001Okay, now we have our special guest City manager Yes, drumroll, please We mr. Mark jinx our city manager is joining us this evening to talk about budget welcome Evening, that's good. It's Good good good to be here and I promise to be short. You've got had a lot on your agenda obviously tonight and still have some more things to go But I since I presented the budget on Tuesday and the capital improvement program I Been making I was at a community meeting earlier tonight. I've got employee meeting one of four tomorrow morning at 7 a.m uh... so we do a lot of talking about the budget a lot of answering questions and i thought uh... the since we are uh... joined at the hip in regards to uh... financing of the uh... schools in the
002city thought it would be useful to come give you some highlights uh... our budgets online like yours is hundreds and hundreds of pages in the operating budget and capital improvement programs almost is is thick our budget this past year focused on being for the second year boil it down into three words, smart, green, and equitable. We focused again on technology and ways to work smarter, on IT investments, green, continuing the greening of the city's fleet, and in continuing making progress on our eco-city plan. And equitable, we have a lot of work to do there. You were just talking about earlier tonight, very similar to what we've... need to work on more and that is our language access plan and basically taking more of our website and putting it in languages other than English, making sure
003when we're using the language line that departments are all signed up, they know how to use it, people who come in to do business with those departments understand that service is available. So we've got work to do and improvements to make and investments to make on that. on that end. We were able to put together the budget, revenue is improving, but it was, it still went only up 3.4%. So it was not, you know, if you believed the real estate writers in regards to what Amazon was going to do, the values in the hottest housing market in the country, uh-uh. It was better, but it was basically just a little bit better. But it was enough. We were able to put together, I think, a responsible base budget, kind of the operating budget, existing services
004and school funding without a tax rate increase for that portion of the budget. And I'll get to the portion that was not funded within the existing tax rates. But I made a point with city staff that we were going to focus, if there were additional tax rate increase on the cap, that would be for capital only and would not be used for the operating budget. So we went through and squeezed $4 million out of existing departments budgets. We looked at user fees where we could better recover costs and gained about a million and a half dollars. So that gave us some resources in addition to the revenue growth to make what I believe is a sound budget. We've got no significant service reductions. We've invested in our workforce. Our budget is up about, and this
005is a chart I'll show you in a minute, on the operating side about $16 million. And that is up about percentage wise about the same as yours And 70% of that increase is going to workforce investment We are seeing a higher employee turnover. We're seeing fewer people apply for city jobs We're seeing our neighbors increase what they're paying their employees. So we're investing in this particular area one investments were making will We're going to make available to schools and that is we're going to reinstitute a basically a down payment assistance program. It's a loan program for city employees. We're going to make it available for school employees as well if they buy in the city. That was in place prior to the recession. It was a budget cut of about a decade ago. And in
006order to get more of our employees, we only have about 19% of our employees live in the city. And what we have found is when people buy their first house or condo in the city, then when they come to kind of go to the next level, when their family gets bigger, they're rooted in this community and they stay. And that's good for all of us to have, whether it's teachers or whether it's police officers living in our community. education funding Was a priority and clearly we put together a CIP any funding plan that focused on capital investments overall In the base budget went out 3.4 percent because that our budgets have to be balanced with revenues we have not used any fund balance to Balance our budget. We have not done that while I've been
007city manager and that was at the existing tax rate We are proposing I am proposing to City Council To add two cents to the real estate tax rate and put a hundred percent of those dollars Which is about eight and a half million dollars? annual basis towards the city and school capital investments I am recommending and I think these words cannot be changed As of tonight given you've adopted your budget, I guess To its two hundred and forty one point four million So that should take care of a hundred percent funding of the operating budget and it allows us also to focus the community debate and basically the the capital needs and Why we need to increase the tax rate I'm only the messenger City Council's the decision-maker. So I need to talk to them
008And we basically also had to absorb a $5 million increase in Metro's budget. You may be able to read this better from your places than on the big screen, but this is kind of the big funding chart. And it shows basically if you look at the total line, it's about three lines up from the bottom. You can see that our revenues are up that 3.4% I mentioned, and the budget is balanced. However, adding to that is the two cents that would go towards the capital budget, and it's just not this year. What I'm proposing is it needs to be two cents this year, two cents more two years from now, and two cents more two years after that. We've been talking the last couple years about the looming of the capital improvement program. We've got
009bridges that were not in our CIP last year that we share with Arlington that they basically said, it's Mount Vernon, East Glebe, you drive across them. Sidewalks are already blocked off. In East Glebe, we don't allow heavy trucks to drive over it anymore. It needs to be replaced. So there are investments that allow long-term value, but they're not free. and looking at what we're facing. I thought instead of just putting together a CIP and saying, well, we'll get to it later. We'll figure it out later that we had to this year say what a reasonable funding plan would look like. Our CIP is the first time it's been changed and Really the fall 2017 was the last really big revision. We only redo our CIP just about every two years since then as you've seen
010on your side construction costs have gone through the roof probably five we're probably experiencing five percent a year cost increases and so therefore you factor that in that's 15 to 20 percent in repricing our projects new projects like like bridges that you know things that you have to do moving those moving those forward And within that CIP the schools CIP is a hundred percent incorporated within the city say a CIP and in the same years The schools have proposed and that was a challenge given that I think 53% of the schools CIP is in the first two years and When I the communities asked me about that I said well when you've got two schools that are almost a quarter of a billion dollars You don't have you don't have much choice And so the
011question was, how do we pay for it? Our capital program is depicted in this graphic. You can see it's schools is the largest single element of the CIP. And that is, if we look back five years, if we look back 10 years, we'd find smaller. Schools were smaller portion of the CIP and we look back 20 years You probably couldn't hardly find the school CIP and the total city CIP and unfortunately the city CIP wasn't very 20 years ago really was not nearly what it should have been for either the city in schools and which means we're playing as you Were talking about GW earlier playing catch-up ball with old buildings and the city is as well So it means that we basically instead of just the normal level of capital investments, we're having to
012deal with a higher level because of decisions that frankly were not made by those who should have made those decisions decades ago. Just to put it in perspective, the pie chart on the left is the current fiscal 20 capital improvement budget. It's $140 million. The pie chart on the right is the total capital budget for just the fiscal 21 year. And you can see it's an increase. It's $342 million. It's an increase of 145%. So it is a big jump and that led to, what do we do about it? How do we pay for it? This chart is kind of gets at how to pay for it. The total of these bar charts represent what debt service will be. All the way over on the left is where we start out the current fiscal year.
013And that's within the existing tax rates, within the existing budgets. And then you see going right, the city and school capital needs. And there is some... cash capital here and there But it's largely debt service and you can see that these numbers increase substantially over overtime and The did then said was what could a funding plan look like and have added in the put in the blue parts of the bar charts is what the tax rate increases, the two, then another two, another two, and then continuing that total of six cents out until 2030 in this chart. And it shows that how much of the increase in debt service is covered by that increased tax rate. You could see that there's still a lot that isn't. That's the part we're going to have to wrestle
014with with the existing existing revenues We may get a little money from the legislature. It appears that they're going to head into doing something on school capital, but the dollar amount they put forward when you slice and dice it and put it, I would imagine it's going to find its way to a school funding formula somewhere, and it'll help, but it's not going to be a material help. So we're really on our own in regards to how we pay for it, and so next year I'll... I've put forward a plan basically that says we need to be kind of eyes wide open and this is real money we're committing to. And when you do capital projects and borrow for them, you can borrow in the first year, it doesn't cost you anything because you don't
015have to pay it back until the second, start to pay it back until the second year. But by the second year, you've committed yourself and there's no going back. And so basically making the initial tax rate commitment this year was important so that when we get to a mandatory debt service increase, we've basically got the money in hand to be able to pay for it. And this this last slide basically summarizes what I've been saying in regards to How we would fund the CIP with that to then two more and then two more cents and The it would not be hardwired or dedicated We talked last year about state law does allow a special line item to be put on the tax bill for school capital. This is proposed basically to be within the existing
016city tax rate. It raises over that 10 year period about $260 million and over that 10 year period we need about double that amount. To pay that increased cost of debt service that you saw on the prior charge. So that means we had that much Otherwise to use growth in the tax base and use our ingenuity and prioritization to figure out a way to fund so with that the That kind of gives a very very high overview of the thousands of numbers and details in in the city budget and we look forward, you know, council does to sitting down on March 4th and talking things over, focusing on the school side, your operating budget, and the CIP. So with that, I'd be happy to answer any questions if you have the time. If not, I
017completely understand. Thank you so much for summarizing that and hitting all the notes that we need to understand. I have Ms. Gentry wants to make a comment. I just really wanted to thank you so much, Mr. Jenks. This was, I think, a really great development in our ongoing work together to have you come and present to us. So this was really, really great. And as you've pointed out, you're going to have to do versions of this over and over and over again. And so we really appreciate you finding the time. And we will look forward to seeing the city council as well. I just kind of want to debrief. comment. When I was hearing your presentation, those that have been watching me for years know that one of my favorite things to say is that
018the budget tells a story. And I think what's interesting is when I hear you speaking, as you said, we are joined at the hip. And our stories really have a lot of common themes. When you talk about what was happening or what was not happening 20 years ago, that that helps explain why we are in the situation right now. And I think that's an element of the story that we're going to have to keep explaining to the community when they're looking at these numbers. And I think another thing that, you know, that was a delay in our work. We don't benefit by delaying any further. It feels like a big ask over a very short period of time, but to your point, construction costs just keep going up. So we really do have to be
019mindful of that. Our city and school planning staff have done such a great job with our school projections. We are the envy of other school jurisdictions, I can tell you. So we know that this need is here and is not going away. I think I want to commend you for your focus on recruitment and retention of the city staff. It's certainly one of the key things that drove a lot of our discussion. In ours as well. We absolutely agree with you the value of getting people to come here, to work here, and to stay here, and to live here. So that's a really exciting thing. And then just one last thing, only because it particularly came up in some of the MacArthur discussions. You know, you talk about one of the priorities is it being
020green, and we are talking about the CIP, and, you know, that is something that our community is very excited about is, you know, when we're thinking about these long-term capital investments is being mindful of the green. So, again, it's a nice. It's great to just keep seeing these these recurring themes and alignments. So again, thank you so much and we'll look forward to talking to you all again I have mr. Suarez Thanks, sure Anderson, and I just wanted to make some similar comments. I wanted to thank you mr. Jenks for coming and presenting to us and giving this overview I'm really excited about what I've heard about your collaboration with dr Hutchings and the positive a productive relationship You've been developing and I'm I'm excited for this board to continue to develop a positive and
021productive relationship with the City Council I think that more collaboration will be productive for both of us as miss Gentry just alluded to there's a lot of similar process similar theme themes that we're handling and and I also wanted to thank you for matching the budget you know proposed your proposal matches the budget this board passed and that dr. Hutchings submitted and and that you've made education a priority in the budget because it's really critical for a future of the city for all kids to be receiving the opportunities they deserve you know and finally I just wanted to to also acknowledge what you said about the state because I, and this is something I reiterate a lot, the composite formula, and I have a strong view that it's very unfair to cities like Alexandria. Obviously,
022you know, there is a high amount of property value in Alexandria, and so that's what we're penalized for, but at the same time, we have, you know, 60%, you know, low income in our division. We have huge ELL population in our division. huge special education population. So we have a lot of very high needs and Governor Northam's done some stuff about at risk to marginally increase, but I think you hit a nail on the head with a comment that when a lot of those increases happen, it doesn't seem like we realize all that much when you plug it into the calculators and in the formulas and I've seen that. And so I just want to end on a note. to the point of collaboration, you know, to the extent that the city and the schools,
023you know, there can be a collaboration between you and Dr. Hutching and a collaboration between the school board and the city council to really think critically about how we can proactively get more funding from the state. I want to have that conversation because, you know, obviously you've proposed tax rate increases and, you know, those are things that members of the community probably aren't. to be completely excited about. I think we can explain to the community why this is critical, you know, all these needs. But the more we can also get the state, you know, hold the state accountable too, I think that will allow us to do that much better. So just wanted to make those comments. And thanks again for coming. I'm looking forward to continued collaboration. Ms. Green? Thank You chair Anderson and
024thank you echo the sentiments of Miss Gentry and mr. Suarez thank you so much for being supportive of the needs of our schools in your budgeting process and even outside of that whenever I call you to do something for programs that I Participate and coordinate with the schools. You're always so willing to be a part of it. So, thank you I just want a little bit of clarification under on this slide the sixth sense and total added by FY 2025 on that next line it says it would add to the addition the existing tax but not be hardwired dedicated Can you explain what you mean there? Hardwired dedicated would mean by ordinance by law or that piece in the state code That could have a separate line for School a school tax rate for school
025capital. So it just adds to the general tax rate And it's used also. This is also city debt service. This isn't the school debt service driving this City capital projects are driving this as well. And so it basically becomes part of the general tax rate and but at the same time there is a a plan And when we say that these dollars are going to win into that need, we know that that's going to be the case. And it's also, you know it has to be the case when most of the capital of the city and schools is going to be debt financed. And so, you know, you're basically hardwired for 20 years every time you issue debt. So that means something has to pay for that debt service and clearly it's going to be
026real estate taxes. So potentially it could be used for multiple things. Legally, yes, but from a practical sense, given the fact that 75% of the city and school's capital is borrowed, that in effect it will end up in debt service, and debt service is debt service for capital projects. Super. Anyone else? All right. Thank you so much. Thank you. It was a pleasure.