Faced with an unexpected $4 million net budget shortfall from the Fiscal Year 09 budget ending last June 30, Falls Church City Manager Wyatt Shields told the News-Press in an exclusive interview prior to tonight’s joint City Council-School Board work session that he feels “it may be possible” to fix the problem without requiring the layoffs of any existing City or school employees.
While the steep shortfall caught everyone by surprise when it was identified in a report from the City’s Chief Financial Officer John Tuohy late last week, Shields confirmed that the numbers were due to three factors: 1. the nagging recession driving down revenues from real estate, sales and other taxes below projections, 2. an audit by Fairfax County of the state’s Department of Taxation coding which found that the state had been crediting to Falls Church about $1 million a year in sales tax that it wasn’t due, and 3. an error in the calculation of the projected real estate tax revenues, calculated in terms of the previous years’ projected numbers instead of actual numbers.
While the almost $3 million of the $7 million shortfall was compensated for in the last fiscal year with cuts and by keeping positions in City government vacant, making for a net $4 million shortfall, Shields said the City is facing another round of numbers below those projected for the current fiscal year, as well.
But he said that the City’s fund balance, which can also be called a “rainy day fund” is being used to mitigate some of the shortfall, major cuts in the City’s non-essential Capital Improvements Program (CIP) and continuing not to fill vacancies in City positions should make up for all but $1.5 million. Shields is working with City School officials to figure out how to address that number, and is expected to make a set of formal recommendations, hopefully in conjunction with the schools, by Oct. 19.
That $1.5 million in cuts, Shields said tonight, could conceivably be made with no layoffs of either City or school personnel, but it is too soon to tell.
These matters will be fleshed out in tonight’s joint session, scheduled to begin at 7:30 p.m. EDT, when City Council and School Board members will air their initial reactions publicly.