[Archived] Alexandria City Manager Proposes $508.9 Million General Fund Operating Budget for FY 2008

City Press Release


	For Immediate Release	For More Information, Contact
	February 15, 2007 PIO# 039-07/bh	Brian Hannigan, Director of Communications, or Raynard Owens, Communications Officer, at 703.838.4300

ALEXANDRIA CITY MANAGER PROPOSES $508.9 MILLION GENERAL FUND OPERATING BUDGET FOR FY 2008
Recommended Budget Meets City Council Targets; No New Taxes Required

February 15, 2007 -- Alexandria City Manager James K. Hartmann tonight proposed a General Fund Operating Budget for Fiscal Year 2008 that includes an increase of 2.25 percent over current spending levels without increasing taxes.

The proposed $508.9 million budget, presented to the Alexandria City Council at its regularly scheduled meeting that was postponed from Tuesday evening due to weather conditions, represents an increase of $11.2 million over FY 2007 General Fund levels.

Under the City Manager’s proposal, the All Funds Operating Budget will increase by 1.2 percent in FY 2008, to $618.9 million.

The budget reflects keeping Alexandria’s real estate tax rate, 81.5 cents per $100 of assessed value, at its current level. The rate is the second-lowest among major Northern Virginia jurisdictions. When combined with the recently announced 2.9 percent decline in the City’s residential tax base for Calendar Year 2007, the average homeowner’s taxes would decline by $124. The last time the average real estate tax bill declined in Alexandria was in 1994.

The City Manager’s proposed budget meets the targets for overall General Fund spending by Alexandria City government ($353.4 million) and Alexandria City Public Schools ($155.5 million) set by the City Council last November as part of a new budget process adopted earlier in the fall. The process is designed to provide more time and information for City Council and the public to consider difficult budget choices before Council adopts the FY 2008 Budget on May 7.

Under the proposal, General Fund spending on City government operations would increase by only 0.2 percent. The proposed budget includes a net reduction of 15 positions and an annual budget savings of $3.5 million from current services.

The $155.5 million proposed General Fund transfer to Alexandria City Public Schools amounts to a 3.75 percent increase over the actual FY 2007 transfer of funds. The proposed Schools transfer represents 31 percent of all General Fund monies, a level generally consistent with those in recent years.

“This budget reflects both changing economic circumstances and the City Council’s mandate to manage the public’s business efficiently and economically,” said City Manager Hartmann. “Through continued management improvements, we will be able to address many of the City’s needs and strategic challenges with only a slight spending increase.”

The new budget format provides greater detail on approximately 500 City government activities, including various measures of costs, performance and results.

Other elements of the City’s budget will increase at higher rates under the City Manager’s proposal: transit subsidies are increasing 7.7%, primarily to fund Alexandria’s share of regional METRO operations, and funding for capital projects is increasing by 11%.

The budget does not include cost-of-living increases (COLA) for either City or Schools employees. “We value our City and Schools workforces and have worked hard in recent years to provide them with fair compensation in this high-cost region,” said City Manager Hartmann. “But given other priorities and mandated spending levels, current fiscal constraints prevent me from being able to recommend a COLA for the next Fiscal Year.”

While equal to the target level set by the City Council in November, the City Manager’s proposed Schools transfer is $6.8 million less than the $162.3 million requested by the School Board in its January 31 adopted budget. “As always, the City Council will review the School Board’s request closely and give full consideration to the material provided by the School Board and public comment,” said Hartmann.

The City Council’s calendar includes eleven Budget Work Sessions and two Public Hearings between tonight and scheduled final budget adoption on May 7. The Budget Public Hearing is scheduled for Monday, April 9. The joint City Council-School Board work session will be held on Wednesday, April 11, and a final public hearing on tax rates will take place on April 24.

The City Manager’s proposed FY 2008 Budget includes few new City initiatives or significant increases, such as:

$1.0 million in increased City subsidy for Metrobus and Metrorail.
$120,000 in increased Emergency Medical Services staffing to ensure a higher level of Advanced Life Support care is always available.
$1.0 million for Child Welfare programs to replace reduced Federal funds.
$200,000 to improve pedestrian and other pavement markings throughout the City.
$111,000 for a 5 percent increase for grants to social service non-profits providing support to Alexandria’s most needy.
In lieu of a COLA, $530,000 for an additional step at the top of the pay scale for experienced employees.
$135,000 to partially replace lost state funding for early childhood programs.
$47,000 for an energy conservation manager to monitor, analyze and coordinate citywide energy conservation measures.

Proposed budget savings include:

$307,000 in savings in the Department of Transportation and Environmental Services as a result of an efficiency and best practices study.
$375,000 in savings due to the closure of the City’s vehicle impound lot.
$227,000 in savings from outsourcing printing production costs.
$171,000 in savings in Information Technology Services, including mainframe computer support and a computer programming position.
$604,000 in savings due to elimination of various positions in the Department of Human Services ($449,000) and non-personnel savings in the Department of Mental Health, Mental Retardation and Substance Abuse ($155,000).
$388,000 in various savings in the Police ($170,000) and Fire ($148,000) Departments and the Sheriff’s Office ($70,000).
$326,000 in various savings in Recreation programs.
$570,000 in savings due to increased employee cost sharing of health insurance premiums.
$483,000 in savings due to vacant positions.

The proposed Fiscal Year 2008 budget also provides $8.9 million in pay-as-you-go financing from the General Fund for capital projects, which, along with bonds and other capital funds, will finance $64.9 million in capital projects, including:

$7.5 million for a new Charles Houston Recreation Center.
$500,000 for preservation of historic museums and facilities.
$7.1 million for the “Metro Matters” program that maintains the Metrobus and Metrorail systems.
$2.7 million for street improvements.
$6.8 million in sanitary sewer and storm water projects.
$1.3 million for first-phase funding of the Windmill Hill Park bulkhead improvements.
$16.2 million in school capital projects, which fully funds the School Board’s request.

Recap of Real Property Assessments Information

On Tuesday, the City of Alexandria announced Real Property Assessments for 2007. The overall value of real property, including both locally assessed real property and state-assessed public service properties, has increased by $1.45 billion, or 4.43 percent over 2006 values, to a new total valuation of $34.24 billion.

Approximately 49.3 percent of the increase is the result of new construction. The remaining 50.7 percent, or $736.7 million, is the result of existing property value appreciation.

The overall value of City of Alexandria’s residential real property tax base decreased by 0.82 percent during the past year, or $166.2 million – from $20.37 billion in CY 2006 to $20.21 billion in CY 2007.

Residential assessments had increased at an average annual rate of 15 percent for single-family and 20 percent for condominiums during the six-year period from 2001 to 2006. During 2006, however, market changes occurred that resulted in level or declining assessments for CY 2007.

The overall value of the City’s commercial real property tax base increased for 2007 by 13.27 percent, or $1.54 billion, to a total of $13.18 billion. New construction accounted for $291.7 million of the increase, while appreciation accounted for the balance of $1.25 billion. Existing commercial properties increased for 2007 by 10.8 percent, on average, with double-digit increases for multi-family rental, office, and hotels/motels. Appreciation reported for 2007 represents a 27.95 percent decrease from the previous year.

The value of new construction, however, increased by 52.53 percent for 2007. Much of this increase is attributable to new, multi-family rental, office and hotel construction.

Alexandria continues to be a leader in providing targeted real estate tax relief. Some $3.7 million in tax relief is projected for qualifying senior and disabled homeowners. Also, $1.25 million is budgeted for the City’s first-in-Virginia, innovative Affordable Home Ownership Preservation Grant program. This income-based grant range extends to households of $100,000 annual income and provides grants of up to $1,200. About 2,400 property tax payers, or 6% of all Alexandria homeowners, are expected to benefit from these real estate tax relief programs.

For additional information about the City of Alexandria's proposed FY 2008 Budget, see www.alexandriava.gov.

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