As expected, Falls Church City Manager Wyatt Shields Monday night presented his recommended Fiscal Year 2020 operating budget to the F.C. City Council that comes in just shy of $100 million. The budget marks a 7 percent increase over the current year, but is balanced with no tax increases, including no real estate tax increases. The increase to the $99.3 million budget, which the City Council now has until April 22 to modify or adopt, is funded with economic development and a better-than-expected 3.4 percent increase in assessed property values.
The biggest cause for the growth in the budget is in debt service, again as expected, with a 46.5 percent increase as the City issues the $120 million in bonds to build a new George Mason High School, construction of which is slated to begin this June. The parameters of the budget overall are in keeping with the best-case expectations of the City’s ambitious undertaking to build a new state-of-the-art high school and pay for it with proceeds from the long-term lease and dense economic development of 10.3 acres on the current high school site. If the plan continues according to expectations, in fact, the real estate tax rate in the City is projected to drop significantly in the next few years.
Shields’ proposed budget is expected to sail through in what should be one of the smoothest budget deliberations in decades, barring any unexpected developments. It fully funds the F.C. School Board’s request for a transfer of $43,383,277 and all employees on both the City side and schools will receive salary increases of 3 percent and up.
On the City side, there will be merit increases of 3.5 percent and for the police there will be 3 percent plus a 0.5 percent cost-of-living adjustment (COLA). For the schools, whose budget request was presented to the Council Monday by new board chair Erin Gill, “step” increases of 2.95 percent will be augmented by a 1 percent COLA. Shields’ budget also calls for the hiring of an additional police officer to accommodate population growth in the City (which has grown by a whopping 30 percent in less than a decade). It also calls for the hiring of two building inspectors and increasing the hours of the fire safety inspector to handle the significant economic development efforts in the works, and the reinstatement of a City human resources director.
Overall, if adopted, Shields’ budget will build the City’s employee base back to the level of 204 that it last had a decade ago prior to the impact of the Great Recession, which required the City to shrink its employee base to 179 in 2012. But the current level would still be supporting a City 30 percent more populous than a decade ago.
The Council was clearly pleased at Shields’ proposed budget unveiled Monday night, noting that the current real estate tax rate of $1.355 per $100 of assessed valuation is par for the course in the region, with commercial real estate tax rates in neighboring Fairfax County actually topping $1.47 with overlay taxes then added into its base rate. For Falls Church this is accomplished despite an increase in its debt service to 14 percent of the total operating budget, up from eight percent currently.
“This is a great budget,” said Council member Dan Sze. “I anticipate a very smooth process.”
Council members Letty Hardi and Phil Duncan noted that there was not enough devoted to addressing the issue of affordable housing. Councilman Ross Litkenhous said that if there was not actual revenue sharing between the City and the schools, it was there in spirit this time. Councilman David Snyder called Monday “a very good beginning,” and said the City should continue to fight to bring down the cost of its share for WMATA (set to increase by $510,995 in Shields’ plan to $1.8 million).
“Economic development is the underlying story that makes this budget work,” Duncan said, cautioning that there are still unknowns, such as the cost overruns that are bedeviling the proposed library expansion project. Mayor David Tarter underscored the night’s positive mood by saying, “If a budget can be pleasant, this is one,” but adding “there is a lot of work ahead.”
The schedule going forward calls for a public town hall on the budget on March 24, a first reading including a preliminary tax rate ordinance on March 25, a public hearing on April 8, and a final budget adoption on April 22.