[Archived] Alexandria City Council Unanimously Adopts FY05 Budget

City Press Release


	City of Alexandria, Virginia Office of the City Manager Alexandria City Hall 301 King Street, Suite 3500 Alexandria, Virginia 22314-3211 www.alexandriava.gov Telephone: 703.838.4300 Fax : 703.838.6343

FOR IMMEDIATE RELEASE
May 3, 2004
PIO 105-04

Alexandria City Council Unanimously Adopts
$432.9 Million FY 2005 Operating Budget
With 4-cent Real Estate Tax Reduction

The Alexandria City Council adopted a $432.9 million operating budget for Fiscal Year 2005 tonight (May 3), which is an 8.8 percent increase over the current fiscal year.

The City’s fiscal year begins July 1. Highlights of the budget are as follows:

The adopted FY 2005 General Fund operating budget totals $432.9 million, which represents an 8.8 percent increase over FY 2004. The All Funds operating budget totals $519 million, which is an 8.3 percent increase over FY 2004.

The adopted budget reflects three different forms of tax relief:

1. A reduction in the real estate tax rate for general purposes by 4 cents from $1.035 to 99.5 cents. This rate includes 1 cent for the cost of acquiring open space, is the second lowest tax rate of any major jurisdiction in Northern Virginia, and is 11.5 cents less than the $1.11 rate in 2001. Over the last 20 years, Alexandria’s real estate tax rate has dropped more than any other major jurisdiction in Northern Virginia.

a. The 99.5 cent tax rate through the end of FY 2005 will provide some $13.6 million in tax relief compared to the current $1.035 rate. The lower rate will be initially applied to the June 15, 2004 real estate tax payments.

b. With this relief, the average residential real estate tax bill will increase by $395 or 12.4 percent.

2. A new and unique program of Affordable Home Ownership Protection grants of $250 per household will be made available to homeowners who have no more than $61,000 in household income and homes worth no more than $362,000. For those homeowners who need to apply to receive these grants, the effective increase in their real estate taxes will be held to no more than 4.5 percent. The cost of this program is estimated to be $745,000 in FY 2005.

3. $2 million for expanded tax relief for senior citizens and the disabled in FY 2005 due to increases in the income limits and net worth limits, an increase of $500,000 over the amount budgeted for FY 2004. This program provides full, 50 percent or 25 percent exemption from real estate taxes provided the income level of the household is below certain levels.

The General Fund budget of $432.9 million reflects the following:

• The budget for general City government operations increased by $16.5 million or 7 percent.
• The budget ensures that the City schools receive full funding of their operating and capital budget requests. The operating budget for the schools is $130.6 million, or a 7.7 percent increase, not including $2 million set aside in the event that the schools do not receive full state aid funding.
• A 2 percent COLA for City and school employees is provided.
• City departments and the schools proposed $3 million in efficiency and service reductions to hold the total increase for discretionary activities to $8.1 million or only
2 percent, including $1.4 million in cash to fund increases in the Capital Improvement Program (CIP).
• The CIP is funded in FY 2005 by $18.9 million in cash and $22.9 million in debt service. The total, $41.9 million, is a 12.3 percent increase over FY 2004 amounts.
• The refuse fee collection for residential customers is increased by $20 a year from $185 to $205 reflecting increased costs for this self-supporting activity.
• The sanitary sewer connection fee will increase by 20 cents per thousand gallons of usage in order to fund new sanitary sewer capital improvements and operating expenses. This will result in a sanitary sewer fee increase of $16 per year for the average homeowner.

The six-year CIP for FY 2005 to FY 2010 totals $302.6 million, which is a decline of $37.5 million or 11 percent from last year’s approved CIP.

• The CIP fully funds the school’s CIP request of $106 million.
• $56 million is for recreation and parks, including $20 million for renovations and improvements to the Chinquapin Recreation Center.

The City Council has indicated its intent to review the funding to be made available by borrowing for open space acquisition this fall, after criteria and priorities have been considered. Council intends that the open space bond amount to be approved will total $10 million or more and will be enough to enable the City to move forward on immediate open space priority acquisitions as well as create a reserve fund so that the City can take advantage of unforeseen acquisition opportunities. The debt service of this borrowing will be financed with a portion of the 1 cent real estate tax rate that is dedicated to the acquisition of open space.

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