Alexandria City Manager Announces $626.6 M Proposed General Fund Operating Budget for Fiscal Year 2014
- On February 26, Alexandria City Manager Rashad M. Young proposed a $626.6 million General Fund Operating Budget for Fiscal Year 2014.
- The proposed Operating Budget includes property and personal property tax rate increases necessary to maintain funding for schools, transit, and capital investments.
- The proposed budget includes a real estate property tax rate of $1.053 per $100 of assessed value, and a motor vehicle personal property tax rate of $5.00 per $100 of assessed value. The majority of this tax revenue will be used to pay for an increase in the Alexandria City Public Schools operating budget, capital investments (both Schools and general government), and transit expansion and improvement.
- The budget includes the City Manager's recommended real estate property tax increase of 2.5 cents; and an additional 3 cents in accordance with the City Council guidance to provide additional revenues to support an increase in capital investments.
- The Capital Improvement Program proposes a $1.27 billion capital investment over the next 10 years; prioritizing Schools capacity needs, fire equipment and apparatus, facility maintenance, and transportation capital investments.
The City has identified a projected $31 million budget shortfall. In order to address that gap in a way that moves the City forward, the City Manager balanced fiscal needs against affordability, and recommended increases and decreases based on their alignment with the City's Strategic Plan. Expenditures would be reduced by $13.8 million in the proposed Operating Budget in addition to other cost savings, while real estate property and motor vehicle personal property tax rates would increase to $1.053 and $5 per $100 of assessed value respectively, adding a combined $21.1 million in revenue. Much of this additional revenue would be used to fund Alexandria City Public Schools (ACPS), capital investments, and transit expansion and improvement. The City's benefits plans are being redesigned in an effort to better control long-term costs and ensure financial sustainability, and to pay for a full merit increase for employees as well as additional investments in career ladders as a part of the Manager's pay for performance philosophy.
The City Manager is recommending a real estate property tax increase of 2.5 cents to balance the budget. In assembling the proposed budget document, the City Manager followed Council's guidance to provide additional revenues to support an increase in capital investments.
In the proposed budget, the City Manager also followed Council's guidance to:
- use no more than 1% of the Fund Balance
- maintain pay-as-you-go funding for capital projects at Fiscal Year (FY) 2013 levels
- make ACPS funding changes based on student enrollment or cost-saving measures
- align Capital Improvement Program funding with the Strategic Plan, and focus on education physical plant capacity; sewer and other basic infrastructure; public safety; and recreation enhancements in considering the requested unconstrained capital investments
In the proposed General Fund Operating Budget, total spending increases by 6.6% ($41.3 million) from the FY 2013 approved budget. Within that budget, the operating budget transfer to ACPS would increase by 3.3% ($6 million) from last year's approved budget. The budget for City operations would also increase by 3.3% ($10.82 million).
"I have structured my proposed budget to meet three critical needs: to close our $31 million shortfall; to help support the education of Alexandria's children; and to continue alignment of our fiscal goals and objectives with the City's Strategic Plan," said City Manager Rashad M. Young. "The majority of these proposed tax increases will help fund our Schools, which affirms our pledge to providing our youngest residents with the quality education they deserve. The increases also underscore our obligation to maintain our capital investments and our commitment to expand and improve our transit systems—all goals identified under the Strategic Plan."
The $38.7 million increase in the City Manager's proposed budget:
- Allocates an additional $6 million for public schools (an increase of 3.3% from last year's approved budget).
- Provides an additional $12.1 million (a 17.3% increase) for capital projects already committed (debt service) or planned (cash capital).
- Provides an additional $10.5 million for capital projects from the additional 3 cent real estate property tax rate increase.
- Provides an additional $2.5 million for increased operating support for transit operations, including funds for the regional Metrorail and bus systems, and for the City's local DASH bus system—a 13.6% increase.
City Council will host seven work sessions to review the proposed budget with City staff, and three public hearings. These sessions are open to the public and will be recorded and posted online. There will be a public budget presentation on Wednesday, March 6, at 7 p.m. The public may submit comments online, or speak at budget public hearings on Monday, March 11, at 4 p.m.; Saturday, March 16 at 9:30 a.m.; and a tax rate public hearing on Saturday, April 13, at 9:30 a.m. The Operating Budget and Capital Improvement Program are scheduled for adoption by the Alexandria City Council on May 6 at 7 p.m. Details about the public budget presentation and public meetings, the proposed budget, and online comments are located at alexandriava.gov/Budget.