Subject: Testimony at CIP Public Hearing

Date: May 23, 2006

The attached was presented (with a smile :) at the Board's public testimony last night. Much of the testimony addressed funding for the Arlington Mill Community Center and parking for the Lee Senior Center, while the tennis players were out in strength asking for more tennis courts (only 81 to go around!)

An interesting sidelight was the number of complaints regarding previous bond issues that never funded the problems they were intended to address. This may be a 'chronic' problem.

Jay Fisette was also heard to complain (several times!) that he thought the construction inflation for the past four years (one of the reasons for the 'supplemental') was much higher than the Manager's reported 25% (which is only about 6% a year, not terribly higher than the general rate of inflation!)

For those interested in low drama, the County Board will hold a work session on the proposed CIP on May 25th at 4:30 p.m.

Regards,

Burt


My remarks this evening reflect the majority concerns of the Revenues and Expenditures Committee of the Arlington County Civic Federation. Given the very brief period before the Board adopts the CIP, we will not have the opportunity to submit a resolution for the consideration of our membership, but may well offer one prior to this fall's bond referendum.

The R&E Committee has the following specific observations and concerns:

1) The Manager is proposing a 'supplemental' bond issue of $36 million. In everyday terms, one would say 'funding cost overruns'. This is particularly disconcerting to voters who have previously approved funds for these projects, in one case, in four previous bond issues. Without rehashing the unfortunate history of these projects, there is a concern that this situation reflects a much greater problem than just a recent increase in unanticipated construction inflation. It goes to concerns about project definition, contract negotiation and the overall project management process. At a minimum, projects should not be put into a referendum 'before their time'. If a one-year vs. a two-year CIP funding cycle would help improve this situation, it should be considered.

2) We support the Manager's stated intention to focus on basic repair and maintenance of existing facilities as a priority for bond funding. We hope the Board agrees with and reflects that priority in its adoption of the CIP.

3) We support the Manager's intention to adequately fund 'paygo' for facilities maintenance and repairs in the comprehensive base budget, rather than relying on fiscal year closeouts to cover these requirements. This is a much more transparent and systematic approach to the problem, particularly for essential street maintenance.

4) We believe the County Board needs to pay very close attention to the impact of increased debt service on the tax rate, and the impact of new projects on additional operating costs. We commend the Manager for reflecting those impacts in the proposed CIP.

5) If the County wishes to maintain its AAA bond rating, the Board and the Manager would do well to better observe the frequently mentioned, but seldom addressed concerns about 'sustainability'. At the end of the day, it's not about how much the County can afford�it's about how much overburdened homeowners can afford. Having already passed a 9.2% increase in the operating budget and a substantial increase in property taxes, you can be sure that homeowners will be looking at this fall's bond funding requests with a keen eye. If they believe that funding $100 million or more in new bonds is not absolutely essential, both the Board and the bond rating agencies may be in for a rude surprise.

Burt Bostwick
Chair, Revenues & Expenditures Committee, ACCF

This page was last revised on: May 25, 2006.