Blog posts are the personal views of Letty Hardi and not official statements or records on behalf of the Falls Church City Council 

Dear Friends,

I’m taking a brief departure from “all budget, all the time” in this week’s update. While we spent 4 hours in work session this week – mostly on the general government budget – after writing this week’s FCNP commentary and an interview about affordable housing, I’ll leave you with those links to read and spend more of my update on the Broad and Washington project and the $24M planned bond issuance this spring (one of our largest yet, including the first of 3 GMHS bond tranches) – both are scheduled for our final vote on Monday.

For your Friday to-read list:

• My FCNP commentary “Budgets are About Striking a Balance”
• Affordable housing – besides me, several others, who know far more than me about the topic – were interviewed about why this matters for Falls Church (In the Spring Real Estate special section of the FCNP – not yet online so grab your paper copy or view the online e-issue)
• Latest business openings – we’ve had some recent big openings and will have more exciting businesses to welcome this spring and summer
  

Take note that the last Town Hall (before our budget vote on 4/23) is this Sunday at 2 pm and our Monday meeting is a regular meeting, which means you can give public comment at the beginning of the meeting, about any of the topics I’m covering or others. I’m also holding office hours on Monday 4/16 at 9 am if you’d like to see me in person and share thoughts and questions.

Best,
Letty

What Happened This Week

(1) FY19 Budget work session

The majority of our work session was spent on the FY19 budget. We tried out a new format for the general government budget and focused on the 6 core values within the 2040 vision and work plan. It was a significant investment of time, but allowed City Council to deep dive into the high priority areas for the City and understand how the upcoming budget supported those priorities (or didn’t in terms of unfunded needs).

Take note – we did have our first substantive discussion on the senior tax relief program. Including in the FY19 budget is $45K to expand relief for the neediest bracket (household income from $0-23K) from a max of $4K to 100% tax relief. Included in the staff report is a comparison of our tax relief program vs our neighbors, so you can see our income limits and abatement amounts are far less generous. We discussed a more comprehensive review of the program is needed, including relief amounts, income limits, deferral vs abatement strategies and what would make them more usable and attractive by seniors.

There is also a running list of Budget Q&A that are updated weekly as more questions come in and responses are written.

As a one stop shop for budget documents and reference, see here: http://fallschurchva.gov/1501/Budget-Capital-Projects

(2) Broad & Washington Development Project

Many documents on Broad and Washington were posted in this week’s work session agenda (and even more in next Monday’s – see below). Staff summarized the applicant’s updated submission in response to the Council questions and concerns raised in the February update. A refresher and my TL;DR version if you don’t want to click and read all of them:

• Proposed mixed use development with nearly 100K square footage of total commercial space (including 74K of office space, 10K for restaurant, 5K for Creative Cauldron’s permanent home, and remainder retail) + 295 apartments varying from studios to 2 bedrooms with dens, with 67% of the units being studios, 1 bedrooms, and 1 bedrooms with dens. Commitments around retail (allowed and prohibited uses) are documented in the updated Voluntary Concessions (VCs), with a firm commitment around restaurant square footage and 2 year effort for a small format specialty grocer.
• As we do with every project, we project fiscal impact before a decision. The fiscal model was re-run based on the final mix of apartments, change in commercial space, retail components: Between $735K- $1M per year is estimated as the net revenue, with “net/net” revenue range of $600K-900K per year which would be the equivalent of 1.5-2 pennies on the tax rate. You can also see how this project’s revenue compares to other mixed use projects.
• An important note: the spinoff economic impact is an additional $62K/year. It’s been awhile since we’ve had a Class A office space built in the city – spinoff economic benefit is an important consideration because in addition to more sales and meals taxes, new office space and jobs bring in critical daytime population, which in turn attracts more dining and retail options to town.
• Noteworthy mentions in the VCs:
  • The affordable housing contribution meets the housing policy, providing 6% of units (18 apartments) at 60% area median income (or choice for 5% of units, or 15 apartments, but with a different mix based on affordable housing demand). Typically, there is a 20 year expiration of the ADUs and this proposal will have them in perpetuity, which is an important concession.
  • The garage will allow paid public parking
  • The typical school capital contribution of $2.2M is included
  • Sidewalk improvements to the project corner and pedestrian improvements for the entire intersection are proposed
  • Traffic calming and permit parking for Lawton St. will be paid for by the developer
• Concerns I shared that I hope will be addressed before next Monday’s vote. (Staff has spent additional time with the developer since our Monday meeting.)
  • The special exception typical expiration is 3 years, but the developer has asked for 5 years. Understanding that an economic downturn could happen that could cause a construction delay, I could see us discussing an extension if necessary – but I don’t see the need to extend the SE approval now.
  • The median cut allowing left turns into Park Place when going south on Washington has been long discussed and should be a completed by the developer prior to the start of construction, so the N. Washington businesses and City parking lot are not negatively impacted.
  • LEED Gold certification should be a firm commitment, especially for an important corner of the City.
  • Announcement of some office and retail tenants/users. One of the constant tensions in any development project is the desire for the city to know that the commercial uses will be occupied by the uses we want vs the developer’s inability to sign leases and commit to tenants, years ahead of the project being completed and at least a year before any shovels are in the ground.
  • I am still wary about the 2nd story “public plaza”. While the design and access of this green space is now more accessible and the developer has committed to programming the space for public use, I had hoped for more features for the plaza and/or additional contributions to parks elsewhere in the city.

(3) Spring 2018 Bond Issuance

Also planned for Monday is our approval to issue the Spring 2018 bond of $24M. That is one of the largest debt issuances in the City’s history. The $24M includes $11.2 for City Hall renovation, $6.5M for architecture and engineering for GMHS, $1M of the 8.7M for architecture and engineering for the library expansion, $1M for Larry Graves turf, and $1M for the firearm facility shared with Fairfax City policy I wrote about last year.

There is some good news. This bond is actually $7M less than planned. Originally the GMHS bond was supposed to be $3M more, and $4M earmarked for acquisition of the Fellows Property has been pushed out until the legal proceedings progress. The FY19 budget includes the planned debt service for the original $31M bond. Note that this doesn’t mean we won’t need to bond the $7M in the future, so all this does is push out the amount of total capital debt (and therefore tax rate projections) shared since last summer. If we need to pay for less debt service this year, we’ll need to plan for that increased debt service (ie operating budget increases) next year. In general, I believe we should scrutinize all bond issuances so that we minimize the amount of the bond and bond only what’s needed at that point in time. While this decision already puts extra pressure on FY20+ budgets, a clear lesson learned from Mt. Daniel is that we should not prematurely take on debt and pay debt service before we need to!

What’s Coming Up:

• Sunday, April 8 – “Sunday Series” Town Hall Meeting (GMHS/WFC + FY19 Budget) – 2 pm, Community Center
• April 9 – City Council Meeting at 730 pm (Highlights: Broad and Washington, Spring 2018 bond, Larry Graves turf MOU)
• April 16 – Letty’s Office Hours – 9 am, The Happy Tart
• April 16 – City Council Work Session at 730 pm
• April 23 – City Council Meeting (final budget adoption)