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F.C. Council Finalizes $65 Million FY12 Budget, Vows Economic Growth Push

councilworksessionReal Estate Tax Rate At $1.27, Schools’ Full Request OK’d

A 13 percent decline in the size of the City’s workforce in three years, combined with a salary freeze over that time, added to a zero-growth transfer to the school system to balance a $65 million Fiscal Year 2012 budget for the City of Falls Church approved by the F.C. City Council Monday at a real estate tax rate of $1.27, up from $1.24 of $100 of assessed valuation in the current year.

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THE FALLS CHURCH City Council made its final big decisions on the FY12 budget at its work session last Thursday. (Photo: News-Press)
Real Estate Tax Rate At $1.27, Schools’ Full Request OK’d

A 13 percent decline in the size of the City’s workforce in three years, combined with a salary freeze over that time, added to a zero-growth transfer to the school system to balance a $65 million Fiscal Year 2012 budget for the City of Falls Church approved by the F.C. City Council Monday at a real estate tax rate of $1.27, up from $1.24 of $100 of assessed valuation in the current year.

The austerity budget was due to a “cascading series of events” over which previous City Councils did not have control, Vice Mayor David Snyder commented prior to the vote tonight, related principally to impacts of the Great Recession and water litigation against the City.

Despite the restraint in the budget, it includes bonding for $5.4 million in capital improvements for the schools, $1 million for “critical maintenance” at City Hall, a maintenance of current levels of service at the public library, $200,000 for “critical maintenance” of City parks, and one-time $1,800 offsets for all City employees to help cope with added employee burdens on covering pension, retirement and health insurance costs. The $1,800 offset will leave all City employees earning less than $50,000 a year with the same level of take-home pay as last year, despite hefty increases in their required contributions to their pension, retirement and health insurance funds.

But much of the focus of the budget discussions this spring was not about the coming fiscal year, which begins July 1, but the looming fiscal difficulties the City is projecting for Fiscal Year 2013 and beyond.

That concern led the Council to approve extra revenue, raising the tax rate two cents above the $1.25 originally recommended by City Manager Wyatt Shields, in order to brace for the follow on years, by among other things restoring the City’s depeleted fund balance to an optimum 12 percent of annual operating costs.

The expected continued fiscal malaise was calculated by the City’s Director of Finance Richard LaCondre based on minimal three-percent revenue growth, apart from real estate taxes, and that led Snyder, Council member Robin Gardner and Mayor Nader Baroukh to sound the call for a redoubled effort to spur new economic development.

Gardner noted that of 10 large-scale mostly mixed use projects approved by previous City Councils in the past decade, only six have been built so far. That means there are four – including the City Center project, the Akridge and Hekemian projects on N. Washington St. and the Hilton Garden Inn project on W. Broad – who have all the required approvals, but that have stagnated.

Gardner noted that while it may take two or three years to build those projects, the minute a shovel goes into the ground, the City starts to make money. Licenses and fees of various kinds all stages of the development process start flowing, she said.

But Mayor Baroukh, in a telephone interview with the News-Press Tuesday, said that while the City Council’s attention will now shift to incentivizing economic development, he said that the focus will not be on the four approved but stalled projects, saying, “None of the current projects on the horizon fit” into the current planning process. Instead, he said, efforts will be undertaken to “see what type of development we need to generate the revenues we need.”

“We can’t move too quickly without ensuring adequate review by the community review and planning experts,” he said and that the approach will be one “sector” of the City at a time. Separate strategies will be developed for regions such as those nearest the East and West Falls Church stations and Seven Corners, the central City and S. Washington.

Staff reductions include the loss of a GIS operator, a graphics specialist, a part-time librarian, a Housing and Human Services director, and an emergency police dispatcher, along with shifting a full-time sheriff deputy position to part time.

Other rate and fee increases include an increase in the auto decal fee from $25 to $33 and in the personal property tax from $4.71 per $100 of assessed valuation, which amounts to an average $18 annual increase for a $20,000 car, and an average 2.8 percent increase for City businesses.

A motion to amend the budget ordinance to reduce the transfer to the City’s schools by $390,000 made by Councilman Ira Kaylin and seconded by Johannah Barry was defeated 5-2 prior to the final vote tonight. Kaylin conceded his amendment was a “symbolic gesture” at evening out the compensation levels between City and school employees, as the school budget includes a salary increase of one full “step” commencing the middle of next year.

According to current projections, City Manager Wyatt Shields indicated that with a three percent growth rate, the Fiscal Year 2013 budget, because of big increases in pension fund requirements among other things, will require another five cent increase in the real estate rate.

In his phone interview with the News-Press, Baroukh said he thought the budget process this spring “went well.”

“There was a lot of discussion of the main drivers in the budget,” saying it involved a departure from past budget deliberations that focused more on individual departments of the government. “Everyone read the individual reports, so instead we focused more on the major issues,” he said.

The compensation and fund balance issues involved a lot of discussion, he noted, adding that “everyone had a lot to contribute. All members of the Council have unique and distinctive perspectives to bring, and the City is better for that.”

More details about the budget passed Monday, provided by the City’s Public Information Office, include the following:

• The budget fully funds the City schools’ request for $27.8 million.

• The $1.27 real estate tax rate, combined with an average increase in assessed values, represents a $176 or 2.4 percent increase in the tax bill for the median single-family home in the City.

• It restores most of the cuts in library service funding proposed by the City Manager. Beginning July 1, the Mary Riley Styles Public Library will re-open on Sundays but will be closed Wednesday mornings. Funding for books, DVDs and periodicals is restored from cuts proposed by the City Manager.

• It eliminates six (full time equivalent) government positions, reducing the City workforce to its lowest level in 10 years, and most City employees will take home smaller paychecks for the second year in a row. The adopted budget requires employees to contribute more to their pension and health insurance, thereby decreasing their take-home pay. To partially offset the decrease in employee compensation, the Council voted to give general government employees a one-time payment of $1,800.

• Monday’s agenda called for consideration of a water rate increase, but action was deferred until June.

• Funding was provided for key capital improvement projects including expansion of Thomas Jefferson Elementary School, and critical maintenance of City parks and City Hall.

• The eliminated positions are: Deputy Director of Recreation and Parks, Director of Housing and Human Services, Emergency Dispatcher (police), GIS manager, Graphics specialist, Part-time librarian.

• There were no cuts in the number of police on the street; however there was a reduction of one deputy sheriff position from full to part-time.

• The City was obligated to cover a10 percent increase in inter-jurisdictional contracts, an increase of $400,000 in its contribution to Metro.

• The budget included an increase in auto decal fees from $25 to $33 and an increase in the personal property tax rate from $4.71 to $4.84. It means that the tax bill on a car valued at $10,000 will increase $6 annually, the tax bill on a $15,000 care will increase $9 annually and the tax bill on a $20,000 car will increase $18.

• The Council did not adopt a commercial transportation tax overlay of five cents, as proposed by the City Manager, but agreed to continue to consider key transportation improvements to benefit business in the City, and how to fund them in the future.

• The budget included increases in development fees, building safety and fire code fees.

 

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