According to a report to the Falls Church City Council from the City’s Chief Financial Officer John Touhy placed on the City’s web site Friday, Falls Church came in a whopping $4 million short of net revenue projection for the budget year that ended June 30. This remarkable number, in a total budget of $66 million, includes a revenue shortfall of $7 million, or over ten percent of the total projected revenue, offset by expenditure cuts of only $3 million.
The stunning news means that the City Council and F.C. School Board, at a joint work session this Monday night, are faced with the prospect of immediate and severe cuts in city and school programs and personnel.
City Manager Wyatt Shields began last week briefing Council members and the School Superintendent in a series of one-on-one meetings.
Tuohy’s report includes a spread sheet of unaudited revenues, expense and changes in fund balance for the City’s general fund through June 30. He reported that of the $7 million in revenue shortfalls, $5.2 million came in lower-than-projected sales tax and real estate tax numbers. The’s City’s fund balance will decline, as a result, to $4.3 billlion, with $1.4 million of that projected to be spent by this year’s end. That means the fund balance, as a percentage of the operating budget, will drop to 4.7, or $2 million below what is needed to meet the City’s minimum policy requirement of eight percent. That shortfall could adversely impact the City’s credit rating, and can only be compensated for by at least $2 million in immediate cuts in spending.
The report does not indicate the level of comparable shortfalls for the current fiscal year, beginning July 1, but they are estimated to be steep, as well.