Fairfax City Council Adopts FY 2016 Budget

Fairfax City Council Adopts FY 2016 Budget

Real-estate tax rate will rise slightly.

Last week’s City Council meeting often seemed more like a work session, with members still haggling about the real-estate tax rate. But after much discussion, some failed motions and several votes, they finally came to a consensus.

They officially adopted the City of Fairfax budget for FY 2016 and set the real-estate tax rate at $1.052 per $100 assessed valuation. It’s a $.012 increase over the current $1.04 tax rate; but is $.013 less than the $1.065 recommended by City Manager Bob Sisson.

The budget also includes 3.5-percent merit raises ($313,000) for eligible employees and a 1-percent cost-of-living adjustment ($270,000).

“We’re spending our money on critical items – public safety and public infrastructure, education, economic development and our employees,” explained Councilman Michael DeMarco. “We’re investing in our quality of life.”

At a brief public hearing beforehand, Economic Development Authority Chairman John Sabo said he was pleased that a half cent of the tax rate will support the EDA. “This will strengthen the City’s economy,” he said.

However, Jon Stehle, chairman of the Parks and Recreation Advisory Board, was unhappy that – although the Council previously adopted the Parks and Recreation Strategic Plan – it wasn’t funded in the budget. “We look forward to discussing the ADA study and the plans for Green Acres and Van Dyck parks, and their funding timeline, with you further,” he said. “We’re proud of our parks and see them as our future.”

THE COUNCIL then tackled the various tax rates. Finance Director David Hodgkins promoted the recommended increase in the commercial and industrial (C&I) tax rate from 5.5 cents to 7.5 cents per $100 assessed valuation. He said the revenue it yields is critical because the City receives “matching funds from the NVTA for this tax. And that money’s used for transportation purposes.”

Councilwomen Nancy Loftus and Ellie Schmidt wondered why this tax couldn’t instead be fully funded from the water fund, “instead of burdening our businesses with a 2-cent tax hike.”

“We wanted to do it incrementally,” replied Hodgkins. “And the 2 cents offsets the decrease in (C&I) valuation, so there’s no increased tax burden on the businesses.” The Council then approved this new tax rate.

Fairfax’s wastewater tax rates will also rise, by 10 cents, he said, “because of the need to maintain and repair our aging infrastructure and wastewater-collections system.” And two cents of the tax rate will again be dedicated to the Stormwater Fund for infrastructure maintenance and state and federal regulatory requirements.

Regarding changes since his proposed budget, City Manager Bob Sisson said he learned recently that “we’ll be receiving three-quarters of a million dollars from the school system.” And he recommended using it for economic development.

Hodgkins noted that the cost of new voting machines rose from $110,000 to $130,000, and the Council approved spending the extra $20,000. Hodgkins then said that, with the school system’s returned revenue, the real-estate tax rate could be lowered to $1.05.

Councilman Jeff Greenfield suggested $1.055, saying the City should earmark $370,000 for an economic-development fund plus $80,000 for a City branding campaign. Loftus appreciated the idea, but said Council hasn’t yet discussed specifics.

Greenfield said nothing would be spent without a plan. “I support it,” said Schmidt. “It would help our real-estate tax rate if we could improve our commercial base.”

Mayor Scott Silverthorne agreed with “putting some money behind economic-development opportunities. Investing [it] should help us out of tough, budget situations.” But Loftus preferred chopping 3 cents from the tax rate while dedicating funds for economic development.

Greenfield’s motion failed, but an amended one by DeMarco passed. He recommended using $300,000 for economic development, with $100,000 of it used for a strategic plan and branding. Agreeing, Councilman David Meyer said, “We ought to be able to step out, have faith in the future and do the right thing.”

Since home valuations have increased, Loftus wanted to cut capital expenditures by $1.4 million so residents’ tax bills wouldn’t rise. But her motion failed. Hodgkins said $1.2 million of the total General Fund is debt service the City must pay.

Schmidt suggested cutting $105,000 total from the allocations for contract and other services, overtime and temporary help. Her motion passed, but with a provision allowing Sisson to decide from where the money should be cut.

Greenfield then moved to set the real-estate tax rate at $1.052. “We’re trying to run a business, and more than 40 percent [of the budget] goes to nondiscretionary expenses,” he said.

Meyer seconded and the motion eventually passed, 4-2. “This is a prudent budget, and I’m glad it included money for economic development,” he said. “And we all appreciate what our City employees do.”

Neither Schmidt or Loftus supported it because it raised property taxes. “Some people’s taxes are going up $800 just because of increased assessments,” explained Loftus. “So this tax increase affects real people’s budgets.”

But, said Councilwoman Janice Miller, “People also tell me how pleased they are with the City services – trash, parks, art programs and special events. I support this budget because it funds police, fire and schools and increases spending for capital needs. It provides a modest salary increase for our employees and preserves our 10-percent cash reserves.”

AGREEING, Silverthorne said, “No one likes paying taxes. But the question is, are people getting value for their tax dollars? I believe our residents are – and better than any other place in Northern Virginia.”

“We still have one of the lowest, overall tax rates and tax burdens of any other jurisdiction, and our citizens know that,” he continued. “And money for economic development is an investment in our future. So all in all, I think we struck the right balance. And our investments in the City will give us back more in return.”