By Carla Branch
In a rare Wednesday night meeting, the Alexandria City Council gave City Manager Jim Hartmann the green light to make just over $5 million in service cuts this year and discussed budget guidance for preparing the Fiscal Year 2010 budget.
“We first gave Council this list of proposed budget cuts on Oct. 22, and discussed them in detail at the retreat on Oct. 25,” said City Budget Director Bruce Johnson. “We have already implemented the efficiency savings of $4.2 million and need your approval to make the proposed service cuts.”
Hartmann proposed the cuts to make up for a $10.5 million budget shortfall this year because of declining revenue from many sources. “We have had an opportunity to consider these cuts, and this is our last bite at the apple before the City Manager moves ahead with them,” said Mayor Bill Euille. “It is my understanding that no member of Council has proposed any changes, so I believe that we can give him the approval he needs to move forward. I considered making some changes, but staff convinced me it would just be robbing Peter to pay Paul.”
Council members discussed two of the proposed cuts in detail before giving Hartmann approval to make them. “I am very concerned about the loss of the police officer at Minnie Howard,” said Councilman Tim Lovain. “The staff, students and parents made a very compelling case for keeping that officer at the school, and I want to make certain that Chief Baker and our school superintendent have discussed this matter thoroughly and have planned for the safety of everyone at the school.”
Police Chief David Baker spoke to that issue. “I have had a conversation with Dr. Sherman and have agreed not to remove the officer from Minnie Howard until Jan. 1. After that, we believe that we can ensure the safety of the students at Minnie Howard and T. C. Williams by using current staff,” he said.
There are currently two School Resource Officers and a Chief of Security at T. C. Williams, in addition to hall monitors who patrol the halls to prevent problems. When the new high school opened last year, students were no longer allowed to leave campus for lunch, making maintaining security easier. “If you find that you cannot come to an agreement on this matter, please come back to Council to discuss it further,” said Councilman Ludwig Gaines. “This is too important to simply make the cut without discussion if you and the superintendent can’t agree on a safety plan.”
The other cut that created more discussion was the loss of the gridlock reduction and prevention program, which places off-duty police officers at ten intersections around Alexandria during rush hour. “The program has been underfunded for the past several years, making it less effective than it should be and forcing us to make decisions about where to place officers,” Baker said. “If you want this program to continue, we need to discuss it in the context of the upcoming budget and decide exactly what intersections we want to cover. As it stands, I have had to make decisions about covering five intersections one day, three the next day, and six or seven the next day. Because of the cost, there has been no consistency.
“It remains our responsibility to ensure that these intersections are safe, and we will, of course, continue to do that. I believe that we can solve some of the problems with signs and other traffic engineering remedies, and I will work with Rich Baier and his staff to see what we can do in that respect,” Baker said.
Vice Mayor Redella S. “Del” Pepper wasn’t completely satisfied. “We really need an officer at the intersection of Duke Street and Taylor Run, because when one isn’t present, there are big problems,” she said.
Baker agreed that this intersection is a problem. “When the new Telegraph Road interchange opens, it will solve many of our traffic problems on Duke Street, but that is two years away. In the meantime, placing flexible posts at that intersection during rush hour should solve some of the problems, because most of the problems there are caused by people waiting until the last minute and cutting in to turn,” he said.
For now, Baker will use on-duty officers for traffic control and look at engineering solutions.
Sales Tax Error Causes Million Dollar Additional Deficit
In addition to the $10.5 million in cuts that Hartmann must already make, Council learned of an additional $1 million in cuts that must be found because of an error in collecting and distributing sales tax receipts. “This was not our error but an error that the State made,” said Assistant City Manager Mark Jinks. “The State collects sales tax on receipts from businesses and distributes a portion of that tax to the locality in which the business is located. For the past five years or so, the State has collected sales taxes from the Target Store on South Route 1, which is in Fairfax County, but has given them to us. This happens because of postal addresses that say Alexandria but are located in Fairfax County.
“The State has finally realized their mistake and has corrected it. That means that we owe them $1 million this year and we will lose another $300,000 next year. The statute of limitations for adjusting this mistake is three years, so we are only going to have to pay them $1 million and not more. We have to pay it all by the end of this fiscal year however, so we must make up for that loss as well as the other revenue losses we have already contemplated,” Jinks said.
Hartmann will return to Council with a proposal on those cuts as soon as possible.
Council Contemplates Property Tax Increases, Deeper Budget Cuts
“In looking at guidance for the City Manager in preparing next year’s budget, we realize that we can neither tax nor reduce our way out of this problem,” said Councilman Justin Wilson. “We have worked very closely with every member of Council to put together this document to give staff appropriate guidance in preparing next year’s budget. None of this is easy. I could not have dreamed that I would be looking at such cuts when I ran for office. I couldn’t have even contemplated these economic hard times in my worst nightmare. Nonetheless, that is where we are, and we must take steps to ensure the longterm health of the city.”
The proposal, which Council will adopt at next week’s legislative session, with or without changes, calls for spending reductions in the City’s operating budget of 3.5% or around $20 million. This includes a reduction in the transfer to the public school system of 2%. “The fact that this is not a surprise to the superintendent or to the School Board speaks to the unprecedented level of cooperation between the Board and Council and the school and city staff, and we appreciate that very much,” Wilson said.
To accomplish those cuts and still retain essential services, Council is contemplating a property tax rate increase of five cents. “This assumes that property values do not decline any further,” Wilson said. Under the proposed increase, the average property owner’s tax bill will be the same as it was in 2008.
When Hartmann brings forward his proposed budget in February, Council has asked that he maintain the $10.5 million cuts already in place for this year, propose an additional $20 million or so in cuts for next year, and be prepared to put $2 million of those proposed additional cuts in place by the end of this fiscal year. “Clearly, we need to find $1 million in additional cuts, so this would mean just an additional $1 million to bring to us in February, that could be made this year,” Wilson said.
Capital projects would essentially be stopped, if the proposed guidance is adopted next week; that is, with the exception of spending on the public safety center, on maintaining infrastructure, on contracts that are ongoing and on projects with allocated funds. One of the ways that Hartmann could fund other capital projects next year is to propose an additional one cent on the property tax rate that would be dedicated to funding those projects. “I really have a concern about dedicated funding streams like this, because once they are in place, they are hard to remove,” said Councilman Paul Smedberg.
Wilson said “I agree with you, Councilman Smedberg, and that is not what we are contemplating here. We are rather looking for a way that the Manager could fund essential capital projects next year, so maybe we should change the word ‘dedicated’ to ‘allocated’. We see this as a one-time solution that the Manager could bring forward if he sees the need.” Council agreed to make that change before next week.
“We have never seen times like this, and we must do something,” said Councilman Rob Krupicka. “However, we felt it necessary to not only give the Manager guidance in preparing his budget but some guiding principles as well.”
In looking at budget cuts, Council will instruct the manager to ensure public safety and the social welfare and health safety net, fund education to the level needed to continue progress for students in the school system, to maintain funding so that economic sustainability continues, to ensure that property values are not harmed and to protect the City’s triple-A bond rating, among others. Also, Council wants Hartmann to protect the City’s work force and ensure that they are compensated in keeping with making the City competitive with other area jurisdictions.
“There will be a reduction in the City’s work force,” Hartmann said. “Also, I know of no area jurisdiction that is planning any type of market rate adjustment. Neither are we, but that is in keeping with everyone else in the region,” he said.
Council will vote on the budget guidance on Tuesday, Nov. 25. Hartmann will present his proposed FY 2010 budget to Council on Feb. 10, 2009, and Council will adopt next year’s budget and the proposed FY 2010-15 capital improvement program on April 27.