Taxes, fees set to increase in fiscal 2015

Taxes, fees set to increase in fiscal 2015

By Erich Wagner (File photo)

Despite earlier directing City Manager Rashad Young to craft a budget without increasing real estate taxes, city councilors reversed course Monday, authorizing a half-cent hike meant to restore funding to popular public programs.

During Monday night’s budget work session — the last chance for officials to add or delete items from the fiscal roadmap — city councilors also agreed to increase the commercial electricity tax rate by 10 percent and business water tax by five percent in fiscal 2015.

These tax hikes join other planned fee increases intended to keep city services in place at a time when costs are outpacing revenue projections. According to City Manager Rashad Young’s $634 million draft budget proposal, revenue before the added tax increases only grew by 1.58 percent.

City council will take a final vote on the budget tonight. All preliminary changes to the budget prior to then were made with the support of at least four councilors, said Mayor Bill Euille.

Among the major changes was the addition of $1.15 million in senior real estate tax relief. City councilors also added $150,000 for senior rent relief.

“$1.15 million is really not what I would have hoped for, but that is what we have before us,” said City Councilor Del Pepper. “It’s workable.”

Another proposed cut that city councilors reversed Monday was a plan to shift the cost of life insurance premiums for former public employees onto retirees, a program that will cost Alexandria nearly $265,000. Councilor Justin Wilson said that while it would be worth discussing how to deal with retirement payments at a later date, the issue should be decoupled from high-stakes budget negotiations.

“I’m uncomfortable with touching the benefits of current retirees,” Wilson said. “Once people retire, they tend to lock into certain expectations around their cost of living. … But in the future, we could have a larger discussion about this, and look at the overall picture.”

City councilors also added an extra $1.2 million in contributions to Alexandria City Public Schools, a compromise given that Young’s original proposal offered the district $2.4 million less than requested. School board chairwoman Karen Graf was thankful for councilors’ efforts, but remained concerned about the school district’s funding gap.

“We’re pleased; we’re glad that seven members [of council] were able to fill out a column for us,” Graf said. “But my biggest fear is we will still have to cut jobs. Hopefully, we can find some creative savings, but the jobs [at risk] serve our most at-need populations in the schools.”

One of the last bits of horse trading by councilors came out of an effort by Vice Mayor Allison Silberberg — with a $32,000 deficit remaining — to secure additional dollars for the fund for human services, which goes toward local charities and nonprofits. Young’s budget proposal was down more than $110,000 from last year’s $2 million appropriation.

Even before Monday’s meeting, councilors had discussed restoring up to $50,000 to the fund. But Silberberg argued for replacing $100,000, with the extra $50,000 coming from Young’s plan to enhance the city’s information technology programs. City councilors already agreed to cut those initiatives by $150,000.

“I know we want to catch up on IT programs, but we can’t do it all in one year,” Silberberg said.

“But how can we offset an increase in funding with a cut, when we’re still in the hole?” asked Wilson, referencing the outstanding $32,000.

Euille, visibly losing patience after two and a half hours of negotiating, proposed a $40,000 cut to the city’s professional development training fund.

“The debate has been had,” Euille said. “It’s dollars and cents, and it takes a consensus to get there.”

Wilson saw an opportunity in the tiny surplus and threw his weight behind it.

“Could that last $8,000 go to street light inspections?” he asked.

Euille agreed to the deal, but labeled it as contingent money, meaning it could be spent elsewhere in an emergency.

Asked if this was acceptable, Wilson sighed, “Yeah, I guess.”

The debate circled back to the Fund for Human Services, but Silberberg was unable to find allies. City Councilor Tim Lovain stepped in, suggesting they split the difference by transferring only $25,000 to the fund, which received a reluctant consensus.

Projector screens displaying budget information finally showed the city’s operating budget with a zero balance — no surplus and no deficit.

“Quick, adjourn!” shouted Pepper.