- Manager makes recommendations for $17.8 million in FY 2016 close-out funds
- $5.4 million funding gap forecast for FY 2018
- Increased funding for Metro, Schools anticipated for FY 2018
- Board draft guidance for FY 2018: balance budget within existing tax rate
Arlington County is asking the public to weigh-in on both the County Manager’s recommendations for how to spend $17.8 million in Fiscal Year 2016 Budget close-out funding and on the Board’s draft guidelines for the County Manager’s FY 2018 Proposed Budget.
“Arlingtonians should have a chance to study and comment on the Manager’s proposals for spending our FY 2016 close-out funds, and the guidelines the Board is proposing the Manager follow in preparing the FY 2018 Budget. We look forward to hearing from them before taking a final vote on these important fiscal decisions at our November meeting,” County Board Chair Libby Garvey said.
Share your feedback on the County website. Comments are visible online and will be compiled and presented to the Board before its November meeting, when the Board will hold a public hearing and take a vote on both close-out spending and the draft guidelines for the FY 2018 Budget.
FY 2016 Close-out recommendations
Fiscal year 2016 ended with a surplus above the amount carried over for reserves and other restricted funding. In total, the General Fund balance was down $9 million from the prior year to $191.2 million. Of this total, 91% or $173.4 million is required for reserves, restricted funding, allocations already approved by Board action, or for continuing projects that straddle fiscal years. The balance of $17.8 million is the amount that the County Manager, Mark Schwartz, is recommending funding for a few priority projects, FY 2017 contingencies and keeping some funds unallocated and some for specific programs in FY 2018.
In a presentation to the Board at its Oct. 18 Recessed Meeting, the Manager proposed continuing his multi-year shift in approach to close-out – focusing available funding allocations on a few major categories of priorities consistent with the Board’s policies. The County continues to move away from providing initial funding for new programs through close-out, Schwartz said, and continues to enhance its financial management processes.
The $17.8 million balance is 2.3 percent of the revised FY 2016 County General Fund budget, excluding schools, Schwartz noted – the lowest as a percent of the total budget in recent years.
“Good financial management and retention of the triple-AAA bond ratings require that the County ends each year with a surplus,” Schwartz noted.
The Manager’s proposed allocation of available FY 2016 funding includes:
- Critical Life Safety Needs: $0.95 million for police equipment for first responders, replacement of generators at key 24/7 facilities, and one-time funding needed for the Virginia Emergency Response System
- Land Acquisition and Temporary Facility Costs: $2.5 million for Fire Stations 8 and 10
- Economic and Revenue Stabilization: $1 million to increase this contingent from $3 million to $4 million to address unanticipated expenditure requirements such as extreme weather events
- Affordable Housing: $2.1 million in one-time funding for the FY 2018 housing grants program and $7.0 million in one-time funding for the FY 2018 AHIF program
- Capital Projects: $1.7 million in one-time funding for FY 2018 capital projects
- Operating contingent: the County Manager has historically maintained a contingent to address unforeseen needs that arise during the current fiscal year ($1 million)
The balance of the available funding ($1.6 million) is recommended to remain unallocated. The County Manager will make recommendations to the Board for its consideration as part of the broader FY 2018 budget process.
The County Board will vote on these recommendations at their November board meeting.
Projected $5.4 million funding gap for FY 2018
Schwartz presented a “baseline scenario” with moderate revenue growth of 2 percent in FY 2018 and a growth of 2.9 percent in expenditures, if service levels remain unchanged and there is no expansion in programs. Such a scenario would result in a $5.4 million funding gap, he said. The funding gap is for the County alone and does not include any projection for Arlington Public Schools (APS) revenues and expenditures.
Schwartz also presented a possible scenario of low revenue growth/ higher expenses that would produce a much larger budget gap that he emphasized he does not expect to materialize. However, it “gives us an outer limit on what is possible if certain assumptions are met,” he said.
There remain significant unknowns in this preliminary projection, the Manager cautioned. “Metro faces significant pressure in closing its budget gap as a result of declining ridership, lower fare revenues and contractual increases in wages and benefits,” and, as a result, “contributions from local jurisdictions will likely increase more than in recent years,” he said.
The County may have updated estimates for APS in November, and will only know the impact of the Governor’s budget when he releases his revised budget in December, Schwartz noted.
The current projected funding gap maintains the current real estate tax rate of $0.991 per $100 of assessed value (including the sanitary district tax), the lowest tax rate in northern Virginia. The projected gap includes no program expansions or increases in demand for services.
Comments sought on draft FY 2018 budget guidance
The Board also asked the public to weigh-in on the Board’s draft before the Board adopts the guidance at its November meeting. The Board’s Budget Guidance gives the Manager parameters for developing his proposed FY 2018 Budget. The Board’s draft guidelines direct the Manager to develop a balanced Proposed Budget for FY 2018. The draft guidance also directs the Manager to prepare a Proposed Budget which reflects current economic conditions, while honoring the County’s vision.
In its draft, the Board directs the Manager to explore further collaborations with APS, as well as regional collaborations and partnerships that might lead to cost savings and efficiencies. The Board also directs the Manager to:
- Provide for enhanced public engagement for the FY 2018 budget process– including possibly expanding use of social media and other online resources
- Present options for program and personnel reductions or eliminations if the Manager cannot present a balanced budget within the existing tax rate, or for tax rate reductions if the Manager can present a balanced budget with a surplus at the existing tax rate or a possible tax rate increase to meet extraordinary needs of WMATA and/or APS
- Identify potential adjustments in certain tax and fee rates
- Provide recommendations for consideration for changes to the Real Estate Tax Relief Program based on feedback from the Senior and Disabled Real Estate Tax Relief Working Group
- Report back on the status of the outside consultant reviewing employee compensation and benefits, and on options for increasing childcare provisions for Arlington County employees
The County Board will vote on FY 2018 budget guidance at the November County Board meeting. After holding a series of public hearings and work sessions on the Proposed Budget, the Board will adopt the FY 2018 Budget at its April meeting.
To read the staff reports and the presentations made to the Board at its Tuesday, Oct. 18 Recessed Meeting, visit the County website. Scroll down to items No. 34 and No. 35.