The clock is ticking, and for the Falls Church City Council, its date with destiny for committing to the next fiscal year’s budget is fast approaching. But in the midst of this nerve-wracking countdown, the Falls Church School Board has sprung with some good news that eases the strain slightly, but now burdens the Council with an even greater task to reduce its plans for a tax rate increase all the way down to zero.
The good news coming from the Schools’ administrative offices by way of Chief Financial Officer Hunter Kimball is that deft moves to find an alternative health care provider for the school system has produced a far better option that will provide the same level of insurance while costing almost $300,000 less.
When the Schools’ current provider, United Health Care, announced it was jacking up its premiums by yet another 10 percent, its third such increase in as many years, Kimball leaped into action, went shopping around and found the Blue Cross-Blue Shield affiliated Virginia’s Local Choice health plan that offered almost identical coverage with lower premiums.
The move was made last week after United Health Care announced its latest premium hike, so that not only did the system avert the sudden burden of a 10 percent rate hike, it was able to come in with a lower rate that is equal, in citizen taxpayer terms, to almost a full penny on the real estate tax rate.
In a second effort to take pressure off taxpayers, and the City Council that is wont to please them, the School Board determined that it could avoid paying for a new school bus out of its budget request, and finance its acquisition instead. That moves takes another almost $100,000 off the budget chalk board.
School Board chair Justin Castillo officially announced those new savings to the City Council at Monday night’s public hearing.
Suddenly, the Council, challenged with the prospect of imposing a four cents (per $100 assessed valuation) tax rate increase on its citizen property owners, finds itself within striking range of meeting the demands of many for no rate hike, at all.
The number is down from a four cent rate hike to a 2.5 cent one, and the Council spent much of its deliberation portion of Monday night’s meeting to considering if noodling at the margins could not, in fact, achieve that.
The final vote on the budget for the fiscal year starting July 1 is not required of the Council until April 27, but it is the hope of the Council and City Manager Wyatt Shields that its parameters can be finalized by the work session of next Thursday, April 23, to give City Hall time to prepare all the paperwork for Monday’s what would be a pro forma vote.
One helpful move could be the decision in the hands of City Treasurer Jody Acosta to switch the City’s operating bank account from one which is liquid but offers almost no interest to another one which is almost liquid – about a week’s delay – but does better on interest payments.
Whereas Shields said at the City Council meeting Monday such a step would not have a significant impact on the overall budget, when it gets down to finding smaller sums to technically balance the budget, it could matter a lot.
Acosta confirmed to the News-Press that the City is awash in cash, no matter how the numbers as calculated in the City’s ledger books. While Shields told a town hall meeting on the budget last Saturday that the City holds about $13 million in cash to cover its fund-balance policy (which is to keep two months worth of cash available for unforeseen developments), the actual cash number sloshing around in the City’s account is at least double that.
So, in back of the envelope calculations, a one percent interest yield on, say, $26 million could generate some $260,000, or enough to close the tax rate gap to a further significant degree.
There are also murmurings from commercial developer quarters that assessments on commercial real estate are markedly below market value, and that efforts are pending to document that. “The City is leaving a lot of money sitting on the table” because of that, one source said.
But at a second town hall meeting on the budget last Saturday at the Community Center, and at a final hearing at a regular Council meeting Monday night, there was a roughly equal expression of concern for rising taxes as there was for the need to maintain the competitiveness and, thereby, the quality of the City’s school system.
Some citizens placed the need for maintaining the schools ahead of planned renovations and expansion of City Hall and the Mary Riley Styles Public Library, although the need for dollars to begin that work will not come up until the next budget cycle.
Jane Rasmusen, treasurer of the middle school PTSA, spoke at the hearing Monday and said that when she moved to the City 20 years ago she bought her home for $216,000 that she could sell today for $900,000. “Shame on us,” she exclaimed, “I’m getting rich off of our teachers. They’re making me wealthy.”
Letty Hardi, with two school-aged children, said her husband grew up going through the Falls Church School System and “has seen a lot of change for the better” in Falls Church. “Many of us are pro-schools and pro-development,” she said, but want the benefits of development to go the schools, and not to City Hall or the library.
As for indications that last September’s low rate of growth of enrollment in the Falls Church system would not hold as a trend, this has been confirmed by the rate of early registrations for kindergarten for the fall. Parents pre-registering their children by an April 1 deadline are indicating the growth rate will bounce back to its pre-2014 levels that had the Falls Church system the fastest growing in the region.
It has been speculated that the low rate last fall could have been accounted for by the onset of the Great Recession in 2007 when individual decisions on family development could have been subjected to delays.