BUDGET IV

We are three days out from making our first vote on the budget—The first read of the school budget. We are required to have this budget approved by mid-May. There could still be some change between the first and second read but that possibility is becoming less likely.

At the outset County Administrator Randy Wheeler of Spotsylvania provided no increase in funding for the schools over the previous year. In Stafford, County Administrator Anthony Romanello allowed only an additional $500,000 for the schools over last year. Neither administrator got a tax rate approved to support their respective budgets leaving shortfalls in both. Based on the most recent stories in the Free Lance Star teachers in both systems are not expecting significant raises, if any, this year.

At our work session with the School Board we were advised that they needed an additional $2.2 million to fully fund the budget. Down from $2.8 million. Most of the increase was related to a 6% raise for teachers as part of an agreed effort to make city teacher’s salaries more competitive.

Earlier in the year I had talked with members of the School Board to prepare them for the possibility that this year, and probably next, we may only expect to maintain what we had gained the previous year. The City Manager allowed for an additional $1 million in this years budget leaving the gap at $1.2 million. That additional funding should allow for teacher raises and keep us in line with our neighbors. Some members of Council have told the School Board we would see what else we could do but raises for city employees would be our first priority.

At our last work session on the budget staff recommended passing on most of the state cuts, $286,000.00, onto the affected agencies. They stopped short of recommending passing on the full cuts to the Constitutional Officers, except for the Sheriff, because that would mean layoffs and disruption of services. The fact that the City was facing the same choices was made by myself and Mrs. Devine. We also questioned why only the Sheriff was facing the full brunt of the cuts. There will be additional discussion on this point. The staff proposal results in an additional $153,000 in revenue.

In addition, after identifying Outside Agencies with which the City has made specific financial commitments--SPCA, Moss Clinic and some others, staff put forth a proposal for a further cut to Outside Agencies of 5%. With the inclusion of both the Regional Jail and Juvenal Detention Center this amounts to $390,000.00. However, staff is not recommending the inclusion of the Regional Jail and Juvenal Detention Center which would cut this number by a third. There is a concern about the response from the other regional members of these organizations. We were advised that the 4% cuts approved in Spotsylvania for Outside Agencies did not apply to these two entities. We are still awaiting a decision from Stafford on how they will handle funding Outside Agencies.

I've expressed my frustration on the escalating costs of the regional jail and am not too sympathetic when I am asking my departments to reduce costs and am told not expect the same from outside agencies. The same applies to Constitutional Officers. Whether this represents the majority view on City Council remains to be seen.

As I have said I don't like making, "across the board," cuts as there are Outside Agencies that do provide cost affective services thereby saving us additional future costs. I hope if it is agreed that we make additional cuts that we spare those groups as much as possible.

The number for City employees to receive a 2% COLA is $400,000. Staff has shown us how we can achieve this goal. As noted above there are additional savings that staff is not recommending. We have also asked if there is any further savings from our budget short of layoffs. Haven't gotten an answer on this yet.

At our last work session we had staff provide us with the affect of cuts from one to five cents in the proposed tax rate to show residents that with cuts come degradation in services. It is easy to say no new taxes until you discover what services you may loose. I remember a call I received last year asking that I not raise taxes and fully fund the Library's requested budget. This years budget is LESS than last years--as is revenue. Significant cuts would mean cuts in service.

Mr. Solley was correct in pointing out that we currently have the lowest tax rate of any City in Virginia (and in comparison to our neighboring jurisdictions) and that the proposed increase is at the low end of what is being proposed in most other jurisdictions. However, any increase in taxes for some means less money for the basics. Our lower tax rate also does not absolve us from showing City residents that we are being good stewards of their money.

More important is that we are not expecting any improvement in revenues for the coming year. While staff has now proposed a scaled back Capital Improvements Plan for this year it still will require a three cent increase in real estate taxes for debt services next year. This is still open for discussion but it clearly shows we cannot ignore what is coming next year as we face the challenges of the current one.

Thoughts and prayers appreciated.