2. Where Have We Been:
General Fund Revenue Growth Rates
Annual Percent Change – FY 1992 – FY 2012
15.00%
10.00%
5.00%
0.00% Real Estate
Non-Real Estate
-5.00%
Total GF
Fiscal Year
*Projected
1
3. Where Have We Been: General Fund Revenue
Average Annual Growth Rates FY 1992 – FY 2012
0.08
0.07
0.06 7.2%
0.05 5.8%
0.04
Forecast
3%
0.03 growth
1.9%
0.02
0.7%
0.01
0
Fiscal Year
*Projected
2
5. Where Have We Been: General Fund Revenue
Historical Perspective - FY 1992 to FY 1999
FY 1992 – FY 1995, 1.9% Average Annual General Fund Growth
Total Real Estate revenue decreased 0.5% per year
Residential values either declined or were essentially flat
Nonresidential values declined each year
All other revenues rose at an average annual rate of 5.1%
Personal Property Taxes rose an average of 5.2%
Sales Tax increased 6.7%, on average
BPOL rose an average of 5.6%
FY 1996 – FY 1999, 5.8% Average Annual General Fund Growth
Total Real Estate revenue increased 4.7% per year
Residential values declined or were flat
Non-residential values fell in FY96 then rose 3.3% to 7.1% in FY97 – FY99
Value of new construction exceeded the increase in total equalization each year
All other revenues rose at an average annual rate of 6.9%
Personal Property Taxes rose an average of 7.8%
Sales Tax increased 6.5%, on average
BPOL rose an average of 7.3%
4
6. Where Have We Been: General Fund Revenue
Historical Perspective - FY 2000 to FY 2007
Revenue grew 74%, an average annual increase of 7%
Of this increase:
• 69% from Real Estate tax revenues which grew at an average annual
rate of 9%
• 31% from all other categories which grew at an average annual rate
of 5%
5
7. Where Have We Been: General Fund Revenue
Historical Perspective - FY 2008 to FY 2012
Revenue grew 3.4%, an average annual increase of 0.7%
Of this increase:
• 132% came from Real Estate taxes which grew at an average annual
rate of 1.5%
• All other categories combined decreased 0.5% per on average
The value of Real Estate in FY 2012 is still 11.6% below that of
FY 2007
6
8. Looking Ahead: Modest Revenue Growth
The County economy (measured by Gross County Product) is expected to
rise, on average, 3% from 2011 to 2015*
From 2000 to 2006, the County’s economy grew at an average rate of 5.8%
Including the recession (2000 to 2010) average annual growth was 4.0%
Northern Virginia is expected to gain 16,000 jobs per year from 2011 to
2015**
Average Annual Change from 1990 – 2010 was 36,000
Federal Spending in the Washington Metro area is expected to remain
relatively flat from 2011 to 2015**
Federal Contract spending in Fairfax County rose at an annual rate of nearly 14% from
FY 2000 to FY 2010
*Moody’s Analytics
**Center for Regional Analysis, GMU
7
9. Looking Ahead: Residential Real Estate
Fairfax County
The number of homes sold in 2011 fell to 12,077 or 13% compared to
the 13,894 sold in 2010
Average price of homes sold in 2011 rose 3.3% from $457,174 to
$472,241
Weakness in the 4th quarter 2011, average home price fell 0.2% from the same
period in 2010
Case-Shiller Housing Index for the Washington Metro Area indicates
home prices falling slightly in 2012 and then experiencing average
increases of 2.5% from 2013 through 2015*
Mortgage interest rates are projected to remain under 5% through 2013
and then rise slowly to 6.4% by 2017**
This is likely to restrict home sales
*Moody’s Analytics
**Blue Chip Financial Forecasts
8
10. Looking Ahead: Nonresidential Real Estate
Office Vacancy Rates at Mid-year 2011
Direct – 12.8% down from 13.3%
Including sublet space – 14.7% down from 15.3%
Total 113.4 million square feet of office space in the County
4 buildings totaling 870,000 square feet are under construction
Office Leasing activity is on track to meet or exceed the average, 10.8
million sq. ft., of the last 5 years
Through the 3rd quarter of 2011, leased 9.2 million square feet
Multi-family rental market is strong
Low vacancy rates, rising rents
New construction and renovations of older buildings will help to meet
demand
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11. Where Does That Leave Us?
• If Revenues (with no real estate tax rate adjustment) are
estimated to increase ~ 3% annually
• Then assume County Disbursements also increase 3% ~
$100 m annually
• The challenge is that $100 m/year will not go very far to
meet existing requirements and Board priorities
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12. Where Does That Leave Us? (continued)
• As examples, in the following categories, annual expenditure growth for both
County and Schools would cost:
• 2% COLA $ 60 m
• Restoration of remainder of compensation increases $ 70 m
• 2% increase in FCPs enrollment $ 40 m
• Fringe Benefits (health, retirement, OPEB) $ 35 m
• Inflation (contracts, utilities) $ 10 m
• Required Debt Service increase to support current CIP $ 7m
• County Metro/Transit $ 3m
• TOTAL $ 225 M
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13. What’s Left to Be Addressed:
Further Progress on Board Priorities
Quality Education System
Student Achievement, Capital Program
Safe Streets and Neighborhoods
Public Safety Staffing, Public safety resources (infrastructure
and equipment)
Clean, Sustainable Environment
Environmental CIP, Stormwater Requirements
Livable, Caring and Affordable Community
Housing Blueprint/Ending Homelessness, Maintaining Safety
Net
12
14. What’s Left to Be Addressed:
Further Progress on Board Priorities
Vibrant Economy
Economic Development, Revitalization
Recreational/Cultural Opportunities
Athletic Fields, Sustainable Library Services
Taxes that Are Affordable
Economic Diversification, Preservation of Intergovernmental
Revenue
Efficient Transportation Network
Transit, Roadway Network
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15. What’s Left to be Addressed:
Capital Requirements
Near Term Capital Requirements beyond basic CIP
Includes Baseline GO Bond Program of $233 m per year
and funding for 3 additional requirements
Other projects outstanding include Tysons
Redevelopment, Transportation and Schools
Two Questions Related to Capital Program
Affordability?
Ratios?
14
16. $233 m Annual Bond Sales FY 2018 to FY 2030
as included in Forecast and Ratios
Human Services Public Safety
Parks - NVRPA 10,000,000 10,000,000
3,000,000 4% 4%
1%
Parks - FCPA
9,500,000
4%
Metro
23,500,000
10%
Transportation
(Roads)
20,000,000 Schools
9% 155,000,000
67%
Library
2,000,000
1%
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17. Capital Requirements: 3 additional requirements
Mid-County
Public Safety Tysons
Mental Health
Description Headquarters Road
Center
* Improvements
(Woodburn)*
Total Project $80-90 million $149 million $45 million
Estimate (prelim.) annually
Annual Debt Service $6 million $11 million $4.5 million
(approx.)
Debt Service begins FY 2016 FY 2017 FY 2019
Amortization Period 30 years 30 years 20 years
Type of Bond Sale EDA Lease Revenue EDA Lease General
Revenue Obligation
Start of Spring / Summer Spring / TBD
Construction 2012 Summer 2013
*Projects have received Board approval and are included in the Adopted CIP
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18. Other Capital on the Horizon
Dulles Rail Shortfall $200m
Represents portion not covered by Phase I & Phase II
Transportation Improvement Districts
Debt Service in C & I Fund
Tysons Redevelopment
Funding formula under discussion by Planning Commission
Transportation Plan
To be discussed
17