Updated: Council in Favor of Two Cents Tax Levy, Other Steps to Overcome $1.2 Million Budget Shortfall

The implementation of a much-discussed two cents tax levy is just one of the many steps Manassas Park City Council decided it would take to overcome a $1.2 million projected shortfall in its fiscal year 2012 budget.

 The decision came Tuesday night during a budget work session that lasted more than four hours and included moments where emotions ran high among council members, city employees and school officials.

 In the end, council decided to go with nine steps as recommended by city manager Jim Zumwalt. The steps are projected to result in a $1,205,200 adjustment in the city’s budget.

 The city expects it will save $126,000 alone from the two-cents tax levy—a move some council members were hesitant to make because it would mean less money for Manassas Park City Schools.

 A two-cent tax levy is simply earmarking two cents of the city’s revenue for debt service.  The schools won’t get any of the $126,000 because the revenue sharing agreement between the two entities mandates that 57 percent of the city’s non-earmarked general revenue be shared with the schools.

 Before the decision about the tax levy was made, Councilman Suhas Naddoni asked what would school officials do with the $126,000 if they received it.

 “I guess the converse of that question is if it wasn’t given to the school division what would we take away,” Manassas Park City School finance director Krista Kelly said. “We’re having a discussion (Wednesday) to try to address what things we would remove from the budget if we did not receive that $126,000.”

 School officials said the school division’s approved budget includes that $126,000 that was taken away so now they have to “backpedal” and recalculate.

He didn’t know that the $126,000 was already included in the budget, Naddoni said.

 “I’ll jump out front and say it hugely affects academics,” school board chairman Michael Wine told council Tuesday. “We have a situation in the school now where we have to hold students back while a bus goes out and makes round and comes back empty to load up again.”

 School division officials have mentioned several times that the schools need newer buses.

 The approved school division budget also includes a pay scale adjustment for transportation workers, such as bus drivers,  who are on pay levels one through 10.  Traditionally, a pay level equates to a year of service within the school system.  Some people with experience prior to hire may start at a higher pay level.

This change was important in helping the school system become more competitive with the other northern Virginia school systems, school administrators said.

 The budget also includes money for most employees to get a one percent salary supplement, Kelly said in an earlier report. Transportation employees that are affected by the salary scale adjustment, superintendents, directors and principals wouldn’t get the salary supplement.

Manassas Park City Councilman William “Bill” Treuting Jr. said he understands that the school divison is having trouble retaining employees, but the city is too. He can’t in good conscience penalize police, fire and other city employees and give money to schools to increase salaries for teachers.

“I put my Kevlar on and take my shots from the school board,” he said. “ …  I sit and look at what we’ve done within the city with cutting city employees .. the cut back in service hours and the things that we are looking at to save every nickel we can.  No offense, but I am more concern with people who can inject drugs into my body when I’m having a stroke or  (those) who have the use of deadly force than I do about having another mediocre teacher. ”

 Because the state gives the school district some $4,000 per child, Manassas Park Mayor Frank Jones said that he wanted school officials to go back before the school board and see if the Average Daily Membership of students could actually be higher in fiscal year 2012.

 If the school district receives 31 more children than the expected 2,800, then the extra money it receives from the state would make up for the $126,000 the division isn’t getting from the city, Jones said.

Here are the other eight steps council decided to take to overcome the shortfall:

 1. Increase revenue estimates, which is a 5.5 percent projected increase in accessed property value— $192,000

 2. Stretch revenue goal for the Manassas Park Department of Parks and Recreation—$265,000

3. Storm Water Utility Fund transfer—$129,000

4. The support of the Community Development Agency with city staff  and resources—$13,200

5. Limit legal costs to contract minimum—$44,000

6. The initial reduction in regional services pay—$230,000

7. EMS cost recovery rate reduction—$30,000

8. Other net line item reductions through budget—$176,000

 Before deciding to go with the city manager’s recommendations, council members explored several other cost-saving methods for the city.

 Councilman Preston Banks said he was in favor of a furlough for city employees and  a pay cut for council members, to save some $227,500.

 The school enacted a furlough in 2010 to save money and the city can do the same, Banks said.

 Council taking a reduction in pay shows leadership, Banks said.

 “There’s no way I can support a furlough … gas prices  at four bucks a gallon .. a furlough— four days or a week, whatever it is— you're talking about people having to make some seriously hard choices,” Councilman Keith Miller said.

 Councilman Suhas Naddoni suggested a one cent tax increase and a decrease in city council members’ salaries. The tax increase would take the current rate of $1.65 per $100 of assessed value of property up to $1.66.  

This is a two-step solution to address the $126,000 shortfall to the schools, Naddoni said.

 “I’m definitely against raising the tax rate even by a penny because I’m not sure if we do that, when does it stop? And how many more pennies?” Miller said.

Other council members told Naddoni that one cent would only generate about $110,000 and that really wouldn’t help the city that much.

 Here are the next steps in the city’s budget process:

 April 18:  Advertise public hearings

 April 19:  Budget direction to school board on its proposed budget and the presentation of the utilities budget.

May 3:  Budget public hearing and utilities budget workshop      

 May 24: Adoption FY2012  city budget