[Archived] Alexandria City Manager Proposes FY 2007 General Fund Operating Budget $503.5 million

City Press Release


	For Immediate Release	For More Information, Contact
	February 15, 2006 PIO# 045-06/rdo	Steven J. Mason, Public Information Officer, or Raynard Owens, Communications Officer, at 703.838.4300 Raynard Owens, Communications Officer, at 703.838.4300

Alexandria City Manager Proposes FY 2007 General Fund Operating Budget
$503.5 million
6.8 Cent Real Estate Tax Rate Reduction

Alexandria City Manager James K. Hartmann presented his proposed $503.5 million General Fund Operating Budget for FY 2007 to the City Council on Feb. 14. This proposed budget is a 7.0 percent increase of $33 million compared to the FY 2006 budget. This FY 2007 budget would allow a 6.8 cent tax rate reduction B from 91.5 cents per $100 of assessed value to 84.7 cents.
This budget is $5.5 million below the overall target set by Council last November as part of a new budget process that included setting two budget expenditure targets for both the City and the Schools. The new process also accelerated the presentation of the budget to Council by approximately 4 weeks to allow additional time for City Council and the public to consider difficult budget choices and provide more information regarding specific spending priorities.

In accordance with that new process, the City Manager has also provided City Council with options for Council consideration which could reduce the FY 2007 budget by an additional $5.9 million and meet the alternative budget target set by Council last fall. If these options are chosen, which City Manager Hartmann characterized as Anot painless@ but Areasonable to consider,@ the budget would be reduced by 1.0% and allow an additional 1.8 cent real estate tax rate reduction to 82.9 cents.

City Manager Hartmann said, AThis budget seeks to balance the community=s need for sound infrastructure and quality services that only local government can provide, with the ability and willingness of residents and businesses to pay local taxes and fees.@

The City Manager=s proposed budget is essentially a status quo budget for City operations. It would add only the equivalent of 6.75 new employees B a 0.3 percent increase B in staff. The budget includes a 3.0 percent cost-of-living increase for both City and School employees.

New City initiatives in the proposed budget costing $2.1 million are offset by $2.1 million in savings and efficiencies. The increased costs are due to factors that drive the cost of simply maintaining current services, such as staffing compensation to maintain the City=s ability to keep and attract a competent workforce in an increasingly competitive, regional labor market, funding for METRO and the City=s DASH bus system, and increases in the costs of debt service, health care and energy.

New proposed initiatives for the City in FY 2007 include:

! Increased funding for gang prevention and other youth activities ($239,000)

! Public safety enhancements including a new 911 call system ($1.5 million), additional funds for the Sheriff and Emergency Medical Services ($673,000)

! Increased funding for selected social service programs ($366,000)

! Other increases in the Capital Improvement Program for funding the acquisition of a yet-to-be-determined site for a new Fire station ($3.0 million), preliminary planning and design work on the new Police Headquarters facility ($4.84 million) and expansion of the Holmes Run trunk sewer capacity ($3.0 million).

In addition the budget provides $3.6 million more for open space acquisition and $3.6 million more for affordable housing initiatives reflecting continuation of the dedication of 1 cent of the real estate tax to each of these purposes by City Council.
The proposed budget provides $150.4 million, an $11.6 million or 8.4 percent increase, to the Alexandria City Public Schools. This amount is $1.8 million less than requested by the School Board, a reduction that reflects a lower assumption about the cost of employee health insurance premiums paid by the Schools. The budget is $2.4 million below the target set for the Schools. An additional reduction of $0.5 million would be required for the Schools budget to meet the lower, alternative target established by City Council.

In conjunction with the presentation of the FY 2007 proposed budget, 2006 real estate assessments have been completed and released. Those assessments reflect the average value of a residence is increasing to $526,852, an increase of 19.5 percent. With the reduction in the 6.8 cent tax rate proposed by the City Manager, the increase in real estate taxes by the homeowner would be 10.6 percent B the lowest rate of increase in seven years and the beginning of the real estate market boom. If the Council chooses to meet the alternative budget target, the average increase in real estate taxes will be 8.2 percent.

In order to provide targeted real estate tax relief, an increase in the income limits to $72,000 in the real estate tax relief program for seniors and the disabled is proposed, as well as an increase in the income limits and grant amounts in the City=s innovative Affordable Home Ownership Preservation Grant program. The income-based grant range would be $325 to $1,000 compared to the current year grant range of $275 to $675. In 2004, Alexandria was the first jurisdiction in the state to adopt such a program.

# # #