The annual budget process in the City of Falls Church got off to an unexpectedly early start this Monday when an impromptu conversation about the City’s recent-years shared revenues policy with the City schools developed into an hour-long debate.

A recently-received revenue sharing document triggered the discussion with a majority on the City Council expressing concern that too literal a divining of the current 50-50 arrangement between the City operations and the schools tilts to the advantage of the schools.

Mayor Letty Hardi was among those who spoke out on the need for a modification of the policy on grounds that more flexibility is needed given the realities of the economic conditions throughout the region.

This year could see a sharp deviation from recent years’ budget patterns in the region, given the fact that student enrollments are sharply down throughout the area due to federal layoffs and the uncertain overall economy.

As for the budget process itself, the Council and School Board have agreed to put off a significant joint discussion until February 16, although preliminary budget data will be provided to both on December 14. 

The change was determined to enable more reliable budget data and other factors to be included in the deliberations and came out of meetings held last summer to improve the process. The second quarter budget data usually becomes available in mid-February so it was determined to be a better time to meet with solid budget data rather than guesswork. It was also decided to have a second Council-School Board joint meeting in April to make sure that all the major budget issues are addressed.

As for the coming budget season, Falls Church’s was the only school district in the wider Northern Virginia region that did not see a significant downturn in enrollment when the numbers got turned in to the state at the end of September.

But the growth of the Falls Church numbers was still below what was predicted and could portend a difficult budget process. So, school officials are already taking careful note of what impact this will have on the 50-50 revenue sharing agreement with the schools.   

Frequently in the recent period the 50-50 revenue sharing agreement has been pointed to as a cause for the copacetic feeling that has characterized the recent years’ budget deliberations. But this will be put to the test this year when it is expected that revenues will not meet expected needs and a press for some serious budget cuts will necessarily arise.

In this Monday’s discussion, the central disagreement was whether the City should continue targeting a 50/50 division of revenue changes or give Council greater flexibility to allocate funding according to actual needs.

The schools’ position was to preserve the 50/50 arrangement, allowing deviations primarily for unexpected circumstances. The majority on the Council took the position to retain 50/50 as a guiding principle but allow exceptions for changing needs, including public safety, enrollment, infrastructure and debt service.

It was proposed to move toward needs-based budgeting, where the division could vary depending on school enrollment and broader population demands.

The person on the City Council who has most consistently reflected the needs of the schools has been Marybeth Connelly. While she like all the others called for the need for greater flexibility going forward, she did not specifically call for any change in the current overall policy

Vice Mayor Laura Downs referred to the contentious nature of deliberations between the Council and School Board prior to the revenue sharing agreement, and she said that it was like a “war” between the two bodies every year.

The change, she noted, contributed to predictability as well as good feelings. 

Council member Justine Underhill spoke out as the strongest proponent of the need to reconsider the current agreement based on changing demographics and enrollment profiles.

The City comes into this budget season with a new city manager and a new director of finance and these changes could translate into a markedly different approach to the subject.

The new city manager, Seth Hendler-Voss, began just last month following an expansive 23-year career in the post by the recently-retired Wyatt Shields. Shields’ lengthy tenure established a pattern of predictability.

Also new in his post as chief financial officer David So, who began a year ago, replacing Kiran Bawa who held the job for eight years before leaving to become the CFO of the San Francisco Bay Area city of Piedmont, California. So came from three years and four months as director of management and budget for the Washington Metropolitan Area Transit Authority (WMATA).