City Services Suffer as Budget Shortfall Reaches $10.5 Million


From city employee benefits such as the Weight Watchers program to one of nine domestic violence police units, the city is making cuts in a plethora of departments in order to stabilize a newly identified budget shortfall of about $10.5 million this fiscal year.

An even larger shortfall is projected for fiscal year 2010, predicted to be in the $50 million range, city officials said.

City Manager James Hartmann presented his revised budget at a retreat last Saturday that cut the current one by 1.9 percent. A projected drop in real estate values leading to declining tax revenues is the main culprit, officials said. Job growth in the region is also slower as well as vehicle and retail sales. Consumer faith in the market and therefore spending is also decreasing, adding to the economic dive.

This is a period where we have to reexamine everything we do, how we do it, why we do it and then make hard, hard decisions about what the future will hold, Hartmann said.

Cuts did not occur across the board. The office of Management and Budget asked department heads to prioritize where they could tighten their belts and where they could not. Hartmann based his new budget on their responses.

The Alexandria City Public School system, which makes up about 31 percent of the citys budget, will not take hits this year. Nor will the fire department, the Office of Real Estate Assessments or various money-generating sectors like Alexandrias Economic Development Partnership, Small Business Development Center and Convention and Visitors Association.

Were trying to be very specific and reasonable about it and take the time to [prioritize cuts] rather than just whacking away blindly, said Director of Management and Budget Bruce Johnson. Hartmann added that the schools will have to be very sensitive to the overall fiscal condition in fiscal year 2010.

The highest cuts from the $543 million budget came from housing, libraries, communications, information and technology, the Office of Management and Budget and the Office of the City Manager. Each department cut their budgets by 4.1 percent respectively. Twenty-four other municipal sectors were affected, ranging from Human Services to Planning and Zoning to the Office on Women. The complete list is available on the citys website.

But while the finances of the city government will decline sharply, Alexandrias economy wont be as badly impacted, according to a presentation given at the retreat. Employment is stable and federal contracting will grow, perhaps aided in the future by the Victory Center, a complex in the city that will likely house federal workers. Tourism and business travel are also stable leading officials to believe that no recession in the citys economy is likely. City staff acted to raise almost $1 million in general fund revenue as well to offset some of the losses.

But some cuts, deemed service reductions by the city, will directly affect citizens while others, termed efficiency measures, will be more indirect. For instance, the budget cuts will exterminate the homeless shelters emergency shelter fund, a safety net to guard against eviction and loss of utilities, which is a direct service cut. Youth basketball timers will now be volunteer positions rather than paid an efficiency measure. Whatever the semantics, Alexandrians lives will be affected in a type of downturn that the city has not dealt with in decades, and one that is not expected to improve any time soon.

When planning future budgets, Hartmann said the city will have to decide what will [alterations] do to our quality of life and is that acceptable to our community? And I think this is something thats going to stimulate a very large community discussion in this budget year because it is unprecedented and has not had to happen for decades.  All these services are important.

The cuts reduced revenue destined for affordable housing initiatives in favor of public safety among other services. Its one of various initiatives that will move in slow motion along with the economy.

Things will get slower, Hartmann said. We are continuing with the Eco City initiative as far as planning but 2010 and 2011 are going to be extremely difficult financial years for us. There may be things that may get deferred to future years or will not be approached as aggressively as we would under normal times.

Some of the most painful cuts, as Johnson described them, came from the Department of Human Services. Various urbanization projects may help by bringing additional office space to the city, but I dont think were going to develop our way out of it given the overall financial times, Hartmann said.

In four or five years, Johnson said its perceivable the city could be $100 million in the hole. Fairfax County is facing a shortfall of $500 million this year, but he said the whole region is ailing and perhaps obviously, none of it is comforting. Officials said it will take the entire communitys input to weather the financial storm.

Were prepared in the sense that we have the mechanisms in place through the more transparent, detailed budget [process], Johnson said. We have to understand what the impacts would be of the different decisions that Council might want to consider and for the public to be able to understand.

There is no word yet on whether tax increases will occur, though they are certainly part of the discussion. In late November the City Council will issue the 2010 budget guidelines to the city manager based on a certain tax rate. He will then produce a budget based on that rate to get a picture of what is feasible. Officials said this years cuts would sink deeper into permanence before they ease up.