City of Alexandria, VA
FOR IMMEDIATE RELEASE -- February 12, 2008 -- PIO#055-08/ajb
Alexandria City Manager Proposes $534.8 Million General Fund Operating Budget for FY 2009
Alexandria City Manager James K. Hartmann tonight proposed a General Fund Operating Budget for Fiscal Year (FY) 2009 that includes an increase of 2.9 percent over current spending levels. This proposed budget increases total General Fund spending by $15.3 million for a total of $534.8 million. The proposed budget was presented to the Alexandria City Council at its regularly scheduled meeting on February 12.
In accordance with City Council guidance, the operating budget transfer to the Alexandria City Public Schools would increase by 4.1 percent or $6.6 million and funding for the remainder of the General Fund budget, including cash capital and debt service funding for all capital projects and transit subsidies, would increase by 2.4 percent or $8.7 million.
The proposed budget assumes no increase in the existing real property tax rate of 83 cents per $100 assessed value. Because of the impact of national and regional trends on the housing market, the average residential tax bill would decline by $82 or 1.9 percent. Although this decline means less revenue to finance the City budget, the decline is modest compared to many other jurisdictions in the greater Washington region. In the proposed budget, the decline was offset by a 12.1 percent increase in the commercial tax base. The decline in the residential tax base, when considered with the increase in the commercial tax base, results in a total tax base increase of four percent.
“This budget reflects both changing economic circumstances and the City Council’s mandate to manage the public’s business efficiently and economically,” said Hartmann. “Through continued management improvements and efficiencies, we will be able to address many of the City’s needs and strategic challenges while holding the line on spending for City operations. Alexandria is a caring community and as a result the budget maintains almost all existing social service programs at current service levels for those who need the programs.”
“The City Council guidance for FY 2009 recognized the fiscal constraints facing the City,” continued Hartmann. “This budget focuses on results within those constraints.”
The budget for City and transit operations and capital projects holds spending to an increase of only 2.4 percent. And even though there are significant savings proposed throughout the budget, it is designed to avoid cutting spending by deferring maintenance. The City’s roads and bridges will remain drivable and safe; the transit system will remain reliable; public buildings will remain well-kept and functional; and historic structures will be preserved.
The budget requests $600,000 in funding for program expansions or additions, the majority of which is related to improving the economic sustainability of the City by providing additional resources to better manage development, promote tourism and to increase regional consumer spending in the City. These few increases in the budget are anticipated to spur positive economic returns for the City in the future.
City staff has conducted a comprehensive review of all existing fees and charges and a total of $2.6 million in fee increases is reflected in the budget, with most of these fees to be charged for cost of development-related activity. Also, for the first time in approximately 20 years, local DASH bus service peak weekday fares are proposed to increase from $1.00 to $1.25.
For City employees, the proposed budget funds step salary increases for eligible employees. The proposed budget recommends no market rate adjustment in salary schedules for City and School employees.
Transportation is a major long term issue facing the region and the City. It is crucial to the City’s future economic development and sustainability, and the residents’ quality of life. New resources available from the Northern Virginia Transportation Authority (NVTA) will be used for transportation planning and the new King Street Trolley service.
“I am simultaneously presenting an Alternative Budget,” explained Hartmann. “The Alternative Budget is well below the maximum five percent growth rate target established by the City Council for FY 2009. I include this Alternative Budget to continue progress in achieving City Council’s strategic goals and to meet significant public needs.”
Increases to the proposed budget are specifically identified and require $6.8 million in additional funding and would result in an overall budget increase of 4.3 percent. Funding this Alternative Budget would require a two cent increase in the real estate tax rate.
Under the Alternative Budget, a one percent Market Rate Adjustment (MRA) for City and Schools employees is proposed as contemplated in City Council’s budget resolution guidance for FY 2009. The MRA would add $2.34 million to the City’s budget and $1.43 million to the transfer to the Schools. For the third consecutive year, the budget partially offsets the increase in the cost of City employee health care by increased City employee cost sharing. The budget provides $2.2 million as part of a four-year plan to eventually increase funding by $11 million a year. This plan will address the City and Schools unfunded availability for post-employment health and life insurance benefits.
The Operating Budget and Capital Improvement Program are scheduled for adoption on May 5, 2008. Eleven Council budget work sessions are planned on the budget. Council must act by March 15 to establish the maximum real estate tax rate that must be advertised 30 days in advance of a special public hearing to be considered, including any special commercial real estate tax for transportation purposes. The regular public hearing on the budget will be held April 14, and the effective real estate tax public hearing will be held on April 22.
The City Manager’s proposed FY 2009 budget includes few new City initiatives or significant increases. The proposed FY 2009 budget also provides $95.3 million in capital projects, $58.8 million funded by City sources. All details may be found at alexandriava.gov/budget and following links to specific topics.