Fairfax County Office of Public Affairs
12000 Government Center Parkway, Suite 551
Fairfax, VA 22035-0065
703-324-3187, TTY 703-324-2935, FAX 703-324-2010

Aug. 2, 2004

On Aug. 2, 2004, Fairfax County Executive Anthony H. Griffin presented the status for the county's fiscal year 2004 which ended June 30, 2004, as well as recommended necessary carryover adjustments for fiscal year 2005, which began July 1, 2004. As the beneficiary of an improving economy that generated a higher level of revenue, Fairfax County realized a positive year-end balance of $48.66 million, after netting out outstanding encumbrances and unencumbered commitments as well as associated Managed Reserve adjustments. This $48.66 million year-end balance represents less than 2 percent of the total fiscal year 2004 General Fund disbursements and consists of additional revenue of $33.71 million as well as expenditure savings of almost $15 million on a $2.6 billion budget.

The additional revenue consisted of higher than anticipated property taxes, other local taxes (including sales, recordation and deed of conveyance, mobile local telecommunications, and business, professional and occupational license taxes), permits, fees and regulatory licenses, as well as revenue from the commonwealth and federal government. A significant portion of the increase occurred during the last quarter of the fiscal year, a surge that was not anticipated during the fiscal year 2004 Third Quarter Budget Review. Griffin noted in his memorandum to the Board of Supervisors, "…after relatively uneven economic performance over the past few years, it has been extremely difficult to predict the exact timing and magnitude of improvements in the economy and their impact on county revenue." A similar phenomenon occurred after the severe economic downturn of the early 1990s. Spending cuts and an unpredictable recovery led to increased balances for both fiscal years 1993 and 1994 as the economy improved.

As part of his recommendations for fiscal year 2005, the county executive identified a revenue increase of $4.85 million, necessary administrative adjustments totaling $33.32 million, the allocation of $7.81 million to the county's Revenue Stabilization Fund as required by board policy, and $0.83 million in associated Managed Reserve adjustments, leaving a balance of $11.55 million for board consideration.

Among the priorities identified in his fiscal year 2004 Carryover Review recommendations are administrative adjustments that support strategic county vision elements, such as Maintaining Safe and Caring Communities, Building Livable Spaces, and Practicing Environmental Stewardship. In addition, an allocation to the Revenue Stabilization Fund of $7.81 million, with an associated Managed Reserve adjustment of $0.16 million, in conjunction with anticipated fiscal year 2005 interest earnings, will bring the total RSF to $42.96 million or approximately 50.9 percent of the targeted amount, which represents 3.0 percent of total General Fund disbursements.

Of the available balance of $11.55 million, Griffin recommended that $5.0 million be set aside for Fairfax County Public Schools' vehicle and computer replacement requirements pending development of a clear approach subject to Board of Supervisors' approval and matching funds from the school system. In addition, he recommended that $2.0 million be placed in a reserve for environmental projects identified by the county executive and approved by the Board of Supervisors as part of its adopted plan, "Environmental Excellence for Fairfax County: A 20-Year Vision."

The Board of Supervisors approved the advertisement of a public hearing on the fiscal year 2004 Carryover Review to be held Sept. 13, 2004. Following the public hearing, the board will take action on the proposed Carryover Review.

Information on the fiscal year 2004 Carryover Review is available on the county's Web site at www.fairfaxcounty.gov/dmb and by calling the Department of Management and Budget at 703-324-2391, TTY 711.