By Cody Mello-Klein | [email protected]
City Council unanimously adopted the FY2023 operating budget on May 4, keeping the real estate tax rate steady, though rising assessments pushed the average tax bill up by $445, or 6.5%. The budget provides car tax relief to residents, increases compensation for city employees and fully funds Alexandria City Public Schools’ budget.
The $839.2 million operating budget is an 8.9% increase over the $770.7 million FY2022 budget and higher than City Manager Jim Parajon’s originally proposed budget, which came in at $829.9 million, a 7.7% increase over last year. The budget increase is about on par with the national inflation rate of 8.5% for the 12 months ending March 31, 2022, according to usinflationcalculator.com.
Employee compensation, particularly for first responders, was a significant issue leading into the final budget. In November 2021, City Council approved mid-year compensation adjustments, including a 1.5% increase across all city pay scales, targeted increases for public safety employees and a $3,000 one-time bonus for full-time city employees.
However, members of the fire department spoke up at last month’s City Council public hearing, testifying to ongoing staffing shortages in AFD that have led to overtime, burnout and retention and recruitment issues. In addition to annual merit increases, the approved budget includes a 7% raise for firefighters, medics and fire marshals; a 6% pay increase for the police department and sheriff’s office and a 4.5% increase for general city staff.
“A lot of people use the statement that budgets are moral documents and that they are reflections of your key values, and I think that this really shows our value in people because we could not run a city and we could not have a city be where people want to live if we don’t care about the people who make it happen and the people who are here walking the streets, working in the businesses, building the businesses, teaching our children,” Councilor Alyia Gaskins said at the May 4 meeting.
Mayor Justin Wilson emphasized that although this year’s compensation increases are a step in the right direction, there will likely need to be further increases in future budgets.
“I think in a world where it’s one of the most competitive labor markets we’ve ever seen, we’re going to have to continue to have this conversation every year about how we make sure we invest in the level of compensation and benefits required to not only attract but retain the best and brightest in the city,” Wilson said.
On top of the compensation increases, the FY2023 also restores $3.4 million in funding for 38 positions that had been subject to a hiring freeze in FY2022.
After last year’s decrease of the real and personal property tax rate – the first rate decrease in 15 years – the FY2023 budget left the real estate tax rate at $1.11 per $100 of assessed value.
There are several setasides within the budget: 2.2 cents out of the $1.11 per $100 of assessed value will go toward the city’s transportation improvement fund, while 1 cent per $1.11 of $100 assessed value will be dedicated to affordable housing. With City Council looking to increase Alexandria’s affordable housing opportunities, the so-called “penny fund” would bring in about $1.8 million, resulting in a total of $4.6 million in dedicated affordable housing funding for the next year.
“I think this penny we’ve put in for housing is a statement of values more than anything else, and I’m very proud to see it go into the budget,” Councilor Kirk McPike said at council’s May 4 meeting.
The approved budget does include some tax relief in the form of the personal property tax on vehicles with an assessment tax ratio of 78.8%. The change, due in part to the appreciation of car values during the pandemic, discounts residents’ vehicles by 21.2% of the actual market value for the 2022 tax year. To offset the tax burden on owners of lower-valued cars, the city also aims to shift state Personal Property Tax Relief funds so that vehicles valued at $5,000 or less, instead of $1,000 or less, will receive a 100% state car tax subsidy. If City Council votes to amend this state funding on May 20, more than 30,000 cars in Alexandria would be eligible.
The budget also features a few fee increases. The stormwater fee, which council doubled from $140 to $280 per billing unit last year, went up again to $294 per billing unit. The residential refuse fee will also increase from $484.22 to $500, while the commercial refuse collection fee will increase from $411 to $500. According to the city, the fee increases will go toward funding Alexandria’s flood waste composting drop-off program and curbside food waste composting pilot program.
Council also adopted a $135 application fee for those looking to create an accessory dwelling unit on their property.
The city is making further investments in modernizing its police force. The FY2023 includes a $2.2 million for a police body camera pilot program, which will be funded using $800,000 from the city, $800,000 of American Rescue Plan Act funds and $600,000 in federally earmarked dollars.
After council’s decision to reallocate $800,000 for the school resource officer program led to months of intense debate last year, council opted to place the $800,000 directly into the hands of the Alexandria Police Department. The money was officially taken out of the SRO alternative contingency and put into APD’s budget to fund six full-time positions in the field operations bureau. The decision of how and where to station the officers now falls under the purview of Chief Don Hayes, albeit with “policy direction by the city manager and City Council,” according to the add/delete summary.
The FY23 budget also includes $490,000 for five new speed cameras in school crossing zones and money for two additional Alexandria co-response teams, partnerships between APD officers and trained mental health specialists.
The approved budget fully funds ACPS’ $248.7 million budget request, including a 10.25% raise for teachers, on which the School Board will vote later this month.
Other highlights include $33.9 million in priority investments, such as climate change, employee compensation, affordable housing, early childhood support programs and public safety supporting initiatives. Council approved $2 million in dedicated funding for climate change initiatives, expansions to DASH lines 30, 31 and 32 and $95,000 for a new position in the city’s race and social equity office.
“I think that’s going to be really important because a lot of people still don’t understand what equity is or they have different definitions or are trying to figure it out,” Councilor Canek Aguirre said of the new equity position. “So, the more we can internalize it as a city, the easier it will be for us to then externally start dealing with residents and having those conversations with residents and trying to explain that a little bit more.”
City Council also approved the $2.73 billion 10-year capital improvement program budget on May 4. A $497.8 million chunk of the FY2023-2032 CIP budget will go to infrastructure projects in ACPS. In FY23 alone, $157.4 million will go toward the construction of a new high school building at Alexandria City High School’s Minnie Howard campus. Another $24.5 million will fund renovations of ACPS’ administrative office building at 1705 N. Beauregard St for a swing space.
Over the next 10 years, the CIP will fund the renovation and expansion of George Mason Elementary School and Cora Kelly School for Math, Science and Technology. The city is also investing $288.4 million in flood mitigation and infrastructure projects over the next 10 years, which aims to expand its response to flooding in the city. In FY23, the city will spend $26.4 million on flood capacity improvements to help improve the intersection of Commonwealth Avenue and East Glebe Road and Ashby Street and East Glebe Road.
The FY23 portion of the CIP budget also includes $73.2 million to purchase 4850 Mark Center Drive, where the Department of Community and Human Services, Alexandria Health Department and a West End service center will be located.
While council spent most of its time on May 4 celebrating this year’s budget, the mayor took time to focus on the future. Wilson anticipated pressure on the city to lower its tax rate next year given the current real estate market and further growth in the residential real estate tax base.
“I think we’re going to come under some pressure, significant pressure, to look at further reductions on the rate and giving our taxpayers additional relief, and that’s going to come balanced with continued needs on the expenditure side,” Wilson said.