FY2018 Budget Highlights and Economic Success Strategic Plan Update

Transcription

1 FY2018 Budget Highlights and Economic Success Strategic Plan Update Robert A. Stalzer, FAICP Deputy County Executive April 6, 2017 w w w. f a i r f a xc o u n t y. g ov

2 The Board of Supervisors has adopted a set of Priorities: By engaging our residents and businesses in the process of addressing these challenging times, protecting investment in our most critical priorities, and by maintaining strong responsible fiscal stewardship, we must ensure A Quality Educational System Safe Streets and Neighborhoods A Clean, Sustainable Environment Livable, Caring and Affordable Communities A Vibrant Economy Efficient Transportation Network Recreational and Cultural Opportunities Taxes that are Affordable 2

3 Conceptual Overview of the Budget Among other things, a budget is: a statement of priorities that reflects a vision of the County s collective future a spending guide which reflects the County s spending priorities; a tool for juggling priorities and appropriately allocating resources; a policy document indicating policy decisions and priorities through the allocation of funds to specific services and programs; a communication device sharing these choices with residents; an outline of anticipated revenues to support County services, including tax rates; and a plan of objectives for the upcoming fiscal year. 3

4 Basic Budget Facts Fairfax County s fiscal year runs from July 1 through June 30 (same as the state) By law, we must have a balanced budget (disbursements do not exceed receipts) The County Executive proposes the budget but the Board of Supervisors must approve it Any adjustments to the budget that exceed 1% require a public hearing to be advertised and held prior to Board adoption 4

5 Fairfax County Budget Structure General Fund Other Funds Departments Transfers Debt Service Funds Special Revenue Funds Finance Police FCPS METRO Enterprise Funds Libraries Health Fire CSB Debt Service Capital Funds Internal Funds Service Funds 5

6 Fairfax County Budget Size Total All Funds Budget $7.59b General Fund Other Funds General Fund Disbursements -$4.10b GF Transfers Direct Expenditures General Fund Agencies - $1.51b Finance Police Health Fire Libraries 6

7 Dynamics of the Budget discussion Population of over 1.1 million 587,000 jobs Median Household Income $113,208 Over 59% of residents have bachelor s degrees or higher County s budget is larger than 4 states budgets: North Dakota, South Dakota, Vermont and Wyoming 7

8 Budget development Board Guidance approved in April each year Budget parameters Growth Reductions New facilities / workload Budget focus Operating Capital Grant Refined revenue forecasts Work collaboratively with FCPS Capital Improvement Program Bond program Debt capacity / affordability 8

9 Budget recommendations and discussion Key budget decisions made: Tax rates Board priorities Compensation (pay and benefits) Transfer to schools County Executive recommendation in mid- February BOS meet with School Board Superintendent s Budget released Board advertisement of the tax rate (and the rest of the budget proposal) 9

10 Budget decisions Input on the Budget focused from mid February to late April Direct contact /advocacy with Board members Community meetings Online comments Public hearings Add-on in early April Development of consensus in mid April Pre-Mark-up late April Mark-up at Board meeting at the end of April Adoption at Board meeting by mid May 10

11 Virginia is a Dillon Rule State Counties have only those powers expressly granted to them by the General Assembly Limits locality s flexibility to raise revenue and diversify tax base If Fairfax County had the same taxing authority as surrounding cities, approximately $132 million could be generated, enough to lower the real estate tax by over 5 cents 11

12 Fairfax County s Revenue Structure Very reliant on Real Estate Taxes, which make up nearly 65% of total General Fund revenue o Over 75% of Real Estate Tax revenue comes from Residential property State limits/controls/caps nearly 90% of the County s General Fund nonproperty tax revenue City and county governments cannot levy personal income tax in the Commonwealth of Virginia Local Taxes, 12.6% Personal Property Taxes, 14.9% Other, 7.9% Real Estate Taxes, 64.6% 12

13 Budget Drivers Resources Employee Compensation Student Enrollment and Changing Demographics New Initiatives/Facilities Public Safety Requirements Safety Net Programs State and Federal Mandates Federal Sequestration State Budget Population Growth Contractual obligations and contract rate increases Utilities Inflation Metro 13

14 Local Economy The County s economy continues to be impacted by the effects of sequestration and defense spending cuts Loss of high paying jobs Recent job gains have been in lower paying sectors High office vacancy rate in the County over 20 million sq. ft. vacant out of million sq. ft. As of mid-year 2016, direct office vacancy rate was 16.5%, highest since 1991, when it was 16.8% During 2016, the local real estate market underperformed the nation again Based on the S&P/Case-Shiller home price index, home prices were up 5.1% nationally through October 2016, but grew 3.4% in the Washington DC Metro area County s FY 2018 real estate equalization growth lower than anticipated half of what it was in FY

15 Federal Procurement Spending in Fairfax County Federal procurement contracts in the County decreased 2.6% in FY 2015 (the last year for which data is available) Federal procurement spending is 13.3% below its level in FY 2012 (in Millions) Fairfax County Procurement Contract Awards $30,000 Defense Non-Defense $25,000 $20,000 $15,000 $10,000 Average growth of 13.3% per year from FY Flat in FY 2012 $5,000 Dropped almost 13% in FY 2013 FY 2014 increased 1.9% $ Federal Fiscal Year 15

16 Local Economy Labor Market County s labor market added jobs in 2015 and growth has continued through mid-2016 Job Growth in Fairfax County (all data as of June each year) Total Non-Farm Employment Increase/ (Decrease) % Change ,533 12, % ,638 (1,895) (0.3%) ,507 (7,131) (1.2%) ,878 8, % ,738 6, % 16

17 FY 2018 Advertised Budget Highlights Budget balanced at current Real Estate tax rate of $1.13 per $100 of assessed value An overall increase for both County disbursements and School transfers of 2.41% $51.69 million (2.70%) increase in School Operating Transfer Includes more than $13 million in savings/minor revenue enhancements and 13 position eliminations generated from opportunities submitted by County agencies Lack of funding limited the number of Board priorities that could be addressed Available balance of $1.99 million for the Board s consideration 17

18 FY 2018 Advertised Budget Context FY 2018 Budget proposal maintains our commitment to: Meeting the requirements of the County s financial policies Fairly addressing needs for both the County and Schools Providing some pay increases for County employees Managing the impact on County taxpayers Focus on meeting Board priorities, particularly related to prior Board actions, and including opportunities for savings and efficiencies 18

19 Significant Unfunded Priorities in FY 2018 Some significant County priorities that could not be included in the FY 2018 proposal include: Market Rate Adjustment of 1.65% Second year of Diversion First funding Police Span of Control Positions per Ad-Hoc Recommendations and Consultant Study Public Safety Staffing Plan Additional funding for employment and day support for individuals with developmental disabilities Next phase of the Ad-Hoc Police Commission recommendations on top of the Span of Control positions noted above Additional General Fund support for Metro 19

20 FY 2018 Advertised Budget: Where It Comes From Charges for Services $81,020,947 SACC Fees $41.7 EMS Transport Fees $20.2 Clerk Fees $4.9 Other $14.2 Revenue from the Federal Government $32,175,146 Social Services Aid $31.6 Other $0.6 Local Taxes $515,390,893 Local Sales Tax $183.3 B.P.O.L. $161.0 Consumer Utility Taxes $44.9 Other $126.2 Recovered Costs/Other Revenue $16,480, % 12.6% Revenue from the Use of Money and Property $32,280,345 Revenue from the Commonwealth* VA Public Assistance $98,616,374 $38.8 Law Enforcement $24.5 Other $ % 0.8% 0.8% 2.4% 14.9% Personal Property Taxes* $611,766,244 Current $598.0 Delinquent $ % 0.3% Permits, Fees and Regulatory Licenses $50,891,047 Building Permits/ Inspection Fees $38.6 Other $12.3 Fines and Forfeitures $11,684,270 District Court Fines $6.5 Parking Violations $2.2 Other $3.0 FY 2018 General Fund Revenues $4.10 billion 64.6% Real Estate Taxes $2,648,855,844 Current $2,639.9 Delinquent $9.0 * For presentation purposes, Personal Property Taxes that are reimbursed by the Commonwealth as a result of the Personal Property Tax Relief Act of 1998 are included in the Personal Property Taxes category. 20

21 Annual Change in General Fund Revenue FY 2009 FY % 4% 4.2% 4.5% 3% 2% 1% 0% 1.1% 0.6% 1.8% 3.5% 2.5% 3.0% 2.0% 1.9% 2.0% (1%) (0.9%) (2%) * Fiscal Year Projections * Without the 4 cent Real Estate tax rate increase, revenue would be up 2.0% 21

22 Real Estate Tax Base Equalization 20.80% 19.76% 2.47% (1.02)% (10.52)% (8.98)% 2.67% - Residential (0.33) (3.38) (12.55) (5.56) Nonresidential (4.51) (18.29) 3.73 Growth (0.22) 0.60 TOTAL 23.49% 22.70% 4.15% 0.51% (9.95)% (9.20)% 3.27% Prelim Equalization 2.53% 2.63% 4.84% 2.40% 1.94% 0.97% 1.00% - Residential Nonresidential (0.10) (0.60) Growth TOTAL 3.27% 3.40% 5.77% 3.46% 2.98% 1.89% 1.90% Projected Value of One Penny in FY 2018 = $23.75 million in Revenue To generate one penny of recurring revenue, we need approximately 2.1B in increased assessed real property valuation. 22

23 Residential Equalization Residential properties comprise approximately 74.4% of total base Residential Equalization Percent Changes Housing Type (Percent of Base) FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Single Family (71.7%) Townhouse/Duplex (19.7%) Condominiums (8.0%) (0.06) (0.32) Vacant Land (0.5%) (1.66) Other (0.1%) Total Residential Equalization (100%)

24 Nonresidential Equalization Nonresidential Equalization Percent Changes Category (Percent of Base) FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Apartments (25.9%) Office Condominiums (3.9%) (0.31) (0.66) (0.07) Industrial (6.6%) (0.26) Retail (17.1%) Office Elevator (31.4%) (2.41) (2.93) (4.67) 3.42 (1.39) Office Low Rise (3.0%) 7.18 (1.72) (2.41) (5.00) Vacant Land (3.0%) 2.01 (0.74) (1.19) (4.62) 1.50 (1.17) Hotels (3.3%) 3.87 (3.94) (4.82) (0.12) Other (5.8%) Total Nonresidential Equalization (100%) FY 2019 Prelim (0.10) (0.60)

25 FY 2018 Advertised Budget: Where it Goes Public Works $77,303,623 Facilities Mgmt. $58.1 Other $19.2 Judicial Administration $38,511,996 Sheriff $19.5 Circuit Court $11.3 Other $7.7 Health and Welfare $448,792,212 Family Services $203.9 Community Services Bd. $129.3 Health $59.3 Neighborhood & Community Services $29.8 Other $26.5 County Debt $146,035,225 FY 2018 General Fund Disbursements $4.10 billion Transfers $148,123,076 County Transit $34.6 Capital $19.4 Metro $13.6 IT Projects $4.8 Other $ % 10.9% 3.6% 1.9% 3.6% Public Safety $488,408,244 Fire & Rescue $203.4 Police $192.6 Sheriff $49.0 Other $43.4 Parks and Libraries $53,049,557 Library $28.4 Parks $ % 1.3% 1.3% 52.8% 9.1% 1.9% 0.8% Community Development $51,425,599 Land Dev. Services $15.6 Planning & Zoning $11.2 Transportation $8.2 Other $16.4 Schools $2,167,442,783 Nondepartmental $373,893,653 Central Services $78,816,921 Information Tech. $32.9 Tax Admin. $24.6 Finance $8.6 Other $12.7 Legislative-Executive Functions $31,401,904 County Attorney $7.5 County Executive $6.7 Board of Supervisors $5.9 Other $11.3 Operating $1,965.2 Debt Service $189.1 Capital $

26 Fairfax County Public Schools Summary $50.95 million Proposed County General Fund transfers total $2.17 billion Overall Schools support is increased $50.95 million, or 2.41%, over FY 2017 School operating transfer of $1.97 billion reflects an increase of 2.70%, or $51.69 million Support for School Capital Construction remains at $13.1 million. School debt service transfer of $ million supports $155 million in annual bond sales The County also provides additional support to the Schools in the amount of $83.4 million for programs such as Head Start, School Health, Behavioral Health Services, School Resource Officers, School Crossing guards, afterschool programming, field maintenance and recreation programs, among others 26

27 Capital and Debt Service Summary $9.28 million Meets debt service requirements Per Reserve policy, refunding savings of $0.8 million available in FY 2018 will be transferred to Revenue Stabilization from Debt Service Fund FY 2018 General Fund support for the County s capital program totals $19.44 million No increases for paydown support have been included Recommendations for one-time projects will be made as part of the FY 2017 Third Quarter Review Significant capital investment requirements continue to be deferred, such as: County & Parks facility infrastructure replacement and upgrades Revitalization maintenance Sidewalks and Trails Will continue to partially address some capital and maintenance requirements depending on availability of Carryover balances 27

28 Economic Success Strategic Plan In order to further implement the Plan s vision of an economically strong and sustainable Fairfax, we focus on four fundamental themes: Each of the four themes contains strategies and a vision of what we aspire to. 28

29 Economic Success Strategic Plan The plan helps to facilitate economic success by charting: Vision and goals to guide economic growth and success Focusing on People, Places, Employment, and Governance Specific actions to make the county successful Plan focuses on 6 goals: 1. Further diversifying our economy 2. Creating places where people want to be 3. Improving the speed, consistency, and predictability of the county s development review process 4. Investing in natural and physical infrastructure 5. Achieving economic success through education and social equity 6. Increasing the agility of county government...no community has a preordained right to prosperity. Prosperity can only be achieved and sustained when a community's citizens, businesses, and government work in concert for everyone's benefit... 29

30 Measuring Success 30

31 Economic Success Plan in Action Project Management Zoning Ordinance Modernization (z-mod) Project Kicked Off 31

32 Equity Resolution Adopted by the Fairfax County Board of Supervisors and Fairfax County School Board in July Whereas, achieving racial and social equity are integral to Fairfax County s future economic success, as illustrated in the Equitable Growth Profile and highlighted as a goal in the Strategic Plan to Facilitate the Economic Success of Fairfax County; The resolution directs the development of a racial and social equity policy to be applied in the planning and delivery of all public services. Through the use of equity tools the county and schools will ensure that decisions are made and resources are allocated within the context of One Fairfax, implementing policies, practices, and programs that will not just eliminate identified gaps, but increase success for all. 32

33 A Study in Contrasts: Why Life Expectancy Varies in Northern Virginia Access to health care and individual health behaviors play a role, but social and economic factors have a greater influence on health and life expectancy. Data reveals how differences in life expectancy and health between neighborhoods are linked to income and race example: Hybla Valley & Fort Hunt 78 years 84years LIFE EXPECTANCY Education Policies & = Economic Policies Health policies African- American Hispanic 24% 46% $45,572 19% live below federal poverty line RACE/ETHNICITY ANNUAL MEDIAN INCOME White 95% $163,750 None below federal poverty line Source: A Study in Contrasts: Why Life Expectancy Varies in Northern Virginia by the Center on Society and Health, VCU

34 Social Equity in Practice: Fairfax Examples According to the Equitable Growth Profile of Fairfax County, sections of Reston and the Richmond Highway Corridor are among the areas of increased inequities (or limited opportunity) within Fairfax. 34

35 Equity in Practice Reston Town Center North Redevelopment Opportunity located in area identified as more inequitable in Equitable Growth Profile Equitable Development: Advances Economic Success Strategic Plan and One Fairfax goals Strong communities & people Great places with equitable access The Reston Town Center North Redevelopment project will be a mixed use development. It will include a public-use green space, an expanded library, upgraded delivery of human services, affordable housing options, and more. The project is just north of the existing Reston Town Center, which will have Metro access after Phase II is complete. 35

36 Equity in Practice Original Mt. Vernon High School Project and Embark (Bus Rapid Transit) Project Projects located in area identified in Equitable Growth Profile as having lower opportunity Can spark equitable growth a healthy, vibrant, community of opportunity OMVHS will encourage collective focus on education and employment outcomes Through a focus on the provision of services in a transitaccessible location (there is an existing bus stop, and eventually Embark Richmond Highway); and dedicated space for teen center, early childhood education, and nonprofit co-location with plans for housing, retail, arts, etc. 36

37 Economic Success Strategic Plan Update Inova and UVA Announce Plans for Medical School and Research Center FCPS Ignite Strategic Plan and ProjectMOMENTUM United Airlines Signs Long Term Lease at Dulles International Airport One Fairfax Resolution Adopted FCPS Students Enter the Shark Tank, $5000 Worth of Prizes Awarded Workforce Inventory School Readiness: An Investment Strategy STEM Snapshot Expanding the Community Conversation around ESSP Topics Fairfax County, Region Partners for Global Cities Initiative Nearly 150 Food Truck Operators and Entrepreneurs Permitted in County Innovation Coalition Planning Series of Salons Brewing Up Economic Success Focusing on Social Equity to Achieve Economic Success Access to Capital Multicultural Business Conference Draws More Than 300 WeWork Expands into Tysons Startup Census Workhouse Brewfest Held in August Department Housing and Community Development Advancing Housing Blueprint Envision Route 7 Original Mt. Vernon High School Reuse Project Capital Bikeshare Hits The Streets Bike Lane Network Expanding Phase Two of the Silver Line Seven Corners Comprehensive Plan Amendment Approved Merrifield: One of America s Best Suburbs and Best Places to Live Reston Town Center North Planning Underway Parks Count! Embarking on the Future of Richmond Highway Aging in Place: Older Adult Housing Adds to Mix of Uses in Reston Redevelopment of Tall Oaks Village Approved by Board Building Repositioning Workgroup Route 7 Widening Approved FCDOT Transportation Status Report Released Transforming I ,000 Square Foot Sports/Fitness Complex Approved in Springfield ULI Technical Assistance Panel Makes Recommendations for Annandale PDC/PRM Zoning Ordinance Amendment Approved Kingstowne Town Center Approved To Become Mixed Use Development Tysons Transformation Cirque De Soleil s Kurious Marvels Thousands Art Installations Enliven Tysons Construction Starts on the Boro Performing Arts Center Placemaking, Pop-up Parks, and Interim Uses Food Trucks Now Legal in Select VDOT Right of Ways in Tysons Customer Information Center Opens in Herrity Building Joint Training Academy Pilot Fairfax First Project Teams Kick-Off Project Management Approach Fairfax County Retains AAA Bond Rating Public-Private Partnerships (P3) Regional GO Virginia Working Group Kicks Off Booster Shot Approved; Progress Continues Craft Beverage Zoning Ordinance Amendment Approved Fairfax County Mentoring Platform Building Official s Blog Gives Customers Timetables and Tips e-plans Speeding Up Zoning Application Process Planning and Land Use Systems (PLUS) Modernization Project Zoning Ordinance Review Underway 37