(Updated 1:10 p.m.) As expected, this year’s $753.3 million city government budget will be significantly cut down — with a $46.6 million reduction from the operating budget and $140.6 million in the capital budget put forward in April.
City Manager Mark Jinks called the new document “Budget 2.0,” representing the possibility that its contents are subject to change at next Tuesday’s (April 14) City Council meeting and throughout the budget process. Jinks said the total projected revenue loss for the 2020 and 2021 fiscal year is $92.2 million, and that the sharp reduction in the budget is due to a deferral of the 2 cent tax residential tax increase initially proposed and a steep drop off in commercial tax revenue.
The main meat of the cuts on the capital side is the postponing or elimination of a number of construction projects. The proposed Capital Improvement Project budget has been sharply reduced from $2.1 billion, and while the T.C. expansion at the Minnie Howard campus is delayed, the in-progress plans to renovate MacArthur Elementary School will proceed.
“Capital projects will be deferred, specifically $30.5 million in waterfront park and flood mitigation costs,” said Jinks. “We’re deferring that to fiscal year 2023 as well as deferring, for two years, the $100 million funding of the Minnie Howard campus until 2023.”
The budget includes $234 million, or a $7.4 million reduction in the transfer to the school operating budget. The city can’t decide how the schools allocate that funding, but Jinks noted with a heavy nod and wink that $7.4 million is the equivalent amount to what school compensation improvements would be — the funding for merit step increases, marketplace adjustment, and retirement plan funding.
“We’re not recommending school board do that,” Jinks said, “only recommending the school board be cut an equivalent amount. It’s up to the school board to decide how to allocate, but I can say freezing pay is something I think you’re going to see in many jurisdictions in the D.C. area.”
The cuts not only represent a scramble to salvage this year’s budget, but planning for continued economic hardship as the virus continues to impact the local economy. While budgets are usually year-to-year, Jinks warned that the budget office is operating month-to-month to handle rapid changes in the market.
“[The budget] has to reflect the new realities of the greatly reduced revenues,” Jinks said. “Our revenues are down, we think between now and the end of the next fiscal year.”
Other cuts include an elimination of the planned 1.5% pay raise to employees citywide, the elimination of the merit and career ladder increases, and deferral of public safety pay raises. The budget also includes a freeze for nearly all city hires, though Jinks said exceptions are made for public safety staffing like planned fire department hires.
Other cuts in the budget include:
- Torpedo Factory Art Center renovations
- Implementation of a municipal fiber system is delayed until FY22
- Canceling $2.5 million set aside for potential open space purchases
- Reduction in complete streets funding by $700,000
- Expanding the capacity of Alexandria Union Station
Essential services like road paving, Jinks said, will remain intact. Jinks warned that while the city needed to scale back it’s budget dramatically, it can’t afford to fall behind on maintenance and infrastructure.
“It’s important to have a strong capital improvement program funded with a good element of cash instead of borrowing — we have projects that we’ve started that we can decide to defer or cancel and not fund in the future,” Jinks said.
The budget is scheduled to be presented to the City Council next Tuesday with a public hearing on the budget for next Saturday (April 18). Jinks said the Saturday meeting will be in-person in the City Council chambers but have an option for in-person attendance with appropriate physical distancing, but online participation is strongly encouraged.
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