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Fairfax City Council Adopts Budget For Fiscal Year 2020-21

Post Date:05/18/2020

On Wednesday May 13, 2020 the City of Fairfax City Council approved City Manager Robert Stalzer’s recommended Fiscal Year  2020-21 $135.6-million General Fund  budget and FY21 – 25 Capital Improvement Program (CIP). The fiscal year runs from July 1, 2020 through June 30, 2021.

As a result of the COVID-19 pandemic, the adopted FY21 General Fund budget is $9.7 million less than the City’s FY 20 budget. This amount represents a decrease of 6.7 percent from the prior year. The total approved FY21 budget for all City funds (General Fund, Wastewater Fund, Stormwater Fund, Old Town Service District Fund, Cable Fund and Capital Fund) is $166.8 million, a 1.8 percent decrease from the corresponding FY20 amount. 

As a result of COVID-19, the FY21 adopted budget anticipates a significant decline in revenues for the remainder of FY20 followed by an additional downturn in revenues throughout FY21, with recovery beginning gradually in FY22.     

Substantial revisions to the initial February 26, 2020 recommended budget were presented for City Council consideration on April 7. These revisions reflected a $20.3 million projected loss in city revenues. As a result of these revenue losses,  the adopted FY21 budget includes a decrease of $1.0 million in capital  projects, a reduction of $3.5 million in operating costs, $5.5 million in short-term CIP borrowing and $7.9 million of expenditures  held in reserve.

Expenditures held in reserve include funding for a  3.5 percent employee merit increase, funding for 5.6 additional FTE positions, funding to alleviate salary compression, funding for two additional small area plans, reduced contract services and operating costs, as well as personnel actions including a hiring freeze, eliminating temporary positions, possible furloughs, layoffs and retirements; suspension of two holidays and freezing overtime. Budgeted expenditures held in reserve will be evaluated on a quarterly basis in conjunction with the City’s quarterly financial review of its revenues and expenditures. 

As a result of a determined effort to keep costs to residents and businesses as low as possible while still effectively operating the City, the adopted FY21 real estate tax rate is unchanged from the FY20 amount of $1.075 per $100 of assessed value. Of the $1.075, 3.0¢ is dedicated to the Stormwater Fund. As a result of a 2.1 percent average increase in January 1, 2020 residential assessments, the average annual residential real estate tax bill will increase $116, or about $9.67 a month. The average annual commercial real estate tax bill will increase by 1.6 percent as a result of the January 1, 2020 commercial assessments. The adopted FY21 budget reduced the proposed Old Town Service District tax rate from $0.06 to $0.0 and eliminated the proposed stormwater tax rate increase of $0.0025.

The adopted budget will fulfill Council directives and goals while minimizing the tax burden for city residents and businesses. 

Despite the economic and operational challenges presented by the COVID-19 pandemic, the city’s adopted FY21 budget overcomes several financial constraints while continuing to accomplish most elements of the city’s adopted Strategic Goals. The adopted FY21 budget maintains the city’s high level of services and creates the foundation needed to realize the city’s long-term economic development goals by implementing the five-year, $95.0 million Capital Improvement Program.  The adopted city FY21 budget also retains a 12 percent Undesignated Fund Balance supporting the city’s AAA Bond Rating. 

The adopted budget will be posted on the city website by July 1 at fairfaxva.gov/budget.

For information on the fiscal year 2020-21 adopted budget, contact Budget Manager Kerry Kidd: email, 703.385.7876

 

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