THE SURPLUS: Falls Church City’s High-Class Problem
By STEPHEN SIEGEL
Falls Church Times Staff
August 13, 2012
There are problems, and then there are high-class problems. While many cities, and even states, around the country are flirting with, or filing for, bankruptcy, Falls Church City has a surplus for this year. Deciding how, or if, to spend it is a high-class problem.
It’s not just a bed of roses here, of course — the City has laid off 17 full-time employees, outsourced garbage collection, and raised tax rates by 25 percent over the last four years. And the debate hasn’t always been pretty.
But with housing values here recovering smartly from their 2009 lows, money has been flowing into City Hall at a faster rate than anticipated. What to do with the money already has been the subject of debate, and will be a feature of tonight’s City Council meeting, where newcomer Dave Tarter has proposed giving some money to the school system for what officials there say is needed technology upgrades and returning a portion of it to the city’s taxpayers.
Mr. Tarter said last week that he expects the amount that would be refunded under his plan to be about three cents on the tax rate, reducing the effective rate from the current $1.27 per $100 of assessed value to $1.24. For the average homeowner of a $700,000 home in the City, that would amount to a refund of $210.
It’s not clear how many on the Council are in favor of Mr. Tarter’s proposal. Last week, a divided council voted 3-2 (with two absences) in favor of a plan by Ira Kaylin to decline the school system’s request to spend $500,000 on technology upgrades and instead restrict the money to capital investments, which presumably would be large expenditures on buildings and the like.
Mayor Nader Baroukh and Johannah Barry joined Mr. Kaylin, while Mr. Tarter and fellow newcomer Phil Duncan were opposed. It’s not known how Dave Snyder and Ron Peppe will vote, although Mr. Peppe, a former school board chair, seemed to indicate he opposed the Kaylin proposal.
The issues here are two-fold: Should the schools be given extra money, and should they get to decide how it’s spent? Or should the City Council decide that?
School Board Chairwoman Susan Kearney said in an interview that the schools need to upgrade aging computer equipment, but also saw their request as one of fairness; she pointed out that school officials returned $672,000 to city coffers four years ago, in a cooperative gesture, as the economy and city revenues began to suffer — and they view it as fair to get something back now.
“We made a specific request” in the budget process this year, Ms. Kearney said. “If there’s a surplus this year, the board would like to share in that because we shared in the bad times.”
Mr. Kaylin has no objection to allocating extra money to the schools. In an interview, he said after taking out between $600,000 and $800,000 for a variety of one-time expenditures, including additional legal fees, his proposal would provide the school system with 50 percent of what’s left, or about $1.4 million. But he wants that restricted to capital expenditures, which he said would save substantial money for the city and its taxpayers over a period of years by avoiding borrowing costs for projects like the expansion of Thomas Jefferson Elementary School.
“At some point, delegation of authority is abandonment of responsibility,” he said.
He also warned that the surplus is a one-time pot of gold that isn’t going to be repeated next year, for which a shortfall in money already is emerging. He warned that any tax rebate, like Mr. Tarter’s proposal, will just have to be reversed next year, where there’s a strong possibility that the tax rate may have to rise five cents to $1.32 per $100 of assessed value.
“We’re not in good shape,” Mr. Kaylin said.
Update, Aug. 14: The City Council deadlocked 3-3 Monday night, with Vice Mayor Dave Snyder absent. That means no decision has been made about what to do with the surplus.
By Stephen Siegel
August 13, 2012