Based on data projections presented earlier this month, the Falls Church City Council voted Monday night to adopt a resolution spelling out “guidance” to City Manager Wyatt Shields going into the shaping of the next fiscal year budget. The key component of the guidance is that all new revenue must come from new economic development alone, and that is projected to be limited to a net 3.2 percent growth number.
“Increases in revenues for expenses can be generated solely by economic growth,” the policy states.
The policy does not speak to revenue growth coming from appreciation of residential real estate values over the last 12 months. Therefore, the policy limiting new expenditures to 3.2 percent projected revenue growth is expected to come into a sharp confrontation with anticipated needs of the Falls Church school system, experiencing more record enrollment growth and likely to require more like a nine percent increase in funding.
The 3.2 percent growth in revenues, projected in presentations by Falls Church Chief Financial Officer Richard LeCondre to the City Council and School Board last week, is foreseen as coming solely from new commercial development and from large improvements to some private residences.
However, it projects no growth in valuations of basic residential real estate, as was reported last week. That data was defended vehemently by both Mayor Nader Baroukh and City Manager Wyatt Shields at Monday’s meeting. They said it was based on an ongoing monitoring of home sale prices by the City Assessor.
The idea floating out there that this information was politically-driven “is extremely unfortunate,” Baroukh said.
Falls Church’s public information office issued the following statement at the conclusion of Monday’s meeting, which is published in full here:
“At the Dec. 10 meeting, the Falls Church City Council approved budget guidance for the City Manager for the development of the Fiscal Year 2014 (FY14) budget which continues to place the City on sound, sustainable financial footing. ‘Even in continued tight financial times, the City Council is committed to providing valuable core services that promote public safety and high quality of life,’ said Mayor Nader Baroukh. ‘The adopted resolution provides guidance to the City Manager for development of the budget. This creates a framework for productive discussion by the community.’
“The resolution adopted by Council includes staff’s revenue forecast of 3.2 percent and provides that any increases in revenues for expenses be generated solely by economic growth. The guidance includes direction for a focus on infrastructure maintenance and improvements and a capital improvements plan for meeting the City’s critical needs.
“Council acknowledged the critical role employees play in the provision of quality programs and services to residents and businesses. The budget guidance provides a level of employee compensation that is competitive within the regional labor market and sustainable over the long-term.
“The guidance also notes that the City Manager is to provide Council with options for dedicated funding for storm water system capital improvements and identify current and potential future financial risks to the City stemming from state decisions regarding the Virginia Retirement System.
“The schedule of budget meetings and public hearings will be posted by the end of December on the City website. The City Manager will present a proposed budget for FY14 to the City Council on March 11, and the Council is scheduled to adopt the budget on April 22, 2013.”