F.C. Council Adopts FY15 Budget With Flat Tax Rate, $216K Cut in Schools’ Request & $200K Bite Into Unassigned Fund Balance

April 28, 2014 8:29 PM8 comments
F.C. Education Association vice chair Joel Block (at podium) calls for supporters of the school budget to rise during tonight's F.C. Council meeting. (News-Press photo)

F.C. Education Association vice chair Joel Block (at podium) calls for supporters of the school budget to rise during tonight’s F.C. Council meeting. (News-Press photo)

By a narrow 4-3 margin, the Falls Church City Council Monday night adopted a budget for the coming Fiscal Year 2015 that keeps the real estate tax rate flat at its current rate of $1.305 per $100 of assessed values while cutting the School Board request by $216,000 and dipping into the City’s unassigned fund balance by $200,000. The compromise was proposed by Councilman Dan Sze.

The 4-3 vote included Mayor David Tarter and Council members Phil Duncan, Marybeth Connelly and Sze voting “yes” and Vice Mayor David Snyder, Nader Baroukh and Karen Oliver voting “no.”

While the Schools’ request was cut by $216,000, Mayor Tarter noted that amount is less than one percent of their total budget and still adds up to a 9.1 percent increase over the Schools’ budget total last year. The package also cuts the general government budget by $219,000 below City Manager Wyatt Shields’ request.

But the most controversial component of the vote was its inclusion of $200,000 to balance the budget to be taken from the so-called “unassigned fund balance.”

This was strongly opposed by Shields and F.C.’s Chief Financial Officer Richard LaCondre, who warned throughout the budget deliberations that began the middle of last month that using “one time money” for operating expenses was a ticket to fiscal doom.

Baroukh and Oliver were also adamant in opposition to any dipping into the fund balance. Even though the current fund balance is 17 percent of the City’s annual operating costs of $80 million, or $13.6 million, such that $200,000 is a tiny drop in the bucket, it is the “slippery slope” that such a move represents that is the danger, Baroukh argued.

“This is the first time a Falls Church City Council has ever proactively dipped into its fund balance,” Baroukh said. “It kicks difficult decisions down the road and sets a precedent.”

But the move was far from being a violation of City fund balance policy, which calls for the fund balance to be maintained in a range of 12 to 17 percent. Others argued that holding the balance at 17 percent is far too conservative.

It was announced this morning that the School Board will convene Thursday night to decide how to alter its budget with the $216,000 cut. Superintendent Dr. Toni Jones and most members of the School Board were present in the audience for last night’s vote. Dr. Jones, teacher Amanda Blanchard, teacher Joel Black (vice president of the Falls Church Education Association) and Henderson Middle School PTA president Doreen Ruyak all spoke during the public hearing in favor of full funding for the schools.

But there were others who spoke against it, including one group of five citizens who came forth to argue that who argued that funding the schools is “not sustainable,” and urged the consolidation of the system with a large surrounding system. “We feel sometimes we are living in the School System of Falls Church, not the City of Falls Church,” one said.

In defending his winning budget option, Councilman Sze said “this maintains the tradition of great schools and a well designed city.” By holding the tax rate at last year’s level, five cents less than Shields recommended last month, Sze said the needs of the 10.4 percent of the City’s population living on fixed incomes and 28 percent who are federal workers who’ve lived with no pay raises in many years are also taken into account.

Almost everyone’s June tax bills will be higher, nonetheless, as appreciated assessed values and the add-on of a stormwater management fee included for the first time will drive them up even with a flat tax rate.

  • FallsChurchCitizen

    It will be interesting to see how the schools apply the reduction in growth in their funding.

  • FallsChurchCitizen

    For perspective, here are blurbs on the final decisions from Loudoun County and Fairfax County:
    http://www.washingtonpost.com/local/virginia-politics/loudoun-adopts-19-billion-budget-schools-face-a-nearly-38-million-shortfall/2014/04/02/a74ca474-ba9e-11e3-96ae-f2c36d2b1245_story.html
    The Loudoun County Board of Supervisors voted Wednesday to adopt a $1.9 billion budget for fiscal 2015, a plan that boosts education spending by nearly $70 million but still falls about $38 million short of fully funding the school system’s requested budget.
    The decision was met with disappointed quiet from a standing-room-only crowd dominated by public school supporters, many of whom wore red or held red signs as a show of solidarity during the hours-long meeting.

    http://www.washingtonpost.com/local/fairfax-approves-county-budget-raising-property-tax-sewer-fees/2014/04/29/cdd790f8-cfbc-11e3-937f-d3026234b51c_story.html
    The $3.7 billion budget raises the real estate tax rate by half a cent to $1.09 per $100 of assessed value and includes higher fees for sewer services and pet adoption, allowing for a 3.3 percent increase in spending over the current budget.
    Nonetheless, it falls short in funding sought by the county school district, allocating an extra $51.5 million to the school system instead of the $98.1 million Superintendent Karen Garza said was needed to ward off drastic cuts and raise teacher pay.

  • vseidita

    It seems like a nice compromise to me. Kudos to the council!

  • Taxpayer

    Good job, Council! Although my taxes will go up (due to that tax assessment) at least it won’t be further impacted by an additional tax rate increase. There has been a lot of analysis done regarding the school budget by readers of this blog (and others). I hope that the comments, which were very insightful, will be taken into account during the next budget cycle. I think the Administration needs to take a hard look at itself to identify where savings can be found – and don’t assume that throwing money at the problem will solve the issue.

  • FCresident

    Federal employees have had within grade step pay increases, just not COLA increases. So the statement “federal workers who’ve lived with no pay raises in many years” is misleading.

    • Ronnie Trout

      Federal employees had a 3 year pay freeze. Not to mention an increase insurance costs.

  • Mike Smith

    Much as I hate to agree with Mr. Shields, I do believe that balancing the budget with non-recurring money (i.e. fund balance) simply gives the Council the opportunity to make a 2015 budget problem into a 2016 budget problem.

    • vseidita

      The City has established a multi-year pattern of underestimating annual revenues and overestimating annual expenses. If this trend continues our starting fund balance for the next year may be similar to where it is now.

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