The City Council passed the FY2011 General Operating Budget last week. Unfortunately, a compromise was not struck that enabled me to support it. I have two primary issues with our budget: Lowering our baseline past the previous fiscal year to ensure that there will not continue to be a perpetual need to increase the residential property tax rate and reductions in costs spent on consultants.
I wrote a memo last November asking for Council guidance to the City Manager to include a directive to not craft a budget that would require any increase to the residential property tax rate by setting our baseline back to 2005 levels and adjusting expenditures upward based on community priorities as outlined in our strategic plan, despite increasing health care insurance costs, state retirement payments and Metro subsidies.
I then made a formal request for a budget memo that would outline the scope of services for individual expenditures in the Contracting Services and Consulting line item in our budget, a single line item responsible for roughly 10 percent of the general operating fund. Without this understanding, Council was put in a position where we lacked needed information to provide greater budget oversight for public benefit.
My requested guidance was not incorporated into Council instructions to the City Manager in November and, unfortunately, Council did not have an understanding of the scope of services for individual expenditures contributing to this large contracting services and consulting line item prior to voting on the FY 2011 budget Monday night.
Without better understanding what we would be paying for and having to increase the residential property tax rate to pay for it contrary to my earlier expressed desires, I was not comfortable to vote yes for the proposed budget.
Admittedly, in the spirit of true conciliation, as we started our deliberations as a Council in February, I realized that with the proposed budget the City Manager returned it would be impossible to approve a budget with no tax rate increase. The Managers proposed cuts were not steep enough in our baseline to accommodate the uncontrollable increases (in millions) in health insurance costs, state retirement payments and Metro subsidies none of which can be suppressed by our local government while at the same time funding what he proposed.
This isnt just my opinion. The Budget and Fiscal Affairs Committee in its annual report said the budget represents budgeting business as usual. And quite frankly, the largesse of our citizenry has become comfortable expecting what the city manager proposed. In short, the tiger was let loose from the bag.
With this in mind, I did come to the table making good faith efforts to negotiate with my colleagues to get to a point we would all be able to support. Although the result was not a unanimous vote, we all made compromises and I am confident that we will continue to do so and, working together, look for ways to increase our governmental efficiency moving forward.
The Contracting Services and Consulting line item is $54.7 million dollars, merely $10 million dollars more than the initial FY2011 projected deficit, and responsible for roughly 10 percent of the citys general operating fund. And according to a budget memo produced in response to my question about what is spent on contracting services versus what is spent on consulting, approximately $17 million of the $54.7 million dollars is spent on consultants (and to date, we still do not know the scope of these services in total).
Despite our actions as a Council supporting the issue I raised, in this papers editorial pages, former Council member Tim Lovain wrote a riveting piece intended to criticize my stance on the need to reduce expenditures in the Contracting Services and Consulting line item in the budget.
While unappreciative of his writing tone and believe it quite unbecoming, I do respect Mr. Lovains effect, be it intentional or unintentional, to more publicly elucidate this blind line item, which I consider a black hole in the citys Budget. The irony of Mr. Lovains writing is that I agree its on the record prior to his writing the piece with everything that he said about contracting being a wise best-practice. Oftentimes there is more than 40 percent cost savings associated with contracting services since an employer does not have to absorb the cost of fringe benefits provided to employees to get the same level of service benefit. There is a clear delineation that needs to be straightened for the public benefit and to correct misperception.
Thus, this one combined line item for contracting services and consulting is larger than the roughly $44 million dollar gap the city managers proposed budget sought to close in part by increasing the residential property tax rate.
The increase in the residential property tax rate would account for roughly $20 million dollars in revenue to fill nearly half the gap on the projected $44 million dollar shortfall. I would have considered it less than prudent to not question such a large, non-transparent portion of the budget that is in great part responsible for the increase to our residential property tax rate and am grateful that my Council colleagues, after our frank discussion on the matter during this years budget deliberations, agree that we need to get behind this number.
When it comes to money matters, the devil really is in the details and it is these details that the current bipartisan council is now seeking to better understand for everyones benefit, as we should, as we work to perfect One Alexandria.
The writer is a member of the Alexandria City Council.
