To City Council members, the mayor and the city manager:
I have lived in Alexandria for 25 years and paid casual attention to the city’s governance and management until now. Upon hearing of our city’s concern over a potential $40 million deficit, I became curious as to how such a prosperous community could find itself in such straits and decided to do some research.
I studied the city’ s annual report, the report of Virginia’s auditor of public accounts, reports from the Bureau of Labor Statistics and from the Securities and Exchange Commission. What I found was an astonishing lack of management, leadership and governance in our city.
And here is why.
Growth of the population serves as a solid benchmark to compare with the growth in our government. Our population grew 11.6 percent between 2000 and 2009. How does an 11.6-percent growth in population manifest itself in growth of services and expenditures? One would assume they would be roughly in line, but not necessarily a direct correlation. After adjusting for inflation, here is what I found:
Per capita personal income up 17 percent (great); total assessed property value up 106 percent (great); general property tax up 45 percent (four times faster than population growth); general property tax as percent of city revenue up 54 percent (up 6.9 percentage points from 2000); city payroll up 41 percent (up 16 percent faster than revenues hogging 68.1 percent of revenues); average city salary up 36 percent (the average city employee makes almost 10 percent more than the average citizen); total city expenditures up 54 percent (up five times faster than population growth); expenditures per government employee up 49 percent (four times the rate of population increase); city spending per citizen up 38 percent (up from $3,450 per citizen to $4,775); education expenses up 50 percent (four times faster than population growth); and expenditures per student up 47 percent (and one of the highest in the nation).
This looks like a pretty dismal record of milking a cash cow rather than conserving resources.
And just what may be the root cause of this? When looking at the breakdown by general departments, some areas of concentration stand out and point to areas needing thorough investigation by the city administration:
– Education – $165.7 million. Is it top-heavy with administration? There has been virtually no student growth yet school payroll is up 41.1 percent.
– Public safety – $91.8 million. Up four times population growth? Are we four times safer than in 2000?Anecdotally I do not notice much difference.
– General government – $77.6 million. This looks like general overhead to me. Should not have grown four times as fast as the population growth.
And where might be the best areas to look for savings? Payroll stands out. The city has increased payroll at 3.5 times the rate of increase in our population.
If the Alexandria City payroll in proportion to revenue was the same as all Virginia independent cities, the savings to the city would be $24 million. If that proportion was the same as Fairfax and Arlington counties our savings would be $85 million.
It appears that, at a minimum, no increase in compensation at any level of the government is justified. Some tough decisions need to be made to get the payroll back in line with a minimum target of no more than 60 percent of revenues. If there is attrition as a result, so be it. We are in a tough economy with unemployment in Alexandria at 4.6 percnet (U-3) and a projected U-6 rate of almost 8 percent. That compares to 6.2 percent and 10.6 percent, respectively, in the metropolitan area. There are plenty of qualified people looking for jobs. It is time for city employees to tighten their belts like the rest of us.
Raising taxes is an unacceptable solution. The job of the city government and leadership is to be faithful stewards of the resources of the city and its citizens. Constant vigilance to prevent the squandering of our resources and reducing costs must always be high on our leadership’s agenda.
The city payroll is the largest target and opportunity. Where the rest comes from is a challenge and charge to the city government and leadership from the citizens of Alexandria.