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A few thoughts on the last budget

As we look back at the most recent budget and look forward to our next, it is hard not to see the enormous structural challenges facing local government finances. Every jurisdiction in the region is faced with the same obstacles, and regardless of party or philosophy, every jurisdiction is struggling with similar revenue, spending and property tax approaches.

As part of this year's budget, the Council established a new budget process for next year that will cause the City to take an even closer look at how we prioritize city spending. Instead of being presented with a fully funded budget from the City Manager, the Council will be presented with a baseline-services budget based on a growth benchmark that we will establish after the fall budget public hearing. We will also add an additional three weeks to the budget process. I believe this new process will help us more clearly prioritize the programs and services most needed in our community. There is no question that this will be more work for city and school staff, the School Board, the City Council and the citizens of Alexandria. Perhaps we will find this process isn?t effective or needs to be modified. But I believe it is worth trying.

Last year, at Councilman Smedberg's and my request, we put into place a process to conduct detailed program reviews of every city department and to establish clear customer service benchmarks. Many of our departments have received the highest levels of national accreditation and our AAA bond rating represents our City's effectiveness. But we can and must always strive to do better. The audits are one way to do that.

A new budget process, performance audits and efficiency will help us improve our City and our budget, but they will not resolve all of the structural budget challenges facing our City.

• Our region is growing faster than inflation. This growth both in Alexandria in surrounding jurisdictions is increasing pressure on Alexandria's infrastructure and quality of life. When residents of Loudon and Fairfax use Alexandria as a highway, our local infrastructure is strained and its need for regular repair increases. Our need to add resources, like police at busy intersections, also increases with the 60-70% cut-through traffic coming into and out of our City every day.
• Health care costs went up by 7-8 percent this last year and much more in previous years. This is a national problem. GM recently announced it is moving operations to Canada to avoid U.S. health care costs. Alexandria?s employee health care costs would have been higher this year had we not worked with the schools to combine healthcare plans in order to increase efficiency. School board member Schmalz and I asked last year that the City and Schools look for ways to increase efficiencies. This effort has saved the City hundreds of thousands of dollars and we expect it to save us more in the future.
• Metro costs to the City went up by 42% over last year. As our region's transportation crisis grows, Metro is increasingly becoming a critical piece of the solution. Unfortunately, local government is being asked to bear too much of the load with few appropriate funding sources. As we look to future METRO needs, we need the State and Federal government to do their share and help. The State of Maryland pays for its Metro costs. In Virginia, these costs are carried by local government. This responsibility can't be left to local government.
• Fuel, Asphalt and other petroleum related costs have gone up by over 40% over the last few years. This directly impacts the costs to fill pot holes and the costs for public safety, trash and other employees to do their jobs.
• And more directly, due to our region's very low unemployment rate and very strong job market, the costs to hire and retain employees are going up dramatically. This year, Fairfax County increased its employee salaries by over 4% and its public safety salaries by 7%. Arlington recently increased its teacher salaries by over 8%. Alexandria, with one of the higher employee turnover rates in the region has work to do to remain competitive. If we use inflation as our gauge for salary increases, then we will be starting down a path of losing more and more teachers and police officers as they take higher paying jobs closer to their more affordable homes in outlying counties. It isn't financially prudent to be the leader in salaries. It also isn't financially prudent to be last as high employee turnover creates training costs and service quality burdens for our City.
• And lastly, our State puts severe restrictions on our ability to generate revenues in the fairest possible way and takes much more of the money we send them than they send back to us.

I am confident our community is up to facing these challenges and that our new budget process will help us, at least in part.