Alexandria City Council Adopts Fiscal Year 2018 Budget
For Immediate Release: May 4, 2017
By a 6-1 vote on May 4, the Alexandria City Council adopted a $728.1 million General Fund Operating Budget for Fiscal Year (FY) 2018, which represents an increase over the current year of 5.8%. The budget includes $242.6 million in operating funds and debt service for public schools (a 3.6% or $8.4 million increase over FY 2017 funding), while spending on City operations and debt service increased by just 2.5% after $4.1 million of spending reductions. The budget also invests $2.1 billion over 10 years in Alexandria’s Capital Improvement Program. FY 2018 begins on July 1, 2017.
To account for stagnant revenue growth, increasing school enrollment, needed City and school infrastructure investments, and Metro cost increases, the proposed budget includes an increase in the real estate tax rate of 5.7 cents, from $1.073 to $1.13 per $100 of assessed value. This would increase the average homeowner’s tax bill by 6.3%, or $356 per year. Alexandria’s real estate tax rate will remain among the lowest in Northern Virginia for homeowners and the second lowest for commercial property owners. There are no increases in any other tax rates.
The adopted budget provides for a real estate tax rate 3.0 cents higher than that proposed by the City Manager. From this additional revenue, $4.3 million will support a major affordable housing project, and the remaining $130.1 million expected to be received over the next 10 years will be placed in a contingent capital reserve to be allocated after recommendations from a blue-ribbon task force on City and school construction needs.
The approved 10-year Capital Improvement Program includes substantially increased funding of $144.7 million to improve Metro safety and reliability and $370.2 million for accelerated sewer outfall projects.
A new stormwater utility fee will be applied to all residential and non-residential property owners to pay for costly new federal and state mandates. This will fund stormwater management more equitably than by raising the real estate tax further, since a fee shifts stormwater management costs to the properties with greater impact on stormwater runoff. The average homeowner will pay $70 for the second half of FY 2018. Smaller residential properties will pay less, and very large homes will pay more. Non-residential properties will pay a fee based on the impervious surface area they contain. Revenue from the stormwater utility fee is projected to raise $4.2 million in FY 2018. The annual refuse fee will increase from $363 to $373 for households receiving City collection services.
Although the City has already been actively working to significantly reduce sewage overflows from its four combined sewer outfalls, work will be dramatically accelerated to comply with a new deadline of 2025 recently enacted by the General Assembly and approved by the Governor. Revenue for these projects will come from a 30% increase in the sanitary sewer fee in FY 2018 (from $1.40 to $1.82 per thousand gallons), with significant increases in sewer-related fees over the next decade. The budget also includes the assumption of $45 million in state aid, like the assistance previously provided to Lynchburg and Richmond to address combined sewer outfalls in those cities.
The adopted budget underscores the City’s investment in its workforce by funding merit increases for employees who earn them through performance, and creating a pay incentive for dual-role firefighter/medic staff. The budget reflects City Council’s Strategic Plan, analysis in the City’s Five-Year Financial Plan, the City Manager’s budget priorities, and extensive input from community engagement meetings and online forums.
To learn more about the entire budget process and view all budget documents, visit www.alexandriava.gov/Budget.