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Falls Church finance director reports FY24 surplus and ARPA obligations; council asks if year‑end funds should cover sewer costs
Summary
Finance Director Kieran Bawa presented preliminary, unaudited FY24 results showing revenues about $5.3M above budget and strong investment income; council asked staff to consider using year‑end surplus or ARPA funds to address impending sanitary sewer costs and to present scenarios in October.
Finance Director Kieran Bawa presented the city’s preliminary, unaudited fiscal year 2024 year‑end report and highlighted several takeaways: overall revenues exceeded budget by roughly $5.3 million (about 5%), expenditures were under budget, and elevated investment income added to one‑time resources. Key revenue drivers included personal property tax, sales tax and transient occupancy (hotel) tax gains driven by development and new facilities.
Bawa said general fund tax revenues came in about 2% over budget; personal property tax was nearly 8% higher than last year due to new vehicles from recent development activity and sales tax and meals tax continued to perform strongly. The staff report shows a provisional unassigned general fund balance and a capital reserve projection that will be used when the council considers October budget amendment requests.
On ARPA, Bawa said the city received $18.0 million, has appropriated $17.89 million and currently has about $2.2 million unencumbered; staff intends to obligate those funds by Dec. 31, 2024, and expend them by Dec. 31, 2026. Councilmembers asked whether any of the remaining ARPA or year‑end surplus should be directed to sanitary sewer obligations, including a capacity purchase with Fairfax County and flow‑equalization basin needs; staff said they will model scenarios and bring recommendations with the October budget amendment.
Council also asked about capital reserve drawdowns tied to the FY25 CIP and whether maintaining a 17% unassigned fund balance target remains appropriate; staff said they will consult financial advisors and return with policy options in November. Several councilmembers urged conservative multi‑year revenue forecasting given uncertainty in near‑term tax receipts and the timing of development projects.
What happens next: staff will prepare an October budget amendment with proposed uses for year‑end funds, present ARPA encumbrance plans to ensure obligations by Dec. 31, and model options for sewer funding and capital reserve policy for consideration in fall budget work sessions.
