City Manager Mark B. Jinks Proposes Fiscal Year 2018 Budget
On February 21, City Manager Mark B. Jinks presented Alexandria City Council with a proposed General Fund Operating Budget of $712.5 million and an All Funds Budget of $873.7 million, which represent increases over the current year of 3.5% and 2.5%, respectively. This budget includes $242.6 million in operating funds and debt service for public schools (a 3.6% or $8.4 million increase over FY 2017 funding), and invests $2.0 billion over 10 years in Alexandria’s Capital Improvement Program.
“Alexandria is at a crossroads,” said Jinks. “My proposals reflect a future-oriented path by prudently investing in needed services, public buildings and infrastructure. This path is longer and initially more costly than a path of reduced services and foregone investments, but it can help maintain a high quality of life and keep our community in a sound social, economic and physical condition.”
The proposed 10-year Capital Improvement Program includes substantially increased funding of $160.6 million to improve Metro safety and reliability; a $144 million (or 66%) increase in funding for school capital projects for the Alexandria City Public Schools to address enrollment-driven capacity needs; and $386 million for accelerated combined sewer outfall projects.
To account for stagnant revenue growth, the proposed budget includes an increase in the real estate tax rate of 2.7 cents, from $1.073 to $1.10 per $100 of assessed value. This would increase the average homeowner’s tax bill by 3.5%, or $197 per year, which is the lowest dollar increase to the average real estate tax bill in five years. Alexandria’s real estate tax rate would remain among the lowest in Northern Virginia for homeowners and the lowest for commercial property owners. There are no proposed increases in any other tax rates.
A new stormwater utility fee is proposed to be applied to all residential and non-residential property owners to pay for costly new federal and state mandates. This would fund stormwater management more equitably than by raising the real estate tax, since a fee would shift stormwater management costs to the properties with greater impact on stormwater runoff. The average homeowner would pay $70 for the second half of FY 2018. Smaller residential properties would pay less, and very large homes would pay more. Non-residential properties would pay a fee based on the impervious surface area they contain. Revenue from the stormwater utility fee is projected to raise $4.2 million in FY 2018.
Although the City has already been actively working to significantly reduce sewage overflows from its four combined sewer outfalls, a further and overly aggressive acceleration is expected to be required under legislation advancing through the General Assembly. Revenue for these projects would come from a 30% increase in the sanitary sewer fee in FY 2018 (from $1.40 to $1.82 per thousand gallons), with a potential projected increase of as much as 500% over the next decade.
The balanced budget proposal is consistent with City Council’s guidance and reflects City Council’s Strategic Plan, analysis in the City’s Five-Year Financial Plan, the City Manager’s budget priorities, and extensive input from community engagement meetings and online forums. The budget underscores the City’s investment in its workforce by funding merit increases for employees who earn them through performance, and creating a pay incentive for dual-role firefighter/medic staff.
The regional economy continues to grow very slowly. Overall, the tax base has increased by just 2% — the lowest rate since the Great Recession and one of the lowest in 20 years. The recent federal hiring freeze and the potential for other major changes in federal policy have created unpredictability that will impact local and regional revenues. Going into the FY 2018 budget development process, the City faced a budget gap of $25 million between projected revenues and the cost of maintaining existing City and School services. In addition, public school enrollment is expected to continue to increase, and the City faces significant new Metrorail funding needs in addition to the near-term unfunded environmental infrastructure mandates from the federal and state governments.
City Council will hold 10 work sessions throughout the spring to review the proposed budget with City staff; a public budget presentation on February 23 at Beatley Library; a special budget public hearing on March 13; and a tax rate public hearing on April 22. All sessions are open to the public and will be recorded and posted online. The public may submit comments online, or speak at the public presentations and hearings.
The full City Manager’s message to City Council, as well as details about the proposed budget, public budget presentation, public meetings, and online comments, are located at this link.
(Photo by Matthew Dailey, on Flickr)