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Grim ‘Cost Modeling’ Approach Being Readied for F.C. Budget

Portending perhaps the City’s worst-ever grim season of cuts in programs and personnel, the Falls Church City Council set in motion a process of “cost modeling” for next spring’s budget Tuesday night that could strike deeply at the quality of the City’s school system as well as its general services.

The work session discussion Tuesday followed the report from Falls Church’s chief financial officer John Tuohy last month, suggesting that City taxpayers will be obligated in the next fiscal year budget to make up for market losses in the City’s three pension and retirement funds to the tune of seven or eight cents on the real estate tax rate.

On top of that, a sharp reduction in revenues is expected from a double-digit decline in the value of commercial real estate, from a decline in sales tax revenues and from a lack in revenues deriving from new residential and commercial construction. All this is due to the wider economic recession.

Therefore, instead of focusing on “revenue enhancement” components of the next budget, which is often seen as code language for considering tax hikes, most of the attention this fall will be on “cost modeling,” which means service and program cutbacks.

The key inflection point this fall will be a joint meeting between the City Council and School Board in the Council chambers of City Hall on November 30, the Monday following Thanksgiving.

By the time of that meeting, as Council members discussed Tuesday, it is their goal to have a variety of “cost driver” options available, based on projections going into next year. These would take the form of estimating the cost of maintaining current programs, versus the cost of shifting, scaling back or eliminating programs.

“Normally, we don’t get into this phase of the budget process until well into March,” City Manager Wyatt Shields told the News-Press in an interview yesterday. Historically, that has been after both the School Board and City Manager have produced recommended budgets, leaving it to the Council to decide what to cut or to keep in order to balance costs against revenues.

But beginning the process by November this year is intended to front-load expectations, and will, in particular, hit hardest the School Board, which has always before shaped its budgets based on the core needs of the school system, and not based on projected revenue shortfalls for the City, overall.

Some are expressing concern that the new process will undermine the School Board’s separate mandate, which is to establish the needs of the schools, its students and staff, instead of to shape an overall jurisdictional budget.

But the City Council Tuesday, and Shields in his interview yesterday, stressed the importance of the Council and School Board “working together” this time.

Some enmity that developed last spring, when the School Board included salary increases for its employees that were not matched on the City government side, is given as a reason for the shift in timing and toward a shared approach this fall, although the severe budget crunch is probably more the real cause.

In the context of this, the Council also debated exhaustively once again the merits and liabilities of creating a so-called “Fiscal Advisory Board” composed of volunteer citizens with expertise in financial planning.

Mayor Robin Gardner, who was among the first proponents of the idea, said that upon further thought she now feels that creating task forces with specific subjects to review may be a better approach.

Among others, Councilman Dan Maller spoke the strongest against the idea of a permanent board, noting it would, in the small environment of Falls Church, become political divisive, “political bromide” to quote him, if its recommendations deviated from Council or School Board policy goals. Council members Nader Baroukh and Lawrence Webb spoke the strongest in favor of establishing a permanent board with a wide, and not specific, mandate.

It was conceded, however, that as no consensus was reached Tuesday, such a body, either as a standing board or in the form of a task force, could be put in place in time to have any practical impact on the coming fiscal year budget.

The fact that there will be a municipal election next May, in which three of the Council’s seven seats will be up for election, only compounds the anticipated difficulties in the coming budget cycle, it was noted.

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