Opinion

Peter’s Take: Reform County’s Budget Close-Out Process

peter_rousselot_2014-12-27_for_facebookPeter’s Take is a weekly opinion column. The views and opinions expressed in this column are those of the author and do not necessarily reflect the views of ARLnow.com.

As my fellow columnist Mark Kelly and I both have previously advocated, it’s time to overhaul the seriously-flawed process Arlington County government has been using to allocate any surplus funds left over at the close of the County’s fiscal year.

Discussion

Both Arlington County and Arlington Public Schools (APS) have fiscal years that end on June 30. Both the County and APS are required by law to adopt a balanced budget. In many years, Arlington County has closed its fiscal year with substantial surpluses. Since APS receives the lion’s share of its revenues from the County under a revenue-sharing arrangement, APS automatically receives its defined pro-rata share of any locally-generated Arlington County revenue surpluses.

However, in past years, each Board has utilized sharply-contrasting processes for deciding what to do with any such surpluses.

School Board’s Current Close-out Process

The School Board first receives, posts on its website, and discusses in a public meeting its staff’s recommendations regarding how to allocate any surplus funds. But, the School Board does not vote on its staff’s proposal until the following month. This process allows the School Board to:

  • discuss the initial APS staff recommendations at a public meeting, and
  • receive a public report from the APS Budget Advisory Committee, and
  • wait a month to get further input from the general public, before finally
  • adopting the final allocation of any APS surplus funds.

County Board’s Current Close-out Process

The County Board’s current close-out process is seriously flawed because it fails to provide the extra month for input from the general public that the School Board’s process provides. For example, last November, the County Board approved $21.8 million in new spending from surplus funds without providing that extra 30-day public review and comment period.

In 2015, the general public was denied a reasonable opportunity to discuss and comment about the Acting County Manager’s recommendation that this was the very best way to allocate last year’s $21.8 million revenue surplus:

  • $1 million for economic development, including incentives to attract new businesses to Arlington
  • $7.8 million for land purchases and other capital investment, including schools
  • $0.8 million for a “larger than anticipated” class of fire recruits
  • $11.2 million to maintain investments in the Affordable Housing Investment Fund and housing grants
  • $1 million for any unexpected needs or issues that may arise next year

Many activists allege that County staff deliberately overestimate expenses and underestimate revenues in the operating budget the County adopts each spring. These activists claim that staff does this so that during the following fall’s fiscal year close-out, the County government can take advantage of a public review and comment period that bears little resemblance to the far more lengthy spring review and comment period that the full operating budget annually receives.

County staff have indignantly countered that any such suggestions are false because the County’s spring budgeting approach simply demonstrates prudent financial planning for which the staff should be praised not criticized.

It isn’t necessary to resolve this continued annual debate over motive, because there is a far better process available to guard against the possibility that the staff’s motives might be suspect.

Conclusion

Starting this fall, the County Board should adopt a new fiscal year close-out process similar to the process long utilized by the School Board.