In a joint work session with the F.C. School Board Monday night, the Falls Church City Council resolved to adopt guidance for the coming fiscal year setting a ceiling on budget growth at 3.1 percent, compared to 2.0 percent a year ago. The meeting marked the kickoff of the next budget cycle for the CIty and its schools, a process that will work toward a final adoption of the FY2021 budget by the end of next April and is expected to be the first operating budget ever in the City’s history to top $100 million.
F.C. Chief Financial Officer Kiran Bawa reported to the joint session that the preliminary revenue forecast for the current fiscal year includes a 3.6 percent growth in real estate assessed values (3.7 percent for residential and 3.5 percent for commercial) compared to 3.04 percent for neighboring Fairfax County and between 2-3 percent for Alexandria. While real estate tax growth is forecast to be 3.6 percent, other taxes (personal property, sales, meals, business revenue and others) will grow by only 1.8 percent, such that total tax revenue growth is projected at 3.1 percent, or about $2.5 million. As the City is required by law to balance its budget each year, the 3.1 percent growth limit was then set at the end of a lengthy meeting of deliberations.
The City also has the happy problem of divining where a $4.2 million surplus from the last two years will be spent. It was carefully noted that the sum does not amount to that much free money as a lot of it is already committed to be deployed into existing lock boxes to pay for ongoing developments like cost overruns at City Hall and the upcoming redevelopment of the Mary Riley Styles Public Library. Still, there will be one-time spending opportunities that can include neighborhood traffic calming, mulch pad construction, stormwater and sewer improvements, affordable housing and dedicated sidewalk improvements. The surplus arose from underspending in some categories in the last year, and due to the late sale of revenue bonds this fall, the avoidance of the payment of the first debt service payment until next summer.
“There is a lot of nuance behind these revenue numbers,” City Manager Wyatt Shields said.
Members of the school board, and including Superintendent Peter Noonan, reminded the Council that in last spring’s budget go-around the Schools were willing to remove five positions in order to stay within the budget guidance then, and maybe a place some of the surplus can be used would be to restore some of those positions. Noonan projected that enrollment in the public school system will rise from 2,658 students currently to about 40 next fall and the new George Mason High School now under construction and expected to be occupied halfway through the next fiscal year will be 100,000 square feet larger, requiring increased costs for materials, supplies and services, and added social workers, school counselors, behavioral support, parent liaisons and instructional resources to drive student achievement.