Ya know, last year I swore to myself that I wasn’t going to pollute my blog with budget information this year. I’m about to fail on that oath….more than once.
So, the City Manager’s (CM) budget calls for average property tax bills to be flat. Last Wednesday night the Council had to choose a tax rate to advertise. Now, the law requires localities to advertise a tax rate if bills increase more than 1%. Ours isn’t going up by more than 1% but I insisted in that meeting that we advertise a rate regardless of what we could or couldn’t do. We elected to advertise a rate of $1.375 and that’s 1 cent higher than the City Manager proposed and 2 cents less than last year. If the Council elects to set that rate, average real estate tax rates will go up $32/year. I don’t expect this will happen but we did that to give ourselves some room in case something happens….something like what follows:
We found out at that meeting that the General Assembly appears to have passed a law that requires localities to give employees a 5% raise (decent article here). That raise will then be dedicated to the Virginia Retirement System (VRS). What that means is that after years of neglegence, the GA is filling the hole in the retirement system with a lot of local money. The other implication of a 5% raise where the entire amount goes to VRS is that employees take-home pay will go down because that 5% increase is taxable social security income. It’s a surprisingly poor solution but the longer you wait to fix problems the fewer options are available. Now this last minute lash-up in combination with VRS rates that were increased will cost the City A MILLION DOLLARS this year. And your taxes probably won’t go up.
Now, this isn’t accomplished by magic. Last year the Council tasked the staff with cutting the cost of benefits and they did it. Staff wasn’t exactly happy about it but they made it happen. They cut more than a million dollars from that cost. It’s essentially the same million we’re filling this hole with. Of course, at the time nobody knew that. I think that’s pretty amazing. We’ve also had to remove pretty much all of our salary contingency to make it happen. That’s not the end of the world but it does remove some flexibility during the course of the year. Keep in mind that the General Assembly hasn’t passed a budget so we will likely have more challenges.
UPDATE: We have more challenges. We recieved last night (21MAR) and updated estimate from PWC for our shared services. It has gone up over $400k. Major increases in Courts and Sherrif. Without being able to judge the impact of the final state budget, Council decided to advertise a rate of $1.385. 1 cent higher than above. Even if we were to adopt that higher rate, we’ll still be cutting the budget again….
March 19, 2012 at 7:46 am
Andy,
Thanks for sharing this, and explaining it in layman’s terms.
March 19, 2012 at 2:52 pm
The tax rate is supportable if Council is maintaining the CM intiative to align the budget closer to Strategic Plan. Depending also on the reasons, would meet the principles of fiscal conservatism as framed by Edmund Burke.
Thank you also for pointing out it was action by the GA and not our Council.
March 20, 2012 at 5:52 am
I keep waiting for the other shoe to fall. Less money should fewer services. Perhaps its too early in the morning for processing on my part.
It sounds like the GA has left us all between a rock and a hard place “fixing” things.
March 20, 2012 at 5:57 am
Perhaps the city should look at selling naming rights. I understand the state is going to fix all of our roads by selling the naming rights for them.
March 20, 2012 at 6:09 am
Just as each Citizen should take personal responsibility for their own finances and financial situation, and not look toward others or the Government to keep them afloat or flush with social services, maybe the City should start to take steps or at least explore ways to become less dependable on money from the General Assembly. Just assume that whatever the General Assemby does from here on out will result in less money being handed out.
March 20, 2012 at 6:29 am
I too favor self-sufficiency. What I don’t like is unfunded mandates where the GA tells us what we have to do and that we have to pay for it. The GA should pay for its own deecisions just like we should have to pay for ours.
March 20, 2012 at 7:17 am
An decreasing reliance upon others would be a good goal. Simple, bold ideas are always the best way to start any strategic planning process. It’s the implementation that’s tough because it usually costs money.
March 20, 2012 at 12:03 pm
Andy,
As the old saying goes, you have to spend money to make it. It just seems that every year there is always something the State does that has a negative impact on us. And, I realize the State complains about what the Federal Government does… it all flows down hill it seems.
I realize there is the ongoing lawsuit, but we should have had Lake Manassas opened a long time ago, I’m sure the other local Governments that have public drinking water lakes and rivers that are open to fishing and boating do not mind that our lake has been closed for years, but that’s a revenue the City has not been able to have for too long. The fire department could hold fishing tournaments on the lake to raise money for new equipment, etc. IMO, every little bit helps. A few years ago when Art Silber was looking for a new stadium, was there any consideration of approaching him about moving to the City? How about trying to relocate or add a new team from the Valley baseball league? Adding new events for oldtown, for example, an octoberfest or touch a truck festival. All of these may not work, but I’d like to see more events that bring people into the City to spend money here, and to keep people from leaving the City to spend money elsewhere. How about trying to attract additional baseball and or softball tournements to the City?
March 20, 2012 at 12:17 pm
COM:
As you have noted, there’s a pending lawsuit so I’ll not talk about the lake. I would note that the City had to make regular investments in the marina when it was open. I’m not sure how that would change. I also can’t talk about baseball stuff but would be happy to chat offline. We have baseball tournaments out at the GMBL facility.
As for the other events, those cost money to put on. You may or may not make it back – so you’ll have to be willing to absorb the loss. Just like we did with the 150th. Certainly we could try something less expensive than that but we would have to increase the budget for it!
March 20, 2012 at 12:36 pm
Andy,
Thanks. How about if we allowed the businesses in Old Town to run the events, give them permits to hold outdoor events etc? That way, maybe we can keep the amount of public money spent at a minimum. Again, I was just tossing out ideas that I believe might be good for the City, or at least might trigger some discussion.
March 20, 2012 at 12:54 pm
COM, there is some of that which goes on and I’d like to see more. However, it is very expensive to put on an event like that. I know that Okra’s has their annual BBQ where they pay for security, etc, etc and that seems to have been succesful.
Maybe we could have HMI in a “coordinating role” to get some of those events working but we’d have to do that with our eyes open….Mardi Gras and Octoberfest ain’t exactly notorious for temperance…:)
March 20, 2012 at 1:09 pm
GMBL tournaments bring in a lot of folks…and GMBL is also expanding is size. One other sport team is the International Senior Softball Assocation who is headquartered over at 9401 East St. in Old Town. They also bring in a lot of folks when they do their annual tournament. Both average several thousand when you toss in players and families. As the Council moves in the direction of exploring what to do with the current ball fields, and move to having new ones over by Dean, they are mindful of these two economic engines for the City.
March 20, 2012 at 2:12 pm
Andy, COM, and others have hit the nail on the head. If we don’t want to see certain municipal services just evaporate, we’re going to have to pay for them. If we want improvement, we’ll have to invest. Every load of asphalt, fire truck, school bus, and fuel bill tends to cost more every year, not less. I’d prefer we not be as dependent on Richmond as we presently are, as the trend in their contributions appears to be on a downward track. The car tax adjustments under Gov Gilmore reduced state expenditures, but we had to make up for it here in local revenue and reduced services. Andy’s outline of the recent burden shift is another example. Not every tax is a bad tax when schools and public safety are a common priority.
Now, there are those that feel that the city of Manassas, and in particular MCPS, are simply wasting millions of dollars. I do not believe that is the whole truth. It’s likely that some programs/people/ways of doing things need to change or go away. Lets assume for a moment that we’ve put the city and school budgets under a microscope, and determined that our budgets (less some state largesse) don’t align with our goals. We don’t have many choices at that point, and the realistic choices don’t always have vocal proponents. If council and the school board can agree on the direction we need to go, and enough citizens show up in support of that direction, I’m sure there is little we cannot do. I hope for the sake of my school age children and my property values that it doesn’t take forever, or degenerate into a protracted fight between various special interests. There’s enough fiddling while Rome burns going on at the federal and state levels, and it won’t serve any of us to do the same in Manassas.
Without more of an all for one and one for all attitude, we’re just treading water in ever more turbulet waters.
March 20, 2012 at 7:02 pm
Yes, responsibility would have to play a large role. I’m not sure about a Mardi Gras event, given that one of the major aspects is “show and tell”.
March 22, 2012 at 10:08 am
http://timesdispatch.com/ar/1783520/
FYI:
Unresolved issues in Richmond and a much larger than expected
shared services bill from PWC, that arrived yesterday, have created
extra challenges in preparing our 2012-2013 FY budget.
April 1, 2012 at 10:20 pm
@Ray:
I wonder just how many (or actually, how few) of those coming for those GMBL and such tournaments stay/eat/shop in the City? I’m betting, MAYBE 20% tops. I don’t see the fields moving to Dean Dr improving that. 🙁