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Meeting Date:
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4/24/2020 - 6:00 AM
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Category:
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Finance and Budget
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Type:
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Info
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Subject:
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COVID-19 Impact on FY 2021 Revenue
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ACPS 2025 Strategic Plan Goal:
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Goal 6: Effective and Efficient Operations
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Funding Source or Fiscal Impact (where applicable)
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File Attachment:
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Agenda Item Summary:
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On April 7, City Manager Mark Jinks announced revisions to his proposed Fiscal Year (FY) 2021 operating and capital budgets for the City of Alexandria, responding to the nearly $100 million budget gap created by the economic impact of the COVID-19 pandemic. The revised proposal for a $753.3 million operating budget in FY 2021 is 5.8% lower than the $799.9 million operating budget Jinks proposed on February 18 and represents a 1.6% decrease from the current-year operating budget. Of note, the prior FY 2021 City Manager’s proposed budget fully funded the Alexandria City Public Schools’ (ACPS) funding request from the City Appropriation of $241.4 million. The revised budget proposes to decrease the City Appropriation to ACPS by approximately $7.4 million to $234.0 million.
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Background:
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According to Mr. Jinks, “the COVID-19 pandemic has triggered the biggest health crisis in a century, and caused what may be one of the biggest, most sudden economic downturns the nation has ever seen. While we don’t yet know the full extent to which this deadly virus will impact Alexandria residents, businesses and City government, I am recommending significant budget changes to continue the City’s record of prudent fiscal management, while relieving some of the burden on taxpayers and focusing on delivering core services to our community.”
To maintain equity between City and ACPS employees, the City Manager proposed to reduce the recommended City operating transfer to ACPS by $7.4 million. This amount is equivalent to the cost to ACPS to provide merit step increases, a 2% bonus for top of scale, targeted market rate adjustments, and the elimination of an employer-paid contribution to the ACPS supplemental retirement plan.
Accounting for the reduction in the City Appropriation for FY 2021 is a significant task, however, it is not the only factor that needs to be considered when revising the ACPS Approved Budget. The ACPS Financial Services’ staff is mindful to consider the COVID-19 pandemic effects on Local, State, and Federal revenue sources as well. While those sources are secondary to the City’s Appropriation, they, too have an important role.
The Virginia Department of Education (VDOE) is currently projecting to have an estimate, in the coming weeks, for State funding to public schools after incorporating the General Assembly’s and Governor’s amendments to the State’s budget.
Staff is also projecting to see a modest decrease in Local Revenue as well. Revenue derived from the Rental of buildings, Summer School fees, and the Indirect Costs charged to Grant programs is anticipated to be affected resulting in decreased revenue from what was previously proposed.
While the City’s revised budget proposal seeks to reduce the City Appropriation to the ACPS Operating fund, the revision also proposes changes to the ACPS Capital Improvement Program (CIP) including deferring $103.7 million in funding for the new ACPS high school facility project .Planning for the project will continue in FY 2021, while the construction funding for the project will be delayed. The rescheduling of this project will allow other priority projects, such as the new MacArthur Elementary School project, to proceed on schedule.
Potential federal funding under the Coro
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Recommendation:
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The Superintendent recommends that the School Board review the above-mentioned Board Brief regarding the ACPS FY 2021 Operating Fund update.
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Approvals:
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Recommended By:
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Signed By:
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Robert Easley - Director, Budget & Fiscal Compliance
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Signed By:
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Dominic Turner - Chief Financial Officer
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Signed By:
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Dr. Gregory C. Hutchings, Jr. - Superintendent
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