The City of Falls Church scored a whopping $2.4 million surplus over budget for the Fiscal Year 2019, which ended June 30, the City’s Director of Finance Kiran Bawa reported to the F.C. City Council at its work session Monday night. The actual numbers for the year were $92,983,636 in revenue (compared to a budgeted estimate of $91,076,688) and $89,368,305 in expenses (compared to $89,918,131 expected) for a net surplus of $2,456,774, on the plus side by 2.1 percent.
Big winners were sales taxes, which came in 11.7 percent higher than the previous year. Meals taxes were also 7.4 percent higher than Fiscal Year 2018. Licenses and permit revenues were 42.6 percent above projections due to early partial payments on the new high school, Founders Row, City Hall and the Railroad Cottages construction projects. Business “gross receipts” (BPOL) taxes were up 2.6 percent.
The City Council hailed the happy results, but put off until a later date the issue of how to spend the surplus. By City policy, expenditures of such surpluses must be limited to “one-time” costs, and one option is the planned renovation and expansion of the Mary Riley Styles Public Library.
The surplus included a reduction in expenditures of $549,000 that Bawa attributed almost entirely to cost savings from personnel vacancies that weren’t filled during the year, as well as from facilities maintenance costs.
The good news of the sales tax and meals tax boosts could be due in part to the “Buy Falls Church” campaign that the local Chamber of Commerce, in concert with the City, launched about this time a year ago to impact, especially, the holiday shopping season.
Council member Ross Litkenhous made that connection in his remarks Monday, saying the increases in those tax revenues by $780,000 added up to over two cents on the real estate tax rate, alone.
On the downside of the FY19 revenue picture were decreases in cigarette, personal property (mostly cars), and hotel taxes, and Council member Letty Hardi cautioned that declines in those numbers could indicate a public concern for a coming recession.
It was ironic that at Monday’s meeting the announcement of the $2.4 million surplus in the recently-completed fiscal year matched in estimated cost, almost exactly, the over-budget component of the library renovation.
In a presentation that followed Bawa’s report Monday, Chief Librarian Jennifer Carroll, a full contingent of members of the Library Board and project consultants Joel Timmons and Mark Manetti indicated that the cost estimate for the project is currently $10.8 million, or $2.4 million above the $8.4 million originally budgeted, and about the same amount above what was approved by voters in a 2016 bond referendum.
With a proffer from the Mill Creek developers of Founders Row (the 4.3 acre project currently under construction at W. Broad and N. West streets) of $$297,396 added in, the budget shortfall for the library is about $2.16 million, or almost exactly mirroring the FY19 budget surplus.
The coincidence was not lost on Councilman Dan Sze at the work session, who commented on it immediately, though discussion of the matter will await a future Council deliberation. Bawa suggested that other uses of the FY19 surplus could be to add to the permit and licensing reserve, to contribute to add on costs for the City Hall renovation that will be coming in October, or to cover part of the cost for a new mulch facility.
She said that the library overage could be subsumed in the City’s long-term bond sale related to the high school project.
However, the exact cost of the library renovation will not be known for months, when work has been completed to permit a “guaranteed maximum price” for the project.