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Fairfax officials say budget forecast presents rosy picture

And now, the hunt is on to spend the extra dollars

Fairfax County is sitting pretty, budget-wise, as it heads into the fourth quarter of fiscal 2023 and county staff have identified ways to allocate higher-than-expected funds.

“We have a larger package than we typically have,” said Phil Hagen, director of the county’s Department of Management and Budget, who presented the Board of Supervisors with the fiscal 2023 third-quarter budget review March 28 at a meeting of the board’s Budget Policy Committee. The review is the final chance for supervisors to adjust the current fiscal year’s budget.

The county has about $109 million in additional resources at the end of the third quarter, driven primarily by a $37.6 million increase in investment earnings. That windfall, aided by the Federal Reserve’s ongoing interest-rate hikes, brings the year’s total for this budget item to nearly $55.2 million.

Personal-property taxes, caused by higher-than-expected levies for vehicles and business-related personal property, increased $11.25 million. Hotel revenues continue to bounce back from the pandemic, resulting in $2.42 million more than expected in year-to-date collections of transient-occupancy taxes.

“We have higher hotel occupancy as well as a higher average daily room rate from what we were seeing a year ago,” Hagen said.

County staff recommended almost $88.3 million worth of expenditure adjustments, which will partly stem from lower fringe-benefit costs, owing to vacancies in some positions, Hagen said. Staff also suggesting adding $10.3 million to the county’s reserves.

Staff members recommended divvying up the $109 million in extra resources thusly:

• $36 million for these capital projects:

– $10 million to offset higher construction costs at the Willard Health Center and Sherwood Community Center project.

– $8.1 million to pay for final courtroom renovations at the Jennings Judicial Center.

– $6.1 million to replace and upgrade infrastructure at county facilities.

– $6 million in support of design-and-development costs for the Original Mount Vernon High School.

– $3.8 million to address emergency-systems failures at some older county facilities.

– $2 million to expand the traffic-signal-preemption program for emergency vehicles – especially in Tysons and along Routes 29 and 50, which should result in faster response times for incidents, Hagen said.

• $23.46 million for information-technology efforts, including:

– $5 million for the second of three phases of a plan to replace election equipment.

– $4 million to modernize the Department of Tax Administration’s tax-payment system.

– $4.5 million to buy a safer, more efficient software-storage system.

• $10.7 million for vehicle replacements, including:

– $5.7 million for the county’s vehicle-replacement program, in part to cover higher costs of transitioning to hybrid and electric vehicles.

– $5 million to cover inflation-related cost increases for Fire and Rescue Department apparatuses.

• $6.5 million to support these Fairfax County Park Authority initiatives:

– $5 million for higher construction costs associated with the Park Authority’s capital projects.

– $500,000 for forestry operations.

– $400,000 for bamboo-mitigation efforts. The funds will help treat about 20 acres of Park Authority land, or roughly 10 percent of the total overgrown with bamboo, Hagen said.

Supervisor Penelope Gross (D-Mason) said the county also needed to focus on other invasive plant species that are menacing local parks.

“Invasive vines are destroying our opportunities for some of our parklands and they’re pulling down trees,” she said. “It’s really bad and it’s making a couple of our smaller parks almost unusable.”

– $350,000 to replace park signage as a result of the Board of Supervisors’ renaming of Route 29 and 50.

– $250,000 for educational initiatives at Sully Historic Site and Sully Plantation, which will highlight the lives of enslaved people, he said.

• $1.13 million for this initiatives of the Office of Elections:

– $580,000 for non-merit staffing because of new legislative rules and additional polling places resulting from the 2022 redistricting.

– $470,000 for costs of the 2023 special and primary elections.

– $80,000 for mailers informing voters of changes to names and locations of polling places.

– $60,000 to cover the General Registrar’s state-mandated salary increase (which will be covered completely by state revenue).

Staff also recommended spending $18.99 million in these categories:

– $9.42 million for accrued-liability adjustments for the county’s insurance fund.

– $4.1 million for Fire and Rescue Department overtime increases.

– $1.5 million for motel placements of an increase number of families experiencing homelessness.

– $1.4 million for road-signage replacements associated with the renaming of Routes 50 and 29.

– $2.57 million to pay for needs at the police department’s South County District Station, including costs related to the Americans with Disabilities Act, heightened security, the station’s hypothermia program and maintenance that previously was provided by the Community Labor Force.

County staff recommended the following spending adjustments:

– A $10 million transfer from the General Fund Pandemic Reserve to support affordable-housing initiatives.

– $6 million in savings from lower fringe-benefit costs.

– A $5 million reduction in Children’s Services Act expenditures, which will be offset partially by a $2.5 million reduction in state funding, for a net general-fund reduction of $2.5 million.

Supervisor Patrick Herrity asked about reductions in county pension funds.

County pension funds have lost about $24.9 million due not only to investment losses, but also higher liabilities because of higher-than-expected pay increases and a smaller base of contributing employees, owing to vacancies, said Christina Jackson, the county’s chief financial officer.

The Board of Supervisors will take action May 2 regarding the third-quarter budget review, then on May 9 adopt the fiscal 2024 budget, which will begin July 1.