Second Up – Mr. Elston

Mr. Elston is the second guest poster!  Councilmember Elston is in his first term in elected office.  He is also our first democrat to serve on the Council in some time:

After last night’s City Council work session, the Council has determined the Advertised Tax Rate, which is the limit for the tax rate that can be set at the end of this budget process. The rate that was agreed upon is three cents higher than last year’s rate and meets the City Manager’s request. What does a three-cent hike mean to most families? It means a ninety-eight dollar tax increase for the average family for the entire year, or basically the cost of one dinner out for the same family. That being done, your council now has some big decisions to make for the 2016 budget.

Dominating the budget discussions thus far have been two related issues: meeting the City’s annual charges from the County for shared correctional services (our jail costs) and the revenue sharing agreement with the schools. Judging from the emails I have received, many citizens are well aware of these issues, so I will outline them quickly. Until just last year, the costs of the jail had always been met by using the end-of-year discretionary funds. That is to say, there was no budget line for the jail costs. Last year, the former Council found that this end-of-year surplus was not enough to cover the costs, and therefore agreed to a two and a half cent increase to the 2015 budget, which almost covered the difference. Continuing to separate this cost from the General Revenue Fund or to include it, is something with which the Council must grapple.

NOW: The Revenue Sharing Agreement with the schools is defined as fifty-eight and a half percent of the General Revenue from the City. This allows the schools to plan their budget based on Projected Revenue. The City’s General Revenue excludes some revenue, specifically levies for targeted purposes; for example, sewer, fire and rescue, and in 2015 as discussed, the cost of the jail. Why is this important? If the jails were considered part of the General Revenue, 58.5% of the two and a half cents raised for the jail, would go to the schools as per the Revenue Sharing Agreement; thus leaving the jail, once again, underfunded. In order to cover the jail costs while including them in the General Revenue, there would have been a necessary tax increase of six and a half cents, to cover both the jail and the Revenue Sharing Agreement to the Schools.

Moving forward, the Council has agreed to discuss a three-cent increase to the overall budget in order to have some room to grow new and better initiatives to improve our city. I suggested an Advertised Tax Rate of six and a half cents so that we might have room to discuss whether or not to include the jail as part of the General Revenue while also honoring our agreement with the schools, or to keep them as a separate levy.

With only a three-cent increase, we are left painted into a corner; however the corner is a little brighter than it might have been. We may have improved capacity to build amenities and drive economic development. We would be able to address transportation, build a public safety building, and address the aspiration for a long-sought library in our community. Of course, we may also be growing the budget for the schools. This is never a detriment to the city. The schools are an important part of the city. Strong schools help assure a strong city.

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If you would like to guest post, drop me a line…..

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Advertised Tax Rate

Some days the City budget process reminds me of a Motely Crue mosh pit that I visited in 1991.  Other times it seems like we're going to mosh and everyone walks away, thinking better of it.  That second is pretty much what happened last night.  The Council was presented by the City Manager with 3 possible scenarios.  All had various line items and numbers that ranged from the existing tax rate to much, much higher rates.  Some had a line item for "Jail Fund" and others had one for "Community reinvestment" (or something close to that).  As always, several different variables that help the Council arrive at a rate.budget

Recall that the pain point here has been the creation of a "Jail Levy" by the City Manager.  That essentially removes revenue from the General Fund that is shared with the schools.  I was very encouraged by the discussion I heard last night.  Mr. Way was as analytical as ever – glad to see that – and I thought Mr. Elston had some interesting observations.  The Mayor offered what I thought was a strong and thoughtful commitment at the end to working with the schools and inside of our existing agreements.  He also encouraged the Council to do the same.  I was glad to see the Mayor do that.  His commitment to our community is undiminished and he's really good at that stuff.  Although I hate to lose him, I would reiterate my endorsement of his candidacy for Senate.

The Manager did offer that he thought the Council had the authority to set aside revenue from the sharing agreement as they see fit.  I agree that the Council has that authority but it's an authority that should never be exercised unilaterally.  If revenue is going to be "carved out" it should only ever be done in consultation with the schools.  It takes a lot more work to build trust between institutions than it does to tear it down.  In this particular instance, creating a "jail levy" seems wrongheaded to me.  In contrast to standing up an entire Fire department from scratch and funding a long-term capital plan, the Jail has been around since I was in short pants.  This seems like an operational cost that the city just doesn't want to pay.  Yes, it's expensive but the revenue sharing agreement is based on the expectation that as the City's costs go up, so do the schools.  This is, in fact, the case. 

It might be that this is just too big a nut to crack in a single year – we may need a hybrid solution where the city creates a levy that sunsets in a couple of years as the levy is merged into the operating budget.  I don't know, maybe that's too silly a construct but it's a thought.  In any event, the Council voted to advertise the Managers recommendation of $1.39.  What this means is that this is the highest rate that can be enacted by the Council.  I view this as a good thing.  I don't know whether or not the Council will elect to set the rate at $1.39 but it gives them room to maneuver and, given their comments last night, they are inclined to work with the schools to get where we all need to go.

I'm encouraged, but we'll have to keep watching to make sure our elected bodies work together!  This sort of uncertainty certainly highlights the need for longer-term planning.

Posted in Schools | 2 Comments

School Funding Wierdness

Soooo….let me get you two pieces of info before I get started:  One – the schools and the City have this thing called the "Revenue sharing agreement".  It says that 58.5% of general fund revenues are to be shared with the schools (whether you love or hate it really doesn't matter right now).  The "General Fund" is comprised of property taxes, business taxes and a few other taxes.  When the City setup the fire levy, we met with the schools in advance and increased the percentage of the general fund they received to compensate for the removal of the fire budget from the General Fund.  Ok, hold on to this for a minute.

Two – The cost of operating the jail has continued to climb.  We have been locking up more people and, because we're short at least one judge, people are staying in jail longer when they aren't released before trial.  Some of that operating cost was built into the budget but over the years as the costs climbed, the Managers of years past "fixed" the situation by using savings accumulated over the course of the year to pay the balance due to the county.  Those savings are collectively called "Year-End funds."  As long as the budget variance wasn't much it wasn't a big deal but it has become an operating expense and not a one-off.   ok, also hold on to this.

Now comes the rest: the proposed budget was never really presented to the public.  The Manager gave a short speech and that was it.  I was disappointed that there was no presentation.  Really, the first time the public will see a budget presentation will be right before the public hearing!!  That's not very transparent.  In looking at the budget forecast an odd thing turns up.  It's easier to show than describe so here:

 

carveout

This is a list (out of the forecast) of all of the tax revenues that the city is to share with the schools.  Real Estate, Personal property, etc, etc all makes sense but wait, what's that last?  The jail is revenue to share?  I didn't know we made money on the jail?….hmmmm…Oh, no…oh my.  It's in parens so it's a "negative revenue" to share.  That's interesting.  My take on that is the proposed budget takes about $1.2 million right off the top before revenue is shared with the schools!  I've checked with other folks and the consensus is that this is exactly what's happening.  Put differently, the City's base budget doesn't include enough revenue to fund our obligation to the jail so we are taking money from our kids education and putting it towards the jail.  Krooks before Kids?  Doesn't sound like a great strategy to me and this proposal should be DOA.

I don't see how, given the revenue sharing agreement, the proposal can just strip a million bucks right off the top.  The City has never done that before that I can recall.  I've read the revenue agreement and I can't see where this is something allowed.  Yes, running a jail is expensive.  No, I don't want to pay more taxes but, unless we're going to go all "Sheriff Joe" and put up a tent over by the airport, we have to have an operating jail and the revenue sharing agreement (again, liking it isn't germane) foresees that as the city's operating expenses go up, the schools will follow a similar trend.  Look, until about 60 days ago it was me on the other side of the dias so I'm sensitive to the fact that the revenue sharing agreement makes things more expensive for the city but enrollment has continued to climb and operational costs, including salaries, don't get cheaper.  Just like the City, the Schools have seen their expenses go up.  

I'd like to see the Council cowboy up and take this on.  We don't have endless resources and I don't want another tax increase but the elected bodies have to sort something out here. 

 

Posted in Schools | 9 Comments

First up, Councilman Wolfe

Mark is an elected republican and is in his second term as a Council member.  He currently chairs the Economic / Land Use committee of the Council.

MUSINGS FROM THIS WEEK'S BUDGET MEETING

Last night the City Council had their first in a series of budget meeting.

From my perspective things break down into two broad strokes:

Mark Wolfe for webFirst, the Managers base budget that calls for a tax rate even with last years is designed to maintain the existing level of services with virtually no new initiatives or expanded services. One key area is the beginning of a program designed to retain younger, experienced Police and Fire providers who are being poached by neighboring jurisdictions.

That makes sense to me. The feedback I have received (confirmed by our citizen surveys) shows that folks are pretty content with the level of services provided by the City. And I am not hearing anyone call for less Police protection, less Fire services, less recreation opportunities, less street maintenance, etc.    

The one question that has come up is why a 4% increase in real estate bills if we are maintaining an even level of services and prices (cost of living) are generally up something like 2%? The answer to that question is in the City’s revenue mix. 

Real Estate taxes make up roughly 55-60% of the total revenue that goes into the City’s general fund. Our problem is that the revenues from the other 45-40% of the revenue stream (Meals tax, Communications tax, BPOL, Machinery, Cigarette, etc) are projected to be flat or slightly decline. That puts an increased burden on the Real Estate tax side. As one friend of mine said, “it’s math!”    

The second area is the Managers call for an extra 3 cents on the tax rate to fund future capital projects and to help provide a dedicated funding source for the City’s NVTA commitments. Essentially this boils down to if you want/need to do extra things from the base budget, you have to pay for them. Some of the big ticket items include a new south side fire station, a replacement to the existing fire station, a new Police/Public Safety facility and a replacement for Dean Elementary School.

To me, this is where the tough sledding for the Council will be. No one wants to increase taxes. But most of the Council (maybe all?) recognize that we need to continue improving the City to make it more attractive to new businesses and residents. Thus expanding the tax base and make Manassas economically viable for the long run. The question is what, when and how? That is where I (and I think the rest of the Council) will really value input from the Citizens. It’s not so much about today, it’s about tomorrow. 

Posted in Information Only | 7 Comments

This space for rent

postnobills100_8663Yo, M-Town!!  First of all, that's one of the funniest signs in a long time.  I wanted to put up a "for rent" sign until I found the Bill sign.  If you don't get it, you're taking this whole thing too seriously.  Anywho….as much as I enjoy writing personal stuff I've tried, over the years, to educate folks about some complicated City stuff.  I'm obviously on the sideline (at least for now) and am opening up the blog to some guest posts.  I already have 2 in the can and will post content from others.  So, here's your big chance: I'll make ya famous!!  If you want your thoughts up here, send them to me and I'll post them.  Blog rules still apply and I retain editorial control.  I promise to run my edits past you and you can tombstone the whole affair if you like.

So, Ray, Rich, Ed and alla the rest of you suckas….send it in!  Oh, this offer extends to elected folk as well.  I'm an equal opportunity offender.

Posted in Andy's Stuff | Leave a comment