From 2002 until 2009 the City was enjoying the run-up in the residential real estate market. Our General Fund budget increased by an average of 6.5% per year. The work force in City Government grew from 2,229 Full Time Equivalents (FTE) to 2,660 FTEs during that period. 

There were  even campaigns calling for Council to limit spending growth to 3% per year. 

In Fiscal Year 2010, the bottom fell out as the Great Recession took hold. The City adopted its first negative budget in at least 40 years, reducing spending from Fiscal Year 2009 to 2010 by over 2%. From 2010 to 2018, the General Fund budget increased by an average of 3.4% per year. 

Sustaining an average budget growth of 3% per year with 4% annual student enrollment growth, employee healthcare costs increasing far above rates of inflation, long-deferred infrastructure needs, and ever-escalating funding challenges from Metro is impossible.  

The most important decision the City Council makes each year is the adoption of the annual operating budget and capital improvement program. The operating budget generally funds the ongoing costs of government (primarily personnel), while the capital budget funds one-time expenditures that provide the community with an asset (new schools, new roads, new playing fields, transit buses, etc). 

In February,  the City Manager presented his proposed Fiscal Year 2019 budgets to the City Council and our budget process is well under way. 

Under current rates, projections are that we would experience an anemic 1.9% revenue growth. That would provide an additional $14 million of new revenue available for both the operating and capital budgets. 

The Washington Metropolitan Area Transit Authority (WMATA) is tentatively requesting an additional $3.6 million of operating funds from Alexandria next year. This is to support existing operations and safety initiatives. 

The School Board's proposed operating budget for the Alexandria City Public Schools has requested an additional $10.9 million, about 5.1%, driven largely by enrollment increases and the planned opening of the new Ferdinand Day Elementary School. 

Providing City employees with scheduled "merit" increases alone costs an additional $5 million. 

The combination of the increases for WMATA, our schools and and our employees' scheduled merit increases depletes ALL of the new revenue available for this upcoming fiscal year. 

In the fall, the City Council approved budget guidance that required the City Manager to present a budget that included no increase in the real estate tax rate of $1.13. Pursuant to state law, the Council was required to "advertise" the highest tax rate that we might consider during this budget process. On March 14th, the Council voted unanimously to advertise the current rate of $1.13. In adopting our budget, we can now choose a rate below the current rate, but no higher. 

As a result, the City Manager was forced to make significant choices to present a balanced budget as required by law.  The proposed general fund operating budget is $742.3 million, an increase of 1.9% from Fiscal Year 2018. With $4.3 million of reductions, the City government spending is itself only proposed to increase by 0.3%. 

That restraint on the City side allowed the City Manager to propose full funding of the Alexandria City Public Schools Superintendent's requested operating transfer. 

The City Manager has proposed 69% of the new revenue to go to the Alexandria City Public Schools, 22% to transit programs and only 7% to the remaining City budget. 

For the past two years the City Council has directed significant new resources into our Capital Improvement Program to address decades of under-investment in our City's infrastructure. 

The City Manager's proposed 10 year Capital Improvement Program continued the focus on expanding infrastructure investment. The 10 year plan proposes spending $2.1 billion driven largely by $453.8 million to address Sanitary Sewer projects, $601 million for transportation projects including WMATA capital funding, $438.1 million of funding for Alexandria City Public Schools capital projects, $153 million for City facility needs and $60 million for land acquisition for both City and ACPS facilities. 

The City Manager has incorporated the recent recommendations of our Ad Hoc Joint City-Schools Facility Investment Task Force in his proposed Capital Improvement Program. This group has assisted the Council in not only synthesizing the considerable facility investment for both the City and the Schools, but also making serious policy recommendations for the governance and implementation of this spending.  

For the first time in quite a few years, the 10 year Capital Improvement Program adopted by the School Board and the funding for that 10 year program proposed by the City Manager are largely aligned. That is a significant milestone. The alignment is a testament to the difficult decisions made by City Council over the past two budgets, the work of the School Board to align to that new revenue picture, and the hard work of the Task Force. 

We have a month left in the budget process.  We have a series of work sessions to dig through each portion of the budget , You can review the questions that have been posed by City Council so far in the process, and the answers that have been provided by our Office of Management and Budget. 

In local government the most controversial decisions that come before the City Council relate to the use of land. As a "Dillon Rule" state, Virginia provides local government with only the powers explicitly provided for by the General Assembly. Land use planning and zoning are one of the areas where the limitations of local authority are most evident.

The libertarian Cato Institute ranks restrictions by states of land-use each year. In a study last year, Cato ranked Virginia as having the 9th least restrictive land-use regulation and the 18th least restrictive zoning regulation in the nation. While some (including myself) might quibble with their methodology, it is true that Virginia has a strong "land rights" ethos. 

At the local level, that generally manifests itself by allowing a landowner largely unfettered rights to develop property they own up to the limits of the existing zoning. We refer to such development as "by-right" development, and the courts in Virginia have significantly restricted local government from having much say in whether such development can occur. 

For the City this means that most of the development that comes before the Planning Commission and City Council is not by-right. In many circumstances in the City, we try to avoid the by-right land-use, and instead trade additional density with the landowner to encourage more compatible development and receive developer-funded amenities to benefit the community. 

This "trade" becomes a staple of the local land-use process. Recent small area plans in Alexandria have highlighted this arrangement. In the Waterfront Small Area Plan, the City traded additional density in exchange for acres of new open space and badly needed flood mitigation. In the Beauregard Small Area Plan, we traded additional density for acres of new open space, hundreds of new committed affordable housing units, transportation improvements, a new fire station, and more. In the North Potomac Yard Plan, we traded additional density for funding for a new Metro Station, new open space, infrastructure improvements and more. The list goes on. 

The premise can be simple: the City provides additional density and the developer cedes some control over the development process. 

Yet, in recent years, the General Assembly has actually worked to further restrict what little local authority the City does have to "extract" proffers for the community from developers. These restrictions on local government authority have unfortunately enjoyed bi-partisan support in Richmond. 

Despite this typical practice, there are some areas of the City where this arrangement doesn't work. If additional density is not desired, the landowner maintains the right to proceed with by-right development. In those cases, the City now becomes a ministerial agency, largely restricted to ensuring that the landowner meets the rules of the underlying zoning. 

In January, the City Council heard such a case. A landowner was attempting to develop a heavily wooded 3.13 acre site just behind Temple Beth El on Seminary Road. The proposal was to build 4 large single family homes on the site. 

In November, the Planning Commission heard this case and determined that under the rules of the zoning in place on the site, the application met the criteria.

The dominant issues raised before the Planning Commission were concerns regarding the placement of the homes, impacts on the natural resources on the property (trees and water resources). and the lot orientation. 

In response to concerns raised, one of the homes was moved slightly, and half of the trees on the site were proposed (voluntarily) to be protected with a perpetual easement. In addition, existing water resources were proposed to be protected with a 50 foot buffer as required by City Code. 

Neighboring property owners, feeling as though the Planning Commission was incorrect in their interpretation of the law, appealed the case to the City Council. An exceedingly rare event, the City Council then held a hearing on the appeal.

After a few hours of difficult and complex testimony, the City Council voted 6-1 to uphold the Planning Commission's decision. 

This is one of those rare situations where the City Council is not placed in a policy-making role, but instead in the role of interpreting our zoning code and ensuring compliance. While there were certainly aspects of this application I would have preferred be changed, that was not the question before the Council according to the law. 

The City was recently notified that pro se plantiffs have challenged the City Council's decision in Circuit Court.

I am hopeful that this case can be resolved swiftly in court.