Okay.

Well, good evening.

This is one of our uh public meetings to discuss the FY27 budget.

Um I am Jim Perajan, I'm the city manager, and it's truly my pleasure to uh provide uh some summary of where we are on the proposed FY27 uh operating budget and capital budget.

If you recall, uh operating budget is uh a single year, it really is the dollars necessary due to operate city city departments as well as partner departments and uh supplement state agencies.

The capital uh budget is a one-year appropriation off of a 10-year capital plan.

And it truly is my honor to present this information to you tonight.

Um Tuesday of this week, there was a a much more detailed presentation, and I believe that's been posted on our website.

I would encourage anyone in the audience or online to uh listen and uh utilize that platform to get some additional detail from the summary that I'm gonna do tonight.

Um I do want to make a few comments.

First of all, I want to thank uh the wonderful staff that I get a chance to work with to pull up the pull together a very difficult budget in this fiscal year with our office of management and budget, office uh leadership and staff, uh the deputy city managers, the city leadership uh departments, as well as our affiliate uh partner agencies.

Um, to build a budget uh in these difficult times really requires us to uh work very, very closely together and make very difficult decisions, sometimes one priority over another.

In fact, that's what we did throughout this budget.

But those efforts and the very acute attention to the detail really have enabled us to propose a budget for consideration that really makes steady progress on council priorities.

Um just uh a couple other points I'd like to make.

Um over the last few years, our budgets really have prioritized our quality workforce that's really the engine by which our community receives the essential service and services it needs to be successful.

At the same time, we have consistently made very difficult decisions to reduce city operating costs, reimagine the delivery of city services, and delay or not add workforce in some important areas to facilitate balancing the budget, countering rising costs, and avoiding placing greater burden on our taxpayers.

During this time, we also have made and continue to make very significant financial commitments to our public school education.

In fact, over the last four years, we have provided over $56 million of new funding to address the needs of our students and teachers who play a critical role in their education.

As we look ahead, Alexandria's future is bright.

We have a strong fiscal policies that we adhere to, a disciplined uh budgetary approach that addresses our needs now and into the future, and this approach is especially important in 2026 calendar year and 2027 calendar year and in 2028 due to the continued fiscal pressures caused by the federal government policies and decisions, increased costs for goods and services, and the competition for best talent.

With a focus on making steady progress towards the goal of making life better for our residents, uh I want to summarize what's in our FY 2027 proposed budget.

So this is the agenda.

I'm gonna summarize it uh you know for you tonight.

The more detail would be uh on our website.

Highlights of the proposed budgets, it's a $977 million general fund budget and a $2.01 billion dollar 10-year capital improvement plan.

Uh that $977 million general fund budget is a little more than 2% growth from last year's uh operating budget.

Um this this budget does not propose a real estate tax rate increase.

Say that again.

It does not uh propose a real estate tax rate increase.

Nine million dollars in in funds, expenditure reductions we have found to help balance our budgets and provide uh needed funding for the priorities you'll see in the budget.

Uh we continue to focus heavily on uh the council priorities that have been established.

I will highlight, as well as making strategic uh funding decisions, particularly trying to grow our economic base on the commercial side in particular.

A couple of major highlights of the budget, uh 32 percent of our new city funding is going to ACPS or public school system for operating capital needs.

This budget also funds uh existing and the recently adopted collective bargaining agreements and provides uh some modest compensation uh for our non-bargain employees with uh one 1.5 percent pay scale adjustment.

Some would call that a cost of living adjustment uh for our eligible non-collectively bargained employees.

We also, as a highlight, provide $33.8 million dollars for housing support and opportunities and multiple programs.

We've also increased uh funding for uh critical nonprofit uh programming and services, uh particularly in uh food security, uh shelter, and uh senior uh meals uh to assist uh with those needed populations.

We also fund uh provide some funding in the early childhood and intervention programs and provide targeted strategic funding in the economic development area.

Just quickly on how we build a budget, it's much like your own households.

You start with what's most important.

In our case, uh we start with the council priorities that have been articulated by the community and then uh confirmed by our city council.

Uh they include the how housing advancing housing opportunities, reducing community disparities, strengthen our economy, and recruiting and uh retaining our thriving workforce.

In terms of the actual process, we go through a very lengthy and comprehensive process to review every aspect of our current budget, uh the performance and value of our current programs and services, our costs, and how we effectively operate city government.

We uh we truly look at every aspect and ask the question is this the right value?

Is the resident or the visitor or the business receiving uh the value that they that they deserve in those processes, and we continue to make adjustments.

As you see in this budget, again, $9 million is being removed in reductions from the previous budget.

The more formal process of building the budget, just to quickly highlight uh really starts uh pretty much all year, uh getting feedback from boards and commissions, residents, um, special committees, um, council uh in their everyday conversations with residents and businesses, uh, staff, uh, technical analysis, uh, really a combination of of everything put together to help identify needs in the community and then try to prioritize those.

Uh the formalized process uh also involves all of our departments, including our partner agencies that are not city departments that we provide funding to, where they propose uh both uh what they believe they need in the budget as well as what uh what we've asked for this year is where they might find deficiencies in that budget to really help us as we move forward.

So it's really a constant reprioritization of uh what's most necessary to fund.

Um obviously there's all sorts of great ideas and great uh programs and initiatives, but you'll see in this budget, it really is about doing what is most important for us to have to do and need to do.

I think this next slide is really important because when we talk about budgets, we talk about what we add in the budget and what we take out of the budget.

And this gives you a little per perspective on you know how we how we evaluate and make budget decisions.

On the addition side, we really look again at the alignment with council priorities, we look at what's truly mandated or legally required.

Um we are always in looking at a state of good repair for our infrastructure that's critical.

Uh life safety, making sure that people not only uh feel safe but are safe in our community, and what vital services we must provide, particularly for those who need them the most.

On the reduction side, we really look at where we can be uh more efficient.

We look at opportunities where we might be able to share resources, or maybe there's an organization like one of our nonprofits that is frankly more effective in delivering that service, and that's where we focus.

And this year we also spent a significant amount of time focusing on all of the positions that we have available in our city and asking the question: are they the right positions and do we need them in this next fiscal year.

You've if you've heard any of the previous budget discussions on an annual basis, you'll hear me talk about strong fiscal policies that the city has put in place for years.

And you'll see some on the slide tonight about fund balance, cash capital, debt, and different policies, but we do not deviate from any of these fiscal policies.

Adherence to these policies is really one of the key reasons we've been able to obtain a triple-A bond rating by independent rating agencies.

What it really means to those of you that are not uh fully involved in budgets is that uh we're always very conservative with our taxpayer monies.

We try not to extend ourselves beyond what we know we can fund.

I think that's really, really critical.

That's why we're able when we have an emergency or a critical incident, we're able to recover from that uh both physically as well as financially fairly quickly because we're very careful with uh how we spend those dollars, much like you might do in your own households, thinking about where you would spend money and where uh that need is so important that you need to fill it, and sometimes you need to make an uh you avoid uh some of those costs uh by uh how you would would operate.

Uh in the general fund, again, it's 977 million.

Um really uh one of the points I would make on this slide is that uh of that uh 977 million, only six percent of our revenue comes from this the state, and that does not cover the costs that we incur uh to supplement state agencies.

Again, just on the tax rate, uh no change to the tax the real estate tax rate, no change in the personal property tax rate.

We continue to provide uh real estate uh tax relief tax relief to our elderly, disabled, and veterans.

That's totally about 12 million dollars this year.

Uh we also have uh adjusted some of our fees to become more market uh competitive, market uh aligned, uh, particularly in the parking uh fee area.

On the enterprise funds, the only change to that fee structure is the continued investment in our stormwater system to deal with flood mitigation.

So, what does this really mean to the average taxpayer?

So, overall to the average taxpayer with the average assessed value, it's roughly $26 a month more in taxes that you would pay.

That doesn't mean everyone will pay that.

What that means is that if you're at the average uh level, uh you will see an increase of $26 a month in your tax bill.

Uh so we talked a little bit about revenue on the uh expenditure side.

I'll go fairly quickly here.

Um this is probably the best slide because it summarizes everything uh in one chart.

Uh if you'll notice the the total there is our expenditures are growing by about 2.2 percent.

And I would just want to highlight that the only way that we can really afford and do what we're doing in this budget is through a combination of some new growth, particularly in the real estate uh assessment side, real estate growth side, but it's also about uh cutting expenditures so that we can afford the initiatives that are in this budget.

And you can see at the 2.2 percent, that's a very that's basically a flat budget.

And just to highlight that, we've been systematically looking at this for the last several years.

Um this chart in front of you here shows uh 30 million, almost 31 million dollars have been uh reduced in our budgets over the last five years.

And that's that's an intentional review of all the efficiencies that we are trying to get out of our local government, including the use of additional technology to to make it easier or support uh some additional work that we can do uh without additional staffing at that point.

Uh speaking of staffing, uh this budget uh does eliminate 45 full-time uh positions.

Uh just to remind everyone, it's 45 uh vacant positions.

There were no filled positions that we had to cut in this budget, but we did cut 45 positions.

We added seven new positions to this budget.

Uh they're primarily for firefighters.

There is a two technology positions and one position in the health department to really help us with the community engagement piece in that area.

And through the budget itself we've also frozen three positions that over the next six months we'll be reevaluating to whether those positions should be filled in this next fiscal year.

Just going to skip a few of these since the public school system is roughly a third of our operating budget I did want to take a moment to highlight a little bit about that.

The way that process works is the school system proposes a budget, adopts that budget provides that to myself for review with my staff and then as a city we uh proposed a budget that evaluates what that request is and make the necessary request as part of the proposed budget.

In this case in FY27 the school's FY27 operating transfers 286 million dollars which represents a 1.5 percent increase and then if you add in the debt service related to the improvements make being made in the school that that total is roughly around 2 percent so it's a 2 percent increase in funding for ACPS.

And that's on top remember of that 56 million that has been provided in new money that has been provided over the the last four years.

And I think this next slide is important as well so it again I mentioned the 56 million which is a roughly a 20 percent increase over that from FY23 to FY27 and you can see on the slide the enrollment figures which is a relatively limited enrollment.

And what I wanted to highlight here is is that this is obviously a difficult budget process and the our school system certainly does a does a good job in a lot of the things that are necessary and they know their system quite well but I would highlight that you know with uh roughly 300 million dollars in funding that they're going to receive from the city to prioritize the needs of our students and support our teachers this is this is a significant investment on the part of the city in addition to all the investment we make for youth that's over I think 30 or 40 million dollars in this budget.

So it's over a 360 million dollar investment in our youth including with ACPS that is prioritizing our kids and our youth on the affordability side we continue to maintain many of the important programs such as the free dash service the tax relief for seniors and elderly but we also provide 33 million dollars in annually in a variety of housing advancing housing programs and I think that is really critical.

On the reduction of disparities probably one of the highlights I would make here is continued investment in some of those nonprofits to provide critical service to us such as a live and some of the emergency shelter and meals for seniors we also are are adding a small amount to support visit volunteer Alexandria they played a critical role during this latest natural disaster with the ice and the storm and frankly would need to provide some additional funding this year to assist them with that.

We also provide some safety net of a million dollar balance designation in case federal decisions as it relates to grants really critical grants change and we're able to pivot to assist in that on the economy this is probably where you'll see some one time funding that is that is substantial in this budget 2000 of additional funding for visit Alexandria that's focused primarily on marketing and mixed mixed media programs trying to to encourage and grow our visitor population in the city and then $7500 to advance Alex Ford which is our our recently adopted economic development strategy and of that $750 roughly $300,000 would go to small business support.

On the thriving workforce, again, we we are a city that has more than half our workforce and collective bargaining agreements, so we are funding those.

Other investments for our metro system, it's a $7 million increase in funding for that purpose, as well as some small funding to improve the appearance and some upkeep in many of our city facilities and as well as along the waterfront.

We also increase some of the storm emergency funding slightly from $800,000 or so to about a million dollars.

And we continue to carry a $3 million balance designation for emergencies, much as like we recently just had.

Certainly with the economy at the national level and some of those decisions, as well as next year our capital improvement plan, which is that 10-year plan.

We are giving a couple of the key projects, one in the schools and one with City Hall, that is going to increase our debt service.

So that's that's one of the areas that we're certainly looking for in 2028.

Just quickly on the capital improvement plan.

It's a 10-year plan.

What you will notice though in the CIP is that that is a significant change, is that while we are fully funding the school system's capital budget request for FY27, the year FY27 budget.

They're critical land use decisions that uh really require uh the appropriate body making those decisions, which would be the city council as it relates to the land use.

And that involves the uh two uh uh middle school renovations at uh Patrick Henry and Jefferson Houston, as well as uh transportation facility off of the Widder Wheeler campus and uh trying to uh move Cora Kelly back into the 10-year plan.

So those projects total roughly $88 million uh with the exception of Cora Kelly, which is out of the plan at this point.

And the intent there would be that the council would engage in a process that they lead that uh is in consultation with the school board to try to uh best analyze and determine the best way to address middle school capacity, address the transportation needs of the school system, and how to perhaps move Cora Kelly into uh the tenure plan.

Uh with that, uh we have a whole series of other slides, but uh I'll leave you with the big budget calendar.

Um this represents um several opportunities for the public to provide additional input.

Um what I would say is the the big message behind this budget is it's about steady progress.

There were a lot of difficult decisions made in this.

Um we prioritized again uh those key four priorities of council um as well as really asking the question are we the right uh local government agency to provide the type of service, or are there nonprofits that could provide that and what assistance would they need?

So with that I will stop and I'm happy to take any questions.

And if there's no questions, that's fine too.

Well, thanks for coming.

Did you get that over of applause?