Local Commentary

Guest Commentary: Our Projects Can Succeed on More Tax-Neutral Path

By Kieran Sharpe

Methodical preparations are certainly key to the success of pending Capital Improvement Program projects (library, city hall and schools). However, proposals for higher taxes and higher reserves are too narrowly focused on borrowing capacity.

What other steps should we take? Here are several aimed to help our projects succeed in a more timely and tax-neutral way. They focus on bringing Fairfax County, UVA, Virginia Tech and Metro into the effort, using longer-term bonds on all upcoming projects, an early start on commercial use, a program-oriented and phased approach to schools, and a more predictable annual operating budget.

1. Identify the area most desirable for commercial use and take steps to free it for such use ASAP.

2. Identify portions of George Mason that are most ripe for demolition, taking account of structural factors but also potential future use for schools, commercial use or parking.

3. Engage right away with neighborhood associations adjacent to the Campus Project site; don’t wait until a later phase as we did with Mount Daniel.
4. Seek agreements with the universities for use of classrooms and parking space. Also, assess availability of office space that could accommodate classes, and compare costs for shifting classes to such offices with costs for space at the grad center.

5. Avoid temporary fixes to George Mason’s roof and HVAC. Order off-site construction of roughly $8 million in modular classrooms and deliver ASAP to a part of the GM/MEH site now vacant or set for demolition and not identified for commercial use.

6. Move parking to accommodate commercial use and school demolition. Seek agreement with Metro for such parking. Assess availability of space at other locations, and then compare costs of shifting parking to such spaces with costs for space at Metro and the grad center.

7. Task a diverse committee with creating a positive vision for future school programs, eyeing more technology, dual enrollment, sharing of spaces among educators, learning outside the traditional school calendar, career-oriented classes at businesses, and emphasis on STEAM disciplines. Set delivery of the committee’s report so revised building specs can get to bidders several weeks before their bid submission deadline.

9. Shift policy to use 30-year level payment bonds for all projects – city hall, library, and schools.

10. Shift policy to let reserves pay for all projects’ debt service.

11. Adopt policy to encourage private owners to donate or sell their land for public use, so we gain land elsewhere to offset land put to commercial use at the campus site.

12. Adopt policy for a transportation surtax on commercial properties, similar to surtaxes already imposed by our neighbor counties. We may choose not to impose it, but without a policy we obtain no bargaining leverage. Our neighbors relieve tax burden on residents and do not discourage business.

13. Wherever feasible, use modular buildings, constructed mostly off-site, to reduce disruption to schools and commercial development. Alexandria has had success with this at Polk Elementary.

14. Assess to what extent user fees could cover costs of an aquatics component.

15. Adopt a joint schools/city agreement for five years that targets a two-percent annual operating increase, adjusted up or down for such factors as school enrollment, benefit costs, competitive pay, business cycle shifts, and Metro costs.

In several cases, these are initial steps that can lead to lower costs or higher commercial value. Requests for alternative parking, for example, could lead to earlier commercial use on our property as well as development beyond parking at the universities and Metro.

While these leave uncertainty about the magnitude of the lower costs or commercial gains, they also show it is now too soon to push taxes higher to bolster borrowing capacity.

Moreover, delays inherent in our process make higher taxes now premature and perhaps counterproductive. The delay due to holding a referendum, for example, would push major construction into FY19 or later, and so delay the need to add bond issues as well. Likewise, the delay in starting commercial use (even if shortened by success on the phasing and parking steps I’ve outlined) could mean that the value of such use won’t be known for several years.

What is certain is that higher taxes would deter commercial growth throughout the city and tend to depress the value of any commercial use at the campus site.

Consequently, while it has been useful to draft changes in financial policy that would boost borrowing capacity, no action should be taken to implement such changes for FY18 (and perhaps several more years) until the scale of the public costs and private offsets comes more clearly into view. With more than 20 percent of budget already in reserves, no hike in taxes or reserves is needed at least until we see how these other steps work out.