City Manager Philip G. Sunderland is proposing an operating budget of $479.6 million for FY ‘04, an increase of 4.6 percent over last year and a six-year Capital Improvement Program (CIP) budget of $327.7 million, an increase of 78 percent over last year.
Despite the dramatic increase in capital expenditures, Sunderland is proposing a 3-cent decrease in the real-estate tax rate. This would take the rate from $1.08 to $1.05 per $100 of assessed property value.
"I truly believe that the taxpayers deserve some relief," Sunderland said. "We obviously need to be judicious. For example, if we cut the rate by 10 cents, we could not sustain the level of services that we currently have. Those are clearly political decisions, but we can decrease the rate by 3 cents and maintain our current level of funding for all programs and give our employees their step increases and a 2.25-percent cost-of-living increase."
Councilman Bill Euille expressed his support for the tax cut after listening to the city manager's presentation at Tuesday's City Council meeting.
"I applaud the city manager's work, but I am going to propose a further cut in the tax rate," he said.
Mayor Kerry J. Donley urged caution. "Looking at a tax cut is appropriate," he said. "However, we must be clear that there are choices to be made. We do not have other revenue to replace our reliance on real estate. (Some 51 percent of the city's revenue comes from real property, commercial and residential.) We are continuing to see cuts in our state funding. As we go through the budget process, we need to keep these things in mind."
SUNDERLAND SAID the general fund share of the city's operating budget is $398.6 million, an increase of 6.1 percent over the FY ‘03 budget. Of this, $122.4 million will fund the school system, and the remainder will fund the city government.
"If you take into consideration debt service and cash capital, about 35 percent of the budget will go to fund the schools, and about 65 percent to fund the rest of the city," Sunderland said.
"The increases in the city's share and in the schools' share of the operating budget are due to personnel costs," he said. "The schools have an increase of about $7 million, and the city has an increase of just over $13 million, all related to cost of living, step increases, the increased contribution to retirement and health benefits, and the schools are changing their compensation system. We will discuss the school system's change in compensation plans at a work session."
THE CAPITAL BUDGET stimulated the most discussion at the Council meeting. "It is very unusual that a city of our size would have two large capital projects coming on-line at the same time," Sunderland said. "But I believe that we must hold the line and fund them as well as maintaining our other capital commitments."
The two large projects are T.C. Williams High School, which adds $45 million to the CIP, and a new police station, which adds $65 million. "We have made a commitment to funding T.C. Williams, and this is something that we need to do," Sunderland said.
As for the public safety center, "The current facility is already too small," Sunderland said. "We will begin to incur a $1 million per year cost to lease space on Eisenhower Avenue to accommodate our current staff until we can build a new facility in 2007-08 or ‘09."
Renovations at Patrick Henry and Charles Houston recreation centers account for $7.6 million. "I am at Charles Houston every Thursday, and this is a commitment we really need to keep," said Vice Mayor Bill Cleveland. Once these two centers are renovated, every recreation center in the city will have undergone significant construction.
AND WHAT ABOUT Chinquapin? "I have placed a place holder of $20 million in the FY ‘07 capital budget for renovation and expansion at Chinquapin," Sunderland said. "I believe that renovation and expansion at Chinquapin to make it a community center that can be used by students at T.C. Williams and by residents of the city is the way to go. We cannot afford to make these changes at Chinquapin and build a multigenerational facility somewhere else in the city. This place holder says that we must begin a public dialogue to determine whether this is the place that we want to have such a facility. Personally, I believe that it is because the students at T.C. Williams can use the recreation center, and the community can use T.C. Williams at night. However, we have not had a public dialogue on this matter, and we need to do so."
Councilwoman Claire Eberwein disagreed. "We have had such a dialogue because we have been discussing this in the context of planning T.C. Williams," she said.
Euille asked about the $3.2 million in the CIP budget for completing renovations at George Washington Middle School. "How much of this is an increase over what was in the budget from last year?" he asked.
Mark Jincks, the assistant city manager for finance, answered by saying, "The school system asked for $600,000 in the FY ‘04 budget last year," he said. "They have added $2.6 million this year. This is largely related to a change in site conditions and other cost overruns."
Councilwoman Redella S. Pepper asked about the $19 million technology expenditure.
"It has gone up slightly, but this is about what we usually spend," Jincks said.
The city budget is available on the Web site at www.ci.alexandria.va.us or can be obtained in hard copy or on CD-rom by calling 703-838-4780.