All right, good evening, everyone.

Good evening, everyone.

We're gonna go ahead and get started.

All right, good evening, everyone.

If I could have your attention, please.

All right, good evening, everyone.

Good evening.

I'm uh excited to welcome everyone this evening to the school board uh meeting room for the city council uh school board joint work session on the FY27 budget.

And uh we did get can you hear me now?

Do I need to start the whole thing over?

Okay, all right.

All right, well, welcome everyone to the City Council School Board work session on the FY27 budget.

Um I just mentioned a couple members that we have joining us virtually this evening, and um at this time I'm gonna turn it over to Mayor Gaskin so that she can go ahead and do the city presentation.

Oh, we're first, remember?

No.

Well, we don't have our do we?

I think so.

Okay.

We're ready to go.

I'm happy to go at any time, always prepared.

Um but so whenever we get it loaded, let's rock and roll.

It's always different when you're not facilitating and you uh come in with an agenda and then it switches.

Okay.

Uh let's see, is there a clicker here?

All right.

Okay, well, good evening, everyone.

Um, let's dive into the fiscal year 2027 budget for the city.

I don't think many of I mean much of what we will present should be familiar because it was presented in the manager's budget.

But what we hope to go over today is really the context in which we prepared this budget, the proposed operating budget for our transfer for ACPS, talking about our capital budget as well, and then finally ending with changes to how the council will be moving forward in FY28 with our allocations to ACPS.

And let's slide.

So when we prepare the budget, part of what we have to focus on is what else is happening around us, recognizing that no budget is prepared in a vacuum, but it is really based on local, regional, national, as well as global context.

When you think about our city, some things that have been impacting our community are really changes at the federal level, um, particularly changes to the federal workforce.

We are a city that has over 13,000 federal workers.

We are also a city that is starting to see rising unemployment.

And so recognizing kind of what type of economic situation our residents are navigating.

This year, some of the other factors impacting the state of the budget were just how we're seeing changes in other tax revenue.

What you this shouldn't be a surprise, but as the economy is uncertain, people are spending less.

When they spend less, that means they're not going out to eat as much.

That means they're not staying in hotels as much.

Um, and so really looking at how that impacts our overall budget.

The manager's proposed budget is about 977 million dollars.

ACPS continues to represent about a third of our budget and is the fastest growing section in our budget.

One of the things I find most interesting is when you look at some of the other categories like safe, secure, and just that represents public safety.

That's the next highest, and it's not one department, it is police, fire, sheriff, deck, and multiple emergency management as well.

And so multiple other departments across the 30 something that we have in the city are really sharing the bulk of the rest of our funding.

In terms of where our revenue comes from, the largest source of our revenue is really the places where people live.

And so looking at property taxes related to single family condominium, as well as multifamily apartments as well.

And you can get a deeper dive on this.

Uh, should you wish?

So this year we were presented with the calendar year 2026 property tax assessments.

What we saw was while there was an increase in total total taxable property tax of about 3.41%.

I think something we should all pay attention to is how this came about.

Honestly, we were projecting about 2.2% growth.

And then in the end of December, we had a large increase in both sales volumes and sales in the old town area.

So it was a last minute surge that came in.

Of that amount, it equates to about 20 million total dollars.

Of that 20 million, the 12.7 million went to the city operating and capital.

I want to point out that 12.7 is shared by over 30 different departments.

I think it's important to pause here because in every budget, we start with ACPS and thinking about how we give our new revenue to our schools and to our to a critical priority for the city and making sure that we have well run, well managed and supported schools for our young people.

In terms of our revenue overview, one of the things we look at is sort of as we grow, what is the impact on the average rev resident?

So while the manager's budget does not propose a tax increase, over 63% of residents will see an increase in their bill.

This is an average, so there are some going up higher than $500 per month.

And then we'll also see there are some other fees that we have raised related to fees in parks and recreation, as well as fees in parking meters and stormwater utility fees as well.

The operating transfer for ACPS that is proposed is 286 million.

This is about 13 million more dollars than we provided in FY25.

I think what we want to be clear about is, you know, the priorities you put in are the priorities you find.

And so we continue to make sure that each year we are increasing.

I think on the next slide, or slide after this, over the past five years, we've increased ACPS's budget by over 53 million dollars.

I wanted to pause on collective bargaining.

I think this is really exciting moments for all of us.

Appreciate the, you know, I think we all saw the press release that came out today.

We are a city that believes in paying its workers, and that's a priority that is shared across both of our bodies.

And so I wanted to just give context as to how we are thinking about collective bargaining in our current budget.

Police, fire, admin, technical labor, and trades represent about 50% of the city's workforce.

What I have here is the one year, like year one cost for each of their contracts.

All of that amounts to about $7 million.

So we're having four major categories within our city, sort of split the money that we allocated for collective bargaining.

When we started preparing the budget this year, one of the things that the manager had said from the beginning is building in an increase for ACPS, recognizing we wanted you to know that some increase was coming as you went into collective bargaining.

That proposed increase was $4.2 million.

I think it's important to recognize that that $4.2 started larger than any other bargaining unit across the city.

So we pulled this number from the press release, the proposed, I think $12.7 million for the proposed contract that you have reached.

I think one of the things to be mindful of here is just kind of thinking about this in total contact.

If we take this at its face value, that is about 20 million dollars.

So that is the total new growth for the city.

That would mean should we put it all to collective bargaining, we would not have the money that we have allocated for your debt service payments as well as some of the other new programs and initiatives in the city.

I think where I see the opportunity for us is the conversation around how do we make sure that every worker is paid and compensated.

It's not police versus teachers or admin versus technical.

Every single person up here matters, and every single person is not a pawn to be debated about between our bodies.

But I think coming to the total compensation package and thinking about it within the totality of our planning.

One thing that I also wanted to just reiterate as to how important this is for the city.

You know, we have celebrated the fact that the city is going to be doing collective bargaining.

I know in our city schools meetings, we raised this early as an area we hoped we could collaborate and discuss.

I know council put forth a proposal to not be at the table or making those decisions, but sort of how could we be sharing information as we build our contracts to make sure that we are in alignment about the fiscal pressures that we're facing in which we're navigating this context, but also making sure that we are sharing information.

So I would just hope, you know, I think today, you know, many of us found out and now we are kind of working through what that means.

But I think this is the key, this is the key context here as to how we came to our numbers, the process we were looking to have.

And I think recognizing that partners have to be direct, or else you're not building a good partnership.

In terms of overall funding transfer, I mentioned this a little bit earlier, but we want to make sure that we are continuing to invest in ACPS, and that is why we continue to do the increase that we're doing.

I think recognizing that the needs are more complex, and even though student increase hasn't been hundreds of thousands of kids, they are kids who have complex needs.

We see that on the city side as well.

It's why we're making sure that we are funding other supports that those children need along with their families.

In terms of how we prepare for that broader youth support, it's both ACPS is transfer, both operating and capital, as well as the funding that the city provides for all youth programming in APD and DCHS, in libraries, and parks and recreation, and in transportation and environmental services.

As I shared, the same needs that you're seeing are the same needs that we're seeing across the city and making sure that as we built this budget, how do we look at ways to increase our funding in all of the areas where children need additional support?

I pulled this slide from the Children Youth and Community Family Plan because it outlines the various areas where we have said as a city that youth needs support.

When I think about some of the numbers that stand out to me where the city's seeing increased costs, last year we served about 46 children through our domestic violence program.

We saw over 1,200 people coming to ask and request rental assistance.

That's just the number of them who had children.

We now have over 22 families with complex needs in our homeless shelter.

We have a waiting list of about 200 families who are waiting, well, 200 people who are trying to get in our shelters with over 50% being families with children.

And so the needs that we're seeing, we're trying to make sure that we are providing food, mental health, transportation, every support, while also recognizing the state of the economy in which we are building our budget.

I should say that in order to make the funding choices that we did, the city is proposing a $9 million cut as well as cutting about 46 different positions.

In fact, the only place where we're adding positions is the fire department and I think one community outreach person.

So this budget does fund the first year at 100%.

It then proposes a portion of the proposed 10-year, about 70%, and then the remainder is placed in contingent reserves.

The reason for the contingent reserves is there are several projects that we believe are not just school decisions, but they are major land use decisions for our city.

And we need to make sure that we are planning and thinking through the implications of those land decisions moving forward.

In terms of how our capital decisions impact the operating budget, I think most people know this, but just to make sure it's clear to everyone, once you guys approve your capital budget request, then the city manager puts forth his budget.

As part of his budget for the capital requests, he has to work with staff to go through how will we fund that?

What are the sources that we will use?

The greatest source is typically borrowing, but there might be other grants or taxes that are level levied in order to support those projects.

From there, we approve and authorize our once council approves the CIP, we then authorize our borrowing and how we will appropriate related funds.

We then go out to the capital markets, we raise funds for those projects, and then every year after that, it's typically a 20-year project, uh 20-year payment plan, we go through the debt service payments that we have to do every year.

That's why when we get new funding, um, we set aside a significant amount for our debt payments so that we can do future projects.

Right here, this slide, this was in the manager's budget, but I asked them to extend it for FY28 and FY29.

You can see that the portion of our general fund that goes to pay off our debt is increasing.

By next year, it'll be about 154 million dollars, and then after that, it will go to 173 million.

I wanted to have us just take a minute to kind of think through.

Sometimes we complete a project, and then the project looks like it's done, and we forget that there's still so much more work to be done to pay on those projects.

And so each of these projects are ones that have been completed that the community is using and spending time in and is serving our city, but they're also ones that require a debt payment this year and into future years.

For a deeper dive, here's an example.

It's from Jefferson Houston.

Folks may recall Jefferson Houston was approved at a budget of approximately 45 million dollars.

Went through the process where school approved that, and then capital did its approval.

Then we went out, we issued bonds to finance this project.

In FY27, the debt service for this project will be 2.7 million dollars.

We will continue to pay $2.7 million every single year until 2044.

So when we think about projects within our CIP, when we think about land use implications, we also have to think about the debt at which we are already paying and where the resources will come from in order to pay off those projects.

That's part of the reason why those have been ones that have been set aside in the manager's contingent reserves.

Moving forward, I think what we I think almost everyone knows this, but there are two ways that the code says that we can allocate funding to the schools.

Historically, we have approved and appropriated funds based on total estimated expenditures.

And then, but that is only one method.

The other method that the state gives the flexibility for the governing body is through major classifications.

As a community, we have heard a lot of questions.

We've also heard people coming to the council and saying, Well, we want you to fund instruction, or we want you to fund teachers, or we want you to fund this very specific thing.

Well, the reality is that's not how our structure works.

We don't make decisions about a specific teacher or specific cohort or specific collective bargaining.

We give a lump sum to the schools to then make a decision about how that is then allocated.

And so as a council, we've been thinking a lot about then what is our role?

How do we create a budget where it is transparent and where folks can see those decisions?

I think today we'll have some discussion about it.

But if someone says, well, council, you need to fund collective bargaining, well, there's a way that the category can say collective bargaining, and you would see either we're funding it or we're not funding it.

And so I think having a budget where then more people know how those decisions are being made, how resources are being allocated, and how we can all engage with those different types of categories.

These are the categories that are listed in the code.

As I mentioned, there's some uh ability to adjust the names or at least work through contingent reserves, but these are sort of the main structures.

Uh, these should look familiar because they're also the same categories at which we receive the ACPS audit every single year.

And in terms of how the approach would work, on March 10th, we are going to review a resolution with our intent to adopt a new process.

That gives us a year to then work through how we would implement this in the upcoming budget.

Um, then when we get into the FY28 budget, the budget would be proposed based on budget classification.

And then at that point, we would make our um authorization based on those classifications.

Our goal by beginning to introduce this into our current budget is to make sure that we have enough time to talk through with the community council's intent, council's reasoning for this, and the opportunity that we see across the city.

And with that, these are just the remaining budget dates.

Uh, I guess what I would just leave with in closing is you know, there shouldn't be a surprise here.

This is the budget we said that we had, and this is the budget that we said we would allocate.

Um, in order to make the choices we had to make, we you know, we've tried to figure out how we build on steady progress, how we increase our investments in ACPS, but also how do we navigate and invest in the many different issues that our city is dealing with.

I think at the end of the day, all of us live here.

We live here for very many reasons.

We also use very many services from the housing that you live in, the sewers that you you know, sewers that are under your homes, the roads that you travel in, and we are facing a lot of maintenance and infrastructure needs that we need to go through.

I also think that we have talked a lot about collaboration and partnership.

I'm not sure what that looks like between our bodies.

I do know it is something that we need to figure out and we need to go into with good faith.

I think one way to make sure that we're doing that is continuing to make sure that we are sharing as openly as possible as possible what we have, how we have, and how we're thinking about each thing within the context of those decisions.

So that's all I have.

All right, thank you, Mayor Gaskins.

I'll take the and we'll transition, I guess, into the ACPS presentation.

So again, uh, I just want to welcome you all and Mayor Gaskins Council members, city manager, and city staff.

I want to thank you for the opportunity this evening to present information about the uh ACPS FY27 operating budget.

Okay.

All right.

So moving into our first slide here, it provides a high-level overview of the school board's approved FY27 operating budget.

And what this slide is showing is that the majority of our revenue, 79.4%, would come from the city appropriation.

An additional 20.2% is allocated from the Commonwealth of Virginia.

There's also a very small portion of federal funding, and we do generate some revenue through local fees, such as for school building rentals.

The school board approved budget for FY27 really prioritized a few major items.

Um classroom instruction, and this means maintaining the existing elementary class size ratios that I know are very important to our teachers and our families.

Also, maintenance and security.

I think you all may know we use contracted custodial and security services.

So those contracts do have escalations in them.

And then, of course, we're excited to share today that ACPS and the Education Association of Alexandria have reached a historic first collective bargaining agreement on wages and step increases.

And of course, we know this is a tentative agreement because the way that collective bargaining works in the Commonwealth, it is contingent upon the appropriation of sufficient funds to ACPS from the City of Alexandria.

Okay.

And this slide shows the projected growth in state and city revenue from fiscal year 2026 to fiscal year 27.

And you'll see in our budget that we're anticipating a 3.4% increase in state funding next year.

Tonight we're requesting a 3.5% increase in the city appropriation, which equates to an increase of $9.8 million from the city.

And the city manager's proposed budget, as was mentioned, included a 1.5% increase in the city appropriation, which equals a $4.2 million.

And this slide is also showing the growth in state and city revenue over the past five years.

So you can see that state funding for ACPS has increased over 20%.

And the increase in city funding over the same five-year period will depend on the city council's final appropriation for FY27.

But one of the things you'll notice is that the five-year percentage growth in state revenue has been a little bit higher than the city.

All right, and here we just wanted to take the opportunity to put our funding request in historical perspective.

So here you can see how our city appropriation request compares to past years.

This shows that an increase of 3.5% does align with past city council adopted budgets.

And the exception was in fiscal years 2021 and 2022 during the COVID-19 pandemic, when of course, I think we all are aware and grateful that the federal government did step in and provide emergency funding to ACPS and many other public school systems in the U.S.

We refer to that as the ESSER funding.

So I want to transition now into talking a little bit more about state funding.

I know that's been a big topic between our two bodies at our last couple of meetings.

And so over the past few years, we've talked a lot about this JLARC study commissioned by the General Assembly to examine Virginia's K-12 funding formula.

And the big headline I think that came out of this study when it was released is that overall Virginia has been underfunding public education.

At the time that the study was conducted in FY21, it found that school divisions across the state spent $6.6 billion more than the state's formula calculated was needed to provide a high quality education students.

So these additional costs, this $6.6 billion, was uh and still is being passed on to localities across the Commonwealth.

And just uh for some more recent data in FY25, Virginia ranked 37th out of all states in per pupil spending.

And this equates to around $2,000 less per pupil spending in Virginia than the national average.

Next, I want to talk a little bit about the local composite index, which I think we're all familiar with here at the table.

Virginia's K-12 funding formula relies on what's called the local composite index.

And for anybody who's listening through this may be new information, this is a score that's assigned designed to measure each locality's ability to pay for its public schools.

And Alexandria is about one of seven school divisions that has the highest LCI score of 0.8000.

So this means that the state assumption is that the city of Alexandria can afford to pay 80% of the cost of providing a high quality education to public school students in Alexandria.

And every year the state produces a report detailing how much SOQ spending per student the state provided to each locality.

And in this report, they always have this table that lists the school divisions that receive the most funding from the state and those that receive the least.

And you can see at the top there that the average for all school divisions, well, you can see the range of all of the school divisions.

But this data from the most recent report for fiscal year 2025, it was released just in December.

And what you can see there is that ACPS received less SOQ funding per student than any other school division in Virginia.

And you can see that Arlington and Falls Church are the other school divisions in our region that are also 0.80 on the LCI.

Okay, another thing that the JLARC study examined was what drives school division spending.

And some of these factors are outside of the direct control of school divisions.

One of those major drivers is the number of students with higher needs.

I think Mayor Gaskin spoke to that.

And this typically includes students receiving English learner services or what we call EL services, students who are eligible for free and reduced meals or farm, which indicates socioeconomic status, as well as students receiving specialized instruction or special education or SPED.

And so you can see here on this table how our demographics in Alexandria compare to other school divisions in our region.

ACPS actually has the third highest percentage of EL students in all of Virginia.

The only two that have higher are Manassa City and Manassas Park City, so you can see they're listed on the table as well.

82% of Virginia school divisions have EL populations, less than 10%.

And the percentage of economically disadvantaged students in ACPS is about 10% higher than the state average, and more than double that of most surrounding school divisions.

And one of the things that the JLARC study said is that Alexandria has among the highest labor costs in the state, estimated to be 38% higher than the average school division in Virginia.

Okay, so what are we doing about this as a school board?

I know this is something that Councilmember Chapman brought up in our November budget retreat.

And we want City Council and the community to know that the school board has been actively involved in advocating for our schools and the need for increased funding from the state.

You see some pictures here where some school board members went down to Richmond advocating with some of our students and parents, who some of whom may be in the room tonight.

You also see in the pictures delegates Alfonso Lopez, Charnel Herring, and of course our new senator, Elizabeth Bennett Parker.

And in the top left corner, there is a picture of Councilmember Chapman who joined myself and Dr.

Simpson Baird for a legislative breakfast in the fall.

Okay, and so this is just highlighting what are some of our efforts to increase state funding that we're working on.

Every year the school board adopts legislative priorities similar to the city council.

We contract with Emily Webb from Advanced Strategies, who supports our legislative program, and she will be providing an update at our board meeting tomorrow.

She's been doing a lot of collaboration this year with Wendy Ginsburg, who represents the city down in Richmond.

And we've been advocating for legislation that increases funding for EL students, English learner students, as well as students receiving specialized instruction.

Both bodies also supported a bill permitting a 1% sales tax to support school construction.

Currently, only a handful of localities in the state have this authority.

ACBS is also part of a coalition of other Northern Virginia school divisions called the Public School Leaders Network, and we've been meeting over the past couple of years and really trying to align our advocacy efforts at the state level.

Another thing is that we participate in SPED regional programming, which provides some additional reimbursements to ACPS.

Okay, next I'm gonna transition into talking about some of the steps that we've taken to reduce spending and balance the budget in FY27.

And maybe this might be an opportunity for me to just jump in and say, in reference to the slide about the additional funding to ACPS of 56.2 million dollars over the fiscal years FY23 to FY27.

During the same period, the city's budget did increase by 138 million dollars in total.

And just wanted to also highlight that when I saw the slide in the city manager's presentation about some of the reductions and expenditures, I asked for our finance staff to pull the same information for ACPS.

And over the same five-year period, we've also had a reduction of $18.9 million.

But just looking at what we reduced this year, we have limited a number of positions, 10.5 non-instructional FTEs, including some central office positions, 3.3 instructional FTEs.

And while some of these positions are vacant, we are cutting some filled positions.

I do want to just emphasize that.

And all departments and schools reduced non-personnel expenditures by 5%, which achieved a savings of 2.2 million dollars.

We have also made the decision to shift 5% of our health care premium cost, which I'm going to talk about in the next slide.

Our Virginia retirement system contribution for FY27 is lower than expected, so that's a savings of 1.9 million dollars.

So this represents $7.7 million in total reductions for FY27.

So just speaking a little bit about the health care.

One of the challenges that we're experiencing in ACPS is that, like many employers, healthcare costs have continued rising, and they are expected to increase by 10 to 15% for the foreseeable future.

And so we did have a robust conversation about this during our budget process.

And by shifting some of these costs, it helps us now and into the future.

So just want you to be aware that we are taking different steps to really look at how we can reduce our spending.

For licensed staff, ACPS currently pays 80% of the health care premium, and licensed employees pay 20%.

This will shift to a 75-25 split.

For support staff, ACPS currently pays 90% of the health care premium, and support employees, that would be folks like our bus drivers, our school nutrition employees, our instructional assistants currently pay 10%, and this will shift to an 85-15 split.

And so these changes will result in a cost reduction of $2 million in FY27.

So on this slide, we just wanted to show you, excuse me, the breakdown of the number of employees in our two bargaining units.

So we have $1,669 FTEs in our licensed personnel bargaining unit.

So that's primarily our teachers and other licensed staff.

And then we have $860.9 FTEs who are our education support professionals, again, bus drivers, school nutrition employees, et cetera, and then $191 FTEs who are not in a collective bargaining collective bargaining unit.

Okay.

All right, so those are that's the breakdown of our staff.

So about 2,500 staff members are covered by our tentative bargaining agreement.

Okay, and so now I'm gonna pivot into what I consider to be really one of the most important parts of tonight's presentation, and that is uh information comparing regional teacher pay.

And I know as I followed along with uh your own collective bargaining process that trying to maintain competitive salaries is something that is a big priority for all of us.

This slide is showing what happened with starting teacher pay for uh individuals with a master's degree, so we call this our master's scale over the past just two years from FY25 last school year to FY26 this school year.

So uh almost 75% of ACPS teachers do have a master's degree or higher.

And in FY25, Alexandria was able to provide the highest starting salary in the region.

And I do remember that because it was I remember that budget year.

I think some of our former colleagues on the school board who are now in city council were a part of that, and um that was that was a great moment.

And in just one year, uh Alexandria starting teacher pay on the master scale dropped to uh seventh in the region.

And this is partly because some of our neighboring divisions have implemented their first collective bargaining agreements in the current fiscal year, this school year.

Um, but I want to highlight here a trend that we're seeing.

It used to be that school divisions closer to the District of Columbia, like Alexandria and Arlington were able to pay higher salaries and attract teachers and other staff who were willing to commute longer distances for the increased wages in our school divisions.

But what's happening right now is that some of the outer jurisdictions are experiencing more revenue growth, I believe partly due to the data centers, and they're starting to surpass us in compensation.

And if this trend continues, we're concerned that it really could jeopardize our ability to recruit and retain our dedicated teachers and other education support professionals that we rely on.

You'll notice also on this slide that ACPS was the only division in FY26 that the actual salary, the starting salary did not change at all.

And that's because we were unable to provide what's called a COLA cost of living adjustment, or sometimes referred to as an MRA, a market rate adjustment in FY26.

And why didn't we provide a COLA or MRA in FY26?

Because of the limited funding that we had.

One of the things we shared, we had a couple of community engagement sessions over in the fall.

We called Fund Our Future, where these were opportunities for community members to engage and ask questions about our budget.

And we shared that a step increase for ACPS employees given the size of our two bargaining units that I mentioned.

A step increase for all ACPS employees is $8.9 million.

And the cost of a 2% MRA for all ACPS staff would be $5.8 million.

And every year, these salary enhancements are competing with some of our fixed recurring costs that ACPS has limited control over, things like health care premium increases and inflationary cost for our contracted services like our custodians and our school security officers, and of course, we know that security in schools is very important today.

We work to provide the very best compensation increase that we can every year to our staff who truly are the heart of our school school division, and we're like again doing the best that we can with the resources that we have to keep our pay competitive.

Now I want to shift into this slide here that is just looking at kind of how our region is shaping up for fiscal year 27.

So this lists the anticipated FY compensation increase for school divisions in Northern Virginia.

And as mentioned, you can see here very pretty clearly that some of the farther out localities, Louda and Prince William County, have been able to provide larger pay increases.

This table indicates also in the right column there where it says CBA, that is indicating which school divisions have collective bargaining agreements.

Like ACPS, Loudoun County Public Schools is planning to implement their first collective bargaining agreement in FY27, and you can see that very large pay increase that they are able to fund with their resources.

And I'll just mention that a couple of these counties do have revenue sharing agreements, and so these funds are already certain to happen.

But we also wanted to highlight in yellow, you see those divisions that are cities as opposed to counties, because I know sometimes we've talked about you know the municipal burden that falls on the cities, but you can see that even whether and one more thing that Manassa City and Manassas Park City are the divisions in the region that to my knowledge are not are not planning to authorize collective bargaining.

But even despite that and despite the municipal burden, you can see that we're still seeing this increased salaries across our region that we are very much competing with here in Alexandria.

I'm just gonna take one quick drink of water.

So the key takeaway is that this trend is presenting a real challenge confronting our city and our school division, should it continue.

We believe that Alexandria is a community that values its public schools and the dedicated professionals who work hard every day to ensure that our students receive a high quality education.

And the school board does stand ready to partner with you, Mayor Gaskins, members of council on how we tackle these challenges.

So just to kind of summarize the challenge before us, ACPS is requesting an approach appropriation in the amount of 292 million dollars for FY27.

The city manager's proposed budget includes an appropriation of 286 million dollars.

This is leaving a gap of 5.6 million dollars.

And I just want to lift up that this doesn't include our final health benefits increase, which we will find out that amount this spring.

We are uh we get 20% of the cost of that from the state.

So we do not get the full amount from the state.

Um and so as we think about you know what we can do to close uh this funding gap.

We're we're certainly interested in um talking about what kinds of ideas folks have this evening.

Um if we uh are forced as ACBS to find a way to close this gap.

I just want to be really transparent with with the public, with you all of some of the um some of the areas we're gonna have to be looking at.

Um so on on this slide you see um eliminating positions in our communications office, uh student support team positions.

We did add a few of those um in the last couple of years to try to reduce the ratio for those staff members uh to students, advanced academic services teacher.

Uh we have a contract with communities and schools, which provides a lot of wraparound services for our students.

Um the IBE program at Jefferson Houston is um at an expense of 116,000.

Our middle school athletic programs, which have been um introduced two years ago and have been really popular with our families, and um I think really a great opportunity for our students.

Um another thing we would be looking at uh is uh increasing our elementary homeroom ratio, so moving to class sizes uh in our budget of 24, 26, 28, and again um that does generate some additional uh money there, but I know that's going to be a very unpopular option for our teachers and our our families.

And then um you see a few positions there at the bottom that were added as part of the school board's um ad-delete process.

We did um we did find other places to make those trade-offs, but the middle school Latin teacher as well as the Afghan family liaison position that we also added to the budget.

So these are some of the the things that we would have to be looking at in order to close that $5.6 million gap on the ACPS side.

Okay, and then um here is really just our final slide.

You know, as we were talking about our budget and what is kind of the the landscape that we are in right now, we really see three paths forward.

And one is that we can work together to find a way to fund the requested appropriation, which would support the city's first collective bargaining agreement with Alexandria City Public Schools teachers and education support professionals.

Uh of course that is our preferred option.

Uh option number two is we can continue to honor the tentative agreement that we have with the unions, and that's going to, though, rely on a reduction of instructional staff, operational staff, or eliminating some programming in order to close that gap, which I just reviewed on the previous slide.

Um and then our third uh the third option is ACPS and EAA could do a reopener uh negotiating again on wages.

However, we risk not reaching a collective bargaining agreement at all because honestly, without further reductions, ACPS does not have the funds to provide that step increase for all of our employees, which I mentioned the total amount on that is quite large.

So I want to thank you all again for the opportunity to share this information and just kind of close with a few key points that uh we really need we really need the full appropriation request so that we can really keep our best teachers in Alexandria and minimize turnover, which we know directly impacts our students and costs more in the long run because we just continue to recruit and then we lose teachers and so on and so forth, and I know you've experienced that with some of your staff as well.

Um we also want to avoid the very real and numerous negative impacts that cuts like this will have on our students and families.

And just finally, you know, we believe that we, Alexandria, all of us have the resources to really tackle these challenges before us, and so we look forward to having a productive conversation with you this evening and having more discussion.

So thank you very much, everyone.

All right.

Well, um, we can move into questions and discussion.

Um happy to open up the floor to anybody who would like to ask a question or make a statement.

Mr.

L newby.

So appreciate the presentation.

Very helpful.

Um walking us through all the needs and the pay comparisons and all of that.

I would probably have appreciated more data on student outcomes and student achievements and how that relates to the investments that the city has been making in ACPS.

I think the bulk the public deserves to see the connection between those investments and the results that ACPS achieving.

So I guess maybe we can open it up a little bit, you know.

I think you may have talked about a little bit, the mayor's talked about a little bit.

Over the last several years.

The city's investment in ACPS has gone up tremendously.

I think it was 20%, 56 million dollars.

But it doesn't seem that student outcomes have been going up.

It's been probably flat.

So I guess help me understand.

As you as we talk about more funding for ACPS, help me understand how is that funding going to move the needle on student achievement.

Um I guess yeah, I'll leave it there.

Like, why don't we talk about that a little bit?

Thank you for the question, Mr.

Elnubi.

And I want to start by saying at the November retreat, um, we did actually bring some information about our outcomes.

And um, this was because in the past I had heard from council members that they wanted to hear more about our academic outcomes.

However, at that meeting, we were asked to rush through that portion of the presentation so that we could get into the budget and the budget part of the presentation.

So I think if we want to spend more time as the two bodies talking about out academic outcomes, I'll say that is something that I would absolutely welcome.

Um we did adopt a new strategic plan uh last year, which I'm happy to, we can make sure that you all have a copy, and we will be getting an update on that tomorrow evening at the school board meeting.

So I want to encourage you to um please tune in for that.

But what I can say, Mr.

Elnubi, is that we in Alexandria, I I I want to really um lift up that yes, our community has invested a lot in our public schools, and we are grateful that um all of us have collectively invested in our public schools.

We can say that with the funding that we receive, we are doing the similar work that is being done in other divisions.

We do not have you know funding that is not being used to support our students.

We're we don't we're not we we don't have um this was something that kind of came out in the J Lark study that there's this idea that because the per pupil um spending is higher in Northern Virginia, for example, that Northern Virginia school divisions are providing so much more for students.

But what the study found is that when you account for some of the higher needs costs, some of the higher labor costs, that um school divisions across the commonwealth are generally uh providing uh pretty much the same services.

But what I can definitively say is that reducing our funding is not going to improve outcomes for our school system.

I feel very confident in saying that.

So I'm happy to um again have further conversation with you about this.

And I I really I think this is a great opportunity for the liaison partnerships that the liaisons can meet and share data from our recent uh strategic plan, how we're thinking about trying to move the needle on academics, and certainly welcome feedback from um council members as well as any community members who want to send any feedback to us.

Okay.

Move on to the next Mayor Gaskins.

I had first a comment and then a question.

Well, two questions.

My first comment was just in regards to the November retreat.

First, I would argue that any opportunity we're together is an opportunity to talk about student outcomes.

Because at the end of the day, that's what we're all here for.

We meet every single month through the city schools, we have regular updates.

There's many times for us to talk through that.

In terms of that presentation, I think we have a responsibility to the public to make sure that we are prioritizing the public's time and to use the bulk of the time on exercises asking us to close our eyes and imagine is the time that was taken away to prevent us from being able to have the conversation that should be focused on the budget.

In terms of tonight, the two questions I have in your final slide where you talked about the positions that you would have to cut and the pressures on the budget.

I'm curious why only one of those was administrative and what's the criteria you use in waiting, sort of which positions to cut or which positions to keep.

Mayor Gaskins, we can um I want to give our superintendent and our our our CFO an opportunity to respond to that.

But you know, I heard earlier some conversation about possibly distributing funding in different categories.

Um I did want to mention that people that that our budget book already breaks down the funding in those categories, and can people can find that on page 123 of our budget book, but um doing something like that, for example, is going to probably require some additional staff time at central office.

And so there are a lot of things that I know when I was listening to the city manager's presentation, he spoke about a lot of the unfunded mandates that are coming from the state around some of your public safety and things of that nature.

There are a lot of mandates that come from the state on public schools right now, and our staff uh at Central Office are the ones who are dealing with a lot of those requirements around um reporting, instructional improvement, and they are going out into the schools and sharing that um those expectations that are coming from the state with the schools.

And so you know, we I think we went through and really looked at the state really um has certain requirements around instruction, around reporting.

And so when you look at that list, you see things like middle school athletics.

Like that is not something that is mandated by the state.

So we really were prioritizing those things that uh we felt were necessary.

But I'll see if Dr.

KY wants to add more to that.

Thank you, madam chair.

Um I I think you hit on all the items.

We were really trying to make sure that first of all um we know how we were not trying to pull from schools, but and also thank you for sharing that a lot of our central office positions as people see them maybe assigned to central office, they are actually out in the schools that are that are student facing.

Also want to talk about the a lot of the positions here, are those uh mandated reporting positions of title programs, Title I and Title II.

And so those positions are also sitting here in central office.

I I will say it it is very difficult to try to be sensitive as we go through this process because we do have staff members who are sitting in those positions, and so um we have to have those conversations with our teams as well.

Also meeting with our staff to see how can we then reassign a lot of these responsibilities to staff who are already kind of working the full load.

So those decisions are very difficult, but I think uh Madam Chair is pretty much answered it in ways that we want to find our best to remove those positions but also continue with the services to our students.

Okay, thank you.

That's helpful.

I'm I was curious because we had to do the same exercise on the city side.

We go through it for every single department for every staff person, and we work through both our equity impact score as well as a number of other criteria to make that decision.

So I didn't know if you guys had a similar matrix or rubric that you use as you go through each decision.

Um Mr.

Turner wants to add on, but I also want to say um with all of the new requirements, like Dr.

Reef was saying that's coming out of the state with the new accountability system and the requirements there, it does require a lot of staff's time and a lot of training and professional learning with all the new literacy programs that are coming out.

So we're also very mindful of when we're looking going through our decision making process, that it doesn't impact the instructional piece, and it also doesn't uh impact safety.

And then my other question I was curious, you pointed out sort of the growth that we had talked about in the ACPS budget, but then you also pointed out the growth that we saw in the city's budget.

Can you expand more on sort of what was the argument you were trying to convey there?

Sure.

So um I think we uh ACPS generally is um makes up about 30% of the city's budget.

I know um in the WAVI guide, for example, it talks about what is the uh appropriation from the governing body, what percentage of that goes to schools, and so when you look at the city's growth uh in funding uh and you look at what went on the ACPS operating side, it it represents about a third of that.

So just showing that there's uh some parallel in that growth.

Okay, thanks.

I just wanted to make sure I was clear that because what I think the way I received it is that you know the city's budget is also growing.

And I think when you're talking about a budget for 30 other departments and a city whose population has increased over that time, it would make sense proportionally that it would be growing as well.

Right.

Um actually I'd love to ask a question too, just a clarifying question about the collective bargaining agreements on the city side.

So this may be a question for uh the manager, Mr.

Route.

Um the I think you said that the uh you had the slide that showed about $7 million in cost for your collective bargaining agreements.

I was looking at those agreements on the city docket, and uh the totals that I saw add up to an FY27 were nine million, nine million dollars, about a two million dollars difference.

I was wondering if you could just provide an explanation about that.

Um yes, that's general fund versus all funds.

So a number of these positions, particularly in the labor and trades and some in the admin and technical, are in sanitary sewer funded, um, stormwater sewer funded.

So they're outside of the general fund.

So the total fiscal impact presented to council was the all funds.

What we've been talking about here tonight is the $977 million general fund budget.

Okay, thank you.

And I know that you had to um eliminate some police officer positions um in order to pay for um for your collective bargaining arrogance.

Can you speak a little bit about that?

Yeah, I I I can elaborate.

So really in all of our collective bargaining, the only way to pay for that seven million wasn't new growth.

It was on the fire side, for instance, if you look um to get to that agreement, we reduced their overtime budget substantially, millions of dollars.

On the police budget, uh the police bargaining, uh we cut out I I think it's over two million dollars in their base budget.

Um that's how we were able to fund both of those agreements.

And I think on labor and trades, again, if you look at the cuts to the 40 plus positions, that that makes up a bulk of some of how we were able to pay for the $7 million.

So really wasn't a whole lot left in terms of new growth to do anything else.

Um but that's really the elements of those three agreements.

Um there's a fourth one that had similar characteristics where it wasn't about new money, it was really about cutting things that we felt like we could do and to cover that.

Did you have you all been seeing this challenge with increasing health care premiums?

And did you all make any adjustments on the health care side?

Yeah, so um when I saw that slide, uh the from a city perspective, both United Healthcare and Kaiser have hit us with very significant increases.

And those are embedded in the budget.

But in order to cover that, um, again, those cuts were critically important.

And it wasn't just for this year's cuts, it's been the cuts over the last four years, knowing that we were likely to have some recessionary impacts based on what we were expecting on the economy.

So a lot of that was somewhat anticipated.

That's why we've been trying to be very careful with we didn't grow FTEs much over the last several years, or very few actually.

Um for the last I think three years, we looked at designated target cuts across multiple departments in order to be able to cover basically the cost increases to run our services.

Because just like I think in ACPS and other places contract costs, escalation, goods and services, that all adds up.

So you know, when you really look at it, there's really not a lot of new growth.

It's really trying to cover the cost of the existing things that we're doing.

And that's how we got to all that.

Uh thank you for that.

I know one of the things in the past um we've we've uh when we've carried a lot of vacancies, we've been able to, for example, when these bonuses come out from the state uh late in the budget season, we've able been able to use some of those savings on vacancy savings to um try to close that gap.

But this year we our vacancy rate has only been about one percent, which is terrific, but um you know we do not have really the flexibility then to rely on those savings.

The I I was wondering if you all any of the um the staff positions that were eliminated, were those did you have to eliminate some filled positions or were those all unfilled positions?

Those were I think 46 vacant positions.

Okay, thank you.

Um yes, Mr.

Shosha.

Thank you, madam chair.

Um this actually really this kind of gets to some of the thoughts that I've been having over um this entire discussion and our budget in general.

Um I think something that's worth saying again or saying is that 87% of our budget is people.

Let me say that one more time.

87% is people.

That's benefits, and that's salary.

So even though we might have flat enrollment, things like step increases, maintaining market competitiveness, covering health care cost increases, as we just heard.

You know, these things are always going to bump up our request.

I was you actually beat me to the punch about the one percent vacancy rate that we have here.

Um I think that is worth repeating.

I mean it's it's a it's a good problem to have.

But like you said, we can't make up the difference based on vacancy savings alone.

Um so with to that we have to look at people and stuff like that.

What where do we make up that money?

Cuts like this, any cuts are going to affect student services.

It's on it's undoubtable.

It's inevitable.

And that in turn will also affect our teachers.

And we're trying to keep our best and brightest here.

I mean, I I see some folks from our teachers, and I I know lots are listening.

But you know, I there was something that the city manager said um that really resonated with me.

Um and I appreciated the the point, which is um you all are in competition for the best talent.

We are too.

We are trying to maintain our wonderful teachers because at the end of the day, that's what's gonna improve our student outcomes, good teachers.

So really my my only question was was gonna be the is gonna be the breakdown of those 46 positions.

So I appreciate that answer, Mr.

Manager.

Thank you, Madam Chair.

Thank you.

Other yes, I think um Mr.

Aguirre.

Thank you.

Um I'd like to put something else in perspective that Mr.

Shosha is bringing up.

So yes, the bulk of cost is personnel.

It's the same thing on the city side.

Um the other thing that I want to put into perspective is that the city is operating with a number of employees similar to the year 2008-2009.

Even though we've had a 20 to 30,000 resident increase.

So while I appreciate him bringing up that it is flat for school enrollment and that there are costs that increase year over year, yes, we are seeing the same thing on the city side.

And we are aware that it's happening on the school side.

But we also have to deal with the reality that we have 20 to 30,000 more residents in the city, and we're trying to service them with the same amount of staff as 2008 levels.

So we're well aware of what you're going through.

We're going through the same thing, and I would even argue going through even more because we're having to deal not just with what you're saying with the year-over-year cost, but also the lack of additional personnel to deal with tens of thousands of additional residents.

I have uh another comment on the historical context for what the schools are asking for.

Uh while yes, it is in alignment with the 3% or 3.5, I forget what the number is.

Um we also have to take into consideration what's happening every single fiscal year.

Because if you look at some of those years, one year was 8%.

It means the city was probably having a good year.

So we're able to give more money.

Every single year, you know, varies depending on what's going on fiscally.

Um I think, yeah, it's always good to let the public know what the LCI is, our demographics.

I think this council is well aware of what those are, and you know, we're lockstep uh with y'all in that and trying to see what the state can do more about it.

Um, and hopefully we do get those additional monies uh for some of our students that need additional supports.

Um and I appreciate what you guys did around the health care benefits to bring it down from 8020 to 7525 and from 90 10 to 85 15.

I know that's not easy, but again, we're looking for cost savings.

Um I think the last thing I would just mention, and it's not a big deal, but you know, it'd be it'd be nice to either have this uh slideshow either email to us or have a copy for us uh at the meeting just as professional courtesy.

Uh certainly um Sergary, we'll we will make sure to have copies of the presentation uh in the future.

We we typically don't I don't think we have been printing since we've moved more digital, but we'll absolutely make sure we do that.

Um I just wanted to like kind of respond to um some of the information you shared, and I I really appreciate you talking about um the city's challenges in terms of the growth and residents um and having the same number of employees and and how uh the funding is really tied to what's happening in uh the economic growth in the city.

Um and that's kind of what I've been looking at.

I know that the at these meetings we've been talking for many years about the capital uh pressure on the operating budget, and I would love to just kind of ask a conversation or invite a conversation about how you all are thinking about that in the future, because when I was excuse me, looking uh at the city's budget, I saw that the um I think the the excuse me, the debt service for city projects.

Um it is really growing um from FY27, 48 million dollars uh per year in debt service to uh FY 36, 105 million dollars.

Um I'm just wondering how you how how we're thinking about that, because I I do think that is um you know what I've seen is when we look at the allocation to ACPS, it seems like, you know, which I know we we've been talking about this for a few years now, but as that funding for the capital is coming more and more it's it's putting more and more pressure on the operating side.

And I know that we both supported the one percent uh sales tax for school construction, and so I'm wondering if um how you all are thinking about that, if maybe somebody could speak to uh how much revenue would be generated by that and if we think that could help us um with some of these challenges that we're facing.

Would love to just invite anybody's uh few.

Yeah, no, I'd say we're we're consistently thinking about that year over year, and you know, of course, any additional money is welcomed and will be beneficial, but I'll let out of the city manager or Mr.

Wicks um, because we we have had the conversation around how close we're getting with debt service year after year with the school board, and I feel that for whatever reason there's confusion, disagreement, but the numbers are the numbers, and while we are reaching closer and closer to what our maximum is, we are gonna come down off of it because of certain projects that are coming off the books.

But I'll let city staff continue.

Yeah, I that's real helpful conversation.

I I do want to kind of start with the little historical.

Um I saw the slide that had the percents, and if you look kind of some of the earlier years, those percents were larger.

Um I just want to put a little context around that.

Some of those percents were larger, and when when you see the percent maybe a little less, that was also at the point at which the council designated more capital capital construction to the needed schoolwork that needed to be done.

So if you kind of look at it in a larger context, you'll see that early on some of the more operating fund went to ACPS, and then that sort of uh normalized a little bit so that those dollars could be put to additional school construction, which has happened in a very needed way, uh I think.

Uh, but that that has had a material effect on the increase in our capital uh approach.

And and if you look at the same point at which we're increasing that, we were removing city projects in order to afford those.

And now we're at a situation where we still have to do some of those city projects.

We have no frankly, we have no choice.

Just like we kind of it's sort of this this movement where we took care of parts of ACPS construction that I think was necessary.

Now we have some city facilities that frankly we have to do.

And that's why there's some of that dynamic.

I would say that when you really look at the long-term CIP, given our potential revenue streams and things like that.

Um if we're able to get additional funding from the state and adjust whether it's on the capital or operating side, I think that's helpful.

But at the end of the day, it's gonna be about how we can carry debt.

And some of that requires projects that have to be joint.

Uh I think what we've we've talked about this in many of the joint meetings, and I'll be a big advocate.

I think if we're building individual projects separately, it costs more, takes more time, it carries more debt service, and we can't function that way long term because it's just not going to be enough money.

So some of the facility work that we're thinking of has to be done together, and that has the potential to save us as a community significant dollars, even though it may not be the most ideal sometimes.

I think that's that's how I think over the next 10 years, we'll be able to achieve a lot of the things that we want to achieve.

And then there's also technology choices, right?

You know, um in our own city budgets, we're looking at technology to reduce some of our costs.

And we're actually making some real good progress on that.

We may have to look, I well, not may, I think we have to look at those things in terms of how we we look at the larger scale facility constructions.

Uh I think that that matters material.

The last thing I would make make a point of is all those fiscal policies have been in place for years, and we adhere to very, very strongly.

Um if we weren't to do that, and we said, okay, we're gonna loosen that, and we ended up having a bond rating that's less than it is that's millions of dollars that doesn't build a single thing for our community, it just costs us more.

That's that's not something that you want to to deal with.

So, Art, I didn't know if you wanted to add anything to that or did that cover Art, can you I think one area that would be helpful for you to expand on is you ask how do we think about this.

We literally went through an entire process where we scrub the CIP, you reprioritize projects, but even before that, there was an entire refinancing effort to be able to support the debt for the existing projects that we already have.

So it's I think if you could shed some light on literally what you do every day.

Sure.

Uh thanks for the opportunity.

Uh for how we think about this, and I think Chair Reef alluded to this.

We've been having this conversation for a number of years.

Um I'd love to see a YouTube mashup video of me saying the exact same thing for seven years in a row.

Um, same line.

Um, and we've kept saying that here's where we are with our uh operating budget support of CIP, but gee, the next couple years look pretty tough.

Those those years are here now.

Um that's how we're thinking about it.

Um, you know, we're focused on 27 right now.

Uh the manager made this point uh last Tuesday, I made it on Wednesday.

Um next year debt service is going to go up 15 million dollars.

Three things.

George Mason, City Hall, paying our Wamata capital bill.

That's the three drivers.

Our Wamata capital bill.

Yeah.

That's the three biggest components of it.

Really, no way to steer around that, right?

Shovels are in the ground.

Um, you know, a little bit more about our thinking.

I think the manager mentioned this, you know, we've been doing using every tool in the tool belt to mitigate some of these costs.

The mayor mentioned refinancing kind of in the era of cheap money after the recession, we pretty uh pretty aggressively pursued refinancing opportunities to lower our debt service.

Um, and we reprioritize projects.

A great example, if you walk down King Street right now between Royal and Fairfax, there are fences around City Hall.

Um, those fences were supposed to be there about 10 years ago, um, 10 years ago.

And we move those for a variety of reasons, whether it's readiness of the project, but also accommodating some pretty big generational investments like the high school and Douglas MacArthur in city projects.

I don't want you to take that as saying it's only schools, but that's how we're thinking about these as the puzzle pieces we're putting together every year to try to mitigate the impact to operating services, including the schools.

Um, but at some point we decided to build really big, exciting things, and we have to pay for that, and that's kind of where we're at now.

Um, but we're gonna try our darndest every year to mitigate that cost as best we can to get through that next fiscal year.

Um is that kind of what you were after, Mayor Gaskins?

Okay.

Thank you.

Uh Dr.

Simpson Bird.

Thank you, Dr.

Reeve, and thank you, Mayor Gaskins, for your presentations and for your leadership of our wild and crazy respective bodies.

Appreciate all that you do.

Um, I just want to start off first by saying thank you, Mr.

Perajon, and thank you.

Mr.

Wicks, um, I love hearing this kind of creative problem solving and coming up with ideas.

I want to hear that from my council colleagues as well.

Feels like there's a lot of defending and blocking and saying we can't and we won't.

And we're here to partner with you.

We're here to find solutions and we're here to work together because we have really strong revenue needs.

Um, as Chair Reef mentioned at the top, um, we've really made state funding uh a major priority in our in our advocacy work, and I personally have worked very hard on this issue, um, particularly during this general assembly session.

We've worked closely with our legislative delegation, our regional school board partners to address these inequities that disproportionately impact Alexandria, and we are making progress.

There has been more discussion in this General Assembly session than ever before about reforming the school funding formula and moving towards a student-based model that will get more resources to the students who are highest need.

And I'm so excited about that.

And that will only benefit Alexandria in the future.

Unfortunately, that work will not resolve our immediate FY27 funding needs.

So I have kind of some additional questions that really hopefully can bring us back to talking about revenues, talking about things that we need to fulfill our promise to our teachers and to ensure this stability and continuity for our students and our staff.

And I'll just also say I I come to this conversation wearing another hat.

I have three kids who go to school here.

And my youngest is in first grade.

We're gonna be here for 11 more years.

And I want to make sure that that all families in Alexandria have that long-term strength and stability by maintaining our educators and who make what's possible for our students every day.

So I just want to say again, I'm here to work with you.

I'm here to partner with you, and I'm here to find solutions because I think they're there.

I think our city has enough money.

I think we have enough resources to do what we're asking for you.

And we have some ideas on how we might do that that I think will come about in our conversations tonight.

So uh my first question, um, I have four, but I'll I'll ask them and pause after each one.

Uh how does the revenue outlook uh reflected in the General Assembly's two proposed budgets for FY27 compare with the assumptions in the city manager's budget?

So do you see a difference in your revenue coming out of the House budget or the Senate budget at this time?

Um so I don't I would say with everything that's still up in the air as to what's gonna actually pass, I don't see a whole lot of difference between what we've proposed and um and what we know at this time.

So we bill, we assume that there will be a certain amount of growth in state revenue.

State revenue as part of the um city's general fund budget is uh relatively small portion of that.

Um so we have assumed some growth in it, but uh I don't think we have enough at this point to be able to say that it has any impact on our final budget numbers.

Are you concerned about any significant revenue losses?

I I do I'll take that one.

I think there are some uh bills, pending bills that are moving forward that would um affect us in a negative way financially.

Be a little more specific.

Can you be a little more specific?

Um I know there's uh a bill that uh let's take collective bargaining uh would potentially take collective bargaining out of local negotiating and put that at the state level.

Um that could have clearly a negative effect because the funding comes from the city or the county, and if you're not at the table in the part of the negotiation and other another party makes that decision, that's problematic.

And I think that's a bill that's moving forward, and that could be difficult.

Would that have any FY27 implications?

Could that impact FY27 though, or is that further out?

I don't know when the effective date would be right now.

It's a pay it's the bill hasn't it's still moving, I think, or stalled.

It would not fit this budget.

Right.

Um okay, so um could you could city staff talk to us about your uh what other policies or strategy or thinking you have around using your current use of fund balance and how you're thinking about that in the FY27 budget?

Um so we have uh a couple of uses of fund balance planned for uh FY27.

We've assumed one and a half percent um use of fund balance in the operating budget, which is roughly 14 million dollars.

I think we're using another 15 million dollars to support the capital improvement program.

Um so combined about 30 million dollars.

We are at about 23 million dollars right now.

Our policy floor is 15 percent, but what we've heard repeatedly um is that uh we should maintain that at a higher level.

Um so I think um without putting a number on it, I don't think we're at 23 right now.

If we were to if we were to use 14 million dollars from fund balance in the FY27 operating budget and another 15 million dollars for the CIP, that would put us down around 20 million dollars.

I mean 20 percent, which is getting to you know uh an area that I think would give us concern.

And how does that compare with your sort of year-to-year use of fund balance?

Is that higher or lower than typical years?

Uh for the operating budget is about 400,000 dollars higher than that than the current year.

This year you're using more of the fund balance.

That's correct.

Okay.

But your policy is for 15 percent.

What's that in dollars?

The floor is the absolute floor is 15%.

So what's up?

But we don't want to get down to 15%.

I mean, let's be very clear about that.

That if we were to get to 15% very quickly, then that would be as the city managers was referring to late earlier.

That's where the bond rating looks at us.

And if they were to lower our downgrade our rating, then our projects get more expensive and it costs us more to do the same thing that we're doing now.

So what's a dollar amount for 15%?

Um I don't remember off the top of my head.

Um and then I wanted to come back to this idea of you know the your cash capital infusion into or cash infusion into capital projects.

Um can you help us understand, you know, if you were to draw that back by say 5.6 million dollars, um, how that would impact the city.

So the the slide that shows the operating budget support, there's two big two main components to that.

Uh one is direct cash capital, which is cash for using to pay for projects, the other is debt service.

Um just to be, I don't think this is what you're asking, but just be clear the debt service part, there's really not a lot of levers to pull if we borrow on a cash flow basis.

So what we're projecting to borrow for in the next year are projects that are underway, just paying the invoices on it.

But your question is about cash capital, and if that were 5.6 million dollars lower.

Um there are certain investments both in the schools and city that it is inappropriate to borrow for, or there isn't a grant source, so the only option is cash capital.

So if we were to reduce uh cash capital by 5.6 million dollars, presumably to increase your transfer, that's recurring.

So it's not 5.6 million, it's 56 million dollars over the 10-year plan.

Uh at this point, that would mean because of our issues with borrowing, our limits there, that's $56 million in project reductions we have to find between city and schools projects.

Uh our cash funding, there are some capitalized staff, both on city and schools that are part of that number.

So that staff would be an option on the table.

Um our IT infrastructure, including the INET that lights up all of our buildings is paid for out of the I out of cash capital.

Um there are some other ancillary costs that don't have a 30 plus or 20 plus year useful license inappropriate to borrow for that we'd have to look at.

But uh I think the the bottom or the one sentence version of that is if we were to transfer that over, it is a reduction of the CIP, is a reduction of the CIP of roughly $50 million over the plan that we'd have to figure out between city and schools on capital.

Thanks for that information and look forward to continuing to work together to meet our goals.

Thank you.

Uh Mr.

Chapman.

Thank you, Madam Chair.

I wanted to um I do appreciate uh my colleagues' questions because it is always kind of uh interesting conversation.

I think Ms.

uh Mayor Wilson was the last one to kind of tinkle with uh you know where we how much we infuse, how much we keep, things like that.

And I think one of the things that came out of that conversation for council back during that time is you know how much do we care about our triple A bond rating, right?

Because I think as as we look at you know, shifting some of those things in that area, that that gets us into an interesting place, especially if we're still building, especially if the economy is not going the way we might want it.

And so I think that's why you've seen us kind of look at while FAS has a certain floor, like that floor is a a no-go for for most of us.

It's not even something that we would consider.

So if that's if we're moving closer to the floor, um just in an annual basis, that's that's not the the way I think council wants to go.

I uh I certainly would not support that, though I do appreciate the question and a conversation around it, because I do think it is um it's worthwhile to remind folks kind of what some of the appropriate fiscal guardrails are uh for for what we do.

Um I think in terms of solutions, I think one of the things that I've been thinking about of late, talk to my liaison.

Did it get a chance to talk to Mr.

Turner just to throw it um throw the idea around because you know it's for me, while I appreciate that we're talking about this annual budget, uh, as we've laid out, and I think uh as Art said, laid out multiple years, we are going to have in a very slow period over the next three years.

And so it's not just meeting uh the need for this year.

It's really how we changing on the city side systematically, which I think is is kind of what you're you're talking about.

I think there are other avenues that we need to look at um and certainly invite the conversation there.

I think also on the on the school side, you know, looking at some systematic changes that are going to be year after year savings.

I I appreciate the slide where you you know you talk about some of the cuts you you can do, and I think one of the things that has come out of this conversation and conversations before is how ACPS uses as FTEs.

Um and uh as Mr.

Sochus said, every FTE that's a salary, that's a benefit, and that's ongoing.

And so using those FDEs sparingly to grow is something that I think we've learned to do.

Obviously, that's a a whole different challenge in education.

Um, and I recognize that, but I also understand the fiscal reality of that as well.

Uh, and I think that is something that uh both of our bodies are going to have to weigh greater uh in going through the next three years.

How do we add?

What are we adding?

You know, I I appreciate and uh you know, I don't always be super positive of these meetings, but I I'll I'll take a stab at it.

I I certainly appreciate the the bravery around school boards conversation about virtual and hybrid education, because that has a systematic effect on what you do with a certain FTE.

We have a we have a virtual Virginia Academy for a reason.

Um, we have some of these tools for or a certain particular position if a school board wants to do that.

And so conversations around that are systematic conversations, are ones that our community is not gonna like, um, but they have a systematic effect.

Whether or not we use them, that is of course school board's choice.

Um same thing with us on our side, you know.

I think we have we have pressed the manager on the use of AI.

Uh, what is that going to do?

Is that going to be able to um add uh savings?

I think the the challenge is uh is going to be what that looks like in the long term or over the short term.

Uh but some of these systematic changes to our organizations are going to be things that we might not like uh to discuss, but those are things that are are gonna have serious savings.

Um let me also talk about something um because I got off track there uh that I wanted to mention.

Um shared services in another fashion.

Um, I had a com a couple of conversations with some folks in HR, and one of the things that we've always talked about is how could we, and obviously not been uh successful at this, but you know, the the risk pool that the city has, a risk pool that ACPS has, they clash, right?

They don't necessarily fit together, and so you can't bring them together to make a bigger risk pool to hopefully get some savings on the health side.

Uh but one of the things that I'm pressing our staff to do, and and would love for ACPS to look at this, is how does this work with other jurisdictions, other school districts, you know, approaching a false church or Manassas Park or even Fairfax County uh or whoever, right?

To say, hey, how can we work together because we have similar risk pools, and on the city side doing the same thing when it comes to Arlington, when it comes to Prince William County and Fairfax, how can we work together as a region to see if there's opportunity here to make savings?

As was noted, everybody is trying to deal well, uh mostly everybody, you know, the folks that have data centers, yes, they're in a different league.

And frankly, I think we need to recognize that uh and put that to the side.

I I certainly appreciate the comparison, but uh unless you're saying ACPS is saying we're gonna do a data center, those comparisons start to fade away very quickly.

And I don't think that's what folks are saying.

Okay.

Um because I think we've had to do the same thing on our side.

When when I'm looking at the chair of Prince William County, we don't talk different, we talk different because they've got data center money.

And that's not something where we are planning to go.

I think we had an opportunity to bring in a large-scale sports facility, um, but that didn't work, right?

And so we've got a we've got to move on.

Uh but to that end, I think we we have to look at comparators uh in a different light.

Uh that's a conversation that we usually have every two or three years within the city as it relates to benefits, uh compensation and the like.

And I think I I would suggest uh our friends at ACPS to do that same thing, you know, start to look at uh more aligned competitors because you are going to see in the next five to ten years that um there is a significant draw to Prince William County to Loudoin uh to folks that have significant data data center infrastructure and data center money.

We cannot compare our tax rate to them.

That's that's not fair to to us because we uh do not have data centers, and I doubt we will have them.

Um but I do think you know the the opportunity to have greater discussion around if this is possible in terms of uh working with comparators um to realize benefits.

Obviously, there's pros and cons, so I think it's a bigger discussion than just uh this fiscal year.

Um but I think it is something that we need to start moving down uh in terms of um how we readjust things for the for the near term.

I would also throw out things like security.

We have security contracts for a number of our businesses or excuse me, our our facilities and libraries do as well.

Um how are we looking at those security contracts all together?

I think uh as we kind of reopen any shared services conversation in city schools, maybe we take another look at other things that that could be thought about and work together on, you know, and I think to uh Dr.

Simpson Bairds, I think that is some of the kind of other work that we need to do.

I don't think it raises you know the level of revenue, but it does definitely show the community that we can you know do uh do some shared services.

I think we're we're trying and uh to the public, we're trying and sometimes striking out, but I don't think it's it's um lost that uh these two bodies do want to work together to save taxpayer resources uh as well.

Um I did have uh uh in terms of kind of a question to my my school board colleagues in terms of strategic changes that uh as you look at the next three to five years uh especially of uh a low growth scenario.

What are some of the things that you're thinking about uh changes to uh the system?

Uh how you uh normalize that with the community, uh, because I've no doubt any changes to kind of regular education here is going to be met with some backlash or discussion at least.

Um but as we talk about fiscal management, what are some of those things that uh can be done?

I think one of the things that I think is brought up and continues to be brought up is and I I still remember Dell Pepper talking about this issue when she was on council is class sizes.

Um you know, that is uh uh a major discussion uh from time to time in these meetings, and so you know what does that look like in the next five to ten years?

Um what does that look like?

Uh obviously we have a an idea of what that looks like now, but uh we attach a number to that.

Uh how does that change things?

Our ass mister Um he asked a question then.

Go ahead.

Were you gonna respond?

Okay, go ahead.

Go ahead, Mr.

Turner.

Well, we'll well okay.

So just uh want to respond to several of those points.

So you mentioned staffing growth, health care, um, and then comparisons with with other divisions and what are our long-term um goals and how are we going to combat this um habitual structural deficit that we that we have.

And if you could save that one, not necessarily for staff, that's a question for the board.

Sure.

Um so just with um in the past, I'll just speak about what we have done in the past, right, for staffing growth.

Um so one of the things that we have done is we no longer go by our historical uh staffing formulas about in fiscal year 2022, we saw this coming, right?

There was no way that we were going to be able to continue to keep up with adding 25, 35, 40 uh additional FTEs every year.

Um so we address that around fiscal year 2022.

Um we are at the point now where we are mandated by the state that we have to have a certain number of specialized instruction teachers, English learner teachers.

Uh those are the areas where we were seeing population growth in um ACPS.

Um if we go any lower, we are approaching the standard of quality minimum for the state of Virginia or the Commonwealth of Virginia.

So that's something that we did back in fiscal year 2022 because we saw it coming in the current um fiscal year budget for 2027.

One of the things that we're looking at is health care.

We understand health care is exploding.

Uh one of the things we're trying to do to control health care is we have we have this shift.

Um likely in in the future we we will have a health benefits committee to sit down and take a look at those things.

Uh you and I spoke before this meeting started about uh approaching other jurisdictions about how can we combine risk pools um to potentially reduce uh healthcare costs in the future.

Um excellent idea.

We we can definitely go look at that.

I think that uh the smaller divisions would probably want to join us.

I think that most likely they would get a benefit, and we would likely not get a benefit um from doing that, but it's definitely something that we can look into.

Uh those jurisdictions currently, um, Manasseh City, Manassas Park City, uh Falls Church City, um, they have a higher split um for their health care um than ACPS currently.

Um that is something that you know my team will take a look into.

That particular example, um, could your team also look at kind of the bigger things as well, right?

I'm focused on us getting up the case.

Absolutely.

You know, there's a way to do that.

Absolutely.

We'll we'll definitely reach out.

I just know, for instance, Fairfax County Public Schools is the 11th largest school division in the entire country, they do their own thing.

They do their own thing.

Um they're not looking for for anybody else that they don't even participate in VRS.

They have their own retirement system.

Um but Arlington, Prince William County, Loudon County for sure, we can definitely reach out to to those jurisdictions as well.

Um, and then uh I'll toss it to the school board to respond to other questions.

Sure, Dr.

Simpson Burr.

I was just gonna respond to the very last question that I think you were directing to us.

And when we think about the future of education and you know what it means for not just our budget, but also the quality of the program that we're offering here.

I think first I'd say that regardless of technological advances, education is about relationships and it is about human relationships that cannot be replaced.

And I don't think that will ever change.

I think we've seen other technological leaps in our country's history, and that idea has always come up.

Oh, this will save money, this will replace teachers, and that has never been the case, and I don't think that AI or any other technology can do that either, because there is something uniquely human about people interacting, students interacting with their peers, with their teachers, that is essential to learning, and I don't think that will change.

Class size is an easy one.

It's a big bang for your buck, however, that's gonna have the most impact on academic outcomes.

And I will mention on the class size piece, because we have so uh there's such a wide variability in the age of our buildings.

Our older buildings have much smaller classrooms, and our newer buildings have much bigger classrooms that if we increase the class size, what is going to end up happening is that the newer school buildings will have bigger classes and the older school buildings will have smaller classes because they can't fit as many people, and that will also create an inequity in our system.

But from a pure dollars perspective, class size is an easy one to get more money, but I don't think it's always a smart option from a instructional approach.

Yeah, and if I could add some clarification to the technology piece, it's not necessarily the the in-class instruction that I'm looking at.

Well, I uh and I appreciate your answer because I I would agree with that.

I think it's the the other areas of a system, right?

I think if if you know, as as the city looks at kind of things like AI, are we looking at what we do with communications and marketing and those areas and if you can use that there?

So, you know, I I would I would turn that question kind of outside the classroom to other functions, to other business functions, and see you know how can those be aligned to to take advantage of technology because I I would agree with you on on that point, but uh I do think um the business community has started to show some models of how business uh business functions can change with you know use of technology.

So thank you.

Mr.

Turner.

I I just had um one follow-up um before uh you mentioned the the comparisons and how some of the larger counties have the ability to have the data centers, and that's what's helping their revenue grow.

I agree with you.

Um and that's why on slide 14 we highlighted the other three cities, right?

Because those are going to be our comps moving forward, right?

So the Falls Church cities, the Manassas Cities and Manassas Park cities.

Um so on slide 14, that's specifically why those are um highlighted because we feel like those are our comps uh moving forward because we understand with the square mileage here in the city of Alexandria, it's highly unlikely that we're going to have data centers that bring you know extra 153 million dollars to to the school system like some of our surrounding jurisdictions.

Um so I just wanted to point that out.

And then on the technology side, that is something that we've also been been looking at as well.

For instance, our phone services here around the school system, right?

We we made a change there to be able to uh save the school system um some costs there.

One of the things that we're also looking at are our software um that we have for uh for our schools, right?

Our subscription costs have been continuing to go up.

Obviously, they go up by when enrollment goes up, but they've been going up because software companies can just do that, right?

So we're also looking at that and ensuring that we're gonna streamline the software products that we're using throughout ACPS so we can uh achieve some savings there and also just consistency across the division.

Right.

Um one of the things that I remember um your you and your staff did a number of years ago was take um take academic books and put them from operating into uh in the capital.

Is there the same opportunity with technology, particularly subscription?

So yes, so that was something um we actually did in one of my first two years here um and Mayor Wilson, uh former Mayor Wilson suggested hey, let's put textbooks on on capital so that it's not competing with with operating resources.

Um we do have some of our technology needs in um the CIP as well.

I think it's about a half a million dollars that helps provide the devices for students or any other um technology upgrades that that we may have.

Um for software licenses, I don't think that would be something that you would want to fund out of uh out of CIP.

I I said the same thing with textbooks, right?

Because what Mr.

Wick said earlier, capital projects are funded with 20-year bonds, and for instance, textbooks are on a seven-year cycle.

If you were to bond finance that, you're paying 13 years past the use of of that.

So and I I recognize that he did say this is why we cash finance some of our capital side, but if we're gonna cash finance it, then it can just stay on the operating side.

Thank you.

Um I just wanted to jump in too and uh provide one response to um Mr.

Chapman in terms of like how we're thinking structurally about um trying to save and um sometimes taking uh positions that people may not uh like.

And that's so I'm thinking about uh from the standpoint of school construction and how we can really lower those costs.

And uh looking at what's happening with enrollment, you know, we saw a little dip this year in the whole region, you know, the uh enrollment's been going down because of the declining birth rate.

So I think we have to watch that closely, but really looking at how can we use the current land and the current structures that we have and repurpose them to meet our needs.

So that's another way that I I've been thinking about um just trying to keep costs down in the long term.

Yeah, I I appreciate that, uh Chair Reef.

I think I'm you know, to my colleagues' earlier point, I think I'm looking really looking for new solutions.

I think that's one that we put on the table and discussed and will continue to discuss.

But I think you know, as we look at structural change, I think you know, both bodies are gonna have to put new things up uh that they're gonna have to look at the Ms.

Green.

Thank you, Chair Reef, and thank you everyone for the discussion.

Uh good evening and happy women's history month.

That's right.

Thank you.

Thank you.

Um I am really enjoying the conversation around um state funding solutions, how we can get more from the state.

And I am very impressed by um um what the school board is doing with lobbying down at the General Assembly.

And um I think truly um the lobbyist firm that we picked up three years ago has truly been a game changer, and I look forward to um what uh they're gonna continue to do.

And I I take pride that I was a part of that.

Um I think is to Mr.

I think Mr.

Turner.

Um, Mr.

Turner.

It's like old times.

It's like old times.

All right.

I um with the slight decrease in enrollment, and I I know it was slight.

Um how does that affect the state sales tax revenue?

And can you give me like a comparison of what it was FY25 versus 26 and what you're perceiving to happen for FY27?

Sure.

And that's my that's my first question.

Sure.

And I um see you're always stylish in your green per usual.

Um so for our state revenue, our the sales tax isn't really based on the number of pupils that we have.

Um, but we are expecting to receive about 1.8 million dollars less in state revenue in the current fiscal year because our ADM average daily membership um has been down in in the current fiscal year.

Um next year we have adjusted our projection for next year.

Our state revenue uh, and I think it was like slide four tonight.

We are projecting about a 3.4 percent increase in our state revenue for next year.

Sales tax as a part of the state revenue in our budget has been performing wonderfully.

Um my entire nine years here in in ACPS.

Um it continues to perform wonderly wonderfully.

Um it is the um the revenue based on the enrollment that is going to impact us this year, um, but we are projecting it to to go up for for next year.

That's good to hear.

Thank you.

And um I know we'll be getting an update um from your lobbyist uh tomorrow.

And I I I look forward to to hearing that.

But um the at-risk add-on and then the additional money for specialized instruction.

Um are we following that?

Is that supposed to come through?

Absolutely.

So the at-risk add-on for specialized instruction as well as EL are two of the biggest ones that we are pushing because that is going to impact us the most.

We have the third highest EL population in the Commonwealth of Virginia.

So any time there is anything related to funding for EL students, that is something that we are behind.

We throw our full weight behind any of that.

We are also behind the Senate bill for the 3 percent salary increase for teachers because that is going to provide additional funding for ACPS as well.

I believe it was about 2 percent previously, if they increased it by another 1 percent, even though it is only 20 percent of SOQ positions, that's still additional money.

And because what we have worked out with our two bargaining units is above 3 percent already, that's going to help um in the long run.

So those are the three items that we are really throwing all of our weight behind because they are going to have the biggest impact for ACPS.

Okay, great.

And as it comes to uh grant funding, particularly with grants that affect at-risk students like the uh the Link Club and after-school programs.

What are we seeing as far as you know, are those being renewed or what what are we seeing for FY27?

So that's actually something that uh Ms.

Burgos just talked about um in a couple of our meetings.

So um specifically for one area we are um likely going to see a decrease.

I believe it's um for the Brent place uh after school programming.

Oh, and Patrick Henry, um, Dr.

Kwat just said.

Um so we will likely see a a decrease in in that grant funding.

Um, we will try to provide services where we can, um, but without the funding, there are going to be services that that go away.

Uh we can't pick up services if we we don't have the funding um to be able to do that.

So um we'll try to continue to provide some services through extended learning um that we have in in schools, um, but we're not gonna be able to provide the same level of service without that funding.

That so it that's two of the locations, not all of the locations?

Correct.

Oh God, we had different grants.

Okay.

And I also wanted to give a shout out as far as um going down to advocate at the State to our PTAC representatives as well.

I see you over there.

You do a great job as well.

Thank you.

All right.

Um I saw Mr.

Beattie's hand and also Mr.

Reina online and just want to be mindful of the time.

It's 853, just giving everyone a time check.

Mr.

Beattie.

I'll talk quickly.

I I uh in the last few rounds of elections that we have had here in the city, uh a couple of candidates uh had on their platforms that they were going to do full funding for the uh for the schools.

And so in all those cases, I went and spoke with those can not all, but in some of those cases I went and spoke with those candidates, and especially those running for State Office, and tried to explain, especially those that didn't have this information yet, what how how the stuff was distributed, how we're not doing very well relative to other places uh in the State, and uh that full funding was going to put a much greater burden on the on the city.

People were surprised.

A lot of folks, I think, as much as we talk about it here, don't really understand uh uh how that stuff works.

But a lot of the candidates that I spoke to are very much into providing more resources to the school system and wanting to do more in different pet P projects that different candidates uh had at the State level and also at the city level.

I see Stany is here, the one that made it made it through on the Democratic side.

We will see uh how that uh how that works out.

But I I uh I think there is a very strong uh interest uh from many of the residents of our city, evidenced by what happened in these last three rounds of uh of uh open seats leading to uh elections that folks uh want to see us continue to improve uh our our our school system.

I want to uh just remind everybody on on Michelle's presentation, there are no new positions proposed in this in this budget.

There are no new programs.

Uh uh.

The total focus is around uh um uh recognizing the great work that our staff are are are doing.

And uh as much as I think it's really, really great that we have been able to reach a tentative collective bargaining agreement with uh the EAA, both the licensed staff and the uh and the support staff.

I think you can see from some of the numbers that uh that Michelle provided that we were going to have to get close to these numbers with collective bargaining or not, just to stay competitive for our recruitment and for our retention.

If we weren't in the 5 percent range that we're talking about here, uh we would fall further behind.

We're already seventh out of eight in the region.

We're gonna fall further behind if we can't keep up with the uh the compensation that's happening in the districts around.

And the numbers that we're looking at in our proposal are only about even with the other districts for this year.

And so uh what we were looking at was uh uh was I think uh even without collective bargaining, we were going to have to wind up close to these numbers uh anyway if we wanted to meet our uh long-term goal of uh of uh recruitment and retention.

We still need bus drivers.

So and if you want to take a second job, we could we still use some bus drivers.

That's uh one place where we're pretty good on recruitment.

We're a little bit short on bus drivers still.

Uh thank you, Mr.

Beattie.

And I'll turn it over to Mr.

Reyna.

Thank you, Chair Reef.

Um appreciate the conversation uh thus far and and really appreciate that we're trying to approach this from uh um joint solutions standpoint, um recognizing that there are a lot of things that both sides have done uh on the cost saving side and certainly support uh Councilmember Chapman's comments around continued conversation for shared services.

Uh at the end of the day, uh I think as everybody around this table knows, there's sort of only two things that we can do.

We can either bring our costs down or we can e increase revenues.

And so we're in a really tight position, obviously, with the fiscal environment that we're in uh right now as Alexandrian residents um have deep concerns about affordability and and so do we.

Uh but at the same time we have deep concerns about our ability to ensure that we are educating uh our students to the best abilities that we can.

And all of that is being surrounded by uh certainly an environment of uh escalating costs.

Um I had one question um just around uh the city's bargaining units.

I saw uh there was a slide around comparison of total amount uh awarded for the bargaining units for the city versus what potentially uh we have a tentative agreement for uh on the school side.

Just a question for um I didn't see the total numbers of staff that are included in those bargaining units and how that may compare to ACPS uh bargaining units.

I can calculate that my number and get you get you that.

Okay.

It would be really helpful to know that.

Um also I'm I'm curious, we included a slide uh around what our potential starting salary uh would be.

I think it was 64,000 uh 800.

Um do you know off the top of your head, for instance, what the starting salary is for a firefighter in Alexandria.

I I don't have that in front of me, um, but I'm happy to get that to you.

I would say when we look at collective bargain, we don't just look at the starting salary.

A lot of times we'll look at what the actual pay is, particularly as it relates to the average salaries, because again, all the way through the you know, it's not just about the interest level, it's also about maintaining the seasoned employee as well.

So I'd be happy to share some of that information with you.

Yeah, I I appreciate that.

I I I did a quick uh search uh and I may be inaccurate, so apologies if I am off, but I believe it was somewhere in the 70s.

Um so I do think there's a little bit of a difference there, and I hear you um city manager around the overall average cost and certainly agree with that.

Um I guess from my standpoint, we've talked um about some potential ways that that we on the school board side uh have brought down costs.

We certainly um, even though it's not something that we wanted to do, um, removed uh over seven million dollars um from the budget, uh, including shifting health care costs uh potentially to our staff uh at a higher rate.

Uh we've talked a little bit around uh my colleague was asking some questions around the use of cash capital and the use of um the fund balance.

The thing that I haven't heard tonight, and I'm just curious about sort of positioning around that is uh the third option for potentially increasing revenue comes down to the possibility of tax increase.

Is that something that is currently under discussion amongst um the council, whether that's either from uh personal real estate side or the commercial real estate side Um I would say on March 10th, the council will set the maximum tax rate.

At this time, there is not agreement among the full body on a tax increase.

There's I think one person who is eager to pursue that.

Thank you.

Mr.

Chapman and Russian.

Oh I should say, even I mean, I don't want to speak, but one of the things that we have discussed is if we do a tax increase, the manager has proposed that a significant portion of that go to paying down our debt.

I think we are all in agreement that if we do any increase, it would be split among the 30 departments.

I appreciate that, Ms.

Mayor.

Um I think you know, it sounds like from my standpoint, um, I really appreciate these conversations to date.

Um there's clearly uh combined sense of trying to find a solution.

Um, but it feels like we maybe haven't moved past what I see are those three options that we presented at the the end of our slides.

Um we either receive the 3.5% to be able to fully fund the collective bargaining tentative collective bargaining agreement we came uh to with EAA, or we stay at the potential uh amount that was suggested by city manager, and we have some pretty substantial cuts that we have to make uh to the system, and even with those cuts, potentially aren't able to provide uh any sort of step increase or market rate adjustment for our staff.

Uh and uh that brings um some deep pain to me.

Obviously, it's not something we want to see.

We will uh make sure that we can work towards delivering the best education uh that we can uh under the circumstances we have, but I'd really like to be able to find a way um for us potentially to look for some other sources of funding to be able to get to that uh higher amount, uh, the amount that we think is is necessary and appropriate to deliver a collective bargaining agreement for the first time ever for our teachers.

I would just say on the city side, I mean, we are very early in our budget conversations.

This is our second work session.

We have a lot of questions that we have to go through across our budget.

Even in the first session that we had, I think we already asked like several related to additional efficiencies and things that we work on.

So I would just say from the city side, we share the same goal as you is terms of finding additional resources support and doing everything we can while also balancing the other thing that you raised around affordability and it being one of the biggest issues that we see within our community and recognizing that our options are limited like yours too.

You gave us the three that you have, and we have similar options around either cut more or raise taxes.

And so I think we have to wrestle with that as a council, and we will continue to do that, recognizing that I think most of us share the same goals and the same outcomes that we want for both our residents, our students, and our teachers across us.

I think the pain that you experience.

I'm a new proud ACPS parent.

I too, I see how amazing the teacher is that my son has.

He's in kindergarten and already doing multiplication.

And I want to make sure that we keep those same teachers and retain them the same way we've been wrestling with every other, I guess, unit across the city.

And even in every agreement that we received, everyone was frustrated because they did not get what they asked for and would have wanted more, and they're still not the top in the region.

And so I just share that because we are wrestling with the same complexity of issues.

We're also wrestling with the same set of limited choices in either cut or increase.

But we have a long way to go, and we'll go through those discussions as we move forward.

Mr.

Elnewby, thank you, Madam Chair.

And just to echo what the mayor was just saying, I think we all share the uh commitment to to this investment.

We all want to see our teachers paid competitively.

Um I think this investment that we make in ACPS as a city is one of the most important investments that we make.

And it's the biggest investment that we make.

Again, we we every year the biggest share of new money goes to ACPS.

In the last three or four years, about 20% growth happened in the funding that we give ACPS.

Um when student enrollment only went up by like one and a half percent.

I think what we struggle with as council members, we have to balance all the priorities.

Every dollar spent in one area is a dollar cut, like the mayor was saying in a different area.

Um I think just looking at that track record, it really shows council's commitment to education, it shows council's commitment to our schools.

But I think with any investment, the return on investment is is critical.

So when we look again, I'm gonna go back when we look at the data and when this data shows minimal academic progress, uh, when funding has gone up 20 percent in three years.

Um, I think that probably doesn't really increase the public's confidence um in in those decisions, and it really becomes really hard for me as a council member to go out and defend these decisions.

I mean, you're talking about a tax increase.

I how do I go out and defend um a tax increase and say the problem is a money problem?

Because if it's a money problem, we should have seen student outcomes go up.

We should have seen student improvement in achievements.

But we haven't seen that given all with despite all the investments that happened in the last I would say 10 years, uh, but specifically the last three years, as we talked about earlier, $56 million increased.

So it just I think as we move forward with these conversations, I'd really like us.

I heard a lot of needs today, needs, needs, needs, which I understand.

I mean, yes, there are needs, but I would love to see these needs being quantified.

I would love to see clear connections between those needs, the investments, and the outcomes.

I would like to see, okay, we have needs.

How much would it cost to educate an ALL student, a special needs student, how much more?

And how much more to get a specific outcome?

So we can go out to the community and say we invested this money and we got this outcome, or we didn't get that didn't get this outcome, right?

Um again.

Our track record as a city is we value educations and educators so much.

Last year, when at the end of the budget side at the end of the budget process, we found additional money.

That money went to ACPS.

I think we're councilman chapman, myself, and Councilwoman Green, we put in an ad delete, and that money went to ACPS.

I would like at one point to see how that money improved outcomes in ACPS.

I would like to see a clear connection on that investment.

What did that investment do to move the needle?

It may be early right now.

We're still, I don't know, three quarters in into the academic year.

But at one point, this is what we need to be seeing.

This is what we need to be talking about.

So we can defend those investments and we when we want to increase those investments, it would just be an easier conversation in the community for for me at least as a council member.

Um I wanted to respond to that, Mr.

Alnubi.

I invite you to a personal meeting with me where we can go through the ACPS strategic plan that we adopted last year, and you and I can review some of the conversations that I've had with the school board about how we can improve academic outcomes, because what I want you to know, and I want all of the community that's listening to know.

This board is committed to improving academic outcomes for kids.

That is what we are focused on, and I am happy to have conversations with you.

But we do have very real structural challenges in Alexandria too.

And I'd be happy to sit down and talk further with you about those.

Um given the hour, I think it's probably time that we wrap up the meeting.

I did just want to um small question as well.

Mr.

Chapman, go ahead.

Thank you, Madam Mayor.

Uh and excuse me.

Madam Chair.

And I do want to correct something my colleague said in a slight way, just so we understand we didn't find money last year.

We broke a promise to another partner to fund them.

That's what we did.

Right?

Like we took INOVA money that we had promised them for the last I don't know how many years I've been on council that we were gonna fund them and said, you know what?

We're gonna break that promise to you, we're gonna give it to the schools instead.

Right?

And so I I I want folks to understand if the public is listening, we didn't find money.

There wasn't money to find.

You know, uh we led a uh a coup to take money from another community partner to find ACPS and give ACPS a little bit of money.

So I want I want to be very specific about what what we did last year.

Um I also wanted to um yeah.

Um I I think to my my colleagues' point, and I'll try to make it very quickly.

I I apologize.

Um the reason I asked about strategic changes is because for for me, uh and while I was kind of flipping and trying to be funny about tax increase, it's not a funny thing for me.

But uh as I've said throughout this meeting, our challenge around revenue growth is gonna be slow for the next few years.

And so it's not about a one-time tax increase, then then we turn around and do it again and then we do it again and we do it again.

No.

It's about finding the structural issues that we have and raising revenue on the city side, but also looking at some systematic cuts that don't hurt uh as much.

You know, one of the things I I would throw out there, and I don't know your budget like I do, and I all due respect to staff.

I don't want to be flippant when I say this, is you know, the superintendent proposed a five percent cut across non-personnel, and that saves I think two million dollars or something like that.

You know, why is five percent the magic number?

Are you looking at seven?

Are you looking at ten?

And I would put this to the board members, you know, asking staff to you know to to look at those higher numbers.

Because then on that slide that you had those listed positions, you can make cuts at a bigger weight to certain personnel areas, non personnel areas, excuse me, and maybe save some of those positions.

Um I would love to see that happen in the ad delete sessions.

I haven't see yet, haven't yet, but I would love to see that.

And and frankly, for our city staff, that's something I'm gonna be looking at as well.

You know, it's great to do a cross-the-board cut, but we know every department is not equal, and that cut is not equal.

And so how do we do that in a in a certain way to get the best bang for the buck out of the areas that we need to, you know, one is printing.

You know, can we do higher than five percent in printing?

You know, we're losing uh using a lot of technology.

What does that mean for printed products?

Obviously, there's a place for that, but what is that perfect number?

That's something that we need to start talking about in terms of policy for our organizations.

Uh thank you for that, Mr.

Chapman.

And I appreciate your comment.

I just I think I will say that five percent is more of a magic number than one percent.

Um but uh anyways, I know this has been um I think this has been a really good conversation tonight.

I don't I I really do want to try to end on a good note here and just say that I think you know, one of the things that happens as we go through the budget process every year is there are um revenue streams that you know around the state funding, for example, that are still kind of being worked out.

We're not sure what they are gonna uh be, what the final numbers are gonna be.

And so I just want to encourage all of us, um, school board and city council to continue to stay in contact with one another um throughout this throughout your budget process so that we can keep each other informed and maybe we can continue to look for solutions.

Um on that note, I want to thank everyone for coming this evening and I uh say goodnight to you all.

Thank you.