FY 2011 Operating and CIP Budget Council Guidance

At its November 24, 2009, legislative meeting Council passed guidance resolutions for the FY 2011 City Operating Budget and the FY 2011-FY 2020 City Capital Improvement Program (CIP). This resolution provides the City Manager with a guide to what Council would like to see in the FY 2011 City proposed operating budget and CIP.
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FY 2011 Budget Guidance

The Budget Situation

  • At the Council budget retreat on November 7, it was informed that to maintain current services, the cost would be $23 million more in FY 2011 than in FY 2010.  However, revenues, under current tax rates are expected to decline between $9 million and $29 million, with a best estimate of $21 million.
  • The shortfall estimate was therefore estimated to be between $32 million and $52 million, with a best estimate of $43 million.

Overview of Guidance

  • The guidance is intended to provide sufficient flexibility to the City Manager to propose a budget that provides core services expected of a municipal government and continues to provide quality services and facilities for the residents and businesses of Alexandria.
  • Nevertheless, City Council fully expects that there will be substantial service reductions in the proposed budget and that these reductions may need to be continued for the foreseeable future.
  • The budget will fund all contractual commitments including debt service and Council also states its intent not to make any material changes that would threaten the City’s double triple A bond rating.

Process

  • The guidance is directed to the City Manager and the Alexandria City Public Schools to assist them in understanding Council’s expectations as they prepare their operating budget requests for FY 2011 and Capital Improvement Program requests for FY 2011 – FY 2020. 
  • Those requests are due the week of February 8 of next year.
  • City Council will consider the requests and pass a budget on May 3, 2010.
  • City Council is not binding itself by this guidance.  It may decide to increase or decrease the amounts specified by this guidance.

Base Operating Budget

  • The City Manager is to submit an operating budget for City-managed programs of no more than $365.4 million – for City operations, debt service and pay-as-you-go capital project funding and subsidies for transit services.[1]
  • The Schools are requested to provide a budget that assumes no more than $167.9 in the operating transfer from the City to the Schools.  This amount is $3.3 million more (2.0%) than last year’s approved transfer, but $10.9 million less (6.1%) than the Schools’ estimated cost to maintain all current services and accommodate expected enrollment growth.
  • The total guidance is $534.1 million – an increase of $4.1 million over the Approved FY 2010 budget (0.8%), but $18.7 million below (3.4%) the cost to maintain current services in FY 2011.

Note:
[1] This amount is equal to last year’s approved amount and $7.8 million less (2.1%) than the estimated cost to maintain all current services. The increase for City managed funds also includes an additional $0.8 million for the cost of that portion of Build America Bond debt service to be subsidized completely by the Federal government through the American Recovery and Reinvestment Act.  No increase in total City employment levels  No across-the-board pay increase (market rate adjustment aka “COLA”) Includes and allowance for merit based step increases for eligible employees based on performance

Base Capital Improvement Program (CIP)

  • Do not increase funding levels assumed in last year’s CIP program for FY 2011 through FY 2015 for “pay-as-you-go” cash capital and borrowing through general obligation bonds.
  • Propose a storm water utility fee as necessary and appropriate for the provision of additional storm water management capital projects (and operating costs).

Base Revenues

  • The City Manager may propose whatever combination of taxes, fees, fines and service charges that is necessary and appropriate to balance the base budget.
  • Base revenues will not include an additional real estate tax for transportation purposes that may be imposed on commercial property under Virginia law. The sale or lease of City assets may be proposed to fund the CIP as “pay-as-you-go” financing.

Supplemental Budget

  • The City Manager may propose for Council’s consideration whatever additional operating costs and capital projects he deems necessary and appropriate to improve public safety, transportation or educational services, or provide additional capital expenditures, together with appropriate sources of revenue for those costs.

 

FY 2012 Impact

  • The City Manager is to provide a special analysis of projected expenditures and revenues in FY 2012 so that Council may plan ahead to the next fiscal year, which also expected to be difficult financially.

Council Budget Resolutions