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Town of Vienna cuts real estate tax rate for first time since 2013 with newly adopted budget

The Vienna Town Council adopted a new budget for the 2021-2022 fiscal year last night (Monday) that decreases the town’s real estate tax rate for the first time in eight years.

At $43.2 million, the new budget increases funding by 5.4% over the adopted FY 2020-2021 budget, including a 6.9% increase in the General Fund to $26.5 million, but revenues remain 3.1% below the budget that had been proposed for FY 2020-2021 before the COVID-19 pandemic forced the town to revise its plans.

In a press release, the town says the funding increase in the budget for the next fiscal year “reflects a return to more normal post-pandemic operations” as Virginia rolls back public health restrictions amid an ongoing vaccination campaign.

“Last year at this time it was difficult to determine if we had budgeted sufficiently to meet the economic challenges of the pandemic,” Vienna Town Manager Mercury Payton said. “We were pleasantly surprised at how well Vienna survived the initial challenges and how well we are positioned to handle improving conditions.”

In particular, the Town of Vienna anticipates increases in revenue from real estate taxes and parks and recreation fees.

The new real estate tax rate of 22.25 cents per $100 of assessed value represents a quarter-cent drop from the current rate of 22.5 cents — the town’s first rate decrease since 2013 — but residents will still see a $72 increase in their tax bill, on average, due to rising property values.

Residents should also brace for higher water and sewer bills after the town council approved raising the rates by 4.3% to support a 6.1% increase in the water and sewer fund budget, which will be $10.8 million for the upcoming fiscal year.

According to the town, the increase in rates is necessary “to offset increasing costs of sewer treatment and to fund necessary infrastructure replacement.” The average resident’s water and sewer bill will go up by about $11.75 per quarter, amounting to a $47 annual increase.

While the budget was passed unanimously, Councilmember Ray Brill suggested the town should look for ways to reduce the water and sewer rates in the future as much as possible while still addressing the need to repair and refurbish infrastructure.

Federal relief from the American Rescue Plan Act could potentially assist with that goal, but the town is still awaiting guidance for how those funds can be used, Vienna Director of Finance Marion Serfass says.

“We’ll be looking for those opportunities,” she told the council.

The Town of Vienna will receive an estimated $14.9 million from the stimulus package, including approximately $46,900 that has been budgeted for the costs of software to support virtual meetings, but the remaining funds are not expected to arrive until fiscal year 2022, which starts on July 1.

The town says lans for utilizing the funds will be shared in a public hearing when the exact amount and distribution date are determined, and it will require an appropriation and budget amendment by the town council.

As part of the budget adoption, the town council voted to keep $97,000 in reserve for the Parks and Recreation Department with the expectation that the money will become available once COVID-19 restrictions lift and the department can ramp up its operations.

The council also moved to unfreeze $434,300 in funds that had been in reserve for the current fiscal year, including $359,300 for worker compensation increases and $75,000 to cover education and travel expenses for required recertification training for town police officers.

Thanks to efforts to conserve costs by having existing staff cover vacant positions and unexpected budget surpluses in business license and state revenues, the Town of Vienna is projecting a $294,000 surplus for FY 2020-21 of $294,000.

About $125,000 of those surplus funds will go to giving eligible employees a 3% salary increase retroactive to April 1 of this year.

“I’m glad we’re doing that. I think our employees need a raise,” Vienna Mayor Linda Colbert said. “I think they’ve been patient and understanding, but they’ve worked hard this year, so I’d like to see that happen.”

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