County Executive Presents Year-End Budget Status
Fairfax County Office of Public
12000 Government Center Parkway, Suite 551
Fairfax, VA 22035-0065
703-324-3187, TTY 711, FAX 703-324-2010
July 31, 2006
County Executive Presents Fiscal Year 2006
Year-End Budget Status and Carryover Review
On July 31, 2006, Fairfax County Executive Anthony H. Griffin presented the status for the County’s fiscal year 2006, which ended June 30, 2006, as well as recommended necessary carryover adjustments for fiscal year 2007, which began July 1, 2006. While FY 2006 revenues came in higher than anticipated, and disbursements were somewhat below the FY 2006 Revised Budget Plan amount of $3.17 billion, after netting out outstanding encumbrances, unencumbered commitments and net administrative adjustments associated with previously approved Board initiatives or other items of an emergency nature, as well as the required Managed Reserve adjustments, the balance is $19.32 million. This amount represents approximately 0.6 percent of the total FY 2006 General Fund Disbursements budget and is $4.68 million less than the FY 2005 ending balance of $24.00 million. This balance is the result of $34.52 million in General Fund revenues over the projection, an increase of just 1.1 percent over the budget estimate, combined with a net savings of $16.35 million in expenditures after adjusting for outstanding encumbered and unencumbered obligations, less $31.55 million for necessary administrative adjustments.
Actual FY 2006 General Fund Revenues and Transfers In were $3.094 billion, an increase of $34.52 million or 1.1 percent over the FY 2006 Revised Budget Plan estimate. This reflects a very close margin on a budget of over $3 billion and is similar to the 1.2 percent increase for FY 2005. The FY 2006 variance is primarily associated with revenue from Property Taxes, Other Local Taxes, Revenue from the Use of Money/Property, and Revenue from the Commonwealth and Federal Government, and was due in large part to the area’s economy, particularly during the first quarter of Calendar Year 2006, as well as rising interest rates, which brought in additional investment income.
Griffin stated, “Based on past trends, we anticipate that this relatively healthy growth may represent the ‘last hurrah’ of an economy that is shifting downward.”
In noting the balance of $19.32 million available for Board of Supervisors’ consideration, the County Executive explained, “My main objective in developing recommendations to the Board as part of the FY 2006 Carryover Review was to be mindful of the changing revenue picture. As the Board is aware, slowing conditions in the real estate market and an overall moderation of the local economy are anticipated to result in significantly lower revenue growth for FY 2008. Consequently, I have kept adjustments to a minimum and focused on those that are essential to public safety and health, represent a prior commitment by the Board, such as providing $8 million to Fairfax County Public Schools to support No Child Left Behind requirements, and/or contribute to an investment in the Board’s priorities and the County’s vision elements.”
In presenting his proposed FY 2006 Carryover Review, County Executive Griffin stressed that he strongly recommended to the Board that they hold the $19.32 million available balance for FY 2008 requirements. He had previously addressed the Board of Supervisors and the School Board on July 17, 2006, about the changing economic conditions and forecasted revenue growth for FY 2008 of only 3.3 percent, and reiterated that concern in his carryover message.
The Carryover package proposed by the County Executive includes a number of recommended administrative adjustments, for a total net impact of $31.55 million, including the associated Managed Reserve adjustment, that are necessary based on previous Board action and priorities. As part of the Carryover Review, adjustments were limited to only the most critical items for which the costs could not be absorbed within agency budgets. In addition, there were several items that were deferred from the FY 2007 Adopted Budget Plan for which the County Executive was directed to address as part of the FY 2006 Carryover Review. These are highlighted below, along with other investments in Board priorities and/or County vision elements.
$8.0 million is included to support the Board of Supervisors’
commitment to provide one-time funding as part of the FY 2006
Carryover Review to address non-recurring items in the Schools’
FY 2007 budget to free up $8.0 million in recurring funding in the
County’s FY 2007 transfer to the Schools in order to accommodate
recurring No Child Left Behind requirements. This supports the Board’s
priority of a Strong Investment in Education.
$4.6 million is recommended for Planning and Transportation Studies and
related staff support to appropriately guide redevelopment
opportunities in several areas of the County, as well as further the
revitalization goals of these communities. This investment supports the
County vision elements of Building Livable Spaces and Connecting People
$5.0 million is recommended to continue to bolster the Reserve for
Catastrophic Occurrences in Fund 501, County Insurance. The
FY 2006 ending Reserve for Catastrophic Occurrences is $11.9
million; however, it has been determined that a reserve of
approximately $15 million is a more appropriate target given the
County’s risk exposure and potential costs. This supports the County
vision element of Exercising Corporate Stewardship.
$1.0 million has been identified to continue to address the Board of
Supervisors’ priority of Environmental Protection and support the
Board’s Environmental Agenda. The projects to be addressed directly
support each of the Agenda’s six topic areas including: Growth and Land
Use; Air Quality and Transportation; Water Quality; Solid Waste; Parks,
Trails and Open Space; and Environmental Stewardship.
$0.3 million was identified for the Health Care for Unsheltered
Homeless Persons program. Funding will support four outreach teams, one
for each of the four human service regions. This initiative supports
the County vision element of Maintaining Safe and Caring
$0.5 million is included for an objective review and analysis of the
Fairfax-Falls Church Community Services Board’s mental health programs
to ensure that they meet County needs now and in the future. The Josiah
H. Beeman Commission will include locally and nationally recognized
experts, and will obtain input from a wide range of stakeholders to
address community needs. The County vision element of Maintaining Safe
and Caring Communities is supported by this effort.
- $0.5 million in savings from several human services agencies will enable the creation of a Prevention Fund to provide incentive funding for the development of programs to prevent youth violence and gang involvement. This supports the Board’s priority of Public Safety and Gang Prevention, as well as the County vision element of Maintaining Safe and Caring Communities.
Another critical issue identified as part of the Carryover Review relates to notification by the Virginia Department of Social Services that Fairfax County will receive $10.4 million less in FY 2007 than was budgeted for the Child Care Assistance and Referral (CCAR) program. This program provides subsidized child care to help the working poor to achieve and maintain self-sufficiency. The County’s FY 2007 Adopted Budget Plan included funding for the CCAR program at an enrollment level of 6,750 children. However, since the budget adopted by the General Assembly reduces the County’s FY 2007 revenue for this program $10.4 million from the adopted budget level, a corresponding decrease in expenditures and enrollment by 1,900 children is required. Griffin noted that this will have a serious effect on low-income families, as well as child-care centers and family child-care providers that serve this population, possibly forcing them out of business.
Losing child-care subsidies also may mean that parents will not be able to continue employment, and may go on or return to welfare programs. Without affordable child care, children may be left alone or placed in unsafe, unregulated child-care settings, with families often making piecemeal arrangements. The alternative is for Fairfax County to assume these costs to avoid having to reduce enrollment. However, based on the highly restrictive revenue outlook for FY 2008, the County Executive did not recommend General Fund resources for this program and noted, “We will continue to work with the Commonwealth to try to identify state resources that can be used to offset or at least reduce the deficit in order to avoid having to reduce enrollment in this critical program.”
The Board of Supervisors approved the advertisement of a public hearing on the FY 2006 Carryover Review to be held Sept. 11, 2006, after which, the Board will take action on the recommendations.
Information on the FY 2006 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.