County staff recommend shoring up economic reserve as FY2025 carryover priorities

Fairfax County budget staff on Sept. 16 presented their FY2025 carryover recommendations, saying a slimmer year‑end balance and rising uncertainty argue for placing more money into the reserve for economic uncertainty rather than new recurring programs.

Phil Hagen, director of the Department of Management and Budget, told the Budget Committee the county ended FY2025 with a general fund variance of about $124 million and a revenue variance of roughly 0.48% of estimates — the smallest balances seen in recent years. "This is our first opportunity to amend the FY2026 budget primarily by identifying uses for the revenue and expenditure balances that remain at the end of FY2025," Hagen said.

Staff proposed using $5.66 million to maintain the county's 10% reserve target, $14.18 million to the capital sinking fund, and reallocating the staff‑typical 20% bicycle and pedestrian allocation (about $9.45 million this year) into the reserve for economic uncertainty; that action would increase the reserve to just over $22 million. Hagen said the change reflects a smaller overall carryover balance compared with prior years and the need to strengthen the county's financial position heading into bond‑rating reviews.

Hagen outlined a set of recommended one‑time allocations: $4.0 million to replace the courthouse security system; $2.5 million to address food insecurity programs; $2.0 million for homeless services contracts; $1.8 million for phase two of the Park Authority's equity implementation plan; and one‑time capital equipment investments tied to the Park Authority "zero waste" plan. He also proposed $5.3 million for IT projects and $2.5 million toward a public safety radio system refresh, which he called a multiyear effort.

On federal stimulus funds, Hagen said the county has expended $215.0 million of $222.89 million in ARPA allocations and recommended reappropriating the remaining $7.6 million so already‑allocated projects can continue to spend through the December 2026 deadline.

The presentation included personnel recommendations: establishing 65 positions overall, many of which staff said are either revenue‑offset or housed in funds with their own revenue. Highlights included 26 positions within Neighborhood and Community Services to implement a "Beyond the Bell" pilot for school‑age child care; 14 positions in the Department of Family Services; and nine positions for the Fairfax‑Falls Church Community Services Board tied to Medicaid waiver slots. Three positions tied to Commonwealth's Attorney state actions were also listed.

Board members pressed staff on which position additions were mandatory as a result of state action, what the legal timing was for creating state‑required positions, and whether some discretionary positions — notably five Park Authority positions to manage an equity implementation and sliding fee registration system — could be handled by existing county staff rather than added at carryover. Katie Horstman, deputy director, told the board some state actions should be processed at carryover and staff would check with county attorneys on timing for others.

A recurring theme in the discussion was concern about spending pace on long‑term capital initiatives. Members noted the county has allocated roughly $82.12 million toward bicycle and pedestrian projects but that only about $12.0 million has been encumbered or spent to date. Supervisors urged staff to explain the gap and to accelerate project delivery where possible; one supervisor said the audit committee will examine the delays.

Hagen closed by noting the FY2027 budget development process and a county‑run employee suggestions portal (open through Oct. 31) that had produced about 400 suggestions in its first week. The schedule for carryover public hearings and the FY2027 forecast was reiterated: a public hearing on Sept. 30, a joint county‑school financial forecast on Dec. 2, and the FY2027 advertised budget plan on Feb. 17, 2026.

The Budget Committee did not take formal votes in the Sept. 16 meeting; staff said detailed project lists, NIP materials and pages of the carryover package contain line‑item specifics for committee review prior to board action after the Sept. 30 public hearing.