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F.C. Council Still Debating Lowering City’s Tax Rate

F.C.’s City Council reviews some of the budget requests from various departments within the City Government. (Screenshot: News-Press)

As the Falls Church City Council closes in on adopting its Fiscal Year 2022 operating budget of about $106 million in less than two weeks, it appears almost certain that property owners will enjoy a cut in their tax rate, below the current level of $1.355 per $100 of assessed valuation.

The only question is by how much, and options currently discussed are ranging from City Manager Wyatt Shields’ recommendation of a single penny reduction, to a drop to $1.33 by Council member Letty Hardi and $1.31 by Council member Ross Litkenhous. Council member Phil Duncan said at Monday’s virtual City Council meeting that he’d prefer Litkenhous’ number, but it all depends on information that is not currently available.

The missing information concerns how much the City will get from the latest round of large federal economic recovery acts — the American Rescue Act of $2 trillion and the American Jobs Act of the same amount designed to offset the impact of the last year’s Covid-19 pandemic — coming from the Biden administration and its majorities of allies in Congress.

Unanswered questions go to how much the City will get, when it will get it and what it will be permitted to use it for. For example, one big, still unanswered  question will be whether or not the federal stimulus money can be used to lower the real estate tax rate, or any tax rate.

The framework for the extended Council discussion that came after 10:30 p.m. Monday was the news that Loudoun County is considering a five cent reduction in its real estate tax rate to under $1. Assistant City Manager Cindy Mester suggested that that proposed rate is without taking any federal money into account.

Litkenhous argued that with two latest large scale mixed use
development projects — Mill Creek’s proposed Founders Row 2 project and Atlantic Realty’s new “1 City Center” project — are projected to add the equivalent of nine cents on the tax rate in the form of net contributions to the City’s revenue base alone. Those two contributions, federal money or not, should justify a big tax cut for property owners, he said.

But others contended that a cautious approach is wiser until more is known about what to expect from the federal government. They discussed approving a FY22 budget on the designated date April 26 and then introducing modifications at a later date that could involve a rebate to taxpayers.

One complication for the City is that its federal money will come third hand, by way of the Virginia state government. That’s because of technicalities in existing federal law that do not recognize independent cities. Mayor David Tarter noted that this contributes to a lot of uncertainty, a sentiment that Shields echoed.

“Third party” money includes that coming from Amazon, an expected $3 million of its proffered contributions to jurisdictions in the region that is supposed to go to affordable housing.

Other targets for the federal dollars that the Council discussed Monday included the $7 million that is needed for stormwater solutions, something that could offset increases in the City’s stormwater fund tax, as well as needed resources for neighborhood traffic calming and sidewalks and the S. Washington bus multimodal project underway now.

Requests for funding for the Jobs Act will go through the office of U.S. Rep. Don Beyer and the biggest chunk of that money for this area is expected to go to the regional bus rapid transit system planned to run from downtown Alexandria, out Columbia Pike and up Route 7 to Tysons.

The earlier plans for that to be a light rail system having been scuttled in Arlington a half-dozen years ago, the bus rapid transit would run the length of Route 7 (Broad Street) in Falls Church, with a diversion to the East Falls Church Metro station.

It is likely that as a “shovel ready” project, it could get significant federal funding from the Jobs Act when it is passed and lead to some swift changes along F.C.’s main corridor.

Other less specifically-defined “Smart City” initiatives are also on the table that involve electric car chargers, solar panels, signal light coordination and other steps.

Shields said the priorities for Falls Church are looking like stormwater improvements, affordable housing, “smart cities” and anti-traffic congestion measures.

But specific allocations of federal resources will probably not be known until June and the money not available until September or October.

“This leaves us with a wide range of options to consider,” Shields said.

“We need to keep pressing to see if we can get our tax rate almost down to what Ross (Litkenhous) is proposing,” Councilman Duncan said.

In other Council developments Monday:

• The Council learned the latest fiscal impact estimates for the West End Gateway Partners’ project is $4,964,849 in revenue to the City annually, being $7.8 million in gross revenue minus $2.9 million in costs (an estimated 69 pupils in the City school system at an annual cost of $16,276 per student). The project is to include 399 rental apartments, 128 condos, 113 senior independent living and 71 senior assisted living units. The rentals include 40 studio, 227 one-bedroom, 96 two-bedroom units and 13 three-bedroom units. The extended-stay hotel will have 146 rooms.

• The project developers having retained Trammel Crow as a partner to fill the space in its office building,

• The latest estimate for the completion of the renovation of the Mary Riley Styles Public Library is June 29, with opening to the public by late July.