As Fairfax City’s new city manager, Rob Stalzer looked at Fairfax’s financial picture with fresh eyes. And last Tuesday, Feb. 26, he presented his proposed budget for the City for Fiscal Year 2020.
He praised Fairfax’s positive attributes, but also clearly explained its challenges. As a result, he’s proposing a real-estate tax increase of 2.75 cents. This hike would raise the tax rate from its current $1.06 to $1.0875 per $100 assessed valuation.
With an average City home having an assessed value of $508,231, this means the average homeowner’s real-estate tax bill would increase $169/year, or $14.08/month. Also figuring into that amount is the fact that homes here have seen a .53-percent increase in assessed value.
Other proposed tax hikes were already planned as part of the City’s ongoing obligations. A 1-cent increase in the Commercial and Industrial (C&I) real-estate tax will take it from 11.5 cents to 12.5 cents per $100 assessed valuation. And a wastewater utility rate jump of 10 percent will support the City’s share of capital project costs required for the Noman Cole Wastewater Treatment Plant.
THE BUDGET also dedicates 25 cents more from the real-estate tax rate for the Stormwater Fund. The money will be used to improve the City’s aging infrastructure, as well as meet federal and state regulations dealing with stormwater management.
Furthermore, the transportation tax fund is planned for a rate increase from 11.5 cents to 12.5 cents for commercial and industrial properties. All residential properties are excluded from this tax. The money is used solely for transportation and transit purposes and enables the City to qualify for matching funds for various transportation projects. The new, proposed rate is expected to generate some $2,393,727 a year.
At the outset of his budget presentation to the Fairfax City Council, Stalzer said, “This is my eighth week [in this job], but I’ve been in the City since fall. And I’ve seen that people who live here take pride in being a part of the City of Fairfax.” He also noted Fairfax’s partnership with GMU and praised the City’s “dedicated and professional staff.”
Other City strengths, said Stalzer, include the Northfax and Old Town areas, both of which are “primed for greater economic success.” Furthermore, he added, “We have sound, financial policies, a 12-percent [of total General Fund revenues] rainy-day fund and a 2035 Comprehensive Plan that provides clear guidance.”
He also stressed that Fairfax has “consistently delivered outstanding value, even though revenue growth has been limited and the City’s ability to adequately address some needs has been significantly constrained.” But, he added, some serious obstacles must be overcome.
“For the past several years, real-estate taxes have grown minimally, especially in the commercial sector,” explained Stalzer. “Citywide real-estate valuation has increased only 1.43 percent annually over the last 10 years. Since real-estate taxes comprise 49 percent of the City’s General Fund revenues, this is a significant concern, now and in the future.”
He also listed other problems. “Public safety and governmental recruitment and retention of personnel is a challenge,” he said. “And there’s a need for clear strategies and policies so people will want to do business with us. We should also have a five-year, adopted CIP [Capital Improvement Program] – and, preferably, with a 10-year horizon.”
“I’m an optimist and I like a challenge,” said Stalzer. However, he acknowledged that 49 percent of the General Fund budget comprises nondiscretionary expenses out of the City’s control.
ON THE POSITIVE SIDE, though, he said budget savings in FY 18 and FY 19 were used to balance the proposed FY 20 budget. He also noted the City’s ability to maximize outside funding sources – state, federal and NVTA 70-percent transportation funds, as well as public-safety grants – to help pay for various projects. And he stated that, during both last year and this year, the City is seeing an uptick in new residential, commercial and mixed-use construction.
Overall, expenditures for all funds in the proposed budget total $169,703,370 – a 1.3-percent decrease from FY 19. General Fund revenues and expenditures equal $146,332,359 – a 3.1-percent increase over FY 19.
Stalzer also recommends trimming some $2.2 million from the Capital Funds budget. “I hate to cut the CIP, but we need the funds for economic development,” he said. “For us to market the product [the City], a large part of that is the general infrastructure.”
So he added $700,000 to Contract Services, primarily focusing on improving both Northfax and Old Town. “And this isn’t a five-year project – it’s a right-now project,” he said. “We need to give ourselves every opportunity for success, and we need to do it immediately.”
Other highlights of the proposed budget include a 2.6-percent cost-of-living raise ($774,000) for City employees to retain parity and salary competitiveness within the region. “Our employees want to work here, and I want them to stay here,” he said. Stalzer also suggests adding $75,000 to the Senior Citizen Tax Relief program “since 16 percent of our population is elderly.”
Both Stalzer and Fairfax Mayor David Meyer thanked Finance Director David Hodgkins, Budget Manager Kerry Kidd and City Clerk Melanie Crowder for all their hard work and input into the budget document, and Meyer thanked the City staff department heads, too. Noting the upcoming public hearings scheduled for the budget, Meyer said, “There’ll be plenty of opportunities for citizens to come forward, comment on the budget and express what they believe our priorities should be.”
FY 2020 Budget Calendar*
March 5: Community Outreach and Council Budget Discussion Work Session
March 12: Public Hearing – Consideration of Real Estate Tax Rate to be Advertised
March 26: Public Hearing and City Council Budget-Discussion Work Session
April 2: City Council Budget-Discussion Work Session
April 9: Introduction of C&I and Wastewater Rates
April 23: Real Estate Tax Rate Public Hearing and City Council Budget- Discussion Work Session
May 8: Special Council Meeting – Public Hearings on the Budget, Rates and Levies, C&I and Wastewater, plus Budget Adoption (Note: This Wednesday meeting will replace that Tuesday’s regular Council work session).
*All these meetings are at 7 p.m. at the Fairfax City Hall Annex, 10455 Armstrong St. in Fairfax.