Countdown to Decision: F.C. Council Gets Ready for Final Vote on Budget

Final Work Session Tonight Ahead of Monday’s Deadline

It’s crunch time for the Falls Church City Council. The Fiscal Year 2012 budget that goes into effect July 1 must be finally approved by the Council at its public business meeting Monday night.

While there will be a final chance for the public to weigh in on things like the tax rates, the schools and City employee compensation before the vote on Monday, the Council hopes to reach a consensus on these matters at what promises to be a lengthy work session at City Hall tonight. The public can sit in on that session, but is not invited to speak up.

Going into the final days, Falls Church Mayor Nader Baroukh told the News-Press in a telephone interview Tuesday that “the process has gone well,” despite the revenue shortfall and painful decisions required to make significant cuts.

He said the two main issues that remain “up in the air” going into the next few days involve determining, on the one hand, the parameters of “critical” needs for maintaining the City Hall buildings and the City’s parks, which have been ignored in the context of tough fiscal times in recent years. On the other hand, he said, landing on an optimum real estate tax rate remains unresolved.

That issue centers not to much on operations for the coming fiscal year as on the looming, deepening shortfalls anticipated in the follow on years. Those on the Council, like Baroukh, who are mindful of the conditions they project down the road are urging a higher real estate tax rate this year as a buffer against such developments.

They are pushing for a four-cent rate hike, from the current $1.24 per $100 of assessed valuation, to $1.28, the move now endorsed by City Manager Wyatt Shields, while others want to hold it to $1.26, saying a “wait and see” approach to the next few years is more prudent. They expect that revenue growth could be more robust than the maximum three percent built into the current projections.

(A penny on the real estate tax rate translates into about $350,000 for the City’s $64 million projected budget).

Right now, the Council appears sharply divided between those two options. At its work session last Thursday, three (Baroukh, Ira Kaylin and Johannah Barry) inclined to the higher number, and three (Robin Gardner, David Snyder and Lawrence Webb) to the lower one. The Council’s seventh member, Ron Peppe, was not in attendance, meaning he may wind up the “swing vote” on the matter this Monday.

The higher tax rate will insulate the City’s fiscal position by escalating the pace at which its fund balance is restored to its optimum level, or 12 percent of annual operating expenses. At that level, the high end of the target range established by City policy, the City will be well prepared for economic storms in the future.

Baroukh told the News-Press he detected a prevalence of support on the Council for granting to the School Board its annual request for a transfer of funds from the City. While he said he personally disagreed with the School Board’s intention to offer a modest salary increase to its employees, rather than a one-time compensation “offset” as is being planned for City employees, the decision is the School Board’s to make, and not his.

In a surprise development last Saturday, F.C. School Board Chair Joan Wodiska, often sharp-tongued in her passionate defense of the interests of the City’s schools in the face of difficult budget times, stood to speak at the final town hall meeting on the City’s budget and hailed the constructive role of Mayor Nader Baroukh in the process.

“We have a good friend in the mayor and the things he’s doing for the schools,” she said. “The City Council has been incredibly collaborative and committed to ensuring we have world class schools in the City of Falls Church. I am very confident things are going to go well for the schools.”

Speaking to a small gathering at the Community Center that included Wodiska Baroukh, Vice Mayor David Snyder, Council members Robin Gardner and Ira Kaylin and Superintendent Lois Berlin and School Board vice chair Patrick Riccards and other City officials, City Manager Wyatt Shields outlined the parameters of the next fiscal year budget as the Council closes in on its deadline for its adoption.

Shields echoed Baroukh’s comments to the News-Press, saying the debate centers now mostly on the amount of the real estate tax rate, since those taxes account for a full 61 percent of the City’s annual revenues.

With the current rate at $1.24 per $100 assessed valuation, Shields recommended a single penny increase last month, but last week revised his recommendation to a new rate of $1.28. His primary concern, he said, is for anticipated major increases in costs coming in the Fiscal Year 2013 budget, related to pension costs that are beyond the City’s control. That, and an early restoration of the City’s fund balance to its target level (12 percent of annual expenditures), justify the overall four-cent rate increase, he said, although the stablization he hopes will derive from that is predicated on an uncertain three percent overall growth in the economy.

Since 2009, Shields noted, the expected adoption of the next fiscal year budget will mark a decline by 13 percent of the number of City employees, from 206 to 179.

Among the changes to his original recommendations he reported that the City Council has agreed to so far are: 1. tabling the plan for a five-cent commercial real estate tax overlay, 2. restoring to current funding levels of the outlay for the City library, 3. limiting a renovation of City Hall to critical maintenance, 4. providing funds for critical maintenance of the City’s parks, and 5. increasing the annual sum, in the form of a one-time bonus instead of a salary increase, to all City employees from $1,300 as proposed by Shields to $1,800.

The budget at this poiont also includes bonding for a $5.95 million expansion of Thomas Jefferson Elementary, increases of the City’s auto decal fee from $25 to $30 and the personal property tax rate from $4.91 to $4.84, averaging out as a $18 annual increase for a car valued at $20,000. There will be an excess trash fee introduced of $1 per bag (for what does not fit into the new trash canisters) and an increase from 50 cents to $1 per bag for leaf and twig bags.