With revenues substantially lower than before the pandemic and tourism still curtailed, Alexandria city officials presented a budget Tuesday evening that “planned for the worst and hoped for better,” according to City Manager Mark Jinks.
The proposed fiscal year 2022 budget shows a small increase in spending from the tightened 2021 fiscal year budget, while giving property owners a 2-cent decrease in the real estate tax rate. (The strong real estate market means property owners will still be paying more this year, even with the lower rate, and stormwater fees may also increase.) There will be no layoffs of city employees. The budget fully funds the requests from Alexandria City Public Schools for capital improvements and operations.
“During these unprecedented times, the city must continue to provide our residents and businesses the support they expect while meeting the community’s needs. This budget, I believe, does this,” Jinks said.
In addition, the City’s hiring freeze could end for most positions and the King Street Trolley could start rolling again in September.
The proposed General Fund Operating Budget is $767.6 million, which is an increase of just 1.9 percent over the current year. The proposed budget includes $239 million in operating funds for Alexandria City Public Schools.
City staff and city council are also considering alternative budgets — one is a budget of $780.6 million that could happen if the real estate tax stays at $1.13 per $100 in assessed valuation instead of decreasing to $1.11, and a modest expansion in services and investments. The other presents a budget of $741.7 million, which would result from a real estate tax reduction of 6-cents instead of 2-cents per $100 assessed valuation, but it requires significant service reductions.
Budget Highlights
The proposed mid-range budget of $767.6 million includes a real estate tax rate proposed reduction from $1.13 per $100 in assessed value to $1.11. With a strong real estate market locally, that means the average tax bill will increase by $252 per year instead of $375 per year at the higher rate.
Other top line items include:
- Revenue from the meals tax, which typically produced $5 million in revenue per year (pre-pandemic), has dropped substantially — so the city is kicking in $2 million to offset that lost. The meals tax supports affordable housing initiatives.
- $505,000 earmarked for early childhood education expansion.
- $600,000 to fund a Community Policing Review Board.
- The City would like to fund a second race and social equity position in the City Manager’s office. There is also funding for other equity initiatives, including funding for pre-trial services, and funding for the new Alexandria Crisis Co-Response Program to support having behavioral health professionals respond alongside police to those suffering a mental health crisis.
- $5 million in Holmes Run trail restoration to repair damage caused from a flash flood in 2019.
- New funding for waterfront flood mitigation.
- Funding for LED light conversions in parks, parking lots and trails to save money on utilities. (Sports fields are excluded at this time.)
- Much-needed funding for stormwater capacity and system maintenance to help prevent flooding in many neighborhoods.
- $14.1 million in the Capital Improvement Budget for municipal fiber improvements. “At one point, in the 90s, the city was among the leaders in internet and fiber technology of any jurisdiction in the country, and we need to kind of get back to getting our systems in good shape and keeping our investment up,” Jinks said. (Read about how that could help businesses and residents here.)
- $3.4 million to replace the Alexandria Justice Information System.
At the end of his presentation, Jinks said, “We looked under every rock that we could and the OMB (Office of Management and Budget) staff is to be congratulated. They took a scrub brush or a Scrub Daddy or who knows what to basically find every dollar they could that wasn’t absolutely 100 percent necessary so we could basically get that out of the budget.”
Capital Improvement Budget
There is $2.66 billion budgeted for capital improvements from FY 2022 through FY 2031, a 26 percent increase over the previous budget.
Major projects include supporting public school facilities improvements, acquiring land for the new Inova Alexandria Hospital, stormwater management projects and the purchase of the DCHS building. Major renovations to City Hall have been punted to 2024, since city officials are doing so well working from home at this time, which may change how the city handles that renovation. Exterior renovations and improvements will start sooner.
Expect an increase in the real estate tax rate starting in FY 2023 to fund future projects.
Federal COVID-19 Funding Coming
The City of Alexandria is expecting to receive an estimated $26 million to $34 million from the federal government to help with increased costs related to the global coronavirus pandemic. The money will likely address food insecurity, eviction prevention, assistance to businesses and individuals and funding for personal protective equipment, COVID-19 testing and vaccinations.
Next Steps
The City Manager will present his proposed budget to the public this Thursday Feb. 18, at 7 p.m. online. (Information on how to attend is available here.)
City Council will hold nine work sessions throughout the spring to review the proposed budget with City staff; a special budget public hearing on March 8; and tax rate and preliminary add/delete public hearings on April 27, before adopting the FY 2022 budget on May 5. All sessions are open to the public. The public may submit comments online or speak at the public budget presentation and at public hearings. More information on the budget and presentations is available at alexandriava.gov/Budget.
