Leesburg Council Proposes Budget Adjustments, But Makes No Decisions

Members of the Leesburg Town Council had their first opportunity Monday night to put forward changes to Town Manager Kaj Dentler’s proposed fiscal year 2021 budget. And, while suggestions were made, it will be another two weeks before there is a clearer picture on the final budget product.

Dentler has proposed to hold the real estate tax rate steady at 18.4 cents per $100 of assessed value which, with the increase in residential assessments, will mean the average homeowner can expect a $3 monthly tax bill increase. The proposed budget weighs in at $143 million total, which includes $62.5 million for the General Fund; $43.2 million in the Capital Fund; $4.2 million in Northern Virginia Transportation Authority funding; and $33.8 million in the Utility Fund.

Dentler’s budget included only one new staff position in the General Fund, an IT systems analyst to be hired Jan. 1. Despite strong returns in meals and consumer taxes, Dentler and the town’s finance staff said the budget was a conservative one to prepare for when the economy begins to slow.      

With recent plunges in the stock market caused in part to uncertainty over the global spread of coronavirus, that thought was top of mind during Monday’s work session. In response to a question from Mayor Kelly Burk, Town Treasurer Lisa Haley said the staff was monitoring the markets daily, but feels Leesburg’s conservative approach will help it to maintain status quo for the time being.

“We have budgeted for fiscal year 2021 an amount that is not overly aggressive, and we do that because we budget conservatively, so even with the market turning we’re able to maintain [operations],” she said.

Clark Case, director of the town’s Finance and Administrative Services Department, noted that the federal funds rate—the interest rate targeted by the Federal Reserve—has more of an impact on the town than the stock market.

Before council members could dig into the budget Monday, Dentler shared two late-in-the-game surprises. Town staff members found out last week the town would have some savings in its healthcare costs, at around $75,000, but late Monday afternoon received the news that the amount the town is required by the state to contribute to retirement savings increased from 10 percent to 11 percent. Those changes alone could cost the town $211,000, which, if no other changes are adopted by the council, would then place the tax rate around 18.56 cents.

Councilman Ron Campbell put forward the most budget adjustments for discussion. He asked the council to consider a 0.5 percent increase in the meals tax; a 1-cent increase in the real estate tax rate; adding two staff positions, a resource librarian for the Thomas Balch Library and a family services officer for the Leesburg Police Department; provide funds to facilitate the conversion from the Dewey Decimal system at Balch; adding a quarterly fee of $5 per household for refuse and recycling services; and fulfilling the budget requests of the Board of Architectural Review and the Economic Development Commission. 

Councilwoman Suzanne Fox asked the council to consider a $30 monthly fee for refuse and recycling services for downtown businesses. Currently, businesses in the town’s core historic district receive trash pickup six days a week and recycling three times weekly, but do not pay extra for the service. It is estimated that the $30 proposed monthly fee would generate an additional $51,000 in revenue for the town.

Burk proposed to fund the remaining board and commission requests not included in Campbell’s proposal, and to increase the non-resident fee differential for daily admission and memberships at Ida Lee Park Recreation Center. That fee is currently 33 percent higher than what town residents pay, but, if her proposal is adopted, could move to 50 percent.

Vice Mayor Marty Martinez asked the council to consider putting a placeholder in the budget for dedicated emergency management funding, but neither he nor the staff offered an idea of what that number could look like. Dentler emphasized that the town’s new emergency management coordinator, Joe Dame, just started his job Jan. 1, and will probably have a better idea of what would be needed in the coming months.

Several council members shared their views on the tax rate, ahead of Tuesday evening’s planned public hearing on the matter. Fox said she was comfortable with the originally proposed 18.4-cent rate, saying it’s “good and fiscally responsible to have some sort of cushion,” pointing to the annual amounts the town sets aside in contingency. 

Councilman Neil Steinberg said he was not comfortable with either the 18.4-cent or 18.56-cent rate, and proposed moving to a 19.4-cent rate.

“A lot of these numbers [in the budget] are based on a continuing healthy economy. We’ve seen the stock market drop, oil prices crash. If the United States and the state of Virginia and the Town of Leesburg start to see any similar effects of what we’re seeing worldwide there’s no reason to expect we’ll be immune from COVID-19. Not to build in a contingency for that very thing is going to be very short sighted,” he said.

Councilman Tom Dunn expressed his support for a lower tax rate than what was originally proposed, but said he would leave it to staff to determine the necessary cuts to accomplish that.

“I know this year started with ‘everything is very tight’. Well when you overspend things are always tight, and we overspend,” he said.

The council chose not to further discuss any of the proposed budget changes Monday night, or conduct any straw polls to see if there was majority support for any of the items. Dentler warned the council that postponing that direction to staff until the next work session March 23, with budget adoption planned for the following evening, will require staff to do much of the work on the fly. He did note that Campbell’s proposal to increase the meals tax would require a separate public hearing, which has not been scheduled.

A public hearing on the budget is planned for budget adoption night March 24.

[email protected]

Leave a Reply