Tax Increase, Raises in City's FY2014 Recommended Budget

Fredericksburg residents could see a real estate tax increase, and school and city staff could receive a salary adjustment if the City Manager's fiscal year (FY) 2014 budget is approved by City Council.

The total general fund recommended budget is $82.6 million, an increase of 5.13 percent over FY2013.

"I believe we have put together for you a very solid and responsible spending plan," City Manager Bev Cameron told City Council.  He and city staff have been working on the budget since November.

The budget proposes a $0.03 real estate tax increase per $100.  That would raise the tax rate from $0.74 to $0.77 per $100 valuation.  "A typical home owner would see an increase of $77 a year, assuming a home value of about $256,000," Cameron said.  He estimated the increased cost at $6.40 monthly.

Employee compensation is included in the budget.  The total increase for most city employees would be three percent of salary, consisting of a two percent cost-of-living increase and a one percent adjustment for the employee retirement contribution.

The recommended budget also reflects increased costs for providing benefits. "Forty percent of payroll expenses are for pension and health benefits," Cameron said.  The FY2014 recommended budget includes $4.57 million to provide health insurance to city staff -- not including school staff, Cameron said. 

To help "bend the curve" on benefits, Cameron said part-time city staff would now be limited to fewer than 30 hours weekly. "The affordable care act requires employers to provide health insurance to staff working 30 plus hours," Cameron said.

A key component of the city budget is the $26.128 million school budget, adopted by the school board March 4.  The amount is a 1.2 million increase over FY2013.  Funding for schools represents almost 32 percent of the city's general fund for FY2014, Cameron said.  

Additional funding in the school budget would provide items including a three percent salary adjustment for school staff (two percent cost-of-living and one percent Virginia Retirement System reform phase-in); the addition of six full-time and four part-time positions in elementary education, math and foreign languages, to meet increased student enrollment; and $590,000 for buses, computers and building maintenance items.

The budget includes transfer of almost $7.2 million to the debt service fund.  The $682,475 increase over FY2013 includes the first year of full cost payment on the debt service for the $35 million in general obligation bonds for construction of a replacement courthouse and renovation of the existing General District Court Building for use by the Juvenile and Domestic Relations Court.

Other budget items include:

• $134,800 for two additional full-time medic positions in Fredericksburg's Fire Department.  The department operates two Advanced Life Support ambulances 5:30 a.m. to 6 p.m. Monday through Friday.  The addition of these positions will move the city toward its goal or providing 24-hour seven-days-a-week advanced life support coverage by paid city staff.  Currently surrounding jurisdictions aid the city in providing EMS services.
• $114,090 for the addition of 3.5 full-time equivalent positions for the Fredericksburg Sheriff's Office.
• $90,995 for the hiring of a purchasing agent for the city.

City Council will review the recommended FY2014 budget in six study sessions scheduled for March 19, 26, and 28; and April 9, 16 and 23.  The first reading of the budget will be at the April 23 City Council meeting.  The second reading and final adoption will be at the May 14 City Council meeting.

The complete FY2014 City of Fredericksburg City Manager's recommended budget can be viewed online. 

The city manager recommends reading the transmittal letter, which heads the document and summarizes the recommended budget. "The transmittal letter helps provide explanation and perspective which may help you see the trade offs that lie underneath my recommendations," Cameron said.

Subscribe here to the free daily email newsletter from Fredericksburg Patch.