Based on indicators of a modest improvement in the local economy, including in both residential and commercial real estate values, the City of Falls Church’s Fiscal Year 2013 budget recommended by City Manager Wyatt Shields Monday calls for a 6.7 percent increase over the current year’s budget, a jump from $65,040,613 to $69,387,379, based on no real estate tax rate increase.
The Council will proceed in a deliberative process toward an April 23 deadline to adopt the budget, commencing with a joint work session with the School Board and Planning Commission at City Hall tonight, and a Town Hall meeting to hear initial citizen input this Saturday at 10 a.m. at the Community Center.
But initial signs of contention developed at Monday’s City Council meeting, when the Council signaled it is in no mood for raising additional revenue, at the same time a spokesmen for the City’s employees warned of high and expensive rates of employee turnovers in the face of continued inadequate compensation levels.
In what could be a bell weather of things to come, the F.C. Council Monday, upon being presented the budget, decided without a formal vote to eschew any flexibility in its upcoming deliberations. It authorized the formal advertisement of the top permissible level of the real estate tax rate at the current rate of $1.27 per $100 of assessed valuation.
Shields had recommended advertising a rate of $1.29 merely to allow flexibility in the event of unanticipated developments or decisions during the course of the adoption of the new budget over the next seven weeks. That has been a common approach to the budgeting process in Falls Church for many years.
But this year, the Council, with all seven members present Monday, made it clear that a preponderance of members were not in favor of that now.
Council member Johannah Barry, saying “the path of least resistance is to hand a bill to citizens,” and so joined Council member Ira Kaylin in his preference to “tie the hands” of the Council at the current $1.27 rate. Mayor Nader Baroukh and Council member Robin Gardner agreed. After all, even though the tax rate may remain unchanged, increased in real estate values will lead to higher tax bills for City property owners.
In the other warning sign that a tough budget deliberation is in store, the chair of the City of Falls Church’s Employee Advisory Committee addressed the Council Monday just before Shields outlined his budget.
Correlating the last three years’ wage freezes to a 40 percent turnover in the City’s staff since 2009, civil engineer Jason Widstrom said that salaries for F.C. City employees are now 15 percent below the average in surrounding jurisdictions, and City employees also pay considerably higher costs for pension and health care coverage.
Widstrom cited a study by the Society for Human Resources Management noting that the cost of high employee turnover rates – Falls Church’s turnover rate being 11.5 percent annually, or 40 percent (104 employees, including the water and sewer fund employees) of its entire workforce since Fiscal Year 2009.
Shields said that while his budget proposes no increases in tax rates, it maintains the City’s financial security, and meets demands for outstanding service to the community.
“With the strong actions taken by the City Council and Management in response to financial challenges over the past several years,” said Shields, “Tthe City is in a stronger financial position to apply resources toward key initiatives and needs.”
The proposed FY2013 budget fully funds the School Board’s adopted budget request of $29.9 million, an increase of 7.3 percent from FY2012; maintains the real estate tax rate at $1.27 per $100 of assessed value; and increases sewer fees by 9 percent, a recommendation in the City’s 2011 sewer rate study.
The City Manager’s proposed budget also calls for an increase in employee salaries, for the first time since 2009. The increase comes after three years of no pay increase and two years of decreased take-home pay.
However, insofar as last year most employees received a one-time bonus in lieu of a salary increase, the bonus is not in effect this year so that the proposed modest salary increase means that, practically speaking, City employee paychecks will remain roughly unchanged, once again.
Shields acknowledged to the Council that City employee salaries are lagging significantly behind those in adjacent jurisdictions. Proposed salary increases for the coming fiscal year are over 10 percent for the City of Alexandria, almost eight percent for Arlington and over four percent for Fairfax County.
The proposed Capital Improvements Program (CIP) provides funding for significant capital projects in FY2013, and sets a capital plan for the next five years. Major funding is provided for the Thomas Jefferson Elementary School renovation, transportation improvements, stormwater mitigation, park improvements, and City public facility improvements.
In a statement from City Hall issued Tuesday, Falls Church Mayor Nader Baroukh said, “Development of a sound budget to meet the strategic needs of the City is one of the most important tasks of the City Council. Over the next few weeks, the Council will thoroughly review the Manager’s proposal and consider input from citizens. We encourage citizens to attend upcoming Town Hall meetings and public hearings and to email Council with suggestions and comments.”