[Archived] Alexandria City Council Adopts FY 2009 Budget

FOR IMMEDIATE RELEASE: May 5, 2008      

Alexandria City Council Adopts General Fund Operating Budget of $542 Million for FY 2009  

On May 5, the Alexandria City Council adopted a $542 million General Fund Operating Budget for FY 2009, a 4.3 percent increase of $22.5 million over FY 2008. The All Funds Operating Budget for FY 2009 would increase by 4.8 percent or $30.3 million.

The FY 2008 real estate tax rate of 83 cents per $100 of assessed value was raised by 1.5 cents to 84.5 cents, which now becomes the lowest rate among major jurisdictions in Northern Virginia. Under this revised tax rate, the average homeowner’s taxes would decline $7, or 0.2 percent. The commercial property real estate tax rate will remain at the same rate as that of the residential property tax, 84.5 cents. At a time when businesses are feeling economic pressure and regional economic competitiveness has intensified, this rate will give Alexandria a distinct business retention and recruitment advantage, compared with neighboring jurisdictions, whose total commercial property tax rates will now be 15% to 22% higher than the City’s rate.

Budget highlights include:

• The adopted budget includes economic sustainability initiatives, such as funding for the new King Street trolley and for a new regional marketing initiative.
• The total Schools operating budget would increase by 4.8%, which fully funds the School Board’s request.
• The adopted budget includes new funding for land use planning as well as transportation and parking planning.
• The adopted budget reflects $2.3 million in budget savings and initiatives and continues the City’s Managing for Results Initiative.

One of the most significant challenges that occurred during this year’s budget process was the Virginia State Supreme Court ruling that came after City Manager James K. Hartmann’s proposed budget was introduced. The Court ruled that the Virginia General Assembly’s delegation of authority to the Northern Virginia Transportation Authority (NVTA) to raise taxes and fees was unconstitutional. The NVTA was set up as a regional authority that would have provided additional transportation funding to all Northern Virginia jurisdictions, including $16 million in annual funding to support projects of the City of Alexandria in FY 2009.

This loss of significant NVTA funding, which resulted from the Supreme Court decision, forced the Alexandria City Council to reprioritize the current budget, and make additional reductions, particularly in the transportation area, to compensate for the lost revenue. The City Council also increased the restaurant meals tax from 3% to 4% and increased the hotel occupancy tax from 5.5% to 6.5%. These tax increases will help compensate for lost NVTA revenues that would have funded the new King Street trolley, transportation initiatives, and expanded marketing of Alexandria stores and restaurants. Alexandria’s personal property tax rate remains unchanged at $4.75 per $100 of assessed value.

“The budget we present tonight represents many hours of hard work and tough deliberations by City staff and by Council,” said Mayor William D. Euille. “Many of the decisions we made were hard ones, but I believe we now have a budget that will meet the current needs of the City and its residents. This budget will carry us through the economic challenges that face our region and our Commonwealth, and allow us to be fiscally responsible and to maintain our AAA Bond Ratings.”

The FY 2009 budget for basic City operations and capital improvement projects is increasing by 4.1% with a net increase of 6.6 City positions. Funding for capital projects will increase by 2.2%, which includes funds for Potomac Yard/Crystal City Transit, a bus rapid transit system that was originally funded in part by the NVTA. The City transfer to the Schools increased by 4.8% or $7.7 million. Thirty-one percent of the General Fund budget is provided for the Schools. 

Program highlights contained in FY 2009 adopted budget include:

• Funding for several initiatives that were facing elimination after the loss of NVTA revenues, including the King Street trolley service, DASH bus operating expenses, and additional positions for a parking planner and transportation planner ($3,192,708).
• Additional funding provided in contingent reserve for additional families seeking child care assistance and enhanced early childhood education programs ($591,269).
• Creation of three shift safety officer positions in the Fire Department, and a contingent reserve to look at other Fire Department safety improvements ($565,185).
• Funding for a Potomac Yard Metrorail Station Feasibility Study ($500,000).
• Funding for additional staff support from Planning and Zoning, Transportation and Environmental Services, Recreation, Parks, and Cultural Activities, and Housing to perform plan reviews and work on other initiatives designated for FY 2009 ($249,633)
• Funding for a one-time pay supplement of $500 for all full-time, City employees; 2% for top of grade City employees; and a proportional equivalent dollar amount for the Schools (a total of $2.1 million for City employees and $1.1 million for Schools employees)
• Retention of the Gridlock Reduction Intervention Program, which provides additional police staff to ease evening rush hour traffic and reduce congestion at up to 10 heavily traveled intersections in Alexandria ($150,000).
• Funding to expand youth summer employment programs, to support the Small Business Development Center and the Arlandria Neighborhood Health Services clinic, to increase monitoring of the Mirant power plant and to purchase clean energy.

“The budget passed by City Council this evening affirms not only the City’s commitment to fiscal responsibility, but also underscores our commitment to providing quality services to our residents,” said City Manager James K. Hartmann. “It gives us the resources we need to be responsive to the growing needs of the community during difficult economic times.”

The table below summarizes these changes for both the City (including the cost of funding all of the Capital Improvement Program or CIP) and the transfer to the Alexandria City Public Schools for its operating expenses.

FY 2009 General Fund Budget
($ in millions)