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City Manager Directs Staff to Make $100 Million in Budget Cuts

Alexandria City Manager Mark Jinks said Monday that the COVID-19 pandemic has created the worst financial crisis he’s ever seen, and has asked staff to make $100 million in budget cuts and prepare for a $35 million revenue shortfall in his fiscal year 2021 budget.

“We crashed, and we don’t know how long this is going to last, when we’re going to come back up,” Jinks told the City Council/School Board Subcommittee in an online meeting. “I’ve told staff we need $100 million in cuts and savings between the current fiscal year and next fiscal year, is my rough guess. That will be savings and looking at capital projects and seeing what we need to cancel or what we need to reschedule to a future year.”

“Our rough estimate is that we’re going to be down $35 million between now and the end of the year. We thought we were going to be up $10 [million] and we’re down $35 [million],” Jinks added.

On Tuesday, City Council will hold an emergency meeting to suspend penalties for businesses and hotels that will not be paying the city’s dining and transient lodging taxes. The city will also impose a moratorium on penalties and interest for business license taxes and consider a resolution to change the filing deadline for business personal property and elderly and disabled tax relief applications.

Mayor Justin Wilson said Alexandria is still in the firefighting phase of dealing with COVID-19, and that the pandemic unfortunately struck the city in the middle of its budget process.

“I think everybody needs to understand the budget implications of this. The financial implications of this are dramatic and will last us a long time,” Wilson said. “There’s also an incredible amount of uncertainty… It would be challenging under the best of circumstances.”

In the meantime, Alexandria City Public Schools are also shut down until the end of the year, and staff are concerned about being able to provide enough free food for students at its designated pickup points.

“The major concern for us is making sure we can continue to provide food for our kids, because we have a lot of students who rely on school lunches and school breakfasts as their means of food every day,” Superintendent Gregory Hutchings, Jr. said. “This is not going to end how productive our students in the next generation will be, but we’re going to still have to respond to providing those necessary supports in regards to food, academics, social and emotional needs of our kids in order for them to thrive.”

The city has to pass its fiscal year 2021 budget on April 29, and it will be a much different document than Jinks’ original $800 million budget proposal, which included 34 new full-time positions and a 1.5% pay increase for all city staff. Since the COVID-19 shutdown across the country, the city has also implemented a hiring freeze and put compensation initiatives on hold.

The manager’s budget also included the $2.1 billion, fiscal year 2021-2030 Capital Improvement Program, which covers city and school system improvements, including the $122 million waterfront plan, the eventual renovation of city hall, $7.5 million for bridge repairs and refurbishments, $17.6 million to support Metro’s capital improvements and $30.5 million toward flood mitigation along the waterfront.

Now those projects will have to be revisited.

Jinks said that the city’s economic recovery will likely take well into next year, and said he is asking staff to prepare a budget for a worst case scenario.

“This is the biggest crisis I have ever seen,” Jinks said. “That said, we’ve got talented staff, we’ve got options. We’ve just got to put our nose to the grindstone and figure out what those solutions are and do it so that we’re not optimistic and end up having another crisis six months from now if we overestimated revenues.”

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