City Manager s FY 2017 Proposed Budget. City of Fairfax, VA City Council Meeting February 23, 2016

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1 City Manager s FY 2017 Proposed Budget City of Fairfax, VA City Council Meeting February 23, 2016

2 FY 2017 Budget Calendar March 1, 2016 (Work Session) March 8, 2016 (Regular Meeting) March 22, 2016 (Regular Meeting) April 5, 2016 (Work Session) April 12, 2016 (Regular Meeting) April 19, 2016 (Tentative Work Session) April 27, 2016 (Special Meeting) Community Outreach & Staff Budget Presentations Budget Public Hearing & Consideration of Real Estate Tax Rate to be Advertised Budget Public Hearing and Budget Mark-Up Budget Mark-Up Introduction of C&I, Wastewater; Budget Public Hearing; RE Tax Rate Public Hearing FY 2017 City Council Budget Discussion Work Session (Tentative) Public Hearings: Budget, Rates & Levies, C&I, Wastewater. Scheduled Budget Adoption (Note: WEDNESDAY replacing Tuesday s Regular Council Meeting) 2

3 FY 2017 Budget Goals Meet Budget Guidelines Comply with Fiscal Policies Operate to Maintain AAA Bond Rating Maintain Hallmarks of City Unsurpassed Services Low Tax Burden Outstanding Amenities 3

4 FY17 Budget Preparation Challenges Greater CIP Funding Necessary Education Contract Funding Funding School Tuition Reserve Discretionary, 40% NonDiscretionary, Maintenance of Cash Reserves 60% Employee Compensation Debt Service Stormwater Funding C & I Funding 60% of Total General Fund Budget is Non-Discretionary 4

5 Annual Debt Service By Fiscal Year $18,000,000 $16,000,000 $14,000,000 $ AMOUNT $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $ Total Library 5

6 FY17 General Fund Expenditures Debt Service & Capital Lease, $6,437,080, 5% General Government, $12,268,171, 9% Police, $12,279,653, 9% Fire & Rescue, $13,280,861, 10% Public Works, $11,871,580, 9% Other (Reserve, Mkt Adjs., Vacancies, Regional Agencies), $363,503, 0% Transfers to Other Funds, $9,958,000, 7% Social Services, $6,124,113, 4% Culture and Recreation, 5,939,448, 5% Education, $54,795,332, 40% Total $136,093,509 Planning & Development, $2,505,162, 2% 6

7 FY17 General Fund Revenue Fines & Forfeitures, $1,401,300, 1% Miscellaneous Revenue, $184,200, 0% Sales Tax, $11,600,000, 9% Use of Money & Property, $622,772, 0% Charges for Services, $3,280,663, 2% Licenses, Permits, Fees, $1,575,375, 1% State Aid, $11,517,011, 8% Other Local Taxes, $9,042,637, 7% Meals Tax, $6,000,000, 2% Federal Aid, $275,846, 0% Personal Property, $10,875,000 4% BPOL, $9,200,000, 4% Miscellaneous, $1,477,817, 1% Total $136,093,509 Real Estate, $67,236,379, 49% Fund Balance, $690,313, 0% 7

8 Fund Expense Activity Fund FY2016 Adopted FY 2017 Proposed % Change General $130,464,802 $136,093, % Capital Funds 22,421,997 15,008, % Wastewater 10,624,040 11,717, % Transit (inc. CUE) 7,088,105 7,256, % (Less Fund Transfers) (7,674,458) (3,229,833) (57.91%) Total $162,924,486 $166,845, % 8

9 FY17 Summary of General Fund Changes FY16 Expense Changes $5,628,706 FY16 Revenue Changes $5,628,706 Net/Required From Other Sources $0 9

10 FY17 General Fund Expenditure Changes Increase / (Decrease) in Expenditures $ Change Changes in Personnel Costs: Merit (3.5%, eligible employees only) 253,534 COLA (1.35%) 369,598 Pay Study Impact 300,000 Temp Help (P & R $100k, Fire Code $35k) 113,609 Overtime (Fire Ops, Fire Code $136k) 151,632 Fringe 172,539 CIP Transfer 1,720,061 School Tuition Contract 1,121,855 Fund Transfers (Storm.25, C&I 2.0 ) 563,480 All Other Changes 437,423 County Contracts - Non Education 306,201 Budget Cuts 268,775 Renaissance Housing Program 50,000 Economic Development Authority -200,000 Total Increase / (Decrease) in Expenditures 5,628,706 10

11 FY17 General Fund Revenue Changes Increase / (Decrease) in Revenues $ Change Real Estate Taxes (Tax Increase 2.7, Assessment Increase 1.7%) 4,178,562 C&I Taxes (Tax Rate Increase 2.0 ) 372,601 Personal Property Taxes (199,000) Local Sales & Use Tax 176,000 All Other Changes 554,877 Ambulance Fees (134,665) State Sales Tax & Basic Aid 290,194 Grants (121,534) Transient Lodging Tax 250,000 Photo Red Light 217,600 Stormwater Tax (.25 increase) 193,057 Court Fines & Forfeitures (135,504) BPOL (200,000) Downtown Fund Transfer (276,470) Use of Surplus/Undesignated Fund Balance 462,988 Total Increase / (Decrease) in Revenues $5,628,706 11

12 Comparative Real Estate Tax Rates $ FY16 Adopted FY17 Proposed $1.30 $1.20 $ $ $0.90 Manassas* Herndon* Vienna* Falls Church* Prince William Loudoun Fairfax County City of Fairfax Alexandria* Arlington 12 *Pending

13 Total Value of Real Estate Tax Base Increases 2.1% over CY15 13

14 Trends in CY 2016 Real Estate Assessments Real Estate Type % Change from CY 2015 Residential +2.8% Commercial +0.8% New Construction +0.4% Combined Total +2.1% or $121.2 Million 14

15 Impact of Proposed Real Estate Tax Rate Increase Residential Properties 2015 Assessed Value $300,000 $500,000 $700, Taxes $3,156 $5,260 $7, Assessed Value $306,564 $510,940 $715, Taxes $3,317 $5,529 $7, Annual Increase $161 $269 $ Monthly Increase $13.42 $22.42 $31.42 Annual Increase of 5.1% 15

16 Impact of Proposed Increase to Real Estate Tax Base Rate of $ C&I Rate of 9.5 Commercial Properties 2015 Assessed Value $1,000,000 $3,000,000 $5,000, Taxes $11,270 $33,810 $56, Assessed Value $1,008,000 $3,024,000 $5,040, Taxes $11,859 $35,577 $59, Annual Increase $589 $1,767 $2, Monthly Increase $49.08 $ $ Annual Increase of 5.2% 16

17 Regional Comparison Estimated Annual Local Taxes & Fees per Average Households - Current Year 12,000 11,000 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 - Prince William County City of Fairfax Loudoun County Alexandria Fairfax County Arlington County Falls Church 17

18 General Fund Support Historical Capital Budget Expenditures 9 8 Adopted Prefunding Proposed Debt Service 7 6 Millions

19 FY17 General Fund Proposed CIP Total Projects Funded 8.1 M; Total reductions 2.7M 1. City Hall/Sisson House Maintenance $20, City Property Yard Maintenance 40, Fire Station #33-Replace Concrete Apron 50, Green Acres Maintenance 45, Old Town Hall Maintenance 25, Northern Virginia Community College 55, IT General Ledger/Personnel Software 125, Police Facility Security Systems Upgrade 30, Police Information Technology Program 76, Police Mobile and Portable Radio Upgrade 199, Police Vehicle Replacement 145,500 19

20 FY17 General Fund Proposed CIP (cont.) 12.Vehicle & Equipment Replacement $325, Northern Virginia Regional Park Authority 62, Planting & Beautification 30, Recycling Containers and Equipment for Parks 5, Kutner Field Irrigation 25, Annual General Park asphalt Resurfacing 25, Feasibility Study for Green Acres Renovation or New Site 35, Van Dyck Park Master Plan to include Erosion & Storm Water Study 40, Playground Equipment Maintenance & 120,000 Replacement 20

21 FY17 General Fund Proposed CIP (cont.) 21.Dale Lestina Trail Connection Completion $20, Asphalt Sidewalk Replacement Program 30, Brick Sidewalk Maintenance 109, Bridge Maintenance - Annual 50, City Sidewalk & Handicapped Ramp Replacement 123,000 Program 26.Fairfax Blvd Stone Wall Cap Rehabilitation 60, Brush/Wood Chipper 50, Emergency Power Battery Backup System 18, Replacement of Older Traffic Signal Cabinets 30, Salt Storage Facilities Preventative Maintenance Property Yard 30,000 21

22 FY17 General Fund Proposed CIP (cont.) 31.Truck Mounted Salt Brine Application System 60, FHWA Mandated Sign Retroreflectivity Compliance 50, Main Street at Pickett Shopping Center $150, Citywide Crosswalk Recoating 32, Curb, Gutter & Sidewalk Maintenance 1,300, Independent Roadway Evaluation 20, Jermantown Road repairs 60, Street Crack Sealing 65, Street Repaving 2,237, Reline Bridge Culvert Storm Structures 75,000 22

23 FY17 General Fund Proposed CIP (cont.) 41.Advanced Signal Detector $80, LED Street Name Signs 25, Streetlight Improvements on Fairfax Boulevard 50, Refurbishing Existing Traffic Signal Intersections 45, Carpet and Tile Elementary Schools 20, HVAC Elementary Schools 16, Concrete Repairs Schools 20, Paving Repairs Schools 25, Roof Repair/Replacement 348, Bridge Maintenance 50,000 Total $6,728,167 23

24 Highlights of Other Funds 24

25 OLD TOWN SERVICE DISTRICT Established in 2000 to help fund downtown projects Provides $186K per $0.06 rate City pays $1.2M annually in debt payments for downtown infrastructure, not including new park City contributes approx. $400K annually in special services for the downtown Service District Sunsets in 2020 unless extended 25

26 WASTE WATER UTILITY FUND Provides for waste water collection, treatment, billing, admin Annual expenditures of $10.7M $2m treatment of 1.2 billon gallons of waste water $4m installment payment for waste water treatment plant $4.7m in operational costs/debt payments Budget recommends increase in waste water rates of 10% Average household quarterly payment increases from $150 to $165 Increase necessary to meet rising costs and to enable continued installments of $40m Waste Water Treatment Plant construction cost City's ranking in wastewater rates lowest in Northern Virginia 26

27 TRANSIT FUND CUE BUS FY17 Budget $7.2m Sources of Revenue CUE Farebox $550k GMU Contribution $750k Transportation Tax Transfer-In $1.90m DRPT (pass through) $3.1m NVTC $828k Regional Bus Systems losing ridership CUE System Ridership down to approximately < 800k; loss of $50k in FY17 No recommended fare change 27

28 Storm Water Fund Currently receives 2 equivalent from the Real Estate Tax - $1.3M, also receives grants & state funding Budget $2.0M Activities Driveway pipe replacement Storm drain outfall maintenance Storm pipe lining rehabilitation Infrastructure replacement 2 major/ 1 neighborhood Stream Evaluation & Restoration Public/Private BMP Inspection/Maintenance Compliance activities regarding Chesapeake Bay & State Regs Recommended.25 increase to 2.25 to address unmet needs Flood Prone area fixes not included 28

29 Transportation Tax Fund Receives 30% funding - $2.4M annually Receives equivalent amount from local effort 2.4M annually Total Receipts $4.5M Annually Gradually increasing C&I Tax 7.5 to 9.5 recommended (ultimately to 12.5 ) Gap funding from remaining water funds ($365K) 29

30 Comparative Wastewater Rates Residential Wastewater Comparison (For 24,000 per quarter) $300 $250 $200 $150 $218 $165 $240 $253 $180 $136 $182 $130 $150 $223 $157 $100 $50 $0 Chart Reflects FY16 Adopted rate *Reflects FY17 Proposed 30

31 Comparative Water Rates Residential Water Comparison (For 24,000 gallons per quarter) $250 $200 $196 $150 $100 $101 $71 $71 $91 $71 $84 $94 $78 $144 $130 $50 $- Chart Reflects FY16 Adopted rate 31

32 Combined Wastewater & Water Rates Residential Wastewater and Water Bill Comparison (for 24,000 gallons per quarter) $450 $400 $350 $300 $250 $200 $419 $319 $294 $287 $251 $311 $276 $221 $209 $220 $344 $150 $100 $50 $- 32 Chart Reflects FY16 Adopted rate

33 Summary of FY17 Budget Presentation 1. Economy has boosted some revenue sources: Sales Tax, Transient Occupancy, RE Assessments; RE assessment increase < FY15 2. Reductions in Key Revenue Sources of Concern (BPOL, Pers. Property, Court Fines Forfeitures, Ambulance Fees) 3. Increases in school tuition contract & other city/county contracts 4. C & I Tax Fully Funded with 2 increase & cash transfer in -(water) 5. C & I Tax Benefits City Greatly; Construction $$ and Transit 6. Recommended.25 Increase in Stormwater Fund 7. Unassigned General Fund Balance 10% 8. Employee Compensation Addressed 9. Wastewater Rate Increase of 10% 10. Capital projects, pay-as-you-go investments at $6.7M & 1.4M in debt payments from General Fund 11. Recommended increase in Real Estate Tax to $ (2.7 &.25 stormwater increase) 12. No Added School Tuition Contract Reserve; Included; Remains at $0 13. City Council Financial Policies & Budget Guidelines: In Compliance 14. Increases to permits & fees most at 5% increase 33

34 Rates and Levies Increases- Amounts Vary, Most Are 5% Increase Electrical Permit Building Permit Plumbing Permit Gas Inspection Mechanical Underground Storage Tanks Elevator Inspection Rental Housing Occupancy Fire Prevention Fire Protection Fire Marshal Sign Permits Non-Residential Use Permits (Non-RUP) Erosion and Sedimentation Control Zoning Fees Special Use Permit Special Exception Variances and Appeals Court Fees Ambulance Transport and Mileage Day Camps Special Events Subdivision Fee Site plan Fees BAR Fees Tree removal Surety Review Bee Keeping 34

35 CONCLUSION FY17 Priorities/Investments Education Employees Infrastructure Each will cost more every year even if efforts are the same. Fairfax County is discussing a Real Estate Tax Rate increase. If approved, City spending will probably rise; amount unknown until 48 hours prior to City budget adoption. City Council strongly encouraged to provide itself with maximum flexibility in setting the advertised tax rate. 35

36 FY 2017 Budget Calendar March 1, 2016 (Work Session) March 8, 2016 (Regular Meeting) March 22, 2016 (Regular Meeting) April 5, 2016 (Work Session) April 12, 2016 (Regular Meeting) April 19, 2016 (Tentative Work Session) April 27, 2016 (Special Meeting) Community Outreach & Staff Budget Presentations Budget Public Hearing & Consideration of Real Estate Tax Rate to be Advertised Budget Public Hearing and Budget Mark-Up Budget Mark-Up Introduction of C&I, Wastewater; Budget Public Hearing; RE Tax Rate Public Hearing FY 2017 City Council Budget Discussion Work Session (Tentative) Public Hearings: Budget, Rates & Levies, C&I, Wastewater. Scheduled Budget Adoption (Note: WEDNESDAY replacing Tuesday s Regular Council Meeting) 36