The fiscal year ending report for the City of Falls Church, all the numbers tallying up to the City’s performance as of June 30, was presented to the F.C. City Council late in the night of a work session last week, but was given its first comprehensive review as presented by the City’s chief financial officer Richard LaCondre at a Tuesday meeting of the Council’s Budget and Finance committee.
While the numbers showed a nominal $3.8 million surplus over the last fiscal year, it was indeed only nominal. LaCondre explained that most of the money had been seen coming and was deployed into the current fiscal year budget.
On the other hand, some surprisingly flat numbers indicated that, going forward, the City is still facing huge challenges to overcome a $2.1 million deficit in the spring, when it adopts its FY16 budget, either by growing revenues or cutting expenses, or both.
The flat numbers were in areas of business and retail economic activity. Namely, tax revenues from meals and sales taxes in Falls Church made no substantial gains in the past year, despite the opening of numerous new restaurants and businesses in town.
“A fixed number of people are spreading around the same amount of money,” LaCondre explained. The only solution, he said, is to increase the number of people who are patronizing Falls Church restaurants and retail businesses.
It is news that many in Falls Church don’t want to hear, because population growth is seen as undermining their preference for an idyllic residential lifestyle, and of putting more pressure on the schools through enrollment growth.
But there is little alternative, when all the options are examined. There are grim realities facing the entire region’s office market, with oversupply leading to dire outcomes.
The fact is that the Northern Virginia economy, overall, is stalling out, thanks to the ongoing impacts of sequestration at the federal level and the shift of government contracting dollars away from the businesses in Northern Virginia that have thrived on them for years.
The report of the Northern Virginia Association of Realtors earlier this month attempted to paint a happy face on the state of the regional real estate market, but the realities are starker. It was a booming market a year ago, but not now.
All these wider market forces are driving Northern Virginia jurisdictions toward solutions they’ve avoided up to now, which is to provide a stock of more affordable housing to compete for the dollars that the younger members of workforce have.
A meeting Monday in Arlington sought to address the increasing unafforability of living there. And despite these trends, Fairfax County has rejected repeated efforts to permit construction of residential studio units, which could be exactly what is needed to correct the stagnating trends in the region now.
The newly-proposed Mason Row project for the intersection of N. West and W. Broad St. in Falls Church does not offer residential studio units, but does present smaller one- and two-bedroom rentals that, its developers say, will appeal to the “millennials,” the 20- and 30-year old population who do not place the same value on single family homes as their parents have, and are less likely to be married and have children.
Not only will residential studio units also attract this population, but by virtue of their relatively lower cost, they will provide workforce housing for the anticipated hundreds of thousands of new jobs that will be created with the expansion of Tysons Corner in the wake of Metro’s new Silver Line.
They will not bring children to overburden the school system, and they will bring sufficient disposable incomes to patronize local businesses and put a charge into the meals and sales tax revenue numbers in the City.
LaCondre made his presentation Tuesday night with four City Council members present – Mayor David Tarter, Phil Duncan (chair of the committee), Karen Oliver and Marybeth Connelly. Also present was Hunter Kimble, the chief financial officer for the City schools.
Kimble reported that, while not official yet, enrollment growth in the City schools appears to be falling short of projections, something which, he said, “Provides us with a little bit of relief.”
Kindergarten class enrollments are in the range of 160 now compared to a projection around 200, he said.
Still, the issue of the passage of a bond referendum for a new Mt. Daniel Elementary school facility this November is foremost on the minds of school advocates, he said. The current situation of record low interest rates for borrowing money for such projects will not last past next summer, LaCondre projected.