At Monday’s Falls Church City Council Meeting, City Manager Wyatt Shields formally launched this year’s annual budget cycle by proposing a Fiscal Year 2019 budget of $93.9 million, up 7.6 percent over the previous fiscal year.
His recommendation calls for a 5.5-cent increase in the real estate tax rate, from $1.33 currently to $1.385 per $100 of assessed valuation to balance the budget, an increase of $372 for the average homeowner in the City, and when added to the average 3.4 percent increase in real estate assessments announced last month, amounts to an overall increase in the average tax bill of $634.
The proposed budget provides for a 1.7 percent ($630,940) increase in general government operating expenditures and a 2.8 percent ($1,171,046) increase in local funding for public schools, as requested by the School Board.
Debt service in the FY2019 budget, which covers the fiscal year commencing this July 1, will increase by 49 percent due to financing for the new George Mason High School, and renovations at City Hall and the Mary Riley Styles Public Library. This increase was projected at six cents, a half-cent more, on the tax rate when the FY2018 Capital Improvements Program (CIP) was adopted in July 2017 and formed the basis for presentations in advance of the school bond referendum that passed by 64 to 36 percent last November.
In Shields’ plan, the operating budgets for general government and public schools will allow for a three cent reduction in the real estate tax rate, absent the increase required for the debt service and the City’s probable obligation in excess of an extra $1 million to the Washington Metropolitan Area Transit Authority (WMATA).
So, the increase in debt service (equivalent to six cents on the tax rate) and for WMATA (equivalent to 2.5 cents on the tax rate) more than offset those operating budget savings.
But the WMATA increase proposed as $1,350,181, or 141 percent, represents a “worst case scenario,” according to Shields, pending potential resolutions offered by the General Assembly and governor later this spring.
The public’s first opportunity to question or comment on the budget plan will come this Sunday at a town hall meeting in the Community Center at 2 p.m.
Deliberations by the City Council will result in the adoption of a final budget by April 23.
The main clash that broke out after the presentation at the Council meeting Monday came in reaction to the Schools’ 2.8 percent request. Mostly, it involved Councilman Phil Duncan squaring off with Vice Chair Marybeth Connelly.
Duncan said the “elephant in the room” was the fact that the Schools violated the guidance they were given in December to hold their operations budget to two percent, and going for 2.8 percent instead. Connelly said the December guidance given was in the context of other guidance along with it, such as the call to “maintain excellent services and schools,” which competed against the two percent guidance.
The difference between the 2.8 and 2.0 increase amounts to $350,000. Under the new budget parameters, a penny on the tax rate is $410,000.
Other School officials, such as School Board chair Lawrence Webb, said they read the Dec. 11 “guidance” as a “starting point,” and not an inflexible number. The overall guidance with the two percent number passed by a 5-2 vote of the Council, but the two percent number was a late revision from a three percent number being discussed at the work session the week before.
Webb, who presented the rationale for the School Board budget request Monday, said that as a result, he was puzzled by the references to the Dec. 11 guidance.
Connelly reminded the Council that the citizens of Falls Church came to the polls last November to deliver the highest voter turnout in the entire commonwealth, and voted in favor of issuing a $120 million bond for a new high school by a 64-to-36 percent margin, knowing the implications for taxes. The Schools, she said, did a commendable job holding their budget request to less than the organic (3.4 percent) growth in annual revenues and should be applauded for that.
Two spokesmen supporting the School Board request, Laura Downs representing the City’s three PTAs, and Farrell Kelly of the Falls Church Education Association, made compelling cases for the 2.8 percent number, citing core needs of the schools and the fact that the 2.8-percent request was the lowest in many years.
Downs noted that last month the three PTAs held a joint meeting and they all voted unanimously in favor of the School Board budget, calling it “a conservative and prudent budget, leaving out over two-thirds of the requests from teachers, staff and principals, and being the smallest requested increase in the last five years.”
The budget’s three percent cost of living adjustment for all staff “is among the lowest in the region,” with “surrounding systems all proposing salary increases averaging 4.7 percent.”
Kelly pointed out that the 2.8-percent increase sought by the School Board “is significantly lower than projected revenue increases for the City,” adding, “It is not wise to pay for overdue capital needs by ignoring or underfunding current, necessary operating expenses.”
“By underfunding the Schools’ operating budget, City Council would be asking the teachers to pick up a large portion of the tab for the new high school, either increased workload or lost compensation. There aren’t many other industries that do that.”
In addition to the new high school, City Hall and library improvements, a Park Avenue “Great Streets Project” with a $435,000 “Smart Scale” grant, tree lighting, flower baskets and sidewalk sweeping downtown (with $60,000 dedicated per year from the hotel tax), traffic signal maintenance (including $100,000 for the Maple and Broad signal light repair) and the already-underway S. Washington St. Transportation Project at S. Washington and Hillwood (with federal money) are other improvements in the Shields budget.