By Carla Branch
alexandrianews.org

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Each November, the Alexandria City Council provides budget guidance to the City Manager that is the framework for how he should prepare his proposed Operating and Capital Improvement Program budget for the upcoming fiscal year. Last night, Council unanimously adopted two fiscal year 2019 Budget Guidance Resolutions: one outlining Council’s budget process and the other giving specific guidance to City Manager Mark Jinks on the principles he should use in preparing his proposed budget.

Vice Mayor Justin Wilson proposed two changes to the staff’s draft Budget Guidance Resolution at Tuesday night’s City Council meeting, both of which were accepted with one resulting in directing the City Manager to maintain the current real estate tax rate at $1.13 per $100 of assessed value. The "Taxes, Fees, Fines, and Service Charges" section now reads: "Taxes, Fees, Fines and Service Charges: In funding the proposed budget, the City Manager shall maintain the existing real estate tax rate of $1.13, but may consider changes to other tax rates, tax designations/reservations, fees/fines/service charges that are equitable, fair and administratively feasible provided that these proposals are observant of the constraints imposed by the Code of Virginia. Such changes can only be considered where they advance the priorities of the Council as stipulated in this resolution, through Legislative Sessions, or the Council Retreat."

“What we are saying with this guidance is that we want the City Manager to prepare a budget that keeps the tax rate where it is,” said Councilman Paul Smedberg. “That means that, according to the revenue projections we were given at our retreat, we will begin FY2019 with a $27 million deficit. We need to be really clear to Mr. Jinks and to the community that the budget we are asking him to present to us will be very tight and could include program cuts in the Operating Budget and even possible cuts to the CIP. I just want to make certain that everyone’s expectations are in line with this direction.”

Mayor Allison Silberberg suggested giving Jinks some flexibility. “While none of us wants to raise taxes, I think it is important to give Mr. Jinks the flexibility to prepare a budget that he thinks is best with the guidance from us that we would prefer no real estate tax rate increase,” Silberberg said.

Silberberg asked if Jinks would prefer some flexibility as he prepares his proposed budget. “We proposed the language we thought was appropriate, but we can prepare a budget as you direct, and you can see exactly what that means,” Jinks said.

Last year, City Council increased the real estate tax rate by 5.7 cents from $1.073 to $1.13 per $100 of assessed value. 2018 is an election year for Council members. The City’s Office of Management and Budget is projecting a less than two percent increase in revenue for FY2019 if the real estate tax rate remains the same. This is $9.2 million over this year’s expected revenue.

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The Office of Management and Budget estimates FY2019 expenditures at $769.1 million, an increase over approved FY2018 expenditures of $40.9 million or 5.6%. This includes estimated FY2019 City government expenditures of $382.2 million, an increase of $4.9 million or 1.3% over this year; transit services estimated FY2019 expenditure of $32 million, an increase of $4.8 million or 17.6% over FY2018; and ACPS estimated FY2019 transfer of $237.6 million, an increase of $23.5 million or 11% over FY2018. The estimated FY2019 CIP expenditures of $117.3 million, which is a $7.7 million or 7% increase over FY2018, includes estimated FY2019 Cash Capital of $38.2 million, an increase of $0.3 million or 0.8% over FY2018; estimated FY2019 City Debt Service of $46.6 million, an increase of $3.4 million or 7.9% over FY2018; and estimated FY2019 ACPS Debt Service of $32.5 million, an increase of $4 million or 14% over FY2018.

Wilson’s second proposed change was related to Alexandria City Public Schools funding Budget guidance. The "ACPS Funding" section now reads: "(f) ACPS Funding: That (1) the City Manager shall recommend for transfer to the Alexandria City Public Schools operating funding an appropriation no greater than the amount approved by City Council for FY 2018 plus the overall General Fund FY 2019 revenue rate of growth, the cost of FY 2019 increased enrollment and the new West End elementary school operating costs, (2) the Alexandria City Public Schools is requested by City Council to articulate in general categories and prioritize any City FY 2019 appropriation requests above current services, (3) the City Manager shall develop options for potential funding of proposed public school capital needs for the FY 2019 through FY 2028 time period taking under advisement the recommendations of the Ad Hoc Joint City-Schools Facility Investment Task Force, and (4) the City Manager shall recommend ACPS capital project debt service in the FY 2019 proposed budget and include such amount as an separate element of his total recommended FY 2019 budget for the ACPS."

“I think this gets to the same point the staff was making but makes it simpler,” Wilson said.

Jinks agreed. “Yes,” he said, “it gets to the same point.”

Council made no changes to the process resolution, leaving in place the same requirements that were applicable in the preparation of the FY2018 budget. “If we are going to adopt this process, we need to mean it,” said Councilman John Chapman. “We all need to remember that we need two co-sponsors to bring forward any proposed changes to the City Manager’s proposed budget. If we do not have two co-sponsors, we should not bring changes up from the dais simply because we think they are important.”

The Alexandria School Board will adopt their ten-year CIP budget no later than Jan. 11, 2018 and their Operating Budget no later than Feb. 22. The City Manager will present his proposed FY2019 Operating Budget and ten-year CIP Budget for the City and ACPS to City Council on Feb. 20, 2018. The City Council will adopt the final FY2019 Operating Budget and ten-year CIP budget for the City and ACPS on May 3, 2018.

 

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