Herndon Town Manager Cuts $500K From FY 2021 Budget Proposal

HERNDON, VA — In response to the economic impact of the coronavirus pandemic, Herndon Town Manager William Ashton submitted a revised Fiscal Year 2021 Budget Proposal to the Town Council on Friday. In it, Ashton cut more than $500,000 in expenditures from the original budget proposal he submitted one month earlier.

Ashton also made two significant cuts on the revenue side of the ledger, removing the proposed 1 cent hike in the real estate tax rate and $100,000 increase in the Business, Professional, and Occupational Licensing (BPOL) returns.

"The initial Proposed FY 2021 Budget, released on April 1, 2020, was the product of many months of staff analysis and consultation with Town Council," Ashton said, in a letter accompanying the revised budget proposal. "It included the priorities that you set forth in your formal budget guidance adopted at the January 28, 2020 Town Council Public Hearing. This proposal was finalized, and had been sent to the printer, when the COVID-19 pandemic took hold and began its unprecedented disruption of daily life, the local, regional, national, and global economies and its threat to health and safety."

Even as Ashton submitted his original budget proposal early last month, he recognized it was "no longer reflective of the current fiscal reality imposed upon the town, county, nation and world due to COVID-19."

The original FY 2021 Proposed Budget projected a General Fund total of $39,371,000, which included a 1.3 percent market rate adjustment (MRA), a 2 percent average pay-for-performance increase for town employees, and an increase of $56,000 in contingency funding. All of those expenditures have been cut in the revised proposal, resulting in a total General Fund budget of $38,806,000 — a difference of $565,000.

Since a great deal of uncertainty remains about the ongoing economic conditions around the pandemic and eventual recovery, Ashton aimed to present a budget that afforded the town with a great deal of flexibility. That way, the town could make incremental decision as more information becomes clear.

"In this highly unusual budget environment staff is proposing that the town take a different approach to meet the demands of flexibility that will be required moving forward," Ashton said, in his letter. "Budgets are not just vehicles through which authorizations and appropriations are obtained from the governing body, they are also spending plans. Through focusing on our spending plan, we can provide the maximum amount of flexibility without taking decisive action before such actions are warranted."

Based on the limited information he had, Ashton was able to project the town would be receiving $5.5 million less in revenue. Therefore, he recommended the Town Council adopt a spending plan and immediately sequester $5.5 million in expenditures to instill spending discipline in order to ensure its budget remains balanced.

"This recommended budgeting approach will keep the town from over-committing in its response to a worst-case scenario," Ashton said. "Instead, it prepares us to respond to the worst case but gives us the flexibility to adapt as we begin to understand the economic climate that we will find ourselves in a post-COVID-19 world."

The Town Council will host public hearings on the proposed budget on May 12 and 26, starting at 7 p.m. The meetings will be held electronically in accordance with the town's declared state of emergency. Details on how to observe and participate in the public hearings can be found online. Comments can be submitted via an online form or by emailing town.clerk@herndon-va.gov.

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Herndon FY 2021 Budget Proposal Delayed Due To Coronavirus