[Archived] What are the FY 2017 budget add/delete items that are eligible for consideration in the Preliminary Add/Delete work session on Tuesday, April 26, 2016?

This memorandum summarizes the list of FY 2017 budget add/delete items eligible for consideration in the Preliminary Add/Delete work session on Tuesday, April 26, 2016 in City Council Chambers at 6:00 pm. City Council’s Add/Delete submissions are described and provided as Attachment 3. 

REVENUES

Revenue Re-Estimates: +306,627 (Budget Memo #18)

Revenue re-estimates developed by staff and summarized in Budget Memo #18 (Attachment 1) include a $306,627 increase in FY 2017 General Fund revenues based on actual FY 2016 billings and collections through March. Of that additional revenue, $94,200 is needed to fund technical expenditure adjustments outlined in Budget Memo #18, leaving a net of $212,427 available to fund additional expenditures in the budget.

In addition to the increased revenues available due to re-estimates, several tax and fee increases have also been proposed for consideration in Add/Delete.

Real Estate Property Tax Increase (Up to 2.0 Cents): +10,245,600 Maximum Increase

City Council advertised a maximum real estate property tax rate of $1.073 per $100 of assessed value, a three (3) cent increase over the current rate, on March 15, 2016 and heard public testimony on April 16, 2016. The FY 2017 proposed budget includes a one (1) cent increase. In advertising the maximum three (3) cent increase, Council directed staff to develop a recommendation for capital projects to be funded by the additional two (2) cents and summarized in the expenditure section of this memorandum. 

Cigarette Tax Increase (11 Cents): +$160,555

Add/delete options include a proposal to increase the tobacco tax by 11 cents from the current rate of $1.15 per pack to $1.26 per pack. The increase would generate an additional $160,555 in revenue. A portion of the increase is proposed to restore a reduction in Northern Virginia Dental Clinic funding included in the proposed budget $57,914. The remaining $102,641 is proposed to increase funding for Neighborhood Health.

Residential Refuse Collection Fee: +$182,490

Add/delete options include a $10 increase in the residential refuse collection fee to implement the trash and recycling can component of the City’s approved Citywide Parks Improvement Plan and expand the availability of public space recycling cans. The proposed budget includes a $16 fee increase, from $337 per household to $353 due to a reduction in the value of recyclable materials sold by the City to offset expenditures. This proposal would increase the fee to $363 in FY 2017.

EXPENDITURES

Expenditure Technical Adjustments: +$94,200 (Budget Memo #18)

Since presenting the proposed budget, staff has identified expenditure adjustments for FY 2017 including increases and decreases not included in the proposed budget due to the timing of their identification. They are summarized in Budget Memo #18 (Attachment 1) and total $94,200, which can be funded by the additional $306,627 in General Fund revenue identified through re-estimates, leaving $212,427 available for other expenditures. 

Washington Metropolitan Area Transit Authority (WMATA) Savings: -$566,102 in the Operating Budget and -$850,000 in the Capital Improvement Program (CIP) (Budget Memo #18)

Included in the expenditure technical adjustments are changes in the City’s share of WMATA operating and capital funding made by WMATA following the presentation of the City’s proposed budget, along with staff’s recommendations that the operating savings be used to increase funding for the City’s Transportation Improvement Program (TIP) by $566,102 and the capital savings be used to increase the City’s Street Resurfacing CIP project by $850,000. The specific use of the TIP funds could be determined by City Council at a later date based on the recommendation of the Transportation Commission.  

Capital Project Funding: Up to +$10,245,600 

The City Manager’s FY 2017 proposed budget includes a one cent increase in the real estate tax rate. At their March 15, 2016 meeting to set the maximum tax rate for calendar year 2016, City Council set the maximum increase at three cents and directed the City Manager to provide options for investing the additional two cents on capital projects. The addition of two cents on the real property tax rate would provide an additional $7.6 million in revenue in FY 2017 and $3.8 million from the second real estate tax payment of FY 2016 for a total of $11.4 million, of which $1.1 million would be required to comply with the City’s policy of retaining 10% of revenue in fund balance and $10.2 million would be available as cash capital funding for projects. 

Staff recommends applying two-thirds of the additional revenue ($6.8 million) as cash capital to fund City transportation, facilities and broadband projects and using one-third ($3.4 million) to fund the ACPS approved Pre-K Center through a combination of cash funding and borrowing. ACPS projects represent approximately one-third of the FY 2017 CIP (excluding the Potomac Yard Metrorail station). The projects listed in the following table represent the City Manager’s recommendation for additional investment should Council choose to fund additional capital projects in FY 2017.  

*In addition, $5.172 million would be borrowed to fund the total $8.3 million needed to fund the retrofitting of the leased space. 

City Council only needs to identify use of the funds generated by the additional two cents on the tax rate for FY 2017. Staff will plan to program these funds as cash capital for projects related to transportation, ACPS, and City facilities in future years of the Capital Improvement Program.

A summary description of each of these projects is included as Attachment 2 to this memorandum.  

Energy and Sustainability Project Manager +$70,000 (CIP Funded) 

One add/delete option is to fund a capitalized Energy and Sustainability Project Manager position in the CIP to assist the City in achieving the Environmental Action Plan by participating in regional sustainability projects to demonstrate new technologies, thus reducing costs and risks to Alexandria; by promoting best green practices to reduce costs to homeowners and at the same time ecological impacts to the environment; by assisting in incorporating sustainability goals and practices into Small Area Plans, such as the Eco-District concept for Old Town North and Eisenhower West, and ensuring that the City’s sustainability goals are largely paid for by developers; and by working with City departments and the Environmental Policy Commission to accelerate the updating of the City’s Green Building Policy as well as the Environmental Action Plan. This proposal is for partial year funding (six months) in FY 2017 and would require a $70,000 reduction in funding for the projects recommended by staff.

Dental/Health Care for the Uninsured +$160,555 (Cigarette Tax Funded) 

This proposal would use revenue generated by the proposed 11 cent increase in the cigarette tax to restore funding to the Northern Virginia Dental Clinic reduced in the City’s proposed budget ($57,914), fund an additional 0.5 FTE Family Nurse Practitioner or Physician at Neighborhood Health to serve an additional 1,300 health care visits by 600 or more adults ($87,878) and provide an additional $14,763 in City funding for Neighborhood Health.

Parks and Public Space Recycling +$182,490 (Residential Refuse Collection Fee Funded) 

This proposal would use revenue generated by the proposed $10 increase in the residential refuse collection fee to implement the trash and recycling can component of the approved Citywide Parks Improvement Plan ($163,469) and to expand the availability of public space recycling cans ($19,021).

Child Care Fee Subsidy +$409,969 (Funded by Offsetting Expenditure Reductions)

This proposal would eliminate approximately 13% of the existing waiting list for the Child Care Fee Subsidy program by providing care for 58 low income children thereby reducing the existing 10 month wait for services. In order to fund this increase, the following corresponding expenditure reductions to new positions added in the FY 2017 proposed budget are proposed.

• Police Motor Officer Sergeant -$100,000: The proposed budget includes $400,000 in Contingent Reserves to fund increased traffic and speeding enforcement. Staff recommends that Council transfer the funds to the Police Department to create two motor officers and one supervisor and increase overtime for traffic and speeding enforcement. The current staffing is nine (9) officers and one supervisor. The staff recommendation would increase the number of officers to 11 and add a second supervisor. This proposal would add two officers but not the second supervisor for a savings of $100,000 to increase the Child Care Fee Subsidy.
  
• Northern Virginia Juvenile Detention Center (NVJDC) Staffing -$174,000: NVJDC is a regional facility located in the City and shared by Arlington County and the City of Falls Church. The NVJDH proposed adding eight (8) staff positions to increase staff-to-youth ratios to meet a federal Prison Rape Elimination Act (PREA) mandate scheduled to go into effect in FY 2018. Adding the positions in FY 2017 would enable NVJDH to begin recruitment and training before the mandate takes effect. Following the presentation of the City’s proposed budget, NVJDH reduced its staffing request to six (6) positions at a cost of $112,000. Staff recommended budgeting the $112,000 increase in the Other Public Safety budget for NVJDH and retaining $62,000 in a City Council Contingent Reserve. This proposal would delay the NVJDH hiring until FY 2018 and eliminate the Contingent Reserve to increase Child Care Fee Subsidy funding by $174,000. 
  
• ITS Business Analyst -$135,969: The proposed budget includes the addition of one (1) new Business Analyst in the Information Technology Services (ITS) department to assist City departments with the analysis, design, configuration, testing, and maintenance of IT system work processes. This proposal would remove the addition of this position from the FY 2017 budget to increase Child Care Fee Subsidy Funding by $135,969.
  

Proposals for Use of the Additional Revenue Identified through Re-estimates +$212,427

The following items have been proposed to be funded by the increased General Fund revenue identified through re-estimates and outlined in Budget Memo #18. In total, the sum of these items ($294,707) is $82,280 greater than the amount of revenue available ($212,427), so not all could be funded at the amounts proposed. They are listed in order of the amount proposed from highest to lowest.

• Fire Hydrant Maintenance +$100,000: The proposed budget includes a reduction from the FY 2016 level of funding that reduced fire hydrant preventive rebuilds from a five (5) year cycle to a 10 year cycle. This proposal would restore the five (5) year cycle.
  
• Library Sunday Hours +$79,862: This proposal would open the three (3) branch libraries for four (4) hours on Sundays, from 1:00 pm to 5:00 pm.
  
• Visit Alexandria Digital Advertising +$50,000: This proposal would partially restore funding eliminated from the budget in FY 2016 ($75,000) to update Visit Alexandria’s digital advertising material’s content.
  
• Old Town Business Improvement District (BID) Study +$25,000: This proposal would provide one-time funding to study the feasibility and best practices for structuring and funding an Old Town BID. 
  
• Park Maintenance +$22,365: The proposed budget includes a $23,459 reduction in park restroom maintenance, dog park maintenance, and litter pick-up from seven (7) days per week to (5) days per week. This proposal would mostly restore the funding for seven (7) day maintenance. 
• Wheelchair Accessible Automatic Door Operator at City Hall +$10,200: This proposal would fund the installation of one wheelchair accessible automatic door operator at the Cameron Street entrance to City Hall.
• Recreation Center Hours +$7,280: This proposal would restore walk-in hours at the Nannie J. Lee Recreation Center that were eliminated in the proposed budget.

ATTACHMENTS:

Attachment 1 - FY 2017 Budget Memorandum 18

Attachment 2 - Capital Projects Recommended for Funding by an Additional Two (2) Cent Increase in the Real Estate Property Tax Rate

Attachment 3 - City Council’s FY 2017 Preliminary Add/Delete Submissions