FOR IMMEDIATE RELEASE: October 25, 2008
City of Alexandria Announces Fiscal Year 2009 Budget Reductions
Revenue Decline Also Forecast for Fiscal Year 2010
At the October 25 Alexandria City Council Retreat, City Manager James K. Hartmann provided a revised Fiscal Year (FY) 2009 budget, in which he outlined a set of proposals to close a now identified $10.5 million revenue shortfall. This shortfall, which is caused almost entirely by a projected drop in real estate values, required the City to adjust its current budget by 1.9 percent.
Hartmann highlighted numerous efficiencies and belt-tightening measures totaling $4.2 million that have been recently implemented to reduce spending, proposed some program and service reductions that total $5.3 million in savings, and new revenue options of $0.9 million. He also warned that additional spending cuts may be needed later this year if State aid is further decreased or tax revenue sources continue to decline. A detailed list of cuts is posted online at alexandriava.gov/budget.
“The potential cuts to programs and services for the current fiscal year will require the City to make some very tough choices in the coming weeks,” stated Mayor William D. Euille. “While the rest of the City’s economy remains stable at this time, the drop in real estate values coupled with the City’s reliance on real estate taxes to fund City services creates the severe immediate problem we face.”
Hartmann also provided information on the forecast for FY 2010. The City forecasts a $35 million decline in revenues for FY 2010, requiring a total budget reduction of 6.5% from the FY 2009 budget. A budget reduction of this magnitude would result in further service reductions, including cuts to staffing levels, consideration of revenue alternatives, or some combination of these options. Hartmann stated, “Given the 6% projected decline in 2009 real estate assessments, and the City’s dependence on real estate taxes for more than 50% of its General Fund revenues, FY 2010 will be a very challenging year. The City has not faced a budget decline of this magnitude in decades.”
City Council will develop budget guidelines based on real estate tax rate assumptions for FY 2010, which will help determine maximum expenditure amounts for the City and Schools budget. City Council will adopt these guidelines at their November 25 legislative meeting.
City Council plans to seek input on the proposed FY 2009 budget reductions, the FY 2010 operating budget and Capital Improvement Plan at a public hearing scheduled for Thursday, October 30, at 7 p.m. in City Council Chambers, City Hall, 301 King Street. A Community Meeting on the Capital Improvement Program is scheduled for Thursday, November 6, at 6 p.m. at the Lee Center Exhibit Hall, 1108 Jefferson Street. For more information, visit www.alexandriava.gov/budget.