Wanted: Caring Adults

Last Fall I attended a meeting of the ‘Parents’ Coalition’, an advisory group associated with the newly formed Falls Church Alliance for Youth.  The Alliance for Youth (AFY) was formed in late 2007 and serves as the primary, interagency team to address the needs of youth in Falls Church City.  The AFY assumed the mission and functions of a variety of previously existing youth-related efforts, such as the Commonwealth Alliance for Drug Rehabilitation and Education, Substance Abuse Free Schools and the Gang Intervention and Prevention Committee.  The AFY is comprised of representatives from the school system and local government agencies that have responsibility related to youth, such as the Police Department, Mary Riles Styles Library, Recreation and Parks, Department of Community Services, Juvenile Court Services and the Health Department.  While the AFY is comprised of the professional staff members of the various agencies, the Parents’ Coalition is for any adult that wants to play a role in helping young people in our community reach their full potential.  

The Alliance for Youth conducts an annual school survey of students in 6th through 12th grade in Falls Church City Public Schools (MEH and GMHS).  The survey, officially known as the PRIDE survey, helps assess the use of drugs and alcohol by our young people.  AFY and the Parents’ Coalition hope to use the results from the latest PRIDE survey as a catalyst to begin a community effort around the well-being and positive development of adolescents in the City.   To be successful at bringing about real positive change for our young people, no resident of Falls Church can stay on the sidelines.  All are on the team.  Stay tuned for future updates about ways that you can support the AFY and participate with the Parents’ Coalition.

Kids can do Politics too

I know most people think kids and teens cannot understand the complexity of politics.  Well, some do.  Consider the sixth grade TAAP advanced class which is trying to sort and classify remarks from the candidates. Another example of young politics is how all the MEHMS grades are doing a mock election, casting votes for Obama or McCain.  Election coordinator, Rory Dippold, is looking for poll workers for this October 30 morning event.  Contact Mr. Dippold to volunteer.  I’ll make a later update to let you know the winner.

George Mason High School M*U*S*I*C* Days

FC City Manager Proposes Budget Cuts

Falls Church City Manager Wyatt Shields has proposed to the City Council the budget cuts described below.  This matter will be discussed in the City Council work session Monday October 20 at City Hall.

City of Falls Church

Meeting Date: October 20, 2008 (Work session)	Title: Resolution Endorsing Proposed Expenditure Reductions To The City Of Falls Church FY2009 Budget (TR8-55)			Agenda No.:
Proposed Motion: MOVE adoption of TR8-55
Originating Dept. Head: Wyatt Shields City Manager 703.248.5004			Disposition by Council:
City Manager: Wyatt Shields 703.248.5004 FWS for Work Session		City Attorney: John Foster 703.248.5010	CFO: John Tuohy 703.248.5092

REQUEST: Council is requested to endorse the City Manager’s proposal for spending restrictions undertaken in response to reduced revenue forecasts for the current fiscal year.

RECOMMENDATION: Adoption of TR8-55.

BACKGROUND: Revised forecasts of the FY2009 revenues are lower than projected last spring when the Budget was adopted. As a result, the City Manager estimates that there will be a shortfall of $800,000 in the current fiscal year (FY2009).

The City Charter Section 6.15 (Administration of the budget) provides for the following actions in this situation where revenues fall short of forecasts:

“If at any time during the fiscal year, the city manager shall ascertain that the revenue cash receipts of the general fund or any utility fund for the year, plus any cash surplus available from the preceding year, will be less than the total appropriations to be met from such receipts, he shall have the power to restrict expenditures, subject to the laws of the Commonwealth relating to obligatory expenditures for any purpose, so as to forestall the incurring of a deficit, provided, however, that there shall be no reduction in salaries except by ordinance.”

Accordingly, working with all City department heads and the School Board staff, the City Manager has developed a plan for making adjustments in the following areas:

	Department	Amount
Reductions:	Sheriff	(4,000)
	City Manager	(31,350)
	Administrative Services	(114,192)
	Environmental Services	(132,000)
	Public Safety	(104,300)
	Development Services	(21,300)
	Community Services	(61,925)
	Schools	(371,000)
Reprioritize:	Capital fund	(138,000)
	Courthouse security	12,000
	CACT – traffic calming	10,000
	Penn & Broad signal	85,000
	City Hall recycling containers	12,000
	Trash truck refurbish	25,000
	Broad street baskets	10,000
	VPIS s

City Proposal to Attract BJ’s Wholesale Club to Noland Site

Proposal for City Council Review and Comment

Brief Background

• Following purchase of the Noland site by JBG Rosenfeld Retail in February 2008, CarMax was brought forward as the developer’s proposed tenant evidenced by a letter of intent to lease the site for 20 years at a market rental rate. The city expressed its concern that this use would be highly underproductive from a tax yield perspective. The city encouraged the developer to pursue a big box retail alternative, potentially with city participation through tax sharing, if justified to make the use economically feasible.

• JBG proceeded to market the site for big box and other retail uses during a time of declining industry sales and waning interest in new store construction. BJ’s Wholesale Club emerged as the only big box retailer with immediate interest in the Noland site. A number of other prospects, including Costco, passed on this opportunity to locate in Falls Church.

• In addition to big box retail, many other uses can be conducted by right on the Noland site, which is zoned for light industrial use. There is a significant delta between market rent that the owner can obtain for leasing the site and the rent that BJ’s can pay to make their ground lease economically feasible. There are extraordinary site preparation and related costs associated with transforming the site for retail use. Tax sharing between the city and the owner to incentivize a big box use is necessary, therefore, for the deal with BJ’s to proceed.

• Staff has consulted Eric Smart of Bolan Smart and Heather Arnold of Retail Compass to receive their feedback and recommendations regarding these negotiations and representations by the developer of investment goals and assumptions. Staff has also undertaken considerable independent research, including direct discussions with BJ’s and other industry insiders to gather data and verify facts. A tour of BJ’s Fairfax City store is scheduled for October 21 for city officials, hosted by the company’s corporate representatives.

The Justification for City Participation in the Deal

• Extraordinary site preparation costs

• • Site infill and retaining walls
  • Streetscape and landscape
  • Traffic signalization upgrade

• Risk sharing that minimizes the city’s exposure

• • No upfront cost to the city (PAYGO approach)
  • No effect on city’s bond capacity or credit rating
  • No additional tax burden on city taxpayers

• Strong upside reward potential from new tax revenue

Range of Projected Tax Yields from 87,800 Square Foot BJ’s

Sales Per Square Foot	Real Property Taxes	Sales Taxes	BPOL Taxes	All Other Taxes	Gross Tax Revenue
$477	$271,000	$418,939	$79,000	$70,000	$838,939
$900	$271,000	$790,452	$149,000	$70,000	$1,280,452

• Public purposes

• • Improved storm water retention
  • Improved appearance of the site
  • Some reserved public parking
  • Additional items to be negotiated

• Tax base diversification

• • 100% commercial development
  • $550,000 in new sales tax (a conservative estimate) would increase total city revenue from this source by about 12% over FY 2007 sales and use tax revenue levels

• Lost opportunity without city involvement

• • Deals in the current retail market are few and retailers are highly selective of new sites.
  • At 8.4 acres, the site is too big and too important to the city’s fiscal future not to get involved.

• Development agreement can protect city interests (to be negotiated)

• Insist on clawback provisions in the event of early termination of store operations.
  • No city liability for tax sharing if performance thresholds are not achieved.
  • Other protections

• Developer’s return on investment goals are commercially competitive and prevailing by industry standards based on our consultant’s review

Economic Development Committee Review

• Following extensive discussions between staff and JBG, City Council’s Economic Development Committee met on October 16 to receive a detailed background briefing, review the progress of the discussions on tax sharing, and advise the city manager on key issues and parameters for framing a deal acceptable to the city.

• The EDC requested independent review of cost estimations that JB’s civil engineers have provided regarding site preparation and infrastructure expenses related to big box use of the Noland site. The city engineer has reviewed the cost estimates and finds them to be generally consistent with industry standards.

• Guidance from the EDC and further negotiations enabled staff to reach a tentative agreement of terms with JBG on October 17. That proposed agreement subject to City Council review and approval is outlined below.

Tentative Agreement between JBG and City Manager

Annual Gross Tax Revenue                  Distribution   City Share                              Developer Share

$0 to $450,000	100% to City	$450,000	$0
$450,001 to $950,000	50% to City 50% to Developer	Up to $250,000	Up to $250,000
Over $950,000	100% to City	Unlimited	$0

• This deal is proposed for 12 years maximum beginning at the start of the first fiscal year following the opening of the BJ’s store.

• If $950,000 in minimum gross tax revenue is generated on the Noland site during each of the first 12 years, the city would receive a total of $8.4 million and the developer $3 million over that period. All tax revenues in Year 13 and beyond would flow to the city.

• The threshold for sharing taxes with the developer would be receipt by the city of $450,000 in gross revenue each year. The city would then share with the developer one half of each tax dollar received in the band between $450,001 and $950,000 in gross annual tax receipts, with a cap at $250,000. Gross tax revenues greater than $950,000 in any year would flow exclusively to the city.

• At present the Noland site produces less than $250,000 per year in gross tax revenue to the city.

• EDA would serve as the city’s agent for this tax sharing agreement. Council would pre-approve the terms of the agreement, and appropriate the necessary funds through the budget process.

Noland proposal and report, 101708

School Board to Transfer Funds to City

In an effort to help reduce Falls Church’s projected $800,000 budget shortfall, the School Board voted Tuesday night to transfer $371,208 in surplus funds back to the city government.

The school systems projected surplus stems from a savings in salary and benefit costs.

“Our enrollment projections were lower than anticipated, which means we didn’t have to hire as many teachers as we expected,” School Board Chairman Ron Peppe said. “We also realized a savings with the retirement of veteran staff members who were at the top of the salary scale and who were replaced by new staff brought in at a lower salary. All of these circumstances happened after this year’s budget was passed.”

The standard practice from year-to-year is for the school system to use its end-of-year surplus as a starting balance for the following fiscal year. Even with Tuesday’s school board vote to return part of the surplus to the city government early, the school system projects a starting balance for FY10 of $890,000, which is consistent with starting balances of previous years.

“The city government has a history of supporting school initiatives that have required resources beyond the scope of our normal operating budget, such as property purchases and school construction,” Peppe said. “I’m glad that we find ourselves in the position to help the city through these difficult economic times.”

“We appreciate the stewardship of the School Board as we try to find ways to cope with the impact of the national economic crisis on our city,” Mayor Robin Gardner said. “City leaders are still working to find ways to make up the rest of the shortfall, but the revenue from the schools is substantial, and we are grateful for the support.”

The City Council will discuss the city’s FY09 budget amendment at its next work session on Monday, October 20th at 7:30 p.m. at the City Hall Training Center.

League of Women Voters: Pump Up Your Voting Skills

Have you been reading news stories about the long lines that are expected at the polls? Tell your family, friends, and neighbors they can make the Nov. 4 election day more efficient by pumping up their skills on Falls Church City’s eSlate voting machine.  Our League is sponsoring hands-on demonstrations with a mock slate of candidates that include Abraham Lincoln and Betsy Ross. You can stop by to try out eSlate:

- Wednesday, October 8, 9 a.m.-1:30 p.m., Mary Riley Styles Library

- Tuesday, October 14, 10-2 p.m., Community Center

- Thursday, October 16, 3-7 p.m., Mary Riley Styles Library

- Monday, October 20, 3-7 p.m., Community Center

For a virtual experience on eSlate, check out the front page of the city’s web site: http://www.fallschurchva.gov/.  You can also take eSlate for a spin at the city’s Office of the Registrar of Voters (300 Park Ave.) during weekday business hours, and on Saturdays, October 25 and Nov. 1, when the Registrar’s office will be open from 9 a.m.-5 p.m.

October Membership Drive

Get the latest scoop on what’s happening with the City and the Schools.   An informational forum is scheduled for Thursday, October 16th at 7:30 PM at the Broadway Condominium.    Wyatt Shields, City Manager and Hunter Kimble, Asst. Supt. for Finance and Operations will speak and be available for questions.  This is a wonderful opportunity to get first hand information.

The Broadway is located on West Broad Street, between Lee Street and Pennsylvania Avenue. Enter at the front door on Lee Street. Enter Code 100 to gain entry to the building. The Club Room is off the lobby to the left. Parking is available on the street, or in the parking lot behind 703 Park Avenue, courtesy of Dr. Michael Silveus. (Enter off of Park Avenue or Lee Street.)

We encourage members to attend and to bring non-members to the event.  Refreshments will be provided.

For additional information on the League of Women Voters of Falls Church, visit www.lwvfallschurch.org.

Facing Budget Deficit, Council Votes to Extend $2,000,000 Loan

Facing an $800,000 budget shortfall this year, the Falls Church City Council last night voted to provide a $2 million loan to the City Center South Housing LLC (also known as the Falls Church Housing Corporation) as part of an agreement to facilitate purchase of property at 360 South Washington Street owned by Mr. Thomas Sawner, CEO of Educational Options, Inc.

The resolution passed by a vote of 4-3, with Mayor Robin Gardner, Vice Mayor Hal Lippman, and Councilmen Dan Maller and Dan Sze favoring approval, and Councilmen Nader Baroukh, Dave Snyder, and Lawrence Webb opposed.

Prior to the debate City resident Ira Kaylin, retired chief risk officer of the Inter-American Development Bank, stated that in his opinion the Council did not have adequate information on which to make a decision. He cautioned that, given the ongoing turmoil on Wall Street, financial experts believe this is not the time for governments to increase their debts and liabilities. Mr. Kaylin likened the City to a minnow swimming upstream against a raging torrent.

Mr. Sawner did not concur with Mr Kaylin’s estimation of the current financial environment. He stated that in voting for approval of the loan the City would be making a prudent bet on a venture that would provide benefits well into the future.

During the subsequent debate Mr. Baroukh and Mr. Snyder questioned the timing of the decision, noting that the Council would be voting prior to an upcoming session on the state of the city budget.

Mr Snyder, who estimated the actual project cost at $14 million, stated that Falls Church was potentially risking bankruptcy or a citizens’ tax revolt.  He speculated that the City might be forced to take a wing off a proposed elementary school in order to sustain the housing project.

Mayor Gardner, in dismissing these concerns, stated that she felt the ultimate agenda of those opposing the loan was to kill the project through delaying tactics. Mr. Snyder and Mr. Baroukh adamantly denied this.

Mr. Maller suggested that a delay of only two weeks would undermine the project. He stated that the City planned so much that it risked becoming paralyzed by analysis.

Vice Mayor Lippman stated that the loan documents had been rigorously analyzed and that the City’s interests were protected to the maximum reasonable degree.

By a 5-2 vote the Council rejected a motion by Mr. Baroukh to delay action on the loan until City Manager Wyatt Shields presents information on Falls Church’s financial situation on October 20. Mr Snyder joined Mr. Baroukh in supporting the motion.

In a second action, the Council voted to select Atlantic Realty’s $4.2 million cash contribution for the Falls Church Housing Corporation project, pursuant to previously approved voluntary concessions. The resolution was approved by a vote of 6-1 with Mr. Baroukh dissenting.