Manassas City Manager Patrick Pate’s proposed budget for the coming fiscal year includes a 4-cent reduction in the property tax rate, though property assessments are expected to increase by 6.7%.
The proposed $253 million budget was delivered to the council March 9, not including school division costs.
Pate said that even with the small decrease in the tax rate, city revenue will increase about 3.5%, and the budget includes a 3% performance pay increase for the average city employee.
Over the past year, residential property tax assessments grew 5.7% and commercial assessments increased 8.6%. The city is also benefitting from a bump in new construction, Pate said. Including the $2.98 billion expansion of chip manufacturer Micron’s Manassas facility, new construction accounts for more than $133 million in new tax revenue, which Pate said he believes is the biggest increase in city history. The budget for the year ending June 30 included $50.75 million in new construction revenue.
Pate’s budget would reduce the overall real estate tax rate from $1.48 to $1.44 on every $100 of assessed value in a home. That would cut about $120 in the tax bill for a home valued at $300,000, although increased assessment values could offset that reduction.
“Our attempt in doing this, is by lowering the tax rate with the assessment growth, there still will be an increase in tax bills, but it’s going to be around 3.5%, not the 6.7% number,” Pate said.
If approved by city council, the city would still net a general fund increase of $2 million, although a decision to leave the tax rate unchanged would double that amount. If the council decides to adjust the proposed rate, it would need to do so by March 18.
The budget does include a 5% increase in water utility costs and a 3% sewer increase. Pate told the council that the average residential homeowner would see a monthly increase of $2.85 in water and sewer bills.
“Stormwater is a major issue that we’re going to have to continue to address,” Pate told the city council Monday night. “We’re facing more and greater challenges based on the Chesapeake Bay regulations.”
The budget also includes an additional $600,000 for shared services agreements with Prince William County, bringing that total to over $12 million. After schools, that’s the second biggest piece of the city’s budget, just ahead of fire and rescue services and the police.
Some of that additional spending will be for new staff, including a public defender’s office approved by the Virginia General Assembly during the session ending this week.
However, Manassas will spend $1.2 million in an agreement for library services with Prince William, down from $1.4 million last year.
Pate and the city council are still negotiating with the county about the agreement at the shared Central Library, which expires this summer. According to Pate, the city is prepared to enter into another agreement with the county to build a new library within the city limits or exit the agreement and operate its own library by contracting Library Systems & Services, a private for-profit company that runs libraries on behalf of municipalities. Last month, Manassas Park announced it will leave the Central Library agreement and operate its own library with the company.
“The budget contemplates the funding to do either of those options,” Pate said.
For police, the budget also funds two new positions associated with red-light cameras that will be installed at a number of high-risk intersections around the city. Each automated ticket ultimately needs to be screened and approved by a member of the police department, so the budget funds one full-time and one part-time officer to handle that in-office work.
Officials believe the revenue from the program will ultimately pay for its cost, but up front the estimate is that the officers, paying the contractor and installing the cameras will cost about $160,000.
“We’re setting up our revenues to just pay for the cost of administering the program,” Pate said.
Council budget work sessions began the night after Pate delivered his proposal. A public hearing on the updated budget will be held April 27, and the budget should go to a final vote at the council’s meeting on May 18.