish us from neighboring jurisdictions and assure a sustainable financial picture for all concerned.
David Snyder is the Vice Mayor of the City of Falls Church.