Falls Church revises FY26 revenue down $1.2M; council will advertise flat tax rate and study switching trash to a fee

Falls Church City officials told residents at a town hall that the city has revised its FY26 revenue forecast down by $1,200,000 and will advertise the current real estate tax rate of $1.21 per $100 of assessed value while the council considers options to close the gap.

City Manager Shields presented the revision and options for the coming fiscal year, saying, “we presented to the city council a $1,200,000 revision to the revenue forecast for FY26.” He told residents the council has directed staff to advertise a $1.21 tax rate and a personal-property tax rate of $5 per $100 of assessed value; public hearings and final consideration are scheduled in coming weeks.

The revenue revision follows weaker-than-expected third-quarter receipts for sales and meals taxes, the city manager said, which he described as “real time” indicators of household spending. City leaders also noted strong assessed-value growth this year—about 10.5% overall, with roughly 12% commercial growth and 6.9% residential growth—which partially offsets the shortfall.

Why it matters: the city faces a choice between raising revenue or cutting spending at a time when both school enrollment and city service costs are rising. The proposed unified FY26 budget totals about $133 million. The general government budget is roughly $57.7 million (a 6.5% increase) and the school transfer is roughly $55.6 million (about a 5.6% increase). Staff estimates that different tax-rate choices would shift the median homeowner’s bill: a larger cut to the rate would require deeper program reductions, while a smaller change would require smaller reductions or none.

School funding and community reaction

Several residents and school employees urged the council to protect the school transfer and classroom services. Cassandra Cloud, a Falls Church homeowner, said, “The schools are so important. They're the heart of Falls Church City,” and asked the council to avoid cuts that would reduce services for students who receive special services. Second-grade teacher Gail Bodner told the council, “We are not asking for luxuries. We are asking for the resources necessary to maintain the quality of education the children of Falls Church deserve.”

Tate Gould, chair of the Falls Church School Board, said the board reduced its initial request to a “needs-based” budget of 5.9% after discussions with the council and emphasized that the city’s enrollment growth is driving the increase: “They are the heartbeat of the city,” Gould said of the schools, adding that the district already has projected an increase of about 54 students next year.

City staff noted compensation and mandatory contract costs are major budget drivers. The proposed budget includes a 5% compensation increase for public safety and civilian employees; the school side is operating with negotiated increases and an average increase that staff and commenters discussed during the session.

Solid-waste financing: study, fee examples and condo concerns

Solid-waste financing emerged as the other major policy question. Shields said staff recommends appointing a task force with a three-month deadline to study solid-waste options and return recommendations in August. The options under consideration include expanding curbside composting, replacing the current tax-supported curbside service with a dedicated solid-waste fee, or expanding city curbside pickup to multifamily and condo properties.

Staff presented cost examples: the city currently spends just under $1 million annually on contracted collection with American Disposal Service; about 28% of that cost is tipping fees at disposal facilities. The curbside compost program would be a net increase of about $65,000 a year and the purchase of new carts for composting would cost roughly $175,000. Staff said moving curbside service to a fee could reduce the real-estate tax rate by about 1.5 cents and be funded by a flat fee of about $332 per year for households that receive curbside service; an alternative smaller 35-gallon bin fee example was $284.

Condo owners and managers urged action on fairness. Kathy Tai, president of the Byron Condominium association, described the condominium’s current private trash contract and said the property’s layout and trash room make direct city curbside service infeasible. She said condo owners want an equitable financing approach and urged that any study group return actionable recommendations quickly.

Other multifamily residents, including speakers from Spectrum, Park Towers and Falls Plaza, also said a fee-for-service model could be fairer than continuing to fund curbside service through general taxes that cover condos that do not receive curbside pickup. Peter Markham, a Park Towers resident, said people in multifamily buildings “have been subsidizing other people's trash collection for the last 35 years.”

Equity and tax-rate scenarios

Shields walked through three tax-rate scenarios staff used as examples: a 2.5-cent reduction to $1.185 (presented earlier by a council member) would require roughly $1.2 million in reductions between schools and general government and leave the median homeowner’s bill about $400 higher than last year; a smaller reduction of 1.5 cents would shrink the reduction need to about $600,000 with a roughly $500 median bill increase; and a half-cent reduction would produce about a $600 median bill increase and require no program reductions in staff’s modeling. Staff also identified a $500,000 revenue contingency in the budget that it recommended keeping intact as a buffer.

Next steps and schedule

Shields reminded residents of the formal timeline: a public hearing on the budget and tax/fee ordinances is scheduled for April 28, a council markup work session on May 5, and final consideration on May 12. Staff recommended the council consider forming the solid-waste task force at the May deliberations so the group could report back in August; any change from tax-funded curbside service to a fee would, if adopted, first appear on the November 2025 real-estate tax bill, staff said.

What was not decided

No formal vote was taken on budget adoption or on changing how solid-waste services are funded at the town hall. The council directed staff to advertise the current $1.21 tax rate and a $5 per $100 personal-property rate and will consider the budget, fee and tax ordinance changes at the public hearing and subsequent meetings.

Residents may review the staff slides and the budget packet at FallsChurchVA.gov/budget and submit comments to budget@FallsChurchVAgov.