City Manager Jim Hartmann released his proposed 2010 city budget and capital improvement program Tuesday night at a starkly serious City Council meeting where officials discussed layoffs and pay freezes for city employees and acute service cuts for residents.
The $524 million budget, which would commence July 1, represents a 3.3 percent ($17.8 million) decrease from the current fiscal years approved budget. But the city manager and the Office of Management and Budget released more telling statistics revealing a 7.7 percent ($43.6 million) drop from the citys current service baseline, meaning the city has $43.6 million less than it needs to maintain current city and school services.
This is certainly the most difficult budget that the city staff has ever had to put together, Hartmann said. I think it taxed all of us greatly and made us search deeply during all of the decisions. Hartmann later added, The Alexandria government faces its most serious fiscal crisis in 30 years.
A total of 121 city personnel positions four percent of the citys workforce will vanish. Seventy-four of those positions are currently vacant but up to 30 city employees could be laid off under the proposed budget, which still awaits a plethora of work sessions and public hearings before its April adoption. Hartmann also proposed a pay freeze for city employees, including merit-based pay raises and cost of living pay adjustments.
Hartmann said the welfare of the employees was a priority, and that they would be considered for vacant positions, assuming they are qualified and the funding is available to keep these posts intact. But many of the positions on the vacancy list are frankly of a higher criticality than some that are on the [reduction in workforce] list, Hartmann said. The employees have been notified and are working with the human resources department, according to the city manager.
We feel bad about the fact and sad about the fact that this is the outcome, Mayor Bill Euille said. But Im in private business and Im having to do the same thing to my employees and myself in terms of compensation. Its unprecedented.
Councilman Justin Wilson commended the Office of Management and Budget for performing their undesirable task of wandering around City Hall as emperors of doom.
With total real estate values down about two percent and expected to fall more, the proposed budget includes a real estate (commercial and residential) tax hike of about $.04 cents, from 84.5 cents per $100 dollars of assessed value to 88.7 cents.
The new real estate tax, responsible for the majority of the citys revenue, would generate about $14 million in the next fiscal year, according to the budget document. As directed by Council, the average homeowners tax burden would stay nearly static at $4,226 one dollar less than last years. Hartmann proposed no other tax hikes, though he did propose raising some fines and fees.
The only way to get through this is as a community, Councilman Ludwig Gaines said. This was a conscious decision here to hold the line and not putting that burden on [homeowners].
Bracing for the worst, the budget includes an additional $2 million in cuts for the current fiscal year, adding to the nearly $11 million departmental cuts Council enacted last year as the economy became weaker. Hartmann said the proposal was a conservative one, to produce reserve funds in case of a revenue shortfall next year.
While the budget proposes critical spending reductions, the city managers budget indicates a focus on public safety. The Alexandria Fire Department will cost the city about two percent more than it did last year and the Alexandria Police Departments budget increased by about one percent. Several new fire stations and a new police headquarters are also in the capital improvement plan.
We did have a focus on public safety in this budget, Hartmann said.
Still, the recession has left $128 million of unfunded projects for the city, with uncertain revenues looming large.
Hartmann, via the Councils request, proposed a two percent decrease from last years public school system allocation, consistently the largest slice out of the citys economic pie. The School Boards adopted budget is currently over that mark by about $900,000 but the Council and Board have budget work sessions scheduled to solve the gap.
With the citys unemployment rate climbing from two to three percent and nonprofit organizations that previously acted as social safety nets also feeling a pinch, Councilman Rob Krupicka stressed the importance of volunteering and called for the city staff to research the most acute needs in our city caused by this downturn.
Continuing with what Hartmann deemed a conservative and sustainable approach, the city manager left any money that could be secured by the federal stimulus package out of the budget document, but said there is a list of $600 million worth of projects for which the city hopes to gain federal money. The budget assumed state funding from Governor Tim Kaines current budget proposal.