The Council Connection
your connection to City Council by Mayor Justin M. Wilson
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Power Plant Redevelopment |
Eventually, they got the support of the City government, and through years of work, led by my former colleague Paul Smedberg and my current colleague Del Pepper, the plant shut down for good a little over 8 years ago.
Now, it's time for what is next.
With the closure of the station, this site became one of the higher priority sites for redevelopment in the City. As the City's focus on the waterfront has led to new public access, increased open space and new economic vitality, the power plant site is a critical missing piece as we work to ensure the connection of the northern end of the waterfront.
Fortunately, Hilco is welcomed to Alexandria with an adopted community vision to guide them. In 2017, City Council approved the Old Town North Small Area Plan. This planning document codified a redevelopment vision for the 20-acre power plant site and the area surrounding it.
While the plan was appropriately non-specific about the exact future development of the power plant site, the approved vision details new open space, mixed-use development, sustainable land-use, affordable housing and much more.
With the entrance of Hilco, I am excited to see an ideal partner for the City to turn this former industrial polluter into the sustainable uses of the City's future!
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This will be the largest single infrastructure project in the City's history!
With remediation expected to require nearly a half billion dollars, the City requested funding from Commonwealth coffers to assist in this challenge. The City has now received a total of $90 million of commitments from the Commonwealth thanks to the support of Governor Northam, and our General Assembly delegation, specifically Senator Saslaw. Other jurisdictions in Virginia with similar systems have benefited from such funding, and this additional investment is a significant accomplishment.
The City is now well on our way to meeting this new timeline.
The challenge is significant. We certainly did not plan to rectify this outfall on the timetable that the Commonwealth has provided. Even with the timetable, Alexandria remains ahead of many jurisdictions around the nation on this issue. Stormwater planning and work coordinated with redevelopment activity has left us better situated than most. I look forward to seeing this work accelerate with the contractor now on board.
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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).
While the revenue loss did not end up being as severe as feared, the precipitous loss of tax revenue is now anticipated to last much longer. When the pandemic hit last year, we had the "benefit" of having already completed real estate property assessments for calendar year 2020. Given the vast majority of our City revenues are based on residential and commercial real estate taxes, the broad impact if the pandemic had not yet hit the City's budget.
The upcoming budget will not have that luxury.
While the residential real estate market in Alexandria has remained strong, even in the pandemic, the commercial real estate market has taken a body blow. Residential real estate in Alexandria is currently projected to grow by 3.6%, which is a healthy rate of growth, not unlike growth in recent years. On the commercial side, our valuations are expected to drop by 4.69%, the largest drop in decades.
Together, our real estate tax base is projected to remain largely flat with a 0.15% increase in valuations anticipated.
Once all other revenue projections are included, the City Manager currently projects overall revenue growth of 0.2%, which would be the most anemic revenue growth since the Great Recession. That would provide an estimated $1.7 million of new revenue for the upcoming year. Current projected expenditure increases are $42.8 million of additional spending, which would create a $41.1 million shortfall.
Given that our local budget must be balanced, that shortfall must be resolved with either spending reductions, tax increases or some combination of the two.
To formally commence that process, the City Council adopted our annual budget guidance for the City Manager. Given the considerable uncertainty, the adopted guidance asks the City Manager to propose his budget with a "bookends" approach, showing a budget that resolves the budget gap without tax increases (all reductions), a budget that resolves the budget gap without service reductions (all tax increases) and a budget that includes a mix of the two options.
It is generally my preference that the City Manager propose a budget without a tax rate increase included, allowing the City Council to make that decision during the budget process. This year, a majority of the Council wished to provide the City Manager with the flexibility to include a rate increase if necessary. That preference was reflected in the adopted budget guidance.
This will be a challenging environment to adopt a budget within. With our residential taxpayers already paying more this year due to the appreciation in our residential tax base, I believe we should again work to avoid a rate increase while protecting the core services our residents depend on.
The City Manager's budget presentation is on February 16th.
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Flood-Resilient Alexandria |
Over the last several months, the City Council has worked to accelerate efforts to address chronic flooding issues, this time due to more frequent and more intense rain events. These storms are causing our residents and businesses to suffer significant financial loss due to damage from flooding and sanitary sewer backflow.
Addressing this challenge requires immediate and sustained action in the following areas:
- Infrastructure Investment and Maintenance
- Financial and Technical Assistance to Residents
- Development Policy Reform
Our interdepartmental team has proposed doubling our current Stormwater Utility Fee, paid by all property owners in the City, to allow for an acceleration of major capacity projects and spot infrastructure improvements, an increase in channel maintenance, new "state-of-good repair" investments, property owner grants and new staffing.
The fee applies to all properties (regardless of their taxable status). For commercial properties, it is assessed based on the impervious surfaces on the property. For residential properties, there are four tiers (apartment, townhome, small single-family home and large single-family home). There is a credit system in place to encourage actions that assist the City's storm sewers. Essentially the fee is structured to be a user fee for the City's stormwater handling.
- $51 million for water quality infrastructure initiatives required under our MS4 Permit
- $19.3 million for stomwater capacity improvements
- $5 million for stream and channel maintenance
While important, these efforts are insufficient to address the capacity issues that remain throughout the City and will not protect the City from the impacts of this flooding in the face of a rapidly changing climate.
The proposed doubling of the fee would cost a single-family homeowner an additional $140 per year, a large single-family homeowner an additional $234 per year, a townhome owner an additional $59 per year and a condo owner an additional $39 per year.
In this new scenario, the proposed budget for capacity projects would increase over 5-fold to $110 million over the next decade. Spot improvements would double, allowing an additional 3 - 6 projects annually.
For Alexandria, a 10-year storm event constitutes one that will drop 2.28 inches of rain over a 60-minute period or 4.81 inches over a 24-hour period. This is a capacity that is at, and in many cases above, that of neighboring jurisdictions.
Yet, now three times in the past 14 months, we have had rain events that far exceeded this capacity. This is not sustainable.
The investments required in our Sanitary Sewer system are funded by maintenance fees paid by existing customers (on the Alexandria Renew Enterprises bills) and by connection fees paid by developers.
In 2016, the City conducted a comprehensive Storm Sewer Capacity Analysis. This exhaustive study looked at each of the City's eight watersheds (Backlick Run, Cameron Run, Four Mile Run, Holmes Run, Hooff's Run, Holmes Run, Potomac River, Strawberry Run and Taylor Run) and identified problem areas where current capacity does not meet our 10-year storm design standard.
The study identified 90 separate deficiencies in the system, and estimated $61 million of construction costs required to address those deficiencies (construction costs are approximately half of expected budget costs). Over half of these deficiencies are concentrated in the Hooff's Run and Four Mile Run watersheds. The reports of flooding from our residents during these most recent events align closely to these deficiencies.
From the maintenance perspective, it is also clear that we have work to do. This fall, the City will undertake a $2 million effort to clear approximately 7,000 feet of the Hooff's Run Culvert. This 70+ year old urban culvert is designed to be "self-cleaning." Last year, after the July 2019 flooding event, the City commissioned a firm to do a robotic assessment of the condition of the culvert. That assessment showed an average of 5% obstruction across the culvert and some areas of 15-20% obstruction. The clearing of the culvert commenced last month and is expected to take several months. It does not appear to have been done before, certainly not in recent memory.
For development, whether large-scale, mixed-use development or a small residential addition, Alexandria's stringent stormwater requirements stipulate that conditions after development to be the same and oftentimes better than they were. As a consequence, the flooding we have experienced in the City is typically in established neighborhoods, areas of our City where we have not seen new development (aside from infill) in decades. Yet, there may be options to further strengthen these existing requirements. Later in this newsletter, I have more detail on legislative initiatives the City is seeking in the upcoming General Assembly session to assist in this effort.
A climate-resilient City requires investments and potentially new policies to ensure that residents of our City do not suffer devastating damage with such frequency.
Putting in place the infrastructure that can support a changing climate will be a significant undertaking for our community. It will involve a large commitment of new resources and possibly private property impacts.
Yet it is my belief that this work requires greater urgency to protect the residents impacted in our City.
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Eight years ago, the City convened the Joint Long Range Educational Facilities Work Group. The group was given the essential charge to understand our recent increase in student enrollment, better project enrollment growth in the future, and to decide what to do about it.
The School Board Chair and Vice Chair at the time, the Mayor at the time, and I joined a group of community members and staff to steer the effort.
We have also worked to understand where the enrollment is coming from. For example, we learned that low-rise apartments generate
nearly three times the students as high-rise or mid-rise apartments do. We learned that single family homes generate nearly double the students as townhouses. We know that public housing and other income-restricted units far outpace any other property type for student generation.
These data points remind us of the need to address this enrollment growth head-on.
In June of 2015, the City Council and the School Board adopted the Joint Long Range Educational Facilities Plan. The Plan is the culmination of the group's work in conjunction with the efforts of both ACPS and City staff. The Plan looks at each elementary school building in the City, assesses the facility's educational adequacy, and provides a roadmap for increasing capacity and addressing deficiencies.
The Superintendent's proposed 10-year Capital Program includes rebuilds or builds of:
- Cora Kelly Elementary School
- George Mason Elementary School
- Minnie Howard Campus of our High School
- A new school to be determined
While capacity will remain the focus of the investments we must make in our school facilities, we have seen far too many examples of the dangers of systemic under-investment in our school facilities. Returning our school facilities to a state of good repair while sustaining a preventative maintenance cycle must be a priority of our collective investment. There can be no excuse for poorly maintained learning environments for our children.
While the pandemic has paused a decade and a half of enrollment growth, it can be assumed that the trend will continue once our schools return to in-person learning. These long-term investments become critical to support the success of our students in the generations to come.
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Bond Refinancing Saves Millions |
In October, S & P Global Ratings and Moody's Investor Services both reaffirmed the City's bond ratings of AAA and Aaa respectively. The confirmation of these ratings, in advance of a refunding of $46.1 million of existing debt, allows the City to access the lowest possible borrowing costs, saving the taxpayers millions over the life of our bonds.
A municipal bond refunding is essentially the municipal version of a mortgage refinancing, where the City is taking advantage of lower interest rates and replacing portions of our municipal debt with new debt at lower rates.
Through a competitive bidding process, the City has awarded these new bonds to Morgan Stanley at a true interest cost of 1.54%. This new debt will result in a net present value savings of $2.4 million. That savings will ease the burden on taxpayers as we address the financial shortfalls over the next few years.
Much like individuals must have a credit check performed before acquiring a mortgage, a car loan, or a new credit card, the City must go before Standard & Poor's and Moody's to have the two organizations assess whether we are doing a good job managing the City's finances.
Our capital budget is funded primarily through a mix of debt and current year funding also known as "cash capital." Relating this to your home mortgage, the cash capital is the down payment. We also pay interest each year on the debt that was issued in previous years.
In issuing the City's rating, Moody's wrote: "Alexandria's financial position will remain stable given a trend of operating surpluses and improving cash and reserve levels, management's conservative budget assumptions, and future tax base growth."
Standard & Poor's similarly cited that "We view the City's management as very strong, with strong financial policies and practices..."
Alexandria is very conservative with our use of debt.
The median for other similarly rated and sized jurisdictions is 2.42%.
In fact, in the Standard & Poor's analysis, they noted that the City was rated higher than the "sovereign" (the US Federal Government) because "we believe the City can maintain better credit characteristics than the U. S. in a stress scenario."
Debt is a tool that allows us to balance the costs of large capital investments across the generations of Alexandria taxpayers that will benefit from them and to pay for our investments from the returns we reap from them.
It is important for us to maintain the careful stewardship that will protect our taxpayers and our City's infrastructure long into the future.
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Greener Commercial Buildings |
While the Federal government has been disengaged from international efforts to address climate change, there is some hope that will change next year. While we await that leadership Alexandria is continuing to take meaningful climate action.
- Reduce greenhouse gas emissions
- Expand Open Space
- Reduce water pollution
- Reduce vehicle miles traveled
- Reduce ozone
To be successful, this work necessarily involves the public and private sector and will ultimately require a state government fully committed to the cause.
While the Green Building Policy will ensure that new development is built in a sustainable manner, to make progress, we must address existing structures.
Last month, the City Council voted 5-2 to create a C-PACE program in Alexandria. A C-PACE program will allow commercial property owners to make improvements to reduce energy consumption, greenhouse gas emissions and sustainability, financed by repayments collected as part of the property's real estate tax payment.
Led by an incredibly motivated and knowledgeable group of residents, the City vaulted to the lead among local governments by adopting the Eco-City Charter a decade ago. The charter defined a comprehensive vision for our City to improve environmental sustainability.
The Eco-City Charter then led the City to adopt the Environmental Action Plan. The plan laid out specific actions the City should undertake. It detailed how we should measure success and it began to define the next phase of our Eco-City evolution.
Meeting the standard requires a myriad of different techniques. Simply put, green building reduces the energy and water usage of buildings, while creating more livable homes and better spaces for work.
While these efficiency improvements are certainly positive for the environment and livability of these spaces, they are also extremely important to the affordability of residency. For those reasons, they were included as components of our recently adopted Housing Master Plan.
Since the adoption of the policy, 95% of the development constructed or under construction has met this policy. This equates to about 10 million square feet of green building.
Yet a lot has changed in the ten years since the approval of this policy. Green building strategies have gone from being a novelty and luxury to being a market standard.
The new policy proposes to raise the bar, with all private development being requested to meet a LEED Silver standard, and and all public development being required to meet a LEED Gold standard. In addition to LEED, the proposed policy also allows for alternate certification options, including Green Globes and Earthcraft, with a process for use of alternate standards.
While the task force supported the notion that public construction activity to lead the way in sustainability, there was some disagreement as to whether LEED Gold was sufficient or whether the City should set Net-Zero construction as the goal. Ultimately Council chose to set Net Zero as the goal for public facility construction. The recently approved MacArthur Elementary School will be our first Net Zero building.
Constrained budgets make it more challenging for our City to continue its leadership in sustainability practices, but we can and should work to lead the region in this policy area. These efforts are critical given recent Federal policy changes, but are also good for our economy and our quality of life. I look forward to working to see them to reality.
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Another Entrance For Potomac Yard Metro |
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.
Yet, there was one area of unfinished business that remained to be resolved. While excessively high bids led to the abandonment of a planned southern mezzanine (complete with southwest and southeast entrances), there was still a desire to improve access to the station from the southwest.
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.
I am excited to see this project come to reality.
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Next month the Virginia General Assembly returns to Richmond for the so-called "short-session." The General Assembly alternates between a 45 day session in odd number years and a 60 day session in even number years.
A year ago, we were prepping for a switch of party control for the first time in 22 years in the House of Delegates and 8 years in the State Senate. While the regular session of 2020 was extraordinary with significant legislation enacted, it was just a prelude to an extended special session, which addressed legislation and budget decisions related to COVID and numerous reforms to Virginia's criminal justice system.
We will continue to enjoy an unprecedented level of influence for our City. Our delegation boasts BOTH Majority Leaders (Senator Saslaw leading the State Senate and Delegate Herring leading the House of Delegates) and a few committee chairs.
Every year, the City Council adopts a Legislative Package for the upcoming General Assembly session. While the state government is certainly a significant financial supporter of the City's budget, Richmond also sets a legal environment that affects how we provide services to our residents.
Along with Vice Mayor Elizabeth Bennett-Parker, I serve on the City's Legislative Committee, which recommends the Legislative Package each year to our colleagues.
Yet we do have specific asks within the legislative priorities, including:
- Funding and Authority For Infrastructure Investments
- Protecting and Expansion of Local Authority and Funding
- Projecting our most vulnerable residents
- Promoting Access, Equity and Equality
- Combating climate change and promoting clean energy
We have included a specific list of legislative asks to support our efforts to address inland flooding, including efforts to regulate the stormwater impacts of smaller infill development and ensure new state resources to support the necessary infrastructure investments.
We are optimistic that this upcoming session will result in new legislation adopted in alignment with the City's values and supporting our delivery of critical services.
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Paid for by Wilson For Mayor | www.justin.net |
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