FY2018 Preliminary Forecasts December 5, 2016 December 5, 2016 1
FY2018 Budget Planning Discussion Capital Funding FY2018 Preliminary Revenue Projection Cost Drivers Schools General Government Illustration Budget Calendar Summary & Key Issues December 5, 2016 2
FY2018 Operating Budget Summary Revenue Growth: 3% projected (Range: 2.5% - 3.5%) $2,441,000 (General Govt and Schools) Expenditure Needs: - Capital Program - PAUG for maintenance, equipment - Reserves for GMHS Project - Operating Needs - WMATA - School Enrollment - Compensation December 5, 2016 3
FY2018 Projections in Region AV growth Total Rev Growth Arlington: 2.1 % N/A Fairfax County: 1.4% 1.6% Falls Church 2.75% 3.0% Low Residential & Commercial AV Growth High Commercial Vacancy rates in both counties Significant Multi-year Drop in Federal Procurement https://arlingtonva.s3.dualstack.us-east-1.amazonaws.com/wp-content/uploads/sites/18/2013/09/arlington-county-fy-2018-joint-budget- Forum-Presentation-11.30.2016.pdf http://www.fairfaxcounty.gov/news2/difficult-budget-forecasts-for-county-and-public-schools-what-happens-next/ December 5, 2016 4
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Real Estate Assessed Value Growth City of Falls Church (Preliminary) Residential: 2.0% increase 1.2% market increase.8% new construction ($15M) Commercial: 4.5% increase 1.75% market increase $30M new construction Overall: 2.75% AV growth December 5, 2016 6
RE Tax Rates in Region 2016 Real Estate Tax Rates TY2016 Extras Comparable Tax Rate Manassas Park City $ 1.550 $ 1.550 Purcellville Town 1.365 0.035 1.395 Leesburg Town 1.323 1.323 Manassas City 1.388 1.388 Herndon Town 1.395 1.395 Vienna Town 1.355 1.355 Falls Church City 1.315 1.315 Prince William Co 1.218 0.050 1.218 Loudoun Co 1.140 0.050 1.190 Fairfax County 1.130 0.088 1.218 Fairfax City 1.062 0.010 1.072 Alexandria City 1.073 0.063 1.136 Arlington Co 0.991 0.058 1.049 AVERAGE 1.254 0.051 1.281 December 5, 2016 7
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Personal Property FY17 Budget: FY17 Actuals To Date: $5.18M $5.45M FY18 Projection: 6% growth December 5, 2016 9
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Sales Taxes FY17 Budget: 12% growth 1 st Quarter: 13% growth over FY16 FY17 growth due to new development FY18 Budget Projection: 3% growth December 5, 2016 11
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Meals Taxes FY17 Budget: 1.2% growth projection FY18 Budget Projection: 3% growth December 5, 2016 13
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Overall Revenue Forecast for FY2018 RE Assessed Value: 2.75% growth Residential: 1.7% growth Commercial: 4.5% growth Other Revenues: 3.3% growth Total Revenue Growth: 3% New Revenue: $2,441,000 December 5, 2016 15
Recent History of Operating General Government* Expenditure Growth 7-YR AVG 5-YR AVG 3-YR AVG 2.2% 4.0% 1.7% School Transfer* 4.8% 7.7% 5.7% *Excludes Debt Service December 5, 2016 16
Known General Gov t Cost Drivers Retirement* $220,000 Health Insurance 270,000 Other Benefits (250,000) WMATA 500,000 PAUG Capital Maintenance 300,000 Total $1,040,000 December 5, 2016 17
WMATA FY17: contribution: $3,034,182 FY18: $500k increase $200k PAUG capital contribution 85% of planned investment already underway $300k operating 10% decrease in revenue 2% increase in costs 15% increase in overall Local Subsidy Plus FY18: $1m in debt financed capital December 5, 2016 18
WMATA FY18 Debt contribution: $1M In addition to $500K State funding possible at around 25% Possible debt service: $131K - $175K CFA for FY2018-FY2023 still in progress WMATA Budget Adoption: March 2017 December 5, 2016 19
General Gov t Cost Drivers Key Budget Drivers Provide competitive compensation Interjurisdictional agreements Unmet Needs ($2.3m identified in FY17) December 5, 2016 20
2016-2017 Student Enrollment Information 2015-2016 ACTUAL Student Enrollment: 2,509 2016-2017 ACTUAL Student Enrollment 2,670 Student Growth from Previous Year 161 +6.4% 2016-17 PROJECTED Student Enrollment 2,595 +3.4% 2016-2017 ACTUAL Student Enrollment 2,670 +6.4% Number of Students Above Projection 75 +3.0% December 5, 2016 21
Grade Class Sizes 2016-17 School Year Actual Students Core Content Teachers Average Class Size FCCPS Policy K 191 8 23.9 22.0 1 190 9 21.1 22.0 2 177 8 22.1 22.0 3 229 10 22.9 24.0 4 196 9 21.8 24.0 5 220 9 24.4 24.0 6 176 9.8 18.0 24.0 7 215 10.3 20.9 24.0 8 197 10.1 19.5 24.0 TOTAL: 1,791 83.2 21.5 December 5, 2016 22
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School Cost Drivers VRS Retirement $450,500 Health Insurance 439,900 VRS Life Insurance 211,900 City Retirement 34,600 Other Benefits (246,600) Total $890,000 December 5, 2016 25
School Cost Drivers Other Budget Drivers Staff/services to Address Student Enrollment Growth Provide/Maintain Competitive Staff Salaries Ensure Adequate Classroom Materials/Supplies December 5, 2016 26
Illustration No Tax Changes Total Revenue Growth $2,441,000 3.0% PAUG Capital Maintenance (600,000) Debt Service (120,000) Pension Dividend 143,000 Funds for Operations 1,864,000 2.2% Known Increases General Gov t 740,000 Schools 890,000 Net Available Funds $ 234,000 December 5, 2016 27
Capital Reserve Funding School Campus Project Plan of Finance Strategic Steps: Begin to build reserves in FY18 Debt Service on GMHS potentially to begin in FY19 Pre-funding at 50% of FY19 projection: $1.6M or 4 cents December 5, 2016 28
Date Budget Calendar Action December 12 Council Budget Guidance January 10 January 30 February 28 March 13 March 27 April 10 April 24 Superintendent s Budget Presentation CIP Presentation to Planning Commission School Board Budget Recommendation City Manager s Budget Presentation First Reading of the Budget Ordinance First Public Hearing of the Budget Ordinance Second Reading, Second Public Hearing and Adoption of the Budget Ordinance December 5, 2016 29
Summary 3% Operating Revenue Growth for FY2018 or $2,441,000 Known cost increases - $2,207,000 Prior to considering any changes to compensation or additional programs. Identified capital needs of $145M are significant challenge to financial capacity Will continue the community discussion on a shared vision for capital program and budget priorities. December 5, 2016 30