Leesburg Town Manager Kaj Dentler is sounding the warning bell that Fiscal Year 2021 budget deliberations will be anything but easy.
As part of a preliminary look at next year’s budget season, Dentler on Monday gave Town Council members a glimpse of some considerations they’ll face in February.
He pointed to the council’s Fiscal Year 2020 budget decision to delay the hiring of six full-time General Fund positions to Jan. 1 as already putting the town “$370,000 in the hole” before his proposed budget is even presented. Those six positions will require 12-month funding to come July 1, 2020, the start of Fiscal Year 2021. With some enthusiasm on the council for adding up to $600,000 to its snow removal budget, based on a staff presentation from two weeks ago, the council could already be looking at more than a one-cent increase on its real estate tax rate. A one-penny increase on the tax rate is expected to generate about $800,000 in additional revenue.
With a tight budget expected, Dentler got council members’ wheels turning with some initial areas to look for additional revenues to avoid a real estate tax hike. That includes increasing the meals tax from 3.5 percent to 4 percent, mirroring meals tax rates of other Loudoun localities, including Purcellville (5 percent); and Hamilton, Hillsboro and Middleburg (4 percent). A half-percentage point increase could amount to an additional $815,000, assuming consumer habits stay the same, he said.
Another avenue to explore would be enacting a 3 percent admissions tax for town entertainment venues, like movie theaters, sporting and music venues. That should generate at least $140,000, he said.
Dentler also suggested looking at a town-wide monthly user fee for refuse and recycling services of $5 per household to generate an additional $700,000. A quarterly $5 fee would generate $233,000. Charging downtown businesses for six-day-a-week refuse and recycling services, which is currently not being done, could generate $51,000 annually if a monthly $30 fee per unit is enacted.
On parking, Dentler suggested a 25 percent increase to parking fines, a change that could generate upwards of $45,000 in additional revenue; and also looking at the parking fees for the Town Hall parking garage. On the garage, options include charging for 24-hour use of the facility on weekdays and Saturdays; or keeping the current revenue hours of 7 a.m. to 7 p.m. Monday through Friday but moving to a $2/hour fee instead of $1/hour. Both of those options would continue with the practice of keeping the first two hours of garage use free, but could generate between $50,000 to $70,000 in additional annual revenue depending on which option is selected. Another garage revenue enhancement could be increasing the fee for monthly parking permits by $5 each for both reserved and unreserved parking spaces, which would net an additional $7,000 annually.
On the expenditure side, the council will be asked to accommodate quite a bit in the General Fund. In addition to the new full-time positions, there is a projected $145,000 increase in the refuse and recycling contract attributable to growth and inflation; and personnel costs for current staff members are expected to increase by about $1.35 million, with both healthcare costs and the desire to stay competitive with salaries in the job market. There are other areas to consider, Dentler said, with a need for additional staffing in the Police Department and possibly also additional full-time staffing in the Thomas Balch Library; implementation of initiatives in the recently adopted IT strategic plan; legal services related to the boundary line adjustment between the town and the county; land development workload costs; employee training and development; and more.
In the Capital Improvements Program, the staff is grappling with many bids coming in over budget with a regional rise in construction costs. Already the Evergreen Mill Road widening project is projected to be $3 million over initial estimates, while the Veteran’s Park at Ball’s Bluff project is $2 million over estimates based on the bids received from contractors.
Dentler could integrate some of his revenue options into his proposed budget, which will be unveiled Feb. 11. The council is expected to adopt the budget at its March 24 meeting, with several budget work sessions between the two dates, to meet a county deadline now that the county has taken over real estate tax billing and collection responsibilities from the town.