City Proposal: Cut Budget, Raise Tax Rate, Kill GEORGE Bus

Last night City Manager Wyatt Shields presented the first draft of the FY 2010 budget to the City Council.  As proposed, the $66.6 million budget calls for a cut of nearly $4 million, a 5.65% reduction from the current fiscal year.

“Although constrained, the anticipated revenues available to the City government allow us to continue to provide most of the public services the community has come to expect,” Mr. Shields said.  “However, the story of this year’s budget is strongly influenced by continuing uncertainty and risk for future years, especially FY 2011.”

Mr. Shields said the long list of spending reductions is in response to the overall decline in revenues due to the recession.  The total value of all real estate in the City as of January 1 decreased 2.5 percent, sales tax receipts are down almost 14 percent, building permits 57 percent, and investment returns 67 percent.

If adopted, the budget’s primary casualty will be the GEORGE bus service, elimination of which will save  $450,000.  The City also plans to cut three part-time and four full-time positions and to freeze the pay of government employees.  Although the City anticipates a 2% increase in student enrollment, the school system will face a cut of 1.6%.

Library and Community Center hours will not be cut under the new budget.  However, it does not include funds for library expansion, which the Planning Commission had recommended unanimously.

Under the proposed tax rate of $1.07, a single-family detached home with a median assessment of $605,950 would see an annual increase of only $76, due to declining property values.  However, to allow for a range of budget options, Mr. Shields recommended the Council consider advertising a rate of up to $1.09 per $100 of assessed valuation.

New fees will be imposed for services such as mulch delivery, street closures for block parties, false alarms, and land development fees.  Restaurants that pay their meals tax early will not receive a discount.

Water and sewer commodity fees will remain unchanged for the fourth straight year.  The water rate will remain at $3.03 per 1,000 gallons in FY 2010 and the sewer rate will remain at $5.91 per 1,000 gallons. These rates are below average for the National Capital Region.

Mr. Shields pointed out that there are reasons to remain confident that Falls Church will overcome its financial challenges.  Its unemployment rate remains low and per capita income remains high.  Residential property values are bolstered by its strategic location, schools, and quality public services.  He also noted that the City’s credit ratings remain very strong:  AA from Moody’s, Aa2 from Standard and Poor’s, and AA+ from Fitch.  These ratings are the highest that a small jurisdiction can achieve.

Mr. Shields’ presentation represents only the beginning of the approval process.  The Council will hold three work sessions on the budget prior to the first public hearing on March 23.  Four work sessions will be held before the second public hearing on April 13.  The Council will hold two additional sessions prior to the final public hearing and formal adoption of the budget on April 27.   The 2010 fiscal year runs from July 1, 2009 through June 30, 2010.

The Proposed FY 2010 Budget (197 pages):

http://www.fallschurchva.gov/Content/Docs/FY2010ProposedBudget.pdf

The City Council’s Budget Schedule:

http://www.fallschurchva.gov/Content/Docs/FY10BudgetTimeline.pdf