Budget Adoption

Tonight, the City Council will adopt the Operating Budget for Fiscal Year 2025 (July 1, 2024 - June 30, 2025) and the Capital Improvement Program (CIP) for the next decade.

While the budget will not be final until the City Council votes this evening, the City Council reached consensus on the package of amendments to the City Manager's proposed budget last week.

The City Council's amendments address a variety of policy areas, including:

• Additional funding for operating and capital expenses within the Alexandria City Public Schools
• Expansion of real estate tax relief for elderly and disabled homeowners
• New funding to address mental health staffing vacancies
• New funding to provide retention bonuses for targeted employees
• New investment in the creation of committed affordable housing
• Expanded investment in regional and national visitation marketing

The most important decision the City Council makes each year is the adoption of the annual operating budget and capital improvement program. The operating budget generally funds the on-going costs of government (primarily personnel), while the capital budget funds one-time expenditures that provide the community with an asset (new schools, new roads, new playing fields, transit buses, etc). 

Three years ago, the City Council was able to adopt the first reduction in the real estate tax rate in 15 years, bringing the rate from $1.13 to $1.11. This year, the City Council will be including the first real estate rate increase in 7 years, increasing the rate by 2.5 cents, to $1.135.

With the impacts of average assessment increases and the impact of the 2.5 cent tax rate increase included, the average single-family homeowner will pay $483 more in 2024 than in 2023 and the average condo owner will pay $285 more.

The City Manager proposed no increase in the annual Residential Refuse Fee of $500, which covers the costs of trash, recycling and yard waste collection (among other services). This fee is paid only by the 20,647 homeowners who receive City trash collection.

The stormwater utility fee is proposed to increase to address stormwater management and Chesapeake Bay clean-up mandates. This fee is paid by all property owners, including non-taxable properties. The new annual fee will be $90.75 for condos, $136.12 for townhomes, $324.10 for small single-family homes and $541.25 for large single-family homes.

In February, the City Manager presented his proposed Operating Budget for Fiscal Year 2025 (July 1, 2024 - June 30, 2025) and his proposed Capital Improvement Program (CIP) for Fiscal Year 2025 through Fiscal Year 2034.The City Manager proposed a prudent budget that responds to emergent needs and community priorities, while respecting the capacity of our taxpayers. Yet, the City Council has heard input from members of our community concerned about unmet needs within our schools, housing, public safety, food insecurity, early childhood education, after-school services, and beyond. The proposed rate increase is to address a portion of these needs.

This budget will be adopted in an uncertain environment, with impacts in the real estate market driven by higher interest rates, and where we continue to see inflation impacting the cost of talent and raw materials, two things local governments buy in large quantities. 

In Virginia, the structure of municipal finance is heavily reliant on real estate taxes. Consequentially, in Alexandria, the real estate market, both residential and commercial, dictates our budgetary fate. After seeing the healthiest growth in our real estate tax base in over 15 years, last year we saw slowing. For 2024, we are now seeing the slowest growth in our real estate tax base in 15 years.

The City Manager's proposed budget included 3% growth in the General Fund, providing $26.9 million of new revenue to fund a $911 million General Fund operating budget.

Only $7.5 million of the new revenue came from the real estate tax. Another $8 million is projected to come from new consumption-based tax revenue, including the dining tax, sales tax, and the hotel tax. Another $5 million of new revenue is projected to come from personal property taxes, including the vehicle tax.

Yet on the expenditure side of the ledger, we are seeing increases in costs across our balance sheet, driven by new costs for cash capital and debt service to support City and School capital investments, new investments to support student enrollment growth, the costs of regional and local transit services and the impacts of new collective bargaining agreements for our City employees (police, fire and labor and trades).

While the City Manager's proposed budget increases overall City spending by 3%, the City Manager proposed a higher 4% increase in spending for the Alexandria City Public Schools.

The City Manager's proposal suggests $13.3 million of new money to cover increases in the debt service for ACPS construction projects and $10.3 million of new money to cover increases in the ACPS Operating Budget. The $10.3 million increase in the operating budget fully funds the Superintendent's proposed budget request, but it does not fully fund the additions to the budget request made by the School Board. Together, the increase in ACPS debt service and the proposed operating budget increase directs nearly ALL of the new revenue available to the City, to ACPS.

In addition to the budget documents linked above, all questions asked by members of Council during the process are posted online, along with answers, for the public to review. Any request to change the proposed budget must be initiated with a budget question, so it is a good window into the thoughts of your elected representatives. 

There is no more important process than the adoption of our annual budget. The budget is a reflection of the values of our community and I thank our residents for their input as we crafted a budget that is reflective of those collective values. 

Let me know your thoughts!

School Funding

When the City Council approves our Operating Budget tonight, we will increase the General Fund transfer to the operations of the Alexandria City Public Schools (ACPS) by $14.3 million, a 5.5% increase. The City's General Fund appropriation to ACPS's operating budget is just under $283.3 million, which itself is roughly 30% of the City's Operating Budget, and our largest agency appropriation.

All of the $283.3 million that the City Council is appropriating to ACPS is collected locally in Alexandria, primarily through the real estate tax and other local taxes. ACPS is also projected to receive $66.2 million from the Commonwealth of Virginia to fund the cost of our schools. This appropriation, which covers a little less than 20% of the operating costs of our schools has been a constant source of tension between local governments in Virginia (particularly those in Northern Virginia) and the state government.

The Commonwealth's contributions to local schools are determined through the Local Composite Index (LCI). The LCI incorporates the value of local real property, gross income and taxable retail sales activity to arrive at a "local ability to pay." Based on this formula there are communities (most of which are in Northern Virginia) that are expected to cover 80% of the costs of their schools (referred to as the "Standards of Quality") from local revenues at one extreme, and localities that cover only 17% of the costs locally, at the other extreme.

In Alexandria, we have consistently voiced concerns in Richmond about the LCI as an inappropriate tool given that it puts too much emphasis on the purported wealth of a community and too little emphasis on the costs of services required by the student body. In the case of Alexandria, with a student body with high levels of poverty, English language learners and special education, the costs of educating our students is not represented by the pockets of wealth in some areas of our City.

During the 2021 General Assembly session, the two houses adopted a resolution that directed the Joint Legislative Audit and Review Commission (JLARC), the General Assembly's body for studying complex policy areas, to study the funding of education in Virginia.

The JLARC study has now concluded and resulted in a comprehensive report on the Commonwealth's funding of K-12 education.

The study has provided important findings, including:

• Virginia schools receive less money from the Commonwealth than other states.
• The Standards of Quality do not accurately reflect the local costs of education
• The formula does not address the costs of educating students with higher needs
• The formula is far too complex to manage

During this year's General Assembly session, while there were not serious attempts to comprehensively reform this formula, there were starkly different visions of how the Commonwealth should meet its obligations for public education. In December, Governor Youngkin presented his budget proposal to the General Assembly. In March, the budget conferees completed their work in reconciling the budgets adopted by the Senate and the House of Delegates and the General Assembly adopted its budget.

The budget adopted by the General Assembly provided considerably more funding from the Commonwealth for Alexandria's public schools than the budget Governor Youngkin had proposed in December.

Once the General Assembly acted, this budget went to the Governor for approval, rejection or amendment. The Governor chose to propose a series of amendments to the General Assembly's budget. I wrote to Alexandria's General Assembly delegation urging them to reject several of the Governor's budget amendments that would have negative impacts on Alexandria.

Ultimately, the General Assembly chose to reject ALL of the Governor's amendments to the budget, as the Governor and the General Assembly leadership agreed to start the process anew and try again in an upcoming Special Session of the General Assembly

The Commonwealth has not adopted a budget for the next two years and they have put off comprehensive reform for a while longer.

I am hopeful that when the Governor and the General Assembly resolve their budget impasse, they do so to the benefit of Alexandria's students.

How resources are provided to schools determines the opportunities for children to succeed. The JLARC report is a serious review of one of the most important financial relationships in Virginia. The report makes significant recommendations that, if implemented, would not only provide additional state money for Alexandria's schools, but also place the Commonwealth's schools on a much stronger financial footing for the future.

I am hopeful that the General Assembly and the Governor will quickly adopt a budget for the next biennium and focus on addressing the larger structural challenges with Virginia school funding during the 2025 legislative session.

New Firefighters

On June 30^th 2010, the Alexandria Fire Department had an authorized workforce of 252 full-time equivalent (FTE) employees. With approval of the City Manager's proposed budget this evening, the authorized workforce will be 347.50 employees. No other City department has experienced that type of workforce growth during that period.

As a result of that investment, we are now making new progress in aligning our Fire Department staffing with the recommendations of the National Fire Protection Association (NFPA). 

NFPA is an organization that promulgates standards and codes for usage by local governments. In 2001, the NFPA published a new standard that detailed the minimum staffing standards for fire apparatus. Alexandria was the only jurisdiction in our region that maintained less than 4 person minimum staffing.  

In the Fall of 2014, the City's then-Fire Chief came to the Council with an entirely new model for cross-trained firefighter-medics. This is the model in use in all of our neighboring jurisdictions. 

By cross-training the existing single-mode medics, the belief was that we could achieve appropriate minimum staffing on all engines, ladders and the rescue company in order to meet the NFPA standard. 

In January of last year, the City Council voted to commit funding to support the second public-sector collective-bargaining agreement in Virginia since the 1970s. This new agreement, between the City and International Association of Fire Fighters (IAFF) Local 2141, represents the firefighters, paramedics and fire marshals of the Alexandria Fire Department.

This new agreement provides for significant increases in compensation for new and existing employees, and a pathway to reduced hours in their work week. It will help make Alexandria a more competitive employer in a very tight regional marketplace for talent.

In order to reduce the workweek of our firefighters from 56 hours to 50 hours, the Fire Chief is proposing to hire 25 additional firefighters. This additional staffing will provide the necessary relief staffing while also reducing required overtime.

In 2012, 2017 and 2018, the City successfully (we had two years where the City was unsuccessful) sought grants under the "Staffing for Adequate Fire and Emergency Response" (SAFER) program. This Federal grant program provides support to local governments to expand these critical public safety services.

A SAFER grant covers most of the personnel costs of these positions in the first and second years, and a portion in the third year. At that point, the City becomes responsible for all of the costs going forward.

Last month, the Council voted unanimously to apply for another SAFER grant for this year. This grant is proposed to fund the addition of 15 FTE. This grant will establish two new emergency medical services transport units, which will be staffed for three shifts per day.

This is an important step forward to ensure that Alexandria's residents and their property are protected by fire suppression and emergency medical services which meet minimum standards. This is an investment in the safety of our personnel and our residents. 

Our Next Mayor & City Council

Early voting begins on Friday and Alexandria Democrats will be selecting their nominee to succeed me as Mayor and to serve on the next City Council. Alexandria Republicans will be using this primary to choose their nominee for the United States Senate. The sample ballot is now available.

The Democratic Primary for United States House of Representatives representing Alexandria was unopposed.

Alexandria Republicans have chosen a party process to select their nominees for Mayor, City Council and United States House of Representatives.

Due to legislation adopted by the General Assembly in 2021, Virginia's primary date has moved from the second Tuesday in June to the third Tuesday in June.

As such, on Tuesday June 18th, all City polling places will be open from 6 AM until 7 PM for the Democratic Primary.

Three years ago, Virginia introduced "no-excuse" early voting, so voters have three choices to vote in the June primary:

1. You can request a ballot by mail online now. Ballots will be mailed upon request. The ballot can be mailed back or dropped 24/7 at the drop-box located in front of 132 N. Royal Street.
2. You can vote in person at the Alexandria Registrar's Office, Monday - Friday from 8 AM until 5 PM. Saturday and Sunday voting will be available in June.
3. You can vote in person at your precinct on the Primary Day of June 18th.

I'll see you at the polls!

Potomac Yard Metro Turns 1!

A year ago this month, the Potomac Yard Metro station finally opened. Today, nearly 1,500 passengers board the Metro Rail system every day at this new station, and we are just getting started!

A lifetime in the making, this new station is one of the most significant economic development initiatives the City has ever undertaken. It is also one of the most significant transportation, climate, and infrastructure projects we have ever attempted.

Thanks to the tireless work of our City staff, our WMATA partners, our contractors, and a legion of residents, this station became a reality.

You can watch the full ribbon-cutting ceremony from last year online (Adjust the volume setting on your phone/computer, as I was quite excited!). We were privileged to be joined by Senators Warner and Kaine, Congressman Beyer, the WMATA Chairman and General Manager, the Director of the Virginia Department of Rail and Public Transportation, the Chairwoman of the Northern Virginia Transportation Authority and the President of Virginia Tech.

With the opening of the new station, DASH Bus realigned three different routes to provide new connections to the station. The DASH 33, 34 and 36A/B lines are now servicing the station, providing frequent (and fare-free!) connections to this new Metro Rail station.

Just a little over 55 years ago, the original plan for Metro Rail was adopted. That original plan called for a Metro Rail station just south of Potomac Yard, which was then an active railroad yard.

It was four and a half years ago, when we gathered to break ground on a Metro Rail station in Potomac Yard.

To say that this station has been a long time coming is an understatement. The arrival of Metro Rail to Potomac Yard is a testament to the tenacity of a legion of Alexandria residents who never gave up hope.

On the front page of the Final Environmental Impact Statement for the Potomac Yard Metro Station are the seals of four entities: Federal Transit Administration, Department of the Interior, WMATA and the 

City of Alexandria. Later in the report there is additional input from the US Army Corps of Engineers, the US Environmental Protection Agency and the National Capital Planning Commission. 

The breadth of the entities involved clearly demonstrates the complexity of the project. This project is deeply complex and has been challenging to bring to reality for decades.

This is the 98th station in the Metro Rail system and the second in-fill station that has been added. It is one of the first rail stations in North America to receive LEED certification for the sustainability of the construction.

In 2008, along with then-Councilman Rob Krupicka, I proposed a new start to efforts to bring Metro to Potomac Yard. We included language in the City's Transportation Master Plan explicitly calling for a new station at Potomac Yard. We also tied the construction and funding of Metro to the development occurring in the Yard.   

The result is a funding plan for Potomac Yard Metro that not only leverages the development activity in Potomac Yard, but also does so without requiring the contributions of General Fund taxpayers.     

The total project budget is $380 million:

• $260 million is being derived from tax revenues generated in Potomac Yard
• $70 million is regional transportation revenues provided by the Northern Virginia Transportation Authority
• $30 million was provided by the Virginia Department of Rail and Public Transportation to support the new southwest entrance
• $20 million was provided as part of Federal Congestion Mitigation and Air Quality Improvement (CMAQ) to support the new southwest entrance

The largest environmental, economic development, and transportation initiative in our City's history is being accomplished using one of the most innovative funding mechanisms used anywhere in the country. 

It was a thrill to see this long-awaited project come to fruition for our community. It's been even more exciting to see so many residents make this new investment part of their daily lives.

A year ago, the City Council voted unanimously to provide written input to the Environmental Protection Agency supporting proposed regulation of "forever chemicals" in Alexandria's drinking water.

Last month, these new regulations were finalized.

"Forever chemicals" is a grouping of chemicals formally known as per- and polyfluoroalkyl Substances (PFAS). They have been used since the 1940s and are present in a wide array of consumer products and believed to be present in the bloodstream of hundreds of millions of Americans. There is an emerging body of scientific research that suggests that prolonged exposure to PFAS may have serious health impacts.

In March of last year, the Environmental Protection Agency (EPA) proposed a National Primary Drinking Water Regulation (NPDWR) to regulate the presence of 6 of the PFAS in our drinking water. This proposed regulation would require public water systems to monitor for the presence of PFAS, report to the public the presence of PFAS and ultimately reduce the levels of PFAS in drinking water.

Alexandria remains one in a relatively small list of Virginia jurisdictions who have a private water utility. Virginia American Water Company (VAWC), a subsidiary of a large national company, provides the water supply to Alexandria's residents and businesses.

As a private utility, VAWC is subject to the authority of the State Corporation Commission (SCC) in Richmond. 

Virginia-American Water Company has been measuring and reporting the levels of PFAS in our drinking water for several years. The current 2023 Water Quality Report that Virginia-American provided to our community shows that Alexandria's drinking water does have elevated levels of PFAS.

In addition to the proposed regulations, the recently-enacted Bipartisan Infrastructure Law included the largest-ever investment in water systems in our nation's history. The City will work with Virginia-American to make the improvements in technology and infrastructure to make Alexandria's drinking water safer for all of our residents.

Food Waste

Two years ago, when City Council approved our current budget, an amendment I proposed was included to expand the City's collection of food waste. My proposal funded both an expansion of our existing Farmers' Market Composting program and a new curbside collection program.

Our Farmers' Market composting program has added two new sites, the Old Town North Market (901 N. Royal Street) and the Southern Towers market collection point (4901 Seminary Road).

Last year, we launched the new curbside collection program. We are now launching the second year of this program and we are accepting new registrations.

These residents will receive a free start-up kit and 6 months of service for free. The City has contracted with Compost Crew to provide this service.

A year from now, residents can opt to continue the service with a monthly or annual fee.

Earlier last year, the United States Department of Agriculture (USDA) announced that it has awarded the City additional funding to supplement local funds in expanding this new program. These funds, drawn from the American Rescue Plan Act (ARPA) are a portion of $9.4 million distributed nationally to support compost and food waste reduction projects.

I am excited to see this program continue to grow. This is a program that will reduce waste and improve the environment. I hope you find it useful!

Solarize

Are you interested in harnessing solar power for your home?

Beginning today, you can sign up to participate in Solarize Alexandria!

Solarize Alexandria is a partnership between the City, the Northern Virginia Regional Commission, and LEAP. 

The goal is to increase the deployment of solar power generation in our residential communities. In addition to reducing emissions and reducing your power bill, the City of Alexandria provides a real estate tax exemption for qualifying solar installations.

The program begins with a free assessment from the program installer. Sign up today!