Mark Schwartz

County Manager: Budget Cuts Are Coming But Not As Severe As First Feared

By ARLnow.com

Arlington County Manager Mark Schwartz’s proposed budget is expected to include a relatively modest $5 million in cuts, but that includes the elimination of about 32 county government jobs.

The early word on the budget comes from an email sent to county staff yesterday by Schwartz and obtained by ARLnow. Schwartz is scheduled to formally present his budget proposal next Thursday, Feb. 21.

The size of the reductions is much smaller than initially feared. Schwartz initially warned that the county was facing a $20-35 million gap.

Schwartz said that the county will work with affected employees to help them find and apply for vacant county government positions.

The manager’s proposed budget is one of the first concrete steps in a months-long process that culminates with the County Board’s adoption of a final budget in April. Arlington Public Schools, meanwhile, is facing its own budget challenges in the midst of continued enrollment growth and school construction.

The email from Schwartz is below.

February 13, 2019

To: All County Employees

As we get closer to submission of my proposed FY 2020 Budget to the County Board (a work session will be held February 21), I wanted to update you on the contents and timeline.

My proposed budget will include more than $5 million in proposed reductions – far less than the $20 to $35 million gap discussed last
Fall. My base budget includes elimination of about 32 positions – about 2/3 of which are currently filled. Affected employees will find out this week about the proposals.

In addition, the proposed budget will continue my commitment to the compensation maintenance plan for all general employees and the added commitments to Police, Fire and Sheriff staff included in the County Board adopted pay philosophy.

Next week I will provide you with more detailed information. Until then, those employees who might be affected by some of the proposed cuts are going through a difficult time. We are encouraging them to pursue vacant County positions and will do our best to match their skills with those vacancies. Our Employee Assistance Program (EAP) is also a great resource and support for all County employees during this time.

These cuts involve difficult choices. The County Board does not adopt a final budget until April 2019, and I will continue to keep you
updated as we learn more. Again, thank you for your continued commitment and support for Arlington County. I am grateful each day for Arlington’s dedicated workforce.

Sincerely,

Mark J. Schwartz
County Manager

EXCLUSIVE: Arlington Spent $4.1 Million on a 10-Mile Dark Fiber Network, But No One’s Using It

By Alex Koma

Four years ago, Arlington officials spent $4.1 million to build a 10-mile fiber optic network aimed at allowing local businesses to get cheaper access to higher-speed internet — since then, the fiber has just sat in the ground, almost totally unused.

At the time, county leaders championed the construction of the “dark fiber” network as a transformative step for Arlington. Though the county is barred by state law from offering internet service itself, officials envisioned smaller internet service providers working with local tech firms to “light” the fiber, providing county businesses with a powerful new option to access the internet at blazing-fast speeds.

But an ARLnow investigation shows that Arlington officials made a series of decisions in designing the program that scared off any businesses interested in leasing the fiber.

A committee of broadband experts convened by the county laid out many of these problems with the network, dubbed “ConnectArlington,” in a thorough report recommending an extensive overhaul of the program’s design. At least one member compared ConnectArlington to the infamous — but never built — “bridge to nowhere” in Alaska.

County officials, including County Manager Mark Schwartz, have now been aware of the group’s conclusions for close to eight months and they say they’re already hard at work to heed some of the committee’s recommendations. The report has even since been forwarded along to the County Board, even though Schwartz had originally hoped to wait to deliver his own recommendations for the program alongside the committee’s conclusions.

Now, it remains an open question how the county will work to address the problems with ConnectArlington, which costs hundreds of thousands of dollars per year for the county to maintain.

“They have this huge amount of fiber in the ground, and not a single strand of it has been leased,” said Chris Rozycki, a member of the Broadband Advisory Committee that studied ConnectArlington. “It’s like they’ve built an interstate, with no on-ramps or off-ramps.”

Fiber frustrations

The Board decided to build the 10-mile network in February 2015, reasoning that it would be a logical extension of the county’s existing fiber network, which connects county facilities, schools, radio towers and traffic signals.

Then-County Board member Jay Fisette touted it to ARLnow at the time as a “competitive advantage over other jurisdictions,” positioning it as a key tool for economic development in the county. It was also designed as a way to provide more competition for large ISPs like Verizon and Comcast — the county’s own research shows that companies at roughly 60 percent of all county office buildings only have one ISP able to offer them fiber-based service.

But the network’s design and the county’s conditions for leasing out the fiber were flawed from the very beginning, according to the broadband committee’s report and interviews with four of the group’s six members.

A chief concern is how the county chose to build out the fiber. Officials designed it as “middle mile” service, meaning it runs along major roadways (along the Rosslyn-Ballston corridor and Columbia Pike, for example) but didn’t initially connect to the buildings along the corridors.

“To be useful, the network must be complete,” the report argues, according to a copy obtained by ARLnow. The report has not been publicly released by the county.

“‘Build it and they will come’ does not always work,” the committee wrote. “Part of the network was built, but not enough to bring the ‘players’ to the game.”

(Read the full report written by the county’s Broadband Advisory Committee.)

(more…)

Morning Notes

By ARLnow.com

APS on Two Hour Delay — Arlington Public Schools is a two hour delays this morning amid a light coating of snow. Fairfax County Public Schools, meanwhile, is closed after initially announcing a two hour delay last night. [Twitter]

County Still Seeking Aquatics Center Sponsor — “Arlington County Manager Mark Schwartz has not given up on his goal of finding sponsors to help offset the cost of the Long Bridge Park aquatics center. ‘I remain optimistic that we will be successful” in finding partners,’ Schwartz told County Board members Jan. 29, though he offered no specifics.” [InsideNova]

ACPD: Get a Designated Driver for the Big Game — “Super Bowl LIII is slated for kick-off this Sunday, February 3, and, for many, this celebratory evening includes alcohol. Enjoy the game and festivities, but don’t drop the ball on safety. Make it your game plan to take a sober ride home – whether it’s by using a ride sharing service, taxi, public transportation, or designated sober driver.” [Arlington County]

Ballston BID to Launch ‘Club’ — “The Ballston Business Improvement District is launching a club for area residents… which appears to be a first-of-its-kind program in the region. When the club kicks off by the end of summer, members will enjoy exclusive benefits like discounts for restaurants and retail, in addition to events like yoga in the park and outdoor movies.” [Washington Business Journal]

Wardian Does It Again — “Michael Wardian, 44, of Arlington, Va. has won the first of seven marathons in the World Marathon Challenge in Antarctica.” [Canadian Running, Twitter]

Arlington Firm Makes Big Acquisition — “CACI International Inc. has reached an agreement to acquire LGS Innovations LLC for $750 million in a deal that extends Arlington-based CACI’s reach into the signals intelligence and cybersecurity markets.” [Washington Business Journal]

Flickr pool photo by Starbuck77

County Manager, Other Top County Employees Score Pay Raises

By Alex Koma

Arlington leaders are doling out raises for County Manager Mark Schwartz and several other senior county employees.

The County Board signed off on modest pay hikes for Schwartz, County Attorney Steve MacIsaac, County Auditor Chris Horton and County Board Clerk Kendra Jacobs at its meeting Tuesday (Jan. 29).

Each one scored 3.25 percent pay bumps on their previous contracts, matching raises the Board handed out last year to the group. All four report directly to county lawmakers.

Schwartz, the top executive in the county government, now stands to pull in just under $262,000 next year. This raise marks the third one he’s earned from the Board since he was hired as permanent county manager in 2016, when he started out with an annual salary of $245,000. His predecessor as manager, Barbara Donnellan, reached a top salary of about $270,000 a year by the end of her five-year tenure.

MacIsaac now pulls in about $253,000 per year, his tenth salary bump since taking over as the county’s top lawyer in 2000. Horton now makes nearly $143,000, earning his second raise since joining the county in 2016.

Jacobs now makes just over $108,000 annually, with the pay bump coming just a few months after the Board hired her to manage meeting materials this past July.

The good news for these county employees, most of whom rank among the highest-paid in the county workforce, comes as Schwartz is warning of some potential bad news for other county workers.

He’s already ordered a hiring “slowdown” to cope with the county’s dire fiscal picture, and has warned layoffs could be in the forecast (alongside tax increases and service cuts) to close a large budget gap in the new fiscal year.

File photo

Arlington Property Values Tick Upwards in 2019, But Not Enough to Fill County’s Yawning Budget Gap

By Alex Koma

Residential and commercial property values in Arlington ticked up last year, sending more revenue into the county’s coffers, but officials warn the increase won’t be enough to avoid the painful budget gaps facing county leaders this year.

The good news, the county says, is that the total assessed value of all Arlington property increased by 3.5 percent this year, compared to a 2.2 percent bump last year. Today (Friday), county mailed out property assessments, which determine the size of homeowners’ tax burdens. It plans to make all that information available online by tonight at 6 p.m.

The county said in a news release that three out of every four homes saw an increase in assessed value, for an overall bump in residential property values of about 2.9 percent. The average home’s value is now $658,600, up from $640,900 last year.

Commercial property also saw a 4.1 percent increase in value, and the county says the construction of new apartments was “responsible for about a third of the collective increase.” Office properties specifically saw a 4.3 percent bump, a substantial turnaround from the 6.9 percent decrease they recorded last year.

“Rising property values mean Arlington is a place people want to live and work,” County Manager Mark Schwartz said in a statement. “And the revenue we collect from real estate taxes helps us maintain the high-quality amenities and public services that make Arlington so attractive.”

Of course, the county still has its challenges. The release notes that Arlington’s office vacancy rate still sits at about 17.4 percent, and the resulting tax revenue slowdown has led to all sorts of fiscal challenges over the last few years.

Amazon’s arrival in Crystal City and Pentagon City will go a long way toward reversing that trend, but county leaders expect that it will take years for Arlington to start to feel the positive revenue impacts.

In the meantime, Schwartz is warning that the county’s budget deficit could be as large as $78 million in fiscal year 2020, given the gap facing both the county and its school system.

Schwartz expects that the county will need to close a gap of anywhere from $20 million to $35 million all on its own, which is driven by factors including Metro’s increasing expenses, the new raises for public safety workers the Board approved in the FY 2019 budget and new spending associated with the statewide Medicaid expansion.

The county school system could also tack on another $43 million in unmet needs, as it works feverishly to build new schools and keep pace with the county’s influx of students.

The County Board has already directed Schwartz to prepare options for the new budget ranging from tax increases to staff layoffs. He’ll deliver a proposal for a new spending plan next month, as will schools Superintendent Patrick Murphy.

File photo

Morning Notes

By ARLnow.com

Christmas Travel Crunch Starts Today — “A record number of people are expected to travel this Christmas season, spurred on by economic comfort and relatively modest gas prices… This year INRIX, a traffic data firm, has forecast the very worst time for drivers to set out on the highways, and for the Washington region, that’s five days before Christmas, on Dec. 20, between 1:15 p.m. and 2:15 p.m.” [Washington Post]

County Manager Pans ART Service — “‘The ART bus performance, recently, stinks,’ Mark Schwartz said during a meeting with Arlington County Civic Federation delegates… In the second quarter of 2018, on-time performance dropped to 83 percent from 92 percent a year before, according to data provided to the county government’s Transit Advisory Committee. Ridership in that quarter was down 14 percent from a year before.” [InsideNova]

Free ART Rides Today and Tomorrow — “Free ART rides on Thurs. December 20 & Fri. December 21. Everyone rides for free! Happy holidays and thank you for riding ART!” [Twitter]

Small Fire in Under-Construction Home — “ACFD is on the scene of a small trash fire at an under-construction home near Discovery Elementary and Williamsburg Middle School.” [Twitter]

Ballston Company Announces New Funding — “Acendre, a leader in secure, cloud-based talent management software for regulated industry verticals, today announced a majority growth investment from Strattam Capital. The investment will enable Acendre to accelerate its growth and more quickly advance its innovative, easy-to-use Software as a Service (SaaS) talent management platform, which helps organizations solve some of today’s most challenging hiring problems.” [Acendre]

Amazon Joins Arlington Chamber — “Amazon.com Inc. has agreed to join the Greater Washington Hispanic and Arlington chambers of commerce and could join more in the region in 2019… The e-commerce giant formally joined the 760-member Arlington chamber on Dec. 3. and subsequently sent a senior public policy official to its annual meeting on Dec. 7, said Kate Bates, chamber president.” [Washington Business Journal]

Nearby: Georgetown Wawa Opening Today — “What an exciting couple of days this week will bring, for fans of hoagies and tacos and caffeine and alcohol-infused frozen Pepsi products. Wawa announced Monday it will open its second D.C. location Thursday, in Georgetown at 1222 Wisconsin Ave. NW. As usual, the event will feature free coffee and a sampling of Wawa fare, in addition to a ‘Georgetown-inspired beverage.'” [WTOP]

Nearby: D.C. Population Breaks 700K — “Today, the U.S. Census Bureau released new official population numbers that put the District’s population at 702,455 as of July 1, 2018. The District’s population has risen every year since 2006 and has soared by more than 100,000 people since the 2010 Census.” [PoPville]

Flickr pool photo by Maryland Nomadic

County Plans Hiring ‘Slowdown’ to Cope With Mounting Budget Pressures

By Alex Koma

County Manager Mark Schwartz is calling for a “hiring slowdown” for Arlington’s government, choosing to leave dozens of positions vacant while county officials mull how to cope with a yawning budget deficit.

Schwartz told the County Board last Tuesday (Nov. 27) that he isn’t planning a full hiring freeze for the county workforce, but he will nonetheless direct 10 department heads to hold off on hiring across 45 different positions for the foreseeable future.

The county’s budget picture for fiscal year 2020 is still coming into focus, but Schwartz projects that the county and its school system could combine to face a $78 million budget gap next year. That means that some mix of tax increases, staff layoffs and program cuts are likely in the offing, after the Board declined to raise taxes this year, and Schwartz is working to get ahead of some of those unpleasant measures with this slowdown.

“It may not be immediately noticeable to people, but we will see increased caseloads for some employees,” Schwartz told the Board. “It’s not something that, unless you’re going around and really trying to appreciate it, you’d notice.”

Schwartz said that the positions left unfilled include roles like librarians, code enforcement and housing inspectors and cultural affairs staffers with Arlington Economic Development. He added that the county generally has roughly 200 positions left unfilled at any given time, out of its workforce of about 3,500 employees, and he’d like to leave some spots open in case the Board does indeed pursue layoffs.

“We want to keep some positions vacant for some employees who might be affected by any reduction in force,” Schwartz said.

At the same meeting, the Board did direct Schwartz to present it with options for both layoffs and tax increases as he develops a proposal for the new budget. Even with Amazon’s impending arrival, and the tax windfall the company’s expected to generate for the county, Arlington leaders are gearing up for what Board member Libby Garvey termed “the toughest budget I’ve had to deal with in my 24 years in elected office.”

“We are looking at a path toward a resolution for a long-term structural budget deficit… so our outlook is so much better than it was even just a few weeks ago,” said Board Chair Katie Cristol. “But this will still probably be one of largest gaps between revenues and needs we’ve seen since the Great Recession.”

The county is indeed projecting that Amazon won’t generate substantial new tax revenues for several years yet, leaving Arlington officials with some lean budgets in the meantime. Schwartz projects that new expenses associated with the statewide Medicaid expansion, to the tune of about $1.2 million a year, and rising costs to fund Metro service, with expenses nearing an additional $10 million this year, will put a particular strain on county coffers.

“This is just a different situation than the county has faced before,” Garvey said.

Schwartz is set to present his first budget proposal to the Board in February.

With Budget Gap Looming, County Board Set to Ask for Proposals on Tax Increases and Staff Layoffs

By Alex Koma

Arlington leaders now say they’re ready to start studying unpleasant budget measures from tax increases to staff layoffs, as they gear up to confront next year’s hefty budget gap.

The County Board is set to sign off today (Tuesday) on new budget guidance for County Manager Mark Schwartz, as he gets to work on a new spending plan for fiscal year 2020. The memo directs Schwartz to develop a range of possible options for the Board to evaluate next year, including “a range of potential tax increases” and “proposals for program and personnel reductions or eliminations” if Schwartz can’t develop a balanced budget while relying on the existing tax rates.

The Board made a handful of spending cuts in the budget for fiscal year 2019, but opted not to raise any of the county’s tax rates.

Since then, Schwartz has frequently called for the Board to give him the flexibility to pursue such budget measures, given the county’s gloomy near-term financial prospects. Though Amazon’s arrival in Arlington could well pour millions in new revenue into county coffers, officials project that their budget challenges won’t vanish overnight. In all, the county’s combined budget deficit could be as large as $78 million next year.

All on its own, Schwartz expects that the county will need to close a gap of anywhere from $20 million to $35 million, a gap driven by factors including Metro’s increasing expenses, the new raises for public safety workers the Board approved in the 2019 budget and new spending associated with the statewide Medicaid expansion.

But the county school system could tack on another $43 million in unmet needs, as it works feverishly to build new schools and keep pace with the county’s influx of new students. Without any tax rate hikes, staff currently projects that the county will be able to send about $7.7 million to Arlington Public Schools than it did last year. But that increase, driven by rising real estate assessments, likely won’t be enough to solve all of the school system’s funding woes — the School Board only narrowly avoided class size increases last year, and will face similar challenges this time around.

The Board’s budget guidance does identify one program that it hopes Schwartz will be able to protect from budget cuts: the Affordable Housing Investment Fund, a loan program designed to incentivize the construction of reasonably priced homes. The memo to the manager suggests that Schwartz craft a proposal to maintain the $14.3 million in funding the Board sent to the fund last year, and recommends making more of the funding “ongoing” rather than subject to the Board’s appropriation process each year.

The latter change was one championed by Board member John Vihstadt in his losing bid for re-election this year, and the entire Board has emphasized the importance of funding affordable housing programs to prepare for Amazon’s projected impacts on the housing market. As part of its deal to land the tech giant, the county even committed to directing about a third of the money it spends on affordable housing each year to specifically serve the areas around Amazon’s new headquarters in Crystal City and Pentagon City.

The Board is set to vote to approve the new budget guidance today, setting the stage for Schwartz to deliver his proposal to the Board in February. The County Board and School Board are also set to hold a joint work session next Tuesday (Dec. 4) to kick off their initial budget deliberations.

County Manager Proposes Rolling Over Most Unspent Funds from Last Budget

By ARLnow.com

Facing a combined budget gap of up to $75 million, Arlington County Manager Mark Schwartz is eschewing the usual divvying up of leftover funds from the last fiscal year and instead proposing to roll them over with an eye on next year’s budget.

Schwartz will recommend at Saturday’s County Board meeting that the $21.9 million in unspent funds available to the county remain primarily unallocated, with $16.5 million being set aside to give the Board more options going into the next budget process.

“Difficult choices will be required to balance the FY 2020 budget and will likely include service reductions, and consideration of a real estate tax increase,” says a county staff report. “Setting aside $16.5 million in undesignated funds from the close-out of FY 2018 will give the County Board some flexibility when weighing these choices.”

Schwartz is also recommending the county allocate $3.4 million (along with $3 million from Arlington Public School) to increase its General Fund Operating Reserve — important for maintaining the county’s triple-AAA bond rating — and $2 million for use by the County Manager “to address unforeseen needs that arise during the fiscal year without reprioritizing or cutting other programs.”

The county has funds left in its coffers at the end of almost every fiscal year, thanks to conservative budgeting practices intended to maintain the triple-AAA rating.

Often, the budget “close-out” process ends up funding a grab bag of county priorities, from law enforcement needs to affordable housing. Asked about that this week, Schwartz said his recommendation does not mean that affordable housing is being deprioritized.

“It doesn’t mean that some of that money going forward couldn’t be used for affordable housing,” Schwartz said at the town hall meeting. “I just think, given the hole we have to fill, I didn’t want to preordain what my priorities would be. We’ll see how the Board receives that.”

A number of civic activists have been pushing the county to reform the budget close-out process, which they see as a boondoggle meant to fund pet projects with minimal public scrutiny or discussion.

Tax Hikes and Service Cuts Look Increasingly Likely Next Year, County Leaders Warn

By Alex Koma

Arlington officials expect a mix of across-the-board service cuts and tax rate increases is the surest way for the county to tackle its widening budget gap next year.

With a funding gap that could ballon as large as $78 million for fiscal year 2020, County Manager Mark Schwartz has repeatedly warned that some tough times are ahead for the county government. He repeated those gloomy projections at a budget-focused town hall with community leaders last night (Wednesday), noting that factors ranging from swelling school enrollment levels to dwindling county revenues to increasing Metro funding obligations will all squeeze county coffers once more.

The question Schwartz (and soon enough, the County Board) is looking to answer is: how should Arlington balance cuts with new tax increases? The answer will set the tenor of the Board’s upcoming budget deliberations, particularly when considering that the county has avoided tax increases in recent years.

“New tax increases are certainly a tool we should be looking at this year,” Schwartz told the group. “It depends on what the Board gives me as guidance, but I’m hoping that they carve out some room for tax increases.”

That’s not to say that Schwartz is only looking at jacking up tax rates — he says he’s asked all of his department heads to sketch out what an 8 percent budget reduction would look like for them, even though he tends to “hate across-the-board cuts” and would much rather “apply a set of principles to choose among departments and decide where to spend our marginal dollars.”

Nevertheless, Schwartz believes the county’s funding squeeze is such that simply slashing expenses can’t be the only answer. In addition to opening three new schools in the coming year and digging deep to cope with money pulled away from the county as part of the new Metro funding deal, Schwartz says the county needs to get creative to address the new costs of public safety pay increases the Board approved last year and new expenses associated with the state’s Medicaid expansion.

“People really have a problem finding something in the budget to get rid of or do less of,” Schwartz said. “It’s not a complaint, but in many cases, we’ve not had a really hard conversation about what we don’t want to do. And at a certain point, efficiencies won’t cut it, and this is one year where it won’t.”

He suggested that both the real estate and personal property tax rates could go up to address those budget concerns, though it’s difficult to know by how much just yet. A great deal depends on the budget the school system delivers to the county, considering that initial estimates suggest a $43 million budget gap from Arlington Public Schools alone — Schwartz encouraged the School Board to consider the hard question of bumping up class sizes and formulating a “revenue-based budget versus a needs-based one,” but the final decision will rest with APS leaders.

Eventually, Schwartz expects that the county’s office vacancy rate will shrink to a point where Arlington isn’t constantly facing such pressures. He noted that the rate has shrunk from 20.8 percent in 2015 to 18 percent as of last month, and as “outdated buildings” in neighborhoods like Crystal City are increasingly refreshed or converted into apartments, he expects the county will soon enough be back on sound financial footing.

In the meantime, however, he urged a focus on more than “nibbling a little bit here and there” and a real focus on “looking at how we do things” to bolster the county’s financial picture.

While the sentiment among county taxpayers is another story entirely, the town hall participants, at least, seemed broadly receptive to paying a bit more to avoid drastic cuts.

“I’m a old, retired coot living on a fixed salary… but Arlington has absolutely fantastic programs for everybody,” said Bill Braswell, a member of the county’s Neighborhood Complete Streets Commission. “I’m ready, willing and able to support a tax increase, because I’m getting far more than I pay in tax increases, and I enjoy it.”

Photo via Facebook

County’s Resident Ombudsman Makes a Change, Prompts Search for Replacement

By Alex Koma

Arlington is now looking for a new ombudsman for county residents, a staffer dedicated to helping people sort out problems and access government services.

County spokeswoman Jennifer Smith told ARLnow that former ombudsman Robert Sharpe transitioned out of the role last week. He’s now serving as assistant division chief for the county’s public health division.

Sharpe took over as ombudsman back in 2016, as part of an expansion of constituent service offerings within County Manager Mark Schwartz’s office.

Smith says Sharpe “made significant contributions to the county’s constituent services efforts serving the community” during his tenure and will now be “responsible for operational and managerial aspects” of the public health division. He previously worked as an assistant director in the county’s Department of Human Services.

Brian Stout will serve as the county’s acting resident ombudsman while Schwartz searches for a permanent replacement, Smith added. She hopes to wrap up that process sometime next month.

The county is also currently looking for a permanent “business ombudsman” to work with local businesses to navigate county regulations, after Shannon Flanagan-Watson was appointed deputy county manager in May. Jeanine Finch is currently filling the role on a temporary basis.

Photo courtesy of Arlington County

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