[Archived] Alexandria City Council Adopts FY 1999 Budget


News Release
FOR IMMEDIATE RELEASE

Date:	Wednesday, May 6, 1998
Contact:	Tom Brannan, Assistant City Manager, (703) 838-4300

Alexandria City Council Adopts FY 1999 Budget

The Alexandria City Council today approved a General Fund Budget for Fiscal Year 1999 totaling $273.1 million, an increase of $7 million, or 2.6 percent, over the current budget. The vote by City Council to approve the FY 1999 Budget, which will fund City government operations from July 1, 1998, through June 30, 1999, was 6 to 1, with Mayor Kerry J. Donley, Vice Mayor Bill Euille, Councilwoman Redella S. Pepper, Councilman David G. Speck, and Council Member Lois L. Walker voting in favor, and Councilman William C. Cleveland opposed.

To maintain current City services while providing increased funding for public education, economic development and tourism promotion, and new capital projects, City Council approved a 4 cent increase in the real property tax rate to $1.11 per $100 of assessed value, the first increase in the real estate tax in five years. Council also voted to approve a 0.65 percent increase in the transient lodging tax to 5.65 percent and approved increases in selected building permit fees to recover the City's direct costs for processing building and related permits. Council deferred consideration of a 5% amusement tax.

In March, after cutting more than $3.6 million in City agency budgets and denying more than $3.5 million in City agency requests for supplemental funding, City Manager Vola Lawson recommended increasing the real property tax rate to $1.11 to make up for the fact that existing residential real estate had appreciated less than one-tenth of one percent since 1997 and less than one-half of one percent since 1991.

"This has been a particularly difficult year," said Mayor Kerry J. Donley, "but this budget contains services and capital projects that our citizens expect and deserve and that are worthy of our support. I'm pleased with what we are able to deliver in this budget, and the modest tax increase approved tonight is the first one in five years."

Meeting this evening to adopt the Budget, City Council added $100,000 to the City's contribution to the Alexandria Convention and Visitors Association, for a total increase of $200,000, increased the budget for the Health Department by an additional $10,000, and added $25,000 for the Alexandria Commission for Persons with Disabilities. Council also increased funding for the City's matching challenge grant for construction of a new Animal Shelter to a total City share of $100,000 by setting aside in Contingent Reserves an additional $45,000 that is to be combined with monies in the Capital Budget. Council also expressed its willingness to expend funds from Contingent Reserves to establish an Office of Parking Adjudication.

Public Education

The largest line item in the FY 1999 General Fund Budget is the City's annual appropriation to the Alexandria City Schools which totals $88.8 million, an increase of $2.9 million, or 3.3 percent. By comparison, the FY 1999 General Fund Budget provides $184.3 million for all City programs and services, an increase of $4.1 million, or 2.3 percent. The $88.8 million appropriation for the Schools is $3.4 million, or 3.6 percent less than requested by the Alexandria School Board. In approving the Schools' appropriation, City Council tonight added $300,000 to the $88.5 million recommended by the City Manager.

Capital Improvement Program

As part of the budget, City Council also approved a new six-year Capital Improvement Program (CIP) for the City and the Alexandria City Public Schools totaling $137.4 million. This six-year program represents an increase of $13.6 million, or 11 percent, compared to the current CIP.

City projects included in the first year of the FY 1999-FY 2004 CIP include the new Central Library on Duke Street, renovation of the Ramsay Recreation Center, repurchase of the Torpedo Factory Building, architectural and engineering plans for the renovation or relocation of the Health Department's North St. Asaph Street facility, renovation of Fire Station 54, and the phased funding for replacement of essential public safety systems.

Economic Development and Tourism

The Approved Budget provides over $1.7 million for economic development and tourism promotion, an increase of over $300,000, or 21.6 percent. These initiatives include: $618,413 in direct and in-kind contributions to the Alexandria Convention and Visitors Association; $450,432 for the Alexandria Economic Development Partnership, Inc.; $25,000 for the Alexandria Small Business Development Center; $100,000 for the Business Assistance Loan Program for new and existing businesses in the Potomac West area; continued support for several public-private partnerships, including the Marketing Fund, the Potomac West Alliance and the Eisenhower Avenue Partnership; and $50,000 in local funding for the City's 250th Anniversary Celebration.

Overall, the Budget provides over $1.7 million for economic development and tourism promotion, an increase of $300,000, an increase of

Public Safety

To support crime fighting and prevention efforts that have reduced serious crime to a 28-year low in 1997, the Approved Budget includes $204,000 to retain eight grant-funded Police Officer positions added to the Police Force in FY 1996 and 1997 under the federal Crime Bill legislation. Federal grant funding for those positions expires in FY 1999.

Employee Pay Scales

The Approved Budget reduces the City's full-time employee workforce by one position to 2,089 and provides no monies for employee cost-of-living or merit increases. The Approved Budget does provide $1.9 million to implement the City's new declining percentage fixed-step pay scales, which were adopted by City Council in December. A comparable percentage increase is provided for School employees.

Real Estate Assessments and Taxes

The assessed value of all real property in the City -- the City's real property tax base -- increased to $11.6 billion, an increase of 3.89 percent, or $434.5 million, with two-thirds of that increase due to new construction. New residential construction added

$92.6 million to the City's tax base, while new commercial construction added $206.4 million to the tax base. As of 1998, residential property accounts for 51 percent of the City's $11.6 billion tax base and commercial property represents 49 percent.

Although the City's tax base increased by 3.89 percent in 1998 to $11.6 billion, it is still $536.6 million below the $12.1 billion value of the tax base in 1991, reflecting the depreciation that occurred in both the commercial and residential real estate markets.

The average assessed value of an existing home in the City increased less than one-tenth of one percent, from $177,640 in 1997 to $177,747 in 1998. At the approved rate of $1.11 per $100 of assessed value, the average residential tax bill will increase from $1,901 to $1,973 for the year, or $6 per month. Due to the stagnant growth in the existing residential tax base, the average residential tax bill in 1997 of $1,901 was below the average residential tax bill of $1,915 in 1991.