Overview

On February 8, 2003, the County Manager presented the County Board with a proposed FY 2004 budget. It followed earlier County Board guidance.

Proposed expenditures $661.9 Million (+5.4%)

[including a compensation contingent of $8 million]

Proposed revenues at current rates of $661.9 Million (+5.4%)

[including a dedicated $9 million prior fund balance

for capital improvements and an 8.6% increase in the

transfer to the Schools]

Overall expenditures for basic County services were scheduled for a 1.2% increase. On March 15, 2003, the County Board voted to advertise the real estate rate at the current rate of 99.3 cents per $100 of assessed valuation. At that current rate, the tax bill of the average single family home would have increased by 17.2%.

Major Factors:

Increased Expenditures:

According to the Manager this was basically a continuing services budget; although items such as METRO operations would increase by 15.7%. Also, projects begun in mid-fiscal year 2003 would be continued at full year funding.

Increased Revenues:

· The following FY’04 revenue projections are not fully comparable to those of FY’02 and before because the County noted in footnotes that it is netting out tax refunds rather than showing them as separate expenditures.

· Because of increased assessments and new construction, real estate tax collections would increase by 13.5%. Personal property tax collections would fall by 0.2%. Overall, local taxes were projected to increase by 8.6%. Revenues from the Commonwealth were to decrease by 2.6% and those from the Federal Government to increase by 13.7%.

· Water and sewer as well as household solid waste fees were scheduled to increase as were parking meter revenues.

Distributable Contingents:

The manager proposed an $8 million compensation contingent to be available for review sometime in March. It was to cover COLA, retirement system enhancements, employee benefit changes, and step one of the living wage proposal. It was not available to the Committee as of March 30^th.

Beyond the living wage proposal, the Manager identified four “Strategic Initiatives”: Economic Sustainability, Transportation, Human Services, and Neighborhood Conservation.

Committee Review Process:

The Revenues and Expenditures Committee agreed at the start of its examination of the budget that our review would be conducted on the following terms:

o Base budget programs would be examined for excesses (including duplication) or underfunding;

o Normal inflation allowances (including step increases) would be expected;

o Withdrawn Commonwealth or Federal funds would be replaced with local funding where necessary;

o The Schools funding level would follow the budget agreement between the County Manager and the School Superintendent;

o Some modest increases would be considered for priority new initiatives, particularly in public safety;

o Some early decisions were to be made tentatively; subject to review after County staff responses to Committee questions were received and reviewed. None were received on a number of key issues.

o A realistic estimate of carryover funds from FY’03 would be developed without reference to the County Manager’s unwillingness to incorporate an estimate in his budget; and

o The Committee would then recommend a real estate tax rate that would balance the resulting budget. This is our standard procedure whatever the changes in assessments have been over the past year, with the focus always on taxing the exact amount required to fund County operations, regardless of changes in real estate assessments.

Using these procedures, the Revenues and Expenditures Committee makes the following recommendations:

Summary of Recommendations

(in millions of dollars with rounding)

Expenditures:

County Manager’s BASE BUDGET………...……………………………....................................$661.9

1. Transfer to the Schools: Schools’ Committee Recommendation……………….............………..0.0

2. General Government...............................................……………………………………..……...+$0.1

3. Public Safety................................…..………………………………………………..................+$0.3

4. Public Works...................................…………………...............………………………………..+$0.5

5. Environmental Services............................................. …………………………………………… 0.0

6. Human Services……………….……..…………………............................................…......….+$.0.3

7. Community Planning, Housing, and Development….................……………………………….+$1.1

8 . Parks, Recreation, and Community Resources…..…..................…………………………………0.0

9. Non-Departmental & Debt Service….............…………..............……………………………….-$1.4

10. Regionals/Contributions and METRO................…..............…………………………………..+$0.0

TOTAL: $662.8

Revenues

County Manager’s BASE BUDGET.....................................………………………………….....$661.9

11. FY’04 Revenue Reestimate……………………………………………………………………+$6.4

12. Carryover: Minimum Estimate............................……………………………………………..+$4.8

TOTAL: $673.1

Surplus of revenues over expenditures………+$10.3

13. Net Committee Balancing Recommendations..............……………………………………...-$10.3

Early FY’04/Carryover Priorities:

14. Carryover: Beyond Minimum Estimate…………….……….…………………………….…+$5.0

. Emergency Preparedness Reserve Fund………………………………………………………-$5.0

Explanations of Recommended Changes

M =’s millions, K =’s thousands of dollars

(1) Transfer to the Schools (0.0):

The Committee accepts the County Manager’s proposed transfer to the Schools including: Operations, Comprehensive Services Act, Capital, Debt Service, Community Activities Fund, and Other of $253.3 million – 48.6% of projected local revenues as per the Superintendent/County Manager “agreement”. However, because of the manner in which the Committee reestimated FY’04 revenues and recognized FY’03 carryover, only the amount, and not the percentage, was maintained.

See the report of the Federation’s Schools Committee, beginning on page 10.

(2) General Government (+$95K):

We support the request of the Clerk of the Board to fund two additional staff (and associated costs) to meet dramatically increased workload in recent years. The Clerk, who the Federation recognized as a Civic Hero, manages an office that is the most common first point of contact for resident questions and concerns. (+$125K)

The Committee continues to oppose the projected expenditure of $100K for a federal lobbyist contract (-$100k) and considers hiring of a grants coordinator (+$70K) more advisable.

Use of consultants. The chart on Page C-26 would purport to note that the ratio of County employees per 100 citizens and the daytime population is holding steady at approximately at 1.85 and 1.2 respectively. However, the bullet on the bottom of page C20 also notes that expenditures for County hired consultants “have risen greatly” and that, “There are increasing consultation services required to supplement and support our mission.” The Committee finds that the accuracy of the chart on page C20 is debatable in view of the statement aforementioned in the bullet and urges that some measure of utilization of consultants (perhaps in FTE equivalents) be added to the chart on that page, reflecting the actual growth in County bureaucracy with a more illustrative description of the causes for the growth.

(3) Public Safety (+$317K):

For the Fire Department, the Committee recommends: 1)The addition of one FTE in the Fire Prevention, Code Enforcement, Investigations and Education Program (Cost: $106K); 2) The addition of one FTE in the Operations and Emergency Services Division to increase the number of inspections (and to offset time lost through recruit training and preparedness training) (Cost: $106K); and 3) The addition of one non-uniformed FTE in the Emergency Preparedness Program for the purposes of CERT administration, CCC support, and the provision of community disaster education. (Cost: $105K)

For the Fire Department in FY 2005, it is suggested that the County Board consider, with full public participation, the following: 1) Four-man staffing of the remaining two Truck Companies ($607,472 in today’s dollars); 2) A Public Affairs/Public Information Officer ($124,970); 3) One additional FTE Administrative Assistant.; 4) Address the headquarter deficiencies, particularly the administration/staff ratio consistent with the Tri-Data study.; and 5) Addition of $2 million to the next CIP for long overdue upgrades to the Fire Academy.

For the Emergency Communications Center, immediate procedural recommendations (without a specific budgetary impact) include: 1) Insure that ECC is staffed with a Fire Department officer, either permanently or rotationally through assignment of those on light duty. This will greatly enhance the ability to screen calls requiring medical attention; 2) The County is encouraged to provide for funding of an Administrative Assistant in FY’05 budget; 3) Include bond funding in the next CIP, if other sources are not available, for the build-out of the ECC/EOC including the capacity to locate wireless instrument callers. And, 4) The County is encouraged to have a well-established career ladder/banding approach to employee retention in place by end of FY’04.

The Police Department is to be commended for its recruitment successes. The Civic Federation urges that greater attention to training be given, particularly in CBRNE, as evidenced by the beliefs of the officers queried by members of our Public Services Committee.

Attention should be given to the caseload in the Criminal Investigations Division of the Police Department. Without making a recommendation, the Civic Federation questions whether the resolution rate might not suffer as a result of the increase in cases per detective. The Civic Federation further urges that the Police Department and County Manager review the pay scale for the rank of Detective.

The County is urged to continue making the strengthening of the Red Light Camera enabling legislation a priority not only from the perspective of revenues that are being lost, but the public perception that safety is being lost as well.

Assign at least one Police Department FTE to the development of neighborhood-based mutual aid systems, including, but not limited to, the introduction of a police-based training program to complement the CERT training. Training would focus on Neighborhood Watch and a variety of programs for neighborhood strengthening, including communications. (Personnel reassignments could accomplish this, or using light-duty officers.

Further Police Department recommendations: 1) Refocus attention on an increase in the shift differential pay for police officers. There has not been an increase in 12-14 years. (Additional money paid to officers for working evening or night shifts.) This should not be in lieu of overtime. A study of neighboring jurisdictions should be considered. And, 2) Review the status of Cold Case Squad; Washington Area Vehicle Enforcement Task Force; JTTF; joint Narcotics programs; intelligence gathering. Insure adequate staffing/participation.

(4) Public Works (+$500K):

The DPW budget now lumps 40 programs into three explained groups. There is no information to identify program costs or trends in funding traffic calming, paving, sidewalk maintenance, paratransit, the ART transit service and many other programs. We urge that the DPW budget provide more program information in FY 2005.

The Neighborhood Traffic Calming program has more than a hundred streets shown by traffic measurements to meet the criteria for traffic calming measures, a ten year backlog based upon current spending levels. We are pleased that DPW is studying program changes to speed up the pace, but it should be obvious that this program to improve basic neighborhood safety needs a funding and staff increase to reduce the bottleneck and deliver these safety measures to neighborhoods in less than ten years, utilizing contract engineering and construction crews if necessary. The measures involving reconfiguration of street surfaces and signage should be paid for from Pay-As-You-Go capital. We recommend adding $500,000 to the current operating budget for this purpose, with additional funding under the next County bond issue if necessary or another Pay-As-You-Go increase next year. This program deserves a higher priority and it was identified by the County Manager as an area for a Strategic Initiative..

Planning functions have taken over an increasing share of the DPW budget, rising from 12% in FY 2002 to 20% this year.

The Department’s increasingly slow servicing of NCAC projects has led to a proposal to hire additional engineers and contract specialists for the Neighborhood Conservation program to perform DPW functions.

The transit program’s net tax support will increase in FY 2003 by 26% ($798,850), among the higher increases in this budget. This is due to the full year costs of new Arlington Transit (ART) bus routes to supplement and eliminate Metrobus routes. Ridership on the new routes is quickly exceeding projections. The program may prove a success, but the failure to provide, as a performance measure, the subsidy per passenger trip and a comparison with the Metro subsidy is a glaring omission in the DPW budget presentation.

The Specialized Transit for Arlington Residents (STAR) program supplements the MetroAccess program. While it is encouraging that utilization is rising every year, costs are apparently still high although there is no program total broken out in this budget.

Although it is not stated in the budget, we believe there is still almost no funding in this budget for installation of the new Carlyle streetlights. We do not believe that NCAC funding should be considered a substitute for a Public Works streetlight program, and recommend that a long-term conversion strategy be laid out in the CIP.

(5) Environmental Services (0.0):

The Committee supports the proposed fee increases for water and sewer and for household solid waste consistent with prior Federation recommendations to achieve full cost recovery.

(6) Human Services (+$340):

Public Health: consistent with prior Federation recommendations. Increase staffing by at least one FTE in either surveillance or epidemiology. The County Manager’s proposed budget notes that “significant workload increases are projected due to intense disease surveillance involving monitoring of emergency room visits, hospital admissions, community physicians, and frequent contact with laboratories. The surveillance activity has ALREADY increased and does not yet include recommended inclusion of EMS and veterinarians. It should be noted that two surveillance nurses, one bioterrorism planner, and one new epidemiologist were added mid-FY’03 as a result of state funding. (+$90K including vehicle

Consistent with prior Federation recommendation: Increase staffing for FY 2004 by 2 FTEs for environmental health inspectors. As the budget has now, for two years, pointed out, the number of inspections is declining – not merely because of a focus on “higher risk” establishments, but because supply of inspectors is not keeping up with demand resulting from new establishments coming on line. Currently, the inspections for both high-risk and medium-risk establishments is nearly 50% less than the suggested national standard for inspections. This is critical for the obvious reason that our restaurant industry is a major contributor to the quality of life in Arlington and to its economic base and because inspections are tools for educating food preparers – those who are on the true front line of food-borne illness defense and are most susceptible to natural or intentional causes of food-borne diseases. There have been no additions in environmental health inspectors in over a decade (since 1992). (+$220K)

Increase the number of public health outreach and information campaigns, either independently or in partnership with existing community resources to better educate the entire public on all aspects of the more serious diseases currently confronting Arlington. (+$30K)

In addition, the Committee believes that four procedural items with immediate budget implications must be addressed: 1) Upgrade the placement of Public Health as a full partner in all emergency preparedness activities; 2) Conduct a full-scale public-private review of the public health system; 3) Plan for budget increases in outlying years in the event State grant funding for bioterrorism personnel is not extended beyond FY 2004; and, 4) By FY 2005, have a well-developed plan for incremental budgetary increases to improve the public health infrastructure.

Agency on Aging and Disabilities: Identifying the currently un- and under-served population is the greatest problem facing this agency. It is recommended that a system/approach be devised to identify senior citizens and the disabled in such a way that help could easily be delivered to them in the event of a disaster while still maintaining privacy and confidentiality needs.

(7) Community Planning, Housing, and Development (+$1,124K):

The backlog of Neighborhood Conservation projects has reached crisis proportions following the approval by the citizens of a much larger NC bond in November of 2002. Coupled with the rise in new neighborhoods in the program, staff is unable to keep up with requirements. Public Works has also fallen far behind on NC projects. The County Manager is proposing to add 10.5 FTE’s to the NC program for project implementation, funded entirely from the NC bond. Since this is an ongoing, routine function that is not cyclical and will continue for the indefinite future, we believe that the positions should be funded from the current budget instead of bond funds. We recommend the addition of $823,929 in first year costs and $687,819 in ongoing costs to the CPHD budget. Without this new staffing the percentage of projects completed on time will fall from 49% to 35%, and overdue NC projects completed will fall from 50% to 25%.

The Community Code Enforcement Division still struggles with enforcement of property management codes, noise control, and the garbage, refuse and weed codes, particularly in the evening and on weekends, when most noise violations occur. The program continues to be understaffed and staff requires additional training and certification. Tickets issued have fallen from 979 in FY01 to 500. To honor the commitment to continue the initiative announced by the late Charles Monroe in January, the Committee recommends two additional FTE’s at an estimated cost of $160K and two vehicles costing $40K.

The Inspection Services Division is using extensive routine overtime to keep up with a workload estimated as 20% over capacity, and is in need of one additional FTE. The Committee recommends that this position be added at a cost of $80K with a vehicle costing $20K for a total of $100K. Some or all of this additional cost may be offset by fees from permit processing and code compliance as well as the reduction of overtime pay.

(8) Parks, Recreation, and Community Resources (0$):

The PRCR budget for FY’04 merely continues the current base level of services with some modest adjustments, including reallocation of a number of positions.

Despite some reorganization in the Cultural Affairs Division to improve efficiency, it has gained one FTE to 22.9 and its total budget has risen more than 15% to $2.1 million. We recommend a closer look at this function to see if the results achieved warrant this level of expenditure and if fees could recover more of the costs of entertainment events. On the other hand, fees are being increased again in this budget for environmental education programs conducted at the Nature Centers. This seems contrary to the usual County practice of providing education for free or minimal fees due to the public good flowing from educating citizens about conservation practices. We would welcome an analysis of whether or not increased fees will discourage attendance.

Park users and the Federation’s Parks Committee have noted for years the need for better maintenance of our tree stock, trails, shelters, signage and other park features. Only 55% of parks buildings are being maintained to standards, the two nature centers are deteriorating and custodial trail maintenance is below standard on 50% of the County’s paved trails. There is no performance measure for the condition of trail paving, but it is clearly substandard in some sections. In addition, making facilities ADA compliant is still being put off. Finally, there is no new tree maintenance funding to follow up on last year’s canopy replacement initiative. We are not recommending additional maintenance funding for this fiscal year only because new resources would be more efficiently used if the County develops a coordinated maintenance plan first.

Carver, Drew and Lee Recreation Centers have been renovated and required additional program funds this year. The new Langston Community Center and the Powhatan Springs Skate Park will open this year, and program activities will begin at Fort C. F. Smith Park. Parking facilities at Barcroft Park and elsewhere are to be used for overnight public parking. Master plans are in preparation for new facilities including the North Tract, Greenbrier Park, Arlington Mill Community Center, 13^th and Herndon Street, Quincy Park, Oakland Park and Maury Park. We support the enhancement of Arlington’s parks, and would like to see more comprehensive planning for the normal increases in operational and maintenance costs at the time when the capital spending is presented to the voters for approval as a bond initiative. No Parks bond should be presented without this analysis.

The PRCR staff has undertaken limited snow and ice removal on the County’s trails since 2001. Given the all-season use of our trails by a wide variety of users and the opportunity to encourage new transit users to reach Metro by trail during snowstorms, PRCR should budget for this activity. We recommend that the County adopt a comprehensive snow clearance policy for sidewalks and trails similar to the one used in Eagan, Minnesota and available on the Web. The cost of various options should be presented in the PRCR and Public Works budgets for FY 2005.

The County is making no progress in dealing with park maintenance funding. We again propose splitting Parks out into a separate Department as it had been in the past to improve the focus on this area. Competing demands within PRCR will inevitably shortchange maintenance of park facilities unless Parks is a separate department. This would also facilitate a more definitive schedule for making our facilities ADA compliant. Even the annual vague statement that this needs to be done at some future time has been removed from this year’s budget presentation.

(9) Non-Departmental/Debt Service (-$1,358K):

Retirees Health Insurance: Reduce expenditure estimate by $78K to more accurately reflect FY'01 and Fy’02 actual costs. Reduction reflects better managed care; e.g. greater reliance on 'primary payer' of MEDICARE.

Debt Service: The County has historically issued bonds and therefore begun debt repayments AFTER the dates used for budget planning; thus a reduction of $243K is reasonable based upon the accuracy of past Federation projection.

Affordable Housing Investment Fund Contingent: Unlike the last four years when the fund was underspent and we had recommended reductions, this year the fund has been largely allocated to three projects. However the Committee recommends that $430K of the proposed local contribution of $2,830K be allocated to County programs, such as MIPAP, designed to promote home ownership. No funds necessary for Federal matching would be affected. Overall, in FY'04 the County projects $28.7 million in housing expenditures--over 4.3% of the Manager's proposed budget.

Retirees Life Insurance: The proposed 36% increase is not justified, we recommend a $37K reduction in the increase (to just over 20%).

COMPENSATION CONTINGENT: Reduce the proposed $8 million by $1 million. However, the Committee supports within this reduced amount: 1) funding of the first phase of the Manager’s “living wage” program and 2) expects that COLA parity between County and Schools employees will be maintained.

(10) Regionals/Contributions and METRO (+$21K):

Regionals expenditures are scheduled to increase by 2%; no major change is recommended

However, again this year a troublesome entry is the ‘passthrough’ for the Arlington Community Access program of $422K. Whereas the County’s contract with the cable provider specifies a direct payment, there is no County revenue actually received and available for passthrough’. The Committee again seeks County staff clarification. A full itemization of all County transactions with the Cable TV provider is being sought to facilitate future budget reviews.

The Committee again recommends that additional funds be devoted to the Virginia Adult Probation and Parole program (+$20K) to provide for a supplemental request currently in process and $1K be added to the Health Systems Agency allocation to accurately reflect current population for the County’s per capita contribution.

Many previous Federation recommendations have been acted upon and cost savings achieved. However, modest long-term savings are possible for the County by: better management of regional agency reserve funds, better monitoring of comparative use rates, and constant updating of population-based assessments because Arlington's share of the regional population is declining.

(11) FY’04 Revenue Reestimate (+$6.4M)

The County Manager’s proposed budget projects only a 4% increase in calendar year 2004 real estate assessment. Calendar year 2003 experienced 15.2%. At a minimum, the Committee believes that, based on current trends, no less than 8% can be safety projected. This would increase FY’04 revenues $6.4 million above the Manager’s estimate. [NOTES: 1) this reestimate is proportionately reduced in the net balancing recommendation in #14 below because the spring 2004 collection would be affected by this reestimate, and 2) as a reestimate of a local revenue group, this change would affect the basis for the Schools transfer.]

While reviewing projected FY’04 revenues, the Committee concluded that a systematic problem existed in Arlington budgeting. The use of a calendar year basis for real estate assessments versus a fiscal year basis for revenues creates unnecessary confusion and uncertainty. The Committee will prepare and send to the Federation’s Legislation Committee a request for Arlington to receive Commonwealth authority to adopt a real estate assessment period consistent with the County’s fiscal year – e.g. when the County adopts a tax rate it would begin only in the period of the budget adopted at that same time.

(12) Carryover: Minimum Estimate (+$4.8)

While the Manager’s Mid Year Review does not explicitly project any increase in FY’03 carryover into FY’04 (beyond the $9.9 million already said to be accounted for in the proposed budget), the Committee believes that a significant amount will indeed be available as in all recent past years. Note that that same document shows that the Adopted FY’03 budget was $627.8 million while the Revised FY’03 budget is now at $671.5 million – nearly a $44 million INCREASE (while last year the Federation has merely projected a $25 million increase in the manager’s original and mid-year estimates).

The Committee believes that an absolute minimum of $4.8 million will be available for budget planning now. This would come from: 1) net expenditure shortfalls; 2) non-use of the $3.3 million in the FY’03 short-term reserve, and 3) modest increases in miscellaneous revenues that the Manager was unwilling to project at Mid-Year, but which may yet be found in the third quarter review due April 7^th.

In addition, the Committee believes that an additional $5 million is likely to be available; barring unforeseen emergencies. For reference purposes, these two estimates are about 1.4% of the Revised FY’03 budget and a modest fraction of actual FY’02 carryover however calculated.

(13) Net Committee Balancing Recommendation (-$10.3 M):

According to a handout at the March 25, 2003 Budget Public Hearing, the Manager estimates that each one cent reduction in the real estate tax rate will have a revenue impact of $4.8 million (over three payments). The Committee recommends a reduction of 2 cents.

The additional $600K plus (including rounding changes to accommodate the above) in surplus revenues could be: placed into the General Contingent Fund; available for a fraction of a cent rate reduction; or available for #14 below.

(14) Carryover: Beyond Minimum Estimate (+$5M)

Emergency Preparedness Reserve Fund (-$5M):

Rather than rely on finding funds for: public education, an emergency purchase as conditions change, or to cover sudden costs of an incident, we recommend that the County establish a reserve fund for this purpose. Studies are now underway to prepare recommendations for a new emergency public communication system, public education and employee training. These recommendations will be ready during the 2004 fiscal year and should not wait for funding in FY 2005. This would prevent any delays in emergency expenditures for preparation, mitigation or response to threats. The fund would permit a better accounting for such costs from the outset for eventual submission of reimbursement claims should federal funds become available.

We recommend that the Emergency Preparedness Reserve Fund be established from the projected carryover funds that are not now included with revenues in the County Manager’s proposed budget, and which have not been used in the Committee’s work above, but have been shown over the decades to be as sure and certain a revenue source as projected tax receipts. We recommend that the fund be established for FY 2004 as a one-time allocation of $5 million to be allocated only from the first amount of available funds over the above minimum calculation. If carryover does not exceed the estimates used above, there would be no contribution to the Fund in Fiscal Year 2004, unless other new monies became available.

Procedural Improvements

The Committee recommends (not in priority sequence) that:

1. .The County Board should direct the County Manager not to procure other services (e.g. consulting services) from the County's external auditor.

2. The County Board should direct the County Manager to change the County's external auditor and the County’s financial advisor at least every five years.

3. The County Board, through an entity such as the Environmental and Energy Conservation Commission, conduct a study for volume/weight based charging for solid waste pickup as well as reviewing the current efficacy of special pickup charges.

4. In order to offer a market rate competitive benefits package, the County should conduct a study of selected occupations each year to review regional competitiveness. To the extent feasible, such a study should be conducted by all local jurisdictions on a regional basis. The Federation recommends that public health nurses be selected as one of the priority occupations for review.

5. Whenever a Program Change Proposal/Strategic Initiative Proposal is presented which will requires expenditures in more than one fiscal year, it should be accompanied by: a) a "fiscal impact" analysis for future fiscal years, and b) an itemization of performance/workload measures which will be used to evaluate it if it is accepted.

6. Prior to the next County bond referendum: a) a 'Master Debt Plan' should be developed, with full public participation, and published with projections of debt service incorporated into the budget, and b) a consistent County policy should be developed, with full public participation, on the criteria for the use of bond proceeds to fund any County operating staff and on the manner in which bonds costs are to be presented to the voters. This Plan should include all “bond-like” instruments including, but not limited to, bond anticipation notes, short-term bank loans in anticipation of bond issuance, and lease-purchase agreements.

7. Routine maintenance costs for new County facilities and major capital equipment purchases must be shown in the fiscal impact statements when they are approved by the County Board and/or the voters of Arlington.

8. While the Committee generally found the proposed budget well organized and presented, there are a number of specific problems that will be identified in writing to the Department of Management and Finance. In particular, the Federation urges consistent budget presentations including use of the current budget year's Adopted Budget and Revised Budget.

9. As a part of its Capital Improvement Program, the County Board should create a five year plan to fully fund all improvements in County, including Schools, facilities necessary to achieve full compliance with the access requirements of the Americans With Disabilities Act.

10. The Department of Human Services should initiate a study to determine which components of its day care licensing, training, and inspection services are suitable for full recovery of costs through fees.

11. Since an important part of the budget process is to determine how well individual programs are serving the community, the County Board should create a policy statement itemizing guidelines for determining measures of user satisfaction and when levels of satisfaction are to be collected by County operating units.

Performance measures are needed whenever a County service, such as a solid waste collection route or preparation of ‘Master Plans’ for parks or sectors, is contracted out.

12. The County should add a Citizens Fund for Arlington mechanism where taxpayers could contribute for either the general fund or for specific funding needs such as schools, traffic calming, libraries, affordable housing, parks, the arts, the Columbia Pike initiative, enhanced e‑government or other purposes as is being done in Fairfax County in 2003.

13. The scope of the program review mandate of the Fiscal Affairs Advisory Commission should be usefully expanded to include the investigation of issues brought to their attention by residents

14. A new table should be added to the proposed budget to highlight changes between the adopted and revised versions of the current fiscal year budget [analogous to the existing overview table in Tab A page 5]

15. The County should not net out tax refunds from projected revenues and expenditures in its budget presentations.

16. The County should include reasonable estimates of carryover when projecting revenues for future fiscal years.

17. Even if no proposals are made for changes in operating reserves and contingent funds, their current status should be shown in proposed budgets.

18. Since the County Board has included utility undergrounding as a part of its approved vision statement documentation, an estimate of the full costs of such a commitment should be noted in the proposed budget and capital improvement plans.

19. Any future revenue sharing agreement(s) between the County Manager and the School Superintendent should be subject to full public hearings before ratification by both elected Boards.

20. There should be consistency in how the Schools and the County handle both capital investment expenses and carryover.

REPORT OF THE SCHOOLS COMMITTEE

The Arlington Public School Board adopted a 2004 fiscal year budget of $323,127,435. This budget would provide for the continuation of existing services, $12 million in new initiatives, and an earlier start for construction of a new Kenmore Middle School. This budget includes a 22% increase in debt service and a 22% increase in the cost of healthcare.

Most of the new initiatives relate to: a compensation adjustment for all employees ($3.5M - 2% COLA); implementation of a new pay schedule for support staff ($2M); re-activation of Claremont Elementary School ($1.1M); implementation of recent boundary changes ($1M); additional elementary school assistant principals ($0.5M); the pick-up of the final 0.5% of employees' share of the Virginia Retirement System ($0.5M). The School Board made two major changes to the Superintendent's proposed budget. They added $790,000 for targeted class size reduction and funded the early start for Kenmore from the operating budget. The budget includes expansion of the preschool program for 4-year olds from low-income families, which would require $270,000 in local funds to go with $312,000 of State funding. Several initiatives, at a combined cost of $500,000, are proposed to address problems of non-native English-speaking students and other students in need of extra educational support. Another $250,000 is proposed for knowledge, skills, and leadership based compensation, details of which are not yet worked out. The remaining initiatives are widely scattered throughout the operating fund.

There appears to be no clear focus or priorities established in this proposed budget. The Schools Committee sees a need for the School Board to refocus the budget. We believe that the overriding priority should be to ensure that all Arlington Public Schools students graduate. The Schools Committee was pleased to have the School Board concur with their opposition to use of the Reserve Fund to accelerate Kenmore. We hope they will be as receptive to the second part of the Civic Federation's resolution to establish a committee to determine the correct size of that fund. Until this is done, any new re-estimate revenue should be added to the Reserve Fund.