The Falls Church City Council and School Board face off in a joint work session tonight at City Hall in its undersized Dogwood meeting room, and they are going in each already aware of the others’ justifications for their Fiscal Year 2015 budget needs that are more than usually at odds. The opening bill comes at 7:30 p.m.
At one of the better attended Town Hall budget meetings of recent years last Saturday, where some two dozen citizens attended, School Board chair Susan Kearney presented the stark needs of the school system facing the fastest student growth rate in the region, and City Manager Wyatt Shields stuck to the assumptions of the recommended budget he proposed earlier this month.
That combination would result in a 4.5 cent increase in the real estate tax rate and, with real estate assessments up around nine percent for residential homeowners and a new stormwater management fee adding substantially more to the bills that property owners will be having to pay beginning in June, no one on the City Council seems to think they can allow all that to go forward.
While there may be some small areas to trim on the City operating budget side – such as the requests for new positions in the Planning, Economic Development and Police departments – most on the Council seem to have their eyes on getting the big savings they’re hoping for by cutting the school budget.
But Kearney was effective at Saturday’s Town Hall meeting in systematically presenting the need for every penny the schools are asking for, in the face of soaring student enrollment that is not expected to abate anytime soon. (Her argument is reiterated in her “guest commentary” in this edition of the News-Press). Reasonable citizens present Saturday avoided ideologically-fueled rants against government spending, and listened intently to the difficult options that both Kearney and Shields presented.
Some raised questions about alternate forms of revenue generation available to the City that Shields indicated strongly the City was not willing to consider to ease the impending new big tax bite, at least so far.
They involve three untapped sources of revenue, all of which were raised in one form or another Saturday:
The first is to relax the City’s unyielding dedication to a line in the sand on its fund balance, money just sitting in the bank as sort of a “rainy day fund.” Insisting on keeping an absolute minimum of 17 percent of the annual operating budget, in an operating budget of $80.1 million (as recommended by Shields), amounts to $13.6 million. But the real City policy is to maintain a fund balance between 12 and 17 percent, so if the Council decided to keep the fund balance at the low end of an acceptable range, that would free up $4 million and wouldn’t change anything, period.
In a budget of $80.1 million, $4 million is a huge amount, equal to 14 cents on the real estate tax rate. Utilizing that money, then, would result in not a 4.5 cent increase in the tax rate, but almost a 10 cent decrease, from $1.305 to $1.21 per $100 of assessed valuation.
That would more than offset the increases in the real estate tax rate to actually lower the tax bills of average citizens.
It is astonishing to contemplate the fact that could be done without directly impacting a single program in the schools or the City.
The second untapped revenue source that came up at the Town Hall Saturday was the use of some of the cash proceeds from the City’s sale of its water system to Fairfax County that was culminated in early January. It is now looking like the cash coming to the City from that will be around $16 million.
Again, that amount put to the current City and School budget would cover all their needs and result in a sizable net tax cut for citizens. But Shields’ argument that such funds should not be disbursed on a one-time basis was compelling. The money should be invested as to generate an annual yield that serves the City over time, which is smart as long as one is confident the wider markets will cooperate.
The third source of revenue for this budget comes through postponing some of the capital improvement projects – such as a new City Hall, a new library and a $100 million new high school, and more – that are looming and that the budget is starting to fund this year. Postponing each one a single year would save a lot of money, and looking in the meantime for more creative ways of building these things could save a lot more even than that.
By property consolidations, melding the functions of the City Hall and library, for example, and coupling that with a private sector investment as has been done in Arlington could lower costs enormously. None of this has yet been explored as an unimaginative City Hall plods ahead in the ways of the past.