budget

Morning Notes

By ARLnow.com

Sunset over Metro 29 Diner on Lee Highway (Flickr pool photo by Wolfkann)

County Gets $500k for Beaver Pond Project — Arlington County has received a $500,000 state grant for a project to improve the Ballston beaver pond. “The $2.7 million improvement project, paid for mostly from stormwater funds, includes changing the flow pattern to keep water in the pond longer, allowing wetland plants to remove nutrients and other pollutants before it flows out,” the county said in a press release. “Construction is expected to begin in the summer 2014.” [Arlington County]

Fisette’s Disclosure Doesn’t Include Husband — County Board Chairman Jay Fisette’s annual financial disclosure did not include the finances of his husband. Fisette was married in D.C. this past September, but Fisette says he’s not required to include his spouse in the disclosure since their marriage is not recognized under Virginia law. [Washington Post]

Howze Tops Fundraising Battle — Democratic County Board hopeful Alan Howze has raised the most money of any County Board candidate, with $16,245. Fellow Democrat Cord Thomas appears to be completely self-funding his campaign, while independent candidate John Vihstadt’s donors include a number of local Republicans. [Blue Virginia]

Congressional Primary Date Set — A date has been set for the crowded Democratic primary in the race to succeed the retiring Rep. Jim Moran (D-Va.). The primary will be held on June 10. [Twitter]

APS Budget Forum Dates Set — Arlington Public Schools will hold three community forums on the upcoming FY 2015 budget. The forums will be held on Jan. 22, Jan. 29 and Feb. 3. [Arlington Public Schools]

Flickr pool photo by Wolfkann

Kaine Praises Budget Deal, but Disappointed With Cuts

By Katie Pyzyk

Sen. Tim Kaine (D) (courtesy photo)U.S. Senator Tim Kaine (D) has offered a statement regarding Tuesday night’s bi-partisan budget compromise that averted another government shutdown.

Kaine largely praised the $85 billion agreement that funds government agencies through 2015. He did, however, express disappointment in certain cuts, such as cost-of-living adjustments for military retirees and for federal employee benefits.

Here is Kaine’s full statement:

“Ever since I took office last January, I made it a mission to do everything I could to replace the across-the-board sequester cuts that have so severely hurt Virginia and return to normal budgetary order. I even delivered my maiden floor speech last February on the urgent need to find compromise and avert sequestration. Tonight, I’m pleased that after passing a Senate budget for the first time in four years and going to conference with the House, a deal has been reached.

I’m disappointed that reductions in the cost-of-living adjustment (COLA) for military retirees and cuts to federal employee benefits were included. But the deal goes a long way toward alleviating the most harmful effects of sequestration next year – cuts that have disproportionately impacted federal employees and the defense community – and restoring basic economic certainty to businesses and families across the Commonwealth. It also ensures we won’t suffer another damaging government shutdown next month that would have resulted in more negative consequences for federal employees.

The two-year, bipartisan agreement will relieve $63 billion of sequester cuts for 2014 and 2015. It will also avert additional defense cuts – including $20 billion in cuts that were set to take effect in January 2014 – and replace non-defense cuts over the next two years. We’ve also given appropriators the certainty they need to write full appropriations bills – a significant step toward ending the dangerous pattern of stopgap, governing-by-crisis measures that have plagued the budgeting process in recent years.

While I’m still examining the details of the deal, I am pleased a spirit of compromise and cooperation prevailed.”

Update at 5:10 p.m. — Rep. Jim Moran (D) has also issued a statement on the budget agreement, saying it’s flawed but he will ultimately support it. The full statement, after the jump.

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Increased Efficiency Earns County Rare Kudos from Taxpayers Association

By ARLnow.com

County Manager Barbara Donnellan discusses her proposed budget in 2011The Arlington County Taxpayers Association doesn’t usually have nice things to say about the county’s spending habits. But on at least one metric the group has some plaudits to share.

The county’s Department of Management and Finance recently released its Comprehensive Annual Financial Report for Fiscal Year 2013, which ended June 30, 2013. In broad terms it looks like county spending is continuing its inexorable rise: “Total expenditures increased from $745.8 million in FY 2004 to $1,122 million in FY 2013, 50.5%, an annual average of 5.1%,” ACTA reported.

Also on the rise: the county’s indebtedness, which now stands at $4,082 per capital for general bonded debt, a 62 percent increase from FY 2004.

But operational efficiency — as determined by looking at the number of full-time equivalent (FTE) county and school employees per 1,000 residents or students — is improving at the same time. For county government, there were 18.68 FTE per 1,000 residents in FY 2004 and only 17.05 FTE per 1,000 residents in FY 2013. Arlington Public Schools were a similar story, with 186.02 FTEs per 1,000 students in 2004, and 177.79 FTEs per 1,000 students in 2013.

The increased efficiency is made possible by increases in the county population and the student body, but ACTA credits County Manager Barbara Donnellan and APS Superintendent Dr. Patrick Murphy with running a tight ship, so to speak.

“While there is still too much local government in Arlington County, and too high taxes, the numbers above show some numbers such as the efficiency ones are moving in the right direction,” ACTA wrote in a blog post. “Kudos to the Manager and staff for keeping the FY 2012 to FY 2013 increase in total expenditures to less than the inflation rate. Also to the Manager, especially, and the Superintendent for increasing operational efficiency.”

Donnellan and Murphy will present their proposed FY 2015 budgets in the first quarter of 2014.

Morning Poll: Long Bridge Park Aquatics Center

By ARLnow.com

Renderings of the future Long Bridge Park Aquatics, Health & Fitness FacilityLast year, voters approved a bond to help build the new Long Bridge Park Aquatics and Fitness Center by a vote of 61 to 39 percent.

Now, however, the ongoing costs of the center are projected to be even higher than anticipated.

“What had been an expected annual operating deficit of $1 million to $1.3 million has now ballooned to more than $4 million, according to projections included in County Manager Barbara Donnellan’s updated budget forecast,” the Sun Gazette reported on Monday.

This news comes at a time when the county is facing a potential $24 million budget gap. Local fiscal watchdog Wayne Kubicki, who previously declared that the aquatics center could turn out to be “Artisphere on steroids,” said that the county would be better served to use its funds for other priorities.

Still, the aquatics center has its supporters, like the group Friends of Long Bridge Park, which has said it’s needed because “the large demand for aquatic activities can’t be met by… high school pools, which have limited public hours and space, and were designed for instruction, not a wide range of community needs.”

The Friends of Long Bridge Park also argue that other aquatics centers can cover most of their operating costs through memberships and rentals. The county itself, meanwhile, cautions that the latest projects are preliminary in nature.

If Donnellan’s projections prove correct, and the aquatics center will not be as self-sustaining as originally believed, do you still think it should be built?
 

Board Closes Out FY 2013 with Budget Surplus

By Katie Pyzyk

County Board discusses FY 2013 closeout funds on 11/19/13Along with discussing recommendations for the Fiscal Year (FY) 2015 budget, the County Board closed out the FY 2013 budget at its meeting on Tuesday. As it turns out, the county was left with a $25 million budget surplus.

The surplus is due, in part, to savings by both the county and the school system, in addition to higher than anticipated tax revenues. Many of the funds will be re-appropriated to FY 2014.

County Manager Barbara Donnellan gave a presentation to the Board outlining the carried-over funds and recommendations for re-appropriation, noting that several of the funds have dedicated revenue sources which restrict their use.

“With all of the economic uncertainty, the federal government shutdown, sequestration and BRAC, Arlington continues to be fiscally responsible,” said Donnellan. “I am recommending that we add to certain pots to ensure that we are prepared for an uncertain economic environment.”

She added that the county anticipates keeping its triple-A rating.

Carried-over funds were allocated to reserves, previous commitments, and priority projects. Some of the one-time allocations are detailed below:

  • Additional $5 million to the economic stabilization fund in light of federal sequestration and BRAC impacts.
  • One-time $3.3 million employee compensation contingency, in case employee step/market pay adjustment is not included in the FY 2015 Budget. Another $1.5 million to fund ongoing comparative pay studies.
  • Affordable housing initiatives for FY 2015, including $2.9 million to Affordable Housing Investment Fund and $1.5 million to housing grants.
  • Additional funding of $1.7 million for Artisphere, for both FY2014 and FY2015.
  • Other FY 2015 set-asides, including a $3.0 million unallocated contingent to provide flexibility for the Board and funding various one-time projects primarily in the technology, planning and safety areas.

Donnellan specifically addressed the issue of what to do with Artisphere, which came in over budget for FY 2013. Donnellan had handed down a warning about Artisphere in February but seemed more optimistic on Tuesday.

“This is a facility that came online just as the economic environment was turning. For the arts to be successful, it needs participation from attendees, donors and local or state support. Very few arts facilities like Artisphere can exist without some form of government support,” Donnellan said. “I want the Artisphere to be successful, and I think many others in our community want it to be successful as well.

Donnellan recapped her previous decision to shift half of Artisphere’s funding from ongoing to one-time. She then made a recommendation for the future, highlighting the arts center’s recent increased attendance, better programming and increased revenue from rentals.

“I’m recommending that we use some of the closeout funding to shore up this facility for this fiscal year and next. I told the Board that FY 2014 would be a transition year for Artisphere,” she said. “We’re beginning to see real signs of progress toward our goal of creating an arts and cultural center that will draw thousands of people from our county and across the region into Rosslyn, generating economic and cultural benefits for our entire community.”

Last fall, Donnellan imposed a hiring slowdown to provide expense savings in light of the budget gap faced in FY 2014. The county credits the hiring slowdown with helping departments achieve a higher amount of savings than in previous fiscal years. The slowdown is expected to continue indefinitely in order to achieve savings in FY 2014.

According to the county staff report, three departments did not achieve expenditure savings in FY 2013:

  • County Attorney’s Office (-$485,626): The over expenditure was primarily the result of increased legal costs and expenses including consultants, expert witnesses, filing fees, court reporters, copying costs and outside legal counsel related to law suits and other transactions the County was involved in during FY 2013.
  • Office of the Treasurer (-$146,731): The over expenditure was due to increased printing expenses and full staffing, which did not enable the Office to achieve a budgeted expense that assumed savings from vacant positions.
  • Economic Development (-$83,647): The over-expenditure resulted from personnel costs exceeding budgeted amounts, including temporary help for Artisphere

After Donnellan’s presentation, the Board voted unanimously to approve the recommended re-appropriation of funds carried over from FY 2013.

Board to Manager: Assume No Tax Rate Hike

By Katie Pyzyk

County Board discusses FY 2015 budget on 11/19/13Budget cuts could be coming next year as county officials try to figure out a way to balance the county’s budget without raising taxes.

At its meeting on Tuesday, the Arlington County Board gave direction to County Manager Barbara Donnellan for developing the proposed Fiscal Year (FY) 2015 budget. The Board recommended the County Manager close a projected $20 to $25 million budget gap while maintaining the current tax rates.

Although this is the sixth consecutive year the county expects a gap between revenues and expenditures, Board members note the gap for FY 2015 is not as severe as in recent years. It’s smaller partially due to higher tax revenue projections — mostly from an increase in residential property assessments — but a significant gap still exists.

“It’s not something to ignore,” said Board member Chris Zimmerman. “There may be tough choices that have to be made.”

An average increase of 5.5 percent for residential real estate assessments is expected to boost the overall real estate tax base 2.6 percent. Commercial assessments are expected to remain flat or decline slightly. Real estate taxes are the county’s largest source of revenue.

Board members recommended Donnellan does not increase the tax rate, which currently stands at $1.006 per $100 of assessed value.

“I for one, could not give guidance to the manager today to raise the tax rate, knowing that we project an increase in real estate on homeowners and not on commercial,” say Board member Jay Fisette. “With all of the issues out there that we will have to grapple with, now is not the time to do that, in my view.”

The Board requested continued funding for services that protect residents’ health and safety, investments in affordable housing and environmental sustainability, and adequate support for public schools. That includes funding for an expected increase in school enrollment. Board members spent much time discussing the need to maintain school funding.

Costs are expected to increase for items such as county employee compensation, funding for Metro and debt financing for major capital projects. New costs are expected for projects such as the new homeless shelter, the Long Bridge Park aquatics center and investments in the ConnectArlington fiber network.

The Board members repeatedly pointed out that this is simply an initial recommendation and more input is necessary before Donnellan presents the proposed budget in February.

“This is the very beginning of the budget process,” said County Board Chairman Walter Tejada. “There’s a whole lot more information and data that we will be getting over the next few months.”

Board members acknowledged the potential to discuss additional cuts should the economic climate worsen. Measures could mimic Donnellan’s previous cost cutting measures, such as the county hiring slowdown that began in 2012.

“Our guidance to the Manager begins a months-long conversation with our community that will involve tough decisions,” Tejada said in a subsequent statement. “With the increase in residential property assessments costing many homeowners close to $300 more per year, we have directed the County Manager to assume no tax rate increase; however, we recognize that this is a time of continued financial uncertainty. If the economic environment changes, we expect the Manager to give us options that may include further budget cuts and/or revenue increases.”

The Board approved the guidance by a 4-1 vote, with Libby Garvey offering the opposing vote.

County Braces for $24 Million Budget Gap

By ARLnow.com

Arlington FY 2015 budget projectionsArlington’s projected budget gap for Fiscal Year 2015 is between $20 and $25 million, the county manager’s financial forecast shows.

County revenues are expected to increase 2.6 percent to $1.093 billion, thanks largely to higher residential real estate assessments. Residential real estate tax revenue is expected to increase 5.6 percent, while commercial real estate revenue is expected to stay the same or slightly decrease, due to weakness in the office market.

Expenses, meanwhile, are expected to increase, thanks to pay raises for some of the county’s 3,344 full-time employees, a rise in the county’s payment to Metro, and costs associated with new facilities like the year-round homeless shelter and the Long Bridge Park aquatics center.

Total county expenses are projected at $675.6 million, and that assumes cutting the county’s Affordable Housing Investment Fund and pay-as-you-go project financing in half, due to the removal of one-time funds. The county government will face a $7.7 million revenue/expenditure gap.

Arlington Public Schools, meanwhile, will see its budget transfer from the county rise 3 percent to $425 million. Still, the school system is expected to face a $16 million budget gap due to a rise in enrollment.

County staff caution that the figures are still preliminary at this point. FY 2015 doesn’t begin until July 1, 2014.

“Current projections rely on incomplete revenue data and preliminary cost estimates,” staff wrote. “Projections will change as more data becomes available and further analysis is completed. Cost estimates could increase and revenue projections could decrease, exacerbating the problem, or estimates could also improve.”

County Manager Barbara Donnellan will present her budget projections to the County Board at its meeting tonight (Tuesday). The Board, in turn, will provide budget guidance to the manager and her staff.

Peter’s Take: Arlington Budget Guidance, Part Two

By Peter Rousselot

Peter’s Take is a weekly opinion column. The views and opinions expressed in this column are those of the author and do not necessarily reflect the views of ARLnow.com.

Peter RousselotThe County Board is scheduled to adopt its budget guidelines on Nov. 19. This column explains in more detail than last week’s why those guidelines should direct an increase in the budget share provided to Arlington Public Schools.

The main reasons are: school enrollment has been rising, while it’s getting more challenging to deliver a 21st century education, and the APS share of the total budget has been slipping.

The combination of these three things happening simultaneously continues to reduce the relative share of educational resources that APS used to have.

School enrollment rising

APS projects that enrollment is expected to continue to grow in FY 2015 by 793 students. This represents an increase of about 30 percent since FY 2007. The financial impact of this enrollment growth for staffing alone could exceed $8 million in FY 2015. Other costs related to this growth (relocatable classrooms, furniture, textbooks, etc.) are likely to add $3 million.

Educational challenges up

APS must honor its commitments to bring instructional time up to the same level and provide the FLES program at all elementary schools. As a percentage, special education enrollment has not changed significantly. But, the severity of the needs of APS’ special education students has been increasing, especially in the autism area. These educational priorities require significant additional resources.

APS share slipping

While there have been occasional one-time, special add-ons in county transfers of funds to APS from FY 2007 through FY 2014, the overall trend of these transfers has been downward in relative terms. Thus, over that period:

  • County revenue provided to APS has grown 32.5 percent, but locally-generated revenue retained by the County has grown 38.6%;
  • Over the same period, the APS budget share has declined from 46.7 to 45.6 percent.

APS also helps to generate Arlington’s tax dollars. A recent report by Dr. Michael Walden concluded that APS’ high and improving academic performance contributes to the Arlington economy:

  • Arlington County residential property values are between $2.7 and $4.7 billion higher than they would have been without academic improvement;
  • These increased property values contribute annually between $27 and $47 million more in property tax revenues than would have been received without academic improvement.

APS’ share of the operating budget should be restored to the level that properly reflects Arlington’s historic commitment to public education.

Peter Rousselot is a former member of the Central Committee of the Democratic Party of Virginia and former chair of the Arlington County Democratic Committee.

Peter’s Take: Budget Guidance for Arlington’s County Manager

By Peter Rousselot

Peter’s Take is a weekly opinion column. The views and opinions expressed in this column are those of the author and do not necessarily reflect the views of ARLnow.com.

Peter RousselotThis is the time that the Arlington County Board generally adopts guidelines for the County Manager to use in preparing the County’s operating budget for the next fiscal year. As a point of reference, you can review the guidelines the Board adopted last year here. ARLnow.com readers should review last year’s guidelines as context for this column.

As I have written in earlier columns, to accommodate the new normal of Arlington’s budget environment, Arlington needs to move now to the type of core services approach to budgeting used in other jurisdictions. Based on that reasoning, the budget guidelines the County Board should adopt this year ought to differ substantially from those it adopted last year.

Here are the guidelines that the County Board ought to provide to the County Manager in preparing the next Operating Budget:

“The County Board directs the County Manager to prepare an FY 2015 budget that realistically reflects current economic conditions. The County Board believes that Arlington faces substantial economic challenges, and will continue to face such challenges for the foreseeable future. A significant slowdown in the growth of federal government spending and troubling increases in commercial office vacancy rates are among these challenges.

“To accommodate this new normal in Arlington, the FY 2015 budget must give priority to spending on core government services such as the public schools, public safety, and maintenance of existing infrastructure. We must continue to ensure a safety net for those in need.

“In developing her Proposed FY15 Budget, the County Manager is directed to:

  1. Ensure that the budget provides for long-term financial sustainability.
  2. Present a balanced budget that eliminates any projected county revenue/expense shortfall using expense reductions to eliminate no less than 75 percent of any shortfall and tax increases to eliminate no more than 25 percent.
  3. Change the county/school revenue sharing allocation reflected in the FY 2013 budget (54.2 percent county/45.8 percent schools) by increasing the schools’ share from 45.8 percent to whatever higher percentage is needed to fund all reasonably anticipated enrollment increases, continue to raise achievement for all students and narrow achievement gaps between various groups of students, expand the FLES program to all elementary schools, and otherwise ensure that we are providing the best education we can afford.
  4. Preserve the County’s AAA/AAA bond ratings.
  5. Fully fund all debt, lease and other contractual commitments. Eliminate duplication and inefficiencies.”

Peter Rousselot is a former member of the Central Committee of the Democratic Party of Virginia and former chair of the Arlington County Democratic Committee.

Morning Notes

By Katie Pyzyk

Lee Highway love

Metro Accident Victim Identified as GMU Student — The person struck and killed on the Metrorail Orange Line tracks between East Falls Church and Ballston early Sunday morning has been identified as 21-year-old George Mason University student Patrick Sibley. Sibley’s brother says he did not have a good sense of direction and may have become lost after leaving a bar in Clarendon and trying to make it home to Vienna. Metro is not commenting on the incident while it is under investigation. [Washington Post]

McDonnell Touts Budget Surplus — Gov. Bob McDonnell says the state ended its fiscal year on June 30 with $585 million more than projected. That’s the largest state surplus since 2005. The cumulative surplus during McDonnell’s nearly four years in office comes in at around $2 billion. [Washington Times]

County Labor Day Closures — Arlington County has posted a list of programs and services that will remain operational while the county offices are closed for Labor Day on Monday, September 2. Libraries, parks, pools, courts and schools will all be closed. [Arlington County]

Morning Notes

By ARLnow.com

Yard sale on Quincy Street (Flickr pool photo by Ddimick)

Too Much Cash on Hand? — Is Arlington County’s nearly $300 million cash hoard excessive? Many county officials says the extra cash cushion is an example of good fiscal stewardship. County Treasurer Frank O’Leary, however, suggests the cash reserves are “causing us to pay more taxes than we should.” [Sun Gazette]

More Coverage for Girls’ Firefighting Camp — The Today Show broadcast a segment yesterday about the Arlington Girls’ Fire Camp. The unique camp has also been covered by CBS News, among other broadcast outlets. [Today Show]

Korean War Tribute at Twilight Tattoo — Last night’s Twilight Tattoo performance at Fort Myer featured a special tribute to the heroes of the Korean War. The high-energy performance commemorated the 60th anniversary of the signing of the Korean War Armistice and was hosted by Joseph Westphal, Under Secretary of the Army. [U.S. Army]

Dating Event for Ages 31-40 — Date Social, the Arlington-based dating startup, will be hosting a dating mixer for those ages 31-40 at Hard Times Cafe tonight, starting at 7:00. Tickets are $12. [Clarendon Nights]

Flickr pool photo by Ddimick

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