Alexandria City Manager Proposes $534.1 Million General Fund Operating Budget for FY 2011

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On February 16, Alexandria City Manager James K. Hartmann proposed a $534.1 million General Fund Operating Budget for Fiscal Year (FY) 2011. The proposed budget includes a range of reductions to close a $44 million spending gap.

“Fiscal Year 2011 will be the third year of unprecedented fiscal challenges facing the City of Alexandria,” said Hartmann. “We can expect at least three, and maybe four more years of difficult financial prospects, calling for significant spending restraint.”

In the proposed budget, total spending decreases by 3.5% ($19.2 million) from what it would cost to maintain current City and Schools services.

Compared to the previous year’s budget, the operating budget transfer to the Alexandria City Public Schools (ACPS) would increase by 2.0% ($3.3 million) from last year’s approved budget. The City-managed part of the budget increases 0.2% ($0.8 million).

The proposed budget includes a tax rate increase of 7 cents, from 90.3 cents to 97.3 cents per $100 of assessed value. The City’s tax rate would still remain among the lowest in the region, and even with the tax rate increase, 34% of homeowners would pay less real estate taxes than last year, due to the 5.5% decline in residential assessments during the past year. The average homeowner would pay $103 more than in 2009. Commercial property owners would also generally pay less taxes because commercial property assessments decreased by 10.6%.

The proposed budget presents several options for increased services that would be funded by dedicated tax and fee increases, if adopted. These options include Citywide transportation improvements for DASH service, Metro station improvements, high capacity transit corridors, and alternative transportation programs that would be funded by a 3-cent increase in the commercial real estate property tax rate. Other options include infrastructure improvements that address flooding and stormwater pollution funded by a new stormwater utility fee; and sanitary sewer capacity improvements funded by an increased water usage fee.

City employees would receive merit-based step increases, but no cost of living adjustment. They would pay a higher percentage of their health care premiums. No employee furloughs have been proposed, but the budget eliminates 67 positions. Staff reductions would result in reduced service hours at some City facilities, and cuts to programs and services.

The Capital Improvement Program (CIP) proposes $612 million in expenditures over the next 10 years, prioritizing maintenance of existing City and Schools facilities and infrastructure, completion of the new Police Headquarters currently under construction, and a limited number of new or expanded facilities for ACPS and the Fire Department. In the proposed CIP budget, many projects would be delayed, reduced in scope, or eliminated.

The public is encouraged to provide input about the proposed budget online (FY2011 Budget). City Council will host 11 work sessions to review the proposed budget with City staff. These sessions are open to the public and will be recorded and posted online. The public may provide comments at a budget public hearing on Wednesday, March 10, at 4 p.m. and a tax rate public hearing on Saturday, April 17, at 9:30 a.m. The Operating Budget and Capital Improvement Program are scheduled for adoption by the Alexandria City Council on May 3, 2010. Details about the public meetings, proposed budget, and online comments are located at  FY2011 Budget.