Late last week, Herndon town staff released its proposed budget for fiscal year 2005 totaling more than $34 million — of which $27,227,689 is designated for the general fund — an overall decrease of $605,496 compared to last year despite an increase in revenue projections for all income sources.
"It's sort of a no frills budget. There are no new programs," said Town Manger Stephen Owen. "It does continue the level of service our citizens expect."
THE PROPOSED BUDGET, which is expected to be adopted by the mayor and Town Council April 27 after a series of work sessions and public hearings, proposes to keep the real estate tax at 28 cents per $100 of assessed value. In addition, it retains the 1.5 percent meals tax, which was approved last year; and factors in a mobile local telecommunications service tax of 10 percent on the first $30 billed, which takes effect in November.
Other income sources remaining the same include the business professional and occupational license tax, consumer utility tax, sewer services rate, sewer availability fee, sewer lateral repair and replacement program, recycling fee, motor vehicle license fee, cigarette tax, water service rate and the water availability fee.
A strengthening real estate market generated a 13 percent increase in real estate assessments and an increase of 6.3 percent for commercial assessments for 2004. For FY '05, staff is projecting a 10 percent increase for real estate revenues. Likewise, the transient occupancy tax revenue is anticipated to increase by 9.2 percent; and business licenses are projected to increase 25 percent.
"The meals tax was originally projected to generate $900,000. It's closer to $844,000 for this year," said Mary Tuohy, the town's director of finance.
In all, recurring revenue is anticipated to increase 7.3 percent.
THE BUDGET PROPOSES two new personnel positions: a senior community inspector for the Department of Community Development and a water and sewer engineer, who will be paid through the water and sewer fund, said Owen. In all, 13 positions were requested by the various departments, with only two making the cut.
"We will take a look at it again," Owen said of the requests.
The budget also proposes an average of 4.5 percent pay-for-performance increases. Pay scales will be adjusted 2.98 percent based on the current market index used by Fairfax County. The adjustments will be given to those who are at the top of their pay scale and receive the required performance rating, said Linda Simmons, the town's human resource manager.
The sworn police personnel are slated to receive a 2.98 cost-of-living adjustment and a 5 percent performance increase, to remain close with the county.
"In 2000, the Town Council gave us the directive to stay on par with Fairfax County police," Simmons said of the difference between Herndon police officers and other town employees' pay structure. "The town police opted out of pay-for-performance. So they receive an increase and COLA."
Owen said the departments were not directed to reduce figures.
"We tell them to create a budget based on what they need and we review the heck out of it," he said.
ONE REASON the budget is smaller than in past years, said Owen, is the proposed fiscal year 2005 capital improvement program, which is mostly funded from the general fund. The town manager is proposing a CIP that is less than it was two years ago. His recommended CIP totals $3,360,500, including moneys from other government agencies. The general fund portion comes to $2,373,000.
Monday night, the town's Planning Commission recommended a FY '05 CIP totaling $5,573,000 in town funds. The commission's version borrows $5 million from the water and sewer fund — mostly to finish the phase 4 renovations of the Herndon Community Center — which would be paid back through a bond issuance slated for next winter.