The Falls Church City Council has scheduled another special opportunity this Saturday morning for citizens to bring their concerns and priorities about the extraordinary next fiscal year budget.
Billed as an “informal discussion” with some members of the Council, it will be at 10 a.m. at the F.C. Community Center.
Faced with the unprecedented need to cut spending below levels in the current fiscal year, the Council is considering both raising the real estate tax rate, and cutting seven City jobs, imposing a wage freeze on all the 350 remaining City employees, and either killing or severely scaling back the operation of the City-owned GEORGE bus service.
A particularly dicey situation faces the Council in this belt-tightening exercise, as the City’s School Board has included a modest “half-step” salary increase for all its employees, amounting on average to about $500 a year, while a strict freeze has been proposed by City Manager Wyatt Shields for all non-school City employees. The disparity has been called “the giant elephant sitting in the room” by Mayor Robin Gardner.
At a work session on the budget last week, at least three of the seven Council members openly expressed their opposition to any salary increases for school employees, despite the fact School Board members were present to defend their decision in the face of continuing competition for talent in the region. The increase, said School Board Vice Chair Susan Kearney, would only bring the City’s salary scale into “the middle of the pack” compared to surrounding jurisdictions, and would insulate it from a potential salary freeze the following year.
But the three Council members, including Lawrence Webb, Nader Baroukh and Vice Mayor Hal Lippman, expressed their opposition to any increase on grounds that it would cause an antipathy between the schools and City employees, harming morale in what is already a tough economic environment.
Still, the Council is powerless to dictate to the School Board whether or not to provide the salary increases, except to cut its overall contribution to the Schools, amounting to roughly half the entire City budget of $66.5 million, by about $300,000, or the equivalent of the salary increase.
Still, the School Board could provide the salary hike anyway, since the Council has no line-item control over the school budget.
Lippman indicated that some school board members are “at least willing to talk” about changing their mind on the salary increase, while others are suggesting that a resolution could be better reached by having a comparable salary increase for City side employees.
But that would only further exacerbate the existing pressures on the budget. Even with a City-side salary freeze, the elimination of seven positions and the 100 percent de-funding of GEORGE, the City Manager’s recommended budget includes a jump in the real estate tax rate from its current $1.03 per $100 of assessed valuation, to $1.07.
With average assessed values of real estate in Falls Church down dramatically, the increase in the tax rate will involve only a modest average net tax bill increase for City residents. But with City residents, themselves, facing all of the pressures of the current, particularly nasty economic recession, many are complaining that they need relief from taxes below even present levels.
However, the Council has voted itself the ability to raise the tax rate even higher than Shields has recommended. If they want to keep GEORGE, or some version of it, or to offer a salary hike for City employees, they could put the tax rate as high as $1.09, which would burden City taxpayers with a more sizeable tax bill.
Councilman Dan Maller raised the subject at Monday’s City Council work session of selling some City property as a way of raising additional cash. But while that subject will be discussed more fully at a future work session, Mayor Robin Gardner said, the City’s Chief Financial Officer John Tuohy cautioned that such an approach might provide some “one time” relief, but would not solve any problems going forward into future budget cycles.
Tuohy warned the Council of the dire fiscal consequences of a failure to reverse the current economic downtrend in the City, noting that zero growth over the next five years would create wide gaps between income and cost factors. Such gaps would grow from $2.1 million in 2011, to $5.6 million in 2012, to $8.3 million in 2013 and $14.2 million in 2014. Since a penny on the real estate tax rate adds up to about $300,000, the cost of filling the gaps with tax hikes would be catastrophic for City residents.
Still, the Council has spent much of its intellectual energy so far not only considering retaining the GEORGE bus system, but also mulling placing a $2 million “place-holder” that Shields proposed removing back into the Capital Improvement Projects (CIP) portion of the budget for an expansion of the Mary Riley Styles Public Library. The $2 million would not be expended until 2011, however.
In the coming fiscal year, set to begin July 1, projected costs on CIP efforts were trimmed by Shields from $2.7 million to $113,000 of City money.
The next official public hearing on the budget will be held Monday, April 13, at 7:30 p.m., and its final adoption will be April 27.