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 by 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, 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 by 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.
The schools already know that they’ll be confronted with a 10 percent increase in health insurance rates, totaling about $300,000, and a 16.68 percent to 17.83 percent increase in mandatory employer expenditures (another approximately $300,000) and an increase in life insurance rates from 1.31 percent to 1.34 percent.
Noonan stressed that all revenue requests will be centered on the schools’ Triennial Plan and goals of extending the International Baccalaureate program to all students, to closing performance gaps among students and advancing the schools’ “caring culture and community.”
These goals, subsumed under the motto of “Sharpening Our 2020 Vision,” are predicated on “making sure all our teachers are trained up,” he said.
The City Council is expected to put the 3.1 percent growth ceiling on the upcoming budget into the form of a resolution to vote upon at next Monday’s last regular meeting of 2019. The draft resolution developed by City Clerk Celeste Heath reads that a guidance statement “is intended to provide a framework for the City Manager and the School Board as they develop a proposed budget for presentation in the spring that is aligned with fiscal projections as well as Citywide goals as expressed in the Capital Improvements Program, the Comprehensive Plan, the City Council work plan and other approved plans.”
It adds, “The City takes tremendous pride in the quality of public input and citizen involvement in the budget process, and the budget process is designed to provide as many opportunities as possible for citizens to exchange information about the budget priorities, and this public input will ultimately inform the Council’s final budget decisions next spring.”
The meeting this coming Monday will be preceded by a swearing-in ceremony for City Council candidates elected to new four year terms last month. That ceremony will begin at 7 p.m. at the Council chambers in City Hall and will include expressions of thanks for the two members of the School Board who chose not to seek re-election and will leave their spots on the board at the end of the year.
Those being sworn in include the three incumbent members of the Council who were all re-elected last month, Mayor David Tarter, and Council members Letty Hardi and Phil Duncan. The ceremony is open to the public.
It will be followed by a public town hall on Thursday, Dec. 12, at 7 p.m. at the Community Center that will be an update on the West End Economic Development Project.
The School Board will convene for a budget work session on Dec. 17, and Noonan will present his proposed budget on Jan. 14, 2020. The School Board will adopt its formal budget proposal on February 18, and City Manager Wyatt Shields will fold that proposal into his overall operating budget proposal on March 9. The Council is expected to adopt the FY2021 budget on April 20.