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Votes

Reality Sets In

City Council would have to set a 1.7-percent growth target to avoid raising taxes.

During their daylong retreat Saturday, City Council members were confronted with the hard realities of dwindling resources and expanding needs. By the time that Budget Director Bruce Johnson explained that the City Council would have to set a 1.7-percent growth target to avoid raising the tax rate, Mayor Bill Euille was forced to rely on his sense of humor to internalize the news.

“Is there a nurse in the house?” he asked. “I think I’m going to faint.”

With each new economic outlook, the city’s revenue expectations seem to dwindle. The rapidly expanding real-estate market over the past five years has cooled. If the city keeps its current real-property tax rate, according to Johnson’s calculations, the city would have to hold itself to a budget of $353.7 million, a 1.7 percent increase of $5.9 million. The school system would have to hold itself to a 3.6-percent increase at $155.2 million, which is about $5.3 million more than last year — a transfer allocation that’s $13.7 million less than Superintendent Rebecca Perry’s preliminary forecast.

“We’re trying to fit a square peg in a round hole,” Johnson told City Council members. “We’re going to have to make some difficult decisions.”

But the 1.7-percent target wouldn’t even fund all of the city’s highest priorities — a list that includes transit subsidies, debt service and salary increases for city employees. So Johnson also prepared an alternative target that would fully fund all of the items listed as a “high priority,” an option that would require about $9 million more than the revenue expectations at the current tax rate. The “high priority” option would set a $357.2 million budget with a 2.7-percent increase of $9.4 million more than last year. Under the alternative “high priority” plan, the schools would get a $160.7 million budget transfer that would represent a 6.9 percent increase of $10.8 million more than last year’s allocation — about $8.2 million less than the superintendent’s forecast.

“No new initiatives are funded in this forecast but essential program improvements are included,” Perry said when she presented her forecast to City Council members. “There is a cost to maintaining services.”

THE DAYLONG RETREAT included discussions on a number of topics. City Council members heard presentations on everything from existing capital projects to the City Manager Jim Hartmann’s new results-based budget plan. The day began with an examination of results from a citywide survey of Alexandria residents conducted by the Center for Research and Public Policy, which conducted 1,001 randomly selected telephone interviews in September. The survey showed that 97.3 percent of Alexandria residents viewed their overall quality of life was “very good” or “good.”

“I never see numbers this high for a city,” said Jerry Lindsley, president of the Center for Research and Public Policy. “You usually find numbers this high in a rural setting.”

But the survey also showed some flaws. The positive rating for courtesy of city government employees declined from 81.6 percent in 2004 to 74.1 percent in 2006.

“That number is way too high,” said Hartmann, referring increasing anger over a perceived lack of courtesy. “Customer service begins with every city employee, and we’ve started several new efforts on improving courtesy.”

The survey showed that residents are most concerned with traffic (30 percent), taxes (16 percent) and the school system (16 percent). But 7 percent said that services to the schools should be cut or reduced. And although 62 percent of respondents said that the city had a “very serious” problem with local real-estate taxes, 15 percent said that taxes could be increased if the city provided an “associated increase in levels of service.”

“I’ll be providing the names of these people,” Lindsley joked. “We could wrap this up now.”

RESULTS-BASED BUDGETING made its long-awaited debut during Saturday’s session, and the city manager gave a presentation about how this year’s budget document will include a price tag for every action of city government. Hartmann calls his new plan the “Managing for Results Initiative,” a new budget format that will give citizens a much better idea of the cost associated with specific services.

“In the future, we are going to be able to make better decisions in this organization,” Hartmann said. “It’s going to be revealing, it’s going to be difficult and it will drive some debate.”

Hartmann presented two hypothetical examples of what the budget documents would look like under the new matrix, one from the Finance Department and the other from the Office of Sheriff. Presentation of the information abandoned the old organizational format that focused on how employees were grouped in favor of a new format that focused on specific services, each of which will be pegged to a dollar amount. For example, the hypothetical document showed that the cost of administering six different retirement plans is $144,591. And the hypothetical cost of auditing 124,142 businesses for compliance is $450,495.

“This is about a culture change,” Hartmann said. “We want to measure accountability.”