City Looking for ‘New Normal’ on Budget

By GEORGE BROMLEY
Falls Church Times Staff

February 2, 2011

City Manager Wyatt Shields advised residents at Monday evening’s town hall meeting that the days of 4.5% revenue growth are over and that Falls Church now is trying to define the “new normal” in the course of developing the FY 2012 budget.  That may be a difficult task, as the City faces a projected budget gap of nearly $2.3 million between anticipated expenses and revenues.

As over 60% of the City’s revenue is derived from property taxes, the tax rate may rise from the current $1.24 in order to balance the budget.  However, many of the attendees at the meeting expressed a willingness to pay higher taxes to sustain City services, for which they had unanimously high praise.

Education costs are the largest single budget item at 43%.  Superintendent Dr. Lois Berlin has recommended a transfer request of $27.4 million, reflecting a very slight decrease over the previous year, but she cautioned Monday that unrest in Egypt may result in more students in City schools as State Department families temporarily relocate from overseas to Oakwood Apartments or Pearson Square.  Currently she projects an enrollment of 2,133 for the next school year, an increase of 3.8%.  The City’s cost per pupil is $12,862, a substantial decline from four years ago, when the cost was $15,004.

Public safety costs are next highest at 11%.  In response to a resident’s question, Mr. Shields stated that the unpaid detention center expenses due Arlington County have  been included in the FY 2012 budget.  These costs have been estimated at over $2.2 million, covering charges incurred during FY 2008-10.

The city manager also was questioned regarding the claims recently filed against the City’s water system by Fairfax County residents.  Mr. Shields described the actions as  “a whole new area of law for which there is no precedent.”  “The matter is under review and we are working with the plaintiffs’ lawyers who have brought the claims forward,” he said.  Concerning the now resolved litigation with Fairfax Water, Mr. Shields advised that the City is in compliance with Judge Ney’s order that it can no longer take a return on equity from the water fund.  He said the impact of this ruling was factored into the FY 2011 budget.

Both Mr. Shields and Dr. Berlin acknowledged that the recent budget constraints have had an impact on the workforce.  The city manager stated that there are 12% fewer employees than there were 18 months ago, resulting in greater workloads for those who remain.  He said that a continuation of the two year wage freeze is under consideration and that managers have been instructed to “work through 10% reductions on a programmatic level.”   “Our whole organization is being transformed through this recession,” he said.  “It’s a strain, but employees are very motivated.”

Dr. Berlin said that many school employees, who also have had wages frozen, are taking second jobs.  Some employees also have had days reduced, resulting in reductions in take home pay.  She maintained there has been no impact on the quality of classroom instruction but that there has been an decline in morale.  The superintendent noted that other local jurisdictions are proposing 1% to 3% raises.  “I am always concerned about people leaving,” she said. “But people have come to Falls Church to teach due to the smaller class sizes, for the community, and knowing, when they’re hired, where their classroom will be.”

In his concluding remarks, Mayor Nader Baroukh identified three interlinked factors as driving the budget process for the next fiscal year and beyond: managing economic development, specifically sector planning ,which he recommended begin sooner than later; determining the shape of the “new normal” for Falls Church’s operations, both at city hall and in the schools; and finding the proper balance between fund balance maintenance and the debt service necessary for capital improvements projects.

Noting that there would be considerable discussion about tax rates in the coming weeks, the mayor also called on residents to ask themselves whether they would be willing to pay for the same services if they were just coming into the community, as compared to rates established in the neighboring jurisdictions.

Citizens’ Comments Encouraged

The city manager and the mayor encouraged residents to provide feedback on services, both those which they believe must be maintained and those which might be reduced or eliminated.  Videos of both meetings are available at the City’s website under “City Webcasts.” A sample response form and a full slide presentation also are available as part of the meetings’ agendas.

Budget Calendar – City and Schools

2/08 – Public Hearing (School Board)
2/12 – School Board work session
2/15  –  School Board presents budget request
2/23 – Planning Commission’s recommendations on Capital Improvements Program
3/14 – City Manager’s recommendations to City Council
3/19 – Saturday Town Hall meeting
3/28 – Public Hearing (Council)
4/11 – Public Hearing (Council)
4/16 – Saturday Town Hall meeting
4/25 – Public Hearing (Council)
4/25 – City Council adopts FY 2012 budget
7/01 – FY 2012 Begins

By
February 2, 2011 

Comments

56 Responses to “City Looking for ‘New Normal’ on Budget”

  1. Bill Royce on February 9th, 2011 7:42 pm

    So Pat –

    Just to summarize and conclude this one, I took data available to the public on the FCCPS web site, multiplied the numbers together and stated the outcome.

    In presenting the outcome, I used contextual information entirely in accord with the Bureau of Labor Statistics, the branch of the U.S. Department of Labor responsible for collecting and evaluating data on various jobs and careers.

    No trickery, no BS, just the facts.

    Based on this information, I asked a couple of questions.

    Your response has been most interesting, as you have –

    — managed to evade most (if not every) direct question I asked (as well as those questions asked by others);

    — repeatedly twisted my words to suit you agenda or to conform to your childhood memories (while you clearly attempted to defame my character, your attempt is so lame and transparent that it is silly and absurd);

    — shown an incredible lack of understanding of the work life in the private sector; and

    — called into question the validity of WABE data by stating “While WABE has its own drawbacks”, but then immediately you cite WABE data to support some new tangent you want to talk about, without ever once explaining the “drawbacks.”

    Enough said — go back to the school board, your leadership is needed there.

    BTW – For those interested, I FOIA’ed our city and school superintendent a month ago to obtain copies of any studies or reports on how administrative functions could be combined for the sake of efficiency. Their substantive response is comprised of the two documents that can be found at:

    http://dl.dropbox.com/u/19675441/SCHOOLS%20RESPONSE%20-%20Consolidation%20memo%203.doc and

    http://dl.dropbox.com/u/19675441/2004%20DistrictMgmt%20Council%20FC%20Report.pdf

    (Evidently, efficiency has been low on their list of priorities for a long time.)

  2. Andy Rankin (Falls Church) on February 9th, 2011 8:30 pm

    I’d love to see those great details from several years ago. If we could see some concrete suggestions for consolidating admin functions or other obvious ways to reduce spending then we could start asking about those specific ideas. It seems like that would be a lot more productive than griping about them in a generic way.

  3. Bill Royce on February 9th, 2011 10:42 pm

    The substance of what I got is at the end of those two links. I haven’t looked at it for a couple of weeks but as I recall its all conceptual-level covering the typical admin functions you would expect to find in a school system or small city. The challenge is that the folks in charge of the institutions typically have little or no motivation to make any of these changes — obviously.

    Anyway take a look and I’d be happy to kick around some ideas / questions for follow-up. I tell you though, I truly believe the greatest opportunity in all of this is to figure out what teacher’s compensation should look like in Falls Church the 21st century. I don’t mean less $$ — ’cause you always have to pay what the market requires — I mean targeted to reward those whose contributions and behaviors move the district towards its goals.

  4. TFC on February 10th, 2011 8:17 am

    Mike: as I recall there were some small steps taken to consolidate functions last budget cycle. Communication Dept functions were slated for consolidation and IT functions were under discussion. I would like to see continued efforts to find opportunities for consolidation.

  5. Andy Rankin (Falls Church) on February 10th, 2011 8:50 am

    Bill touches on something I’d be interested in, but I doubt would ever get much traction. I’ve never worked for the government and I’m an entrepreneur so I have a different view on how compensation works. The City is small enough that it seems like it could be feasible to come up with an approach to compensation (for teachers and all City employees) that wasn’t based so much on years of experience but instead was based on performance and results.

  6. Karen Hoofnagle Falls Church City on February 10th, 2011 9:05 am

    Suzanne – Thanks. That’s exactly what I was trying to understand. If you figure that we’re already 7 or 8 cents into the red, it makes the absolute size of the problem easier to understand.

    For a hypothetical 500,000 house, with a current tax load of 1.24 currrently paying 6200 in yearly taxes, moving to a rate of 1.31 increases the tax burden (assuming a flat assessment because I’m lazy) to 6600. That’s an increase of 33 a month. I won’t say I like taxes, but given the mess we’re in with the water system and the pension, if that’s the “New Normal”, I for one will accept it a heck of a lot more cheerfully than I’ll accept laying off teachers or cutting further into their take home pay.

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