MAN ABOUT TOWN: Where’s the Change?
By GEORGE SOUTHERN
Falls Church Times Columnist
November 22, 2010
No, despite the headline, the Man About Town is not indulging in Washington commentary. When I ask, “Where’s the change,” I’m sticking close to home. The new City Council has been in office almost five months now, and I can name only two actions different from what their predecessors would have done:
(1) Repealed the election change ordinance in favor of a referendum; and
(2) Declined to provide a million-dollar advance on proposed new seniors housing.
That’s it. And in the greater scheme of things, those two “changes” are less than defining moments.
The previous Council behaved as if their ship of state had not struck an iceberg, and was not sinking. And I gave them grief for that. But now the new Council seems to be acting out the same role.
Where’s the sackcloth and ashes? Wailing and gnashing of teeth? Maybe it’s going on in private, but don’t the taxpayers deserve to know if Council is worried?
But to be fair, just what could City Council do dramatically different? Frankly, I can’t think of anything that wouldn’t cause a firestorm of protest. Because institutions always resist change. And the Little City is no exception.
Does anyone really know how bad it is?
Each month, City Council gets a report from the acting Chief Financial Officer. That’s at least an improvement – it used to be only quarterly. But at last Monday night’s briefing our CFO admitted not to having been aware that the state Supreme Court had declined to hear the City’s appeal of the Water War judgment. (Note to CFO: Read the Falls Church Times!) That means the City has 30 days to pay out close to $2.5 million.
The financial report as of October 31 shows the City’s fund balance at a flat $2 million. Subtract $2.5 million from that, and . . . .
Of course, there will be a cash infusion come December 5 when property tax is due. But talk about living paycheck to paycheck!
The new City Council, like the old City Council, continues to ignore the “elephant in the room.” And this time I’m talking about capital improvements. Simply put, there are none. Because we can’t afford them.
As the ship of state lists to starboard, we’re planning a budget that essentially ignores the fact that buildings and equipment wear out. And that school and City employees, while appreciative of an annual salary hike, at the very least don’t want to see their net paycheck shrink – which could happen when employees shoulder a larger share of pension contributions.
Our City Manager has prepared a draft resolution for Council to approve that would “guide” him in making the budget. Included in his proposal is:
(1) No increase in real estate revenue. But since property values (particularly commercial) continue to decline, the projection is that we’ll need a 4 cent tax increase to obtain the same revenue as this year.
(2) Increased pension costs of $1 million and one-half percent higher operational costs.
Add (1) and (2) and what have you got? A slash-and-burn personnel policy. There’s no other way to balance the budget – and forget about trying to restore the fund balance, or provide for capital improvements, or fund the schools’ increased enrollment.
No, in the end, the new City Council is pretty much like the old City Council. They’re not miracle workers. And for that matter, why should we expect them to be?
I certainly don’t claim to have an answer how to fund the Little City – short of just raising the tax rate as needed. I think 26 cents would be a good start, which would give us a nice round rate of $1.50. Then you could restore the fund balance, pay for the schools, and start providing again for capital improvements.
Trouble is, not a single member of Council ran on an “Increase Our Taxes” campaign.
But the hard truth is, if you want a boutique city with a boutique school system, you have to pay for it. If, on the other hand, you want efficiency, you have to consolidate.
Meanwhile, the only good news is the City’s application for $6 million in interest-free school construction bonds provided by the Feds and divvied up by the State of Virginia.
But, while it’s worth a try applying for the money, we should remember that every other school district in the state has its eyes on the same pot. And Falls Church does just happen to be the wealthiest district, per capita, in the state. So I wouldn’t bank on that “free money” just yet.
By George Southern
November 22, 2010
Falls Church in the News
I realize that this is a blog type of newspaper, but I must say that it’s more informative than the News Press by far.
If what you say is true, that the CFO didn’t know about the VA Supreme Court’s decision, that is beyond appalling. I would expect the city to have been saving up money as soon as they lost the initial lawsuit. The appeal time certainly would have allowed them to budget for the financial shortfall. If they had decided to budget for it, who would have criticized them? I don’t know who the attorneys were on the case, but certainly they could have advised the city that appeals are rarely granted, and that the city should have taken steps to ensure that they could pay back the money.
Keep up the good work, George. Your online “rag” is a welcome read in the mornings!
I’m pretty sure that I heard that the city had already budgeted for returning $2.5M back to the water fund so that return shouldn’t reduce the fund balance like you are implying. Otherwise – this column seems to be just a retread of previous “let’s combine with Arlington” opinions.
I seem to recall one of our Council members running with an 8-point “100 day plan”. The only thing that happened during that time period was beginning the process on voting to maybe change the election date back to May. Glad we settled that!
You are wrong to say the new Council is like the old Council. The old Council ignored the icebergs all around the ship. The new Council screams in panic about the icebergs and runs around the deck rearranging the chairs while the same old captain sails the same old course.
See the difference?
You are correct that Falls Church is likely facing tough competition for a QSCB. That is why we worked hard on putting forward the strongest plan to both meet our needs and maximize the total points we can earn. More details on our app can be found in my FCT Community Comment post Sunday.
Our application depended on support in the City. That is why it was so important to get unanimous endorsement for our plans from both the City Council and Planning Commission.
George, you are correct about the perception of wealth here in Falls Church. I would urge you to read the memo of support from the Long Range Financial Planning Working Group in our app to the state. In providing its endorsement for the project, the working group makes a compelling case for our need of these moneys and the financial realities we are facing.
Yes, the City’s fund balance is $2M, but if the previous Council was in place, our fund balance at this time would be $0. That’s a HUGE difference between the previous and the current Council. Don’t be short sighted, certain Council members were bound and determined to hand over $2M to the Housing Commission; it is because the new Council voted against it, that we have the current fund balance. So it could be worse.
To FCC resident….. “Council members were bound and determined to hand over $2M to the Housing Commission” you wrote…. it wasn’t the Housing Commission it was the Falls Church Housing Corporation..
Thanks for everyone’s comments. Speaking of the Fund Balance — another way to think of it is cash on hand.
So in response to TEC above, if the City has $2 million cash on hand, that doesn’t mean it actually has $2 million cash plus another $2.5 million saved away to pay back the Water Fund. A budget is the plan; the Fund Balance is the reality.
And in response to FCC resident, the plan was for the City to borrow money to loan to the Housing Corporation. So although a $2 million loan would definitely have been a debt burden, it would not have greatly affected the current cash on hand (Fund Balance).
Where can I get one of those bumper stickers?
I don’t think that the Council, or the City Manager for that matter, have really grasped the fact that the current budget is unbalanced and that the funding gap needs to be closed. I’m reading the same financial numbers that the City Manager is reading and I certainly don’t come to the same conclusions that he came to in his recent FCNP op-ed.
Pat, where can we find the memo of support from the LRFPWG?
(EDITORS: See our story “How to Apply for $5.95 Million Interest-Free.” It has a link to the entire application package, including the LRFPWG letter of support.)
Why would anyone living in the City want to have such a negative bumper sticker? George, we found your article to be informative and enjoyed reading the community responses too. We support the News Press and the Falls Church Times Online. Two square miles with thousands of highly educated people should be able to find creative solutions if we stay positive and work together.