1. Calling the Roll. The meeting was called to order by Mayor Euille, and the City Clerk called the roll; all the members of City Council were present. REPORTS AND RECOMMENDATIONS OF THE CITY MANAGER FOR DISCUSSION 2. Consideration of the Proposed Annual Operating Budget for FY 2008 (including Schools) and the Proposed Capital Improvements Program for FY 2008-2013 (including the Schools CIP.) (A copy of the City Manager's memorandum dated May 4, 2007, is on file in the Office of the City Clerk and Clerk of Council, marked Exhibit No. 1 of Item No. 2; 5/7/07, and is incorporated as part of this record by reference.) WHEREUPON, upon motion by Councilwoman Pepper, seconded by Councilman Gaines and carried unanimously, City Council adopted the FY 2008 general fund operating budget overall expenditure levels of $519,494,732 and revenue levels of $519,494,732, which represent a 4.38% increase over the FY 2007 operating budget and reflect: a City government general fund operating budget of $359,255,035, which incorporates $61,437 in technical City expenditure adjustments and $5,796,000 in net City expenditure increases from the FY 2008 proposed budget as specified in docket item #2, section I and represents a 3.3% increase over the adjusted FY 2007 City government operating budget. Technical expenditure re-estimates to proposed budget $30,087 Animal Welfare League contract inflationary increase $(26,917) Commonwealth's Attorney impact of increase in State revenue $(12,791) Other Public Safety decrease in required supplement for Adult Probation and parole $(26,742) Health Department withdrawn supplemental request $(11,000) Court Service Unit increase in State revenues $123,800 DHS increase in Comprehensive Services Act (CSA) funding - Budget memo #57 $(15,000) Cash Capital decrease $61,437 Total Technical Expenditure Adjustments Changes to Proposed City General Fund Operating Budget Expenditures $2,770,000 1.5 percent cost-of-living adjustment (COLA) for City employees (after eliminating the Q-step) Budget memo #'s 19, 20, 21, 34 and 61 $877,000 DHS Programs (add to contingent reserves) - Budget memo #13 $780,000 Red Light Programs - Budget memo #24 $80,000 100 year-old buildings study - Budget memo #47 $75,000 Inventory of Alexandria Global Warming Emissions $65,000 Sheriff (Deputy Sheriff Position) - Budget memo #54 $240,000 Sheriff Deputy Position Reclassification - Budget memo #54 $49,000 Environmental Action Plan Efforts $900,000 Transportation Improvements - Budget memo #53 $(40,000) Decrease in Funds to Contingent Reserves $5,796,000 Net City Expenditure Increases and Reductions A transfer to the Schools of $160,239,697 from the general fund to the school operating fund, which reflects a 6.9 percent increase over the FY 2007 general fund transfer, as well as incorporates a $4,739,697 addition to the FY 2008 proposed general fund as specified in docket item #2, section I: Change in Proposed Transfer to Alexandria City Public Schools Operating Budget $2,650,000 Increase in the General Fund transfer to the Alexandria Schools Operating Budget (FY 2008 proposed Operating Budget, p. 9-3 and Budget memos #12, 16, 29 and 71) $2,089,697 1.5 percent cost-of-living adjustment (COLA) for School Employees $4,739,697 Total Schools Transfer The voting was as follows: Pepper "aye" Macdonald "aye" Gaines "aye" Krupicka "aye" Euille "aye" Lovain "aye" Smedberg "aye" WHEREUPON, upon motion by Councilwoman Pepper, seconded by Vice Mayor Macdonald and carried unanimously, City Council adopted a COLA of 1.5 percent for City and School Employees, including the City Manager, City Attorney, City Clerk, Clerk of the Court, Commonwealth Attorney, and for City Council Aides and the Mayor's Aides, and approval of merit step increases for all eligible employees. An increase in FY 2008 revenues of $10,597,134, which includes $3,500,000 in added revenues due to re-estimates; $5,069,718 due to a real estate rate increase of 1.5 cents to 83.0 cents per $100 per assessed value; and $2,027,416 in other tax and fee adjustments, as specified in docket item #2, section II Technical Revenue Re-estimate to the Proposed Budget (Budget memo #33) $1,900,000 Increase in Real Property Tax Revenue estimate $1,700,000 Increase in estimate of Intergovernmental Revenues $300,000 Increase in Transient Lodging Tax Revenue estimate $200,000 Increase in estimate of interest income on General Fund investments ($200,000) Decrease in estimate of Bank Franchise Fee Revenue ($200,000) Decrease in estimate of Restaurant Food Tax Revenue ($200,000) Decrease in estimate of Sale of Impound Lot Vehicles Revenue $3,500,000 Sub-total FY 2008 Technical Revenue Re-estimate Changes in Proposed Tax and Fee Rates and New Revenues $5,069,718 Increase in real estate tax revenues due to 1.5 cent tax rate increase effective for both payments in FY 2008 $180,000 Increase administrative fees for delinquent personal property tax collection $200,000 Eliminate tax exemption for Federal employees that use hotels and pay directly $900,000 Start new State vehicle registration fee - Budget memo #53 $750,000 Red light camera revenues - Budget memo #24 $(2,584) Reduction to balance the budget in non-tax revenue $7,097,134 Total Increase in Tax and Fee Rates and New Revenues A change in reservations of proposed Council contingent reserves as specified in docket item #2 section IV Changes and Reservations of Proposed Council Contingent Reserves $375,000 Contingent reserves in the proposed budget $837,000 Net amount added by Council Member adds $(90,000) Gang Prevention Coordinator (Budget memo #22) $(877,000) DHS set aside (Budget memo #13) $(130,000) Net Reduction in Undesignated Contingent Reserves A FY 2008 transfer to the Capital Projects Fund of $9,765,564, which reflects $885,000 in net additions to the FY 2008 Proposed CIP, as specified in docket item #2 section VI. The voting was as follows: Pepper "aye" Gaines "aye" Macdonald "aye" Krupicka "aye" Euille "aye" Lovain "aye" Smedberg "aye" WHEREUPON, upon motion by Councilwoman Pepper, seconded by Vice Mayor Macdonald and carried unanimously, Council moved adoption of the FY 2008 to FY 2013 Capital Improvement Program totalling $389,050,427 which, when compared to the FY 2008 to FY 2013 Proposed CIP, reflects an addition of $5,685,000 over six years and establishes planned funding levels for each of the six years of the capital plan. This motion reflects the addition of $900,000 per year for transportation capital improvements and a $15,000 technical downward re-estimate for FY 2008 only. The adopted totals in the CIP will be $66,125,350 in FY 2008 and $900,000 more than the proposed budget in fiscal years 2009 through 2013. Changes in proposed Capital Improvement Program (CIP) $5,400,000 Transfer for Transportation Capital Improvements to be funded by Vehicle Registration Fee Increase ($900,000 per year) (Budget memo #53) $(15,000) Technical Expenditure Adjustments (Budget memo #32) $5,385,000 Total changes in Proposed CIP Adopted Proposed FY2008 $66,125,350 $64,940,350 FY2009 $101,053,243 $100,153,243 FY2010 $100,230,672 $99,330,672 FY2011 $49,171,320 $48,271,320 FY2012 $35,370,311 $34,470,311 FY2013 $37,099,532 $36,199,531 The voting was as follows: Pepper "aye" Gaines "aye" Macdonald "aye" Krupicka "aye" Euille "aye" Lovain "aye" Smedberg "aye" WHEREUPON, upon motion by Councilwoman Pepper, seconded by Vice Mayor Macdonald and carried unanimously, Council moved changes in the proposed General Fund Unreserved Fund Balance Designations, resulting in the addition of $2,175,000, as specified in docket item #2, Section III. Changes in Proposed Fund Balance Designations Designated $400,000 National Harbor-related $ - Other Post-Employment Benefits $850,000 FY 2007 CIP Artificial Turf Field - Budget memo #'s 52 and 68 (revised from docket item) $500,000 CSA Designation of Fund Balance $300,000 FY2008 CIP Trash Cans/Lights (revised from docket item) $25,000 King Street Garden $100,000 City Trees $2,175,000 Designated Total Undesignated $342,504 Estimated Contribution to Undesignated Fund Balance in FY 2008 $342,504 Undesignated Total $2,517,504 Estimated Changes in Fund Balance (as of the end of FY 2007) The voting was as follows: Pepper "aye" Gaines "aye" Macdonald "aye" Krupicka "aye" Euille "aye" Lovain "aye" Smedberg "aye" ORDINANCES AND RESOLUTIONS 3. Second Reading and Final Passage of an Ordinance to Establish the Real Estate and Personal Property Tax Rates for Calendar Year 2007. (#19 and 20, 4/24/07 and #16, 4/10/07) [ROLL-CALL VOTE] (A copy of the City Manager's memorandum dated May 4, 2007, is on file in the Office of the City Clerk and Clerk of Council, marked Exhibit No. 1 of Item No. 3; 5/7/07, and is incorporated as part of this record by reference. A copy of the informal memorandum explaining the ordinance is on file in the Office of the City Clerk and Clerk of Council, marked Exhibit No. 2 of Item No. 3; 5/7/07, and is incorporated as part of this record by reference. A copy of the ordinance referred to in the above item, of which each Member of Council received a copy not less than 24 hours before said introduction, is on file in the Office of the City Clerk and Clerk of Council, marked Exhibit No. 3 of Item No. 3; 5/7/07, and is incorporated as part of this record by reference.) WHEREUPON, upon motion by Councilwoman Pepper, seconded by Vice Mayor Macdonald and carried unanimously by roll-call vote, City Council adopted the ordinance on final passage the amendment in the nature of a substitute for the 2007 real estate and personal property tax rates with the following amendments: Section 3-2-181 change from $.835 to $.830 and to change Section 3-2-223 a change from $.835 to $.830. The voting was as follows: The voting was as follows: Pepper "aye" Gaines "aye" Macdonald "aye" Krupicka "aye" Euille "aye" Lovain "aye" Smedberg "aye" The ordinance reads as follows: ORDINANCE NO. 4477 AN ORDINANCE to amend and reordain Section 3-2-181 (LEVIED; AMOUNT) of Division 1 (REAL ESTATE), and Section 3-2-221 (LEVIED ON TANGIBLE PERSONAL PROPERTY OTHER THAN MOBILE HOMES, AUTOMOBILES, TRUCKS, ANTIQUE MOTOR VEHICLES, TAXICABS, MOTOR VEHICLES WITH SPECIALLY DESIGNED EQUIPMENT FOR USE BY THE HANDICAPPED, MOTORCYCLES, CAMPERS AND OTHER RECREATIONAL VEHICLES, BOATS AND TRAILERS; AMOUNT), Section 3-2-222 (LEVIED ON MACHINERY AND TOOLS USED IN MINING OR MANUFACTURING BUSINESS; AMOUNT), Section 3-2-223 (LEVIED ON MOBILE HOMES; AMOUNT) and Section 3-2-224 (LEVIED ON AUTOMOBILES, TRUCKS, TRAILERS, SEMI-TRAILERS, ANTIQUE MOTOR VEHICLES, TAXICABS, MOTORCYCLES, CAMPERS AND OTHER RECREATIONAL VEHICLES, BOATS AND TRAILERS; AMOUNT) of Division 3 (TANGIBLE PERSONAL PROPERTY AND MACHINERY AND TOOLS), all of Article M (LEVY AND COLLECTION OF PROPERTY TAXES), Chapter 2 (TAXATION), Title 3 (FINANCE, TAXATION AND PROCUREMENT) of The Code of the City of Alexandria, Virginia, 1981. THE CITY COUNCIL OF ALEXANDRIA HEREBY ORDAINS: Section 1. That Section 3-2-181 of The Code of the City of Alexandria, Virginia, 1981, as amended, be, and the same hereby is, amended and reordained to read as follows: Sec. 3-2-181 Levied; amount. There shall be levied and collected for the calendar year 2007 on all real estate located within the territorial boundaries of the city and subject to taxation for city purposes under the constitution and laws of this state and city, a tax of $.830 on each $100 of the assessed value thereof, for the support of the city government, for the payment of principal and interest of the city debt and for other municipal expenses and purposes. Section 2. That Section 3-2-221 of The Code of the City of Alexandria, Virginia, 1981, as amended, be, and the same hereby is, amended and reordained to read as follows: Sec. 3-2-221Levied on tangible personal property other than mobile homes, automobiles, trucks, antique motor vehicles, taxicabs, motor vehicles with specially designed equipment for use by the handicapped, motorcycles, campers and other recreational vehicles, boats and boat trailers; amount. There shall be levied and collected for the calendar year 2007 on all tangible personal property, other than mobile homes, automobiles, trucks, antique motor vehicles, taxicabs, motor vehicles with specially designed equipment for use by the handicapped, motorcycles, campers and other recreational vehicles, boats and trailers, owned or held by residents or citizens of the city or located within the territorial boundaries of the city or otherwise having a situs within the city and subject to taxation for city purposes under the constitution and laws of this state and city, a tax of $4.75 on every $100 of assessed value thereof, for the support of the city government, for the payment of principal and interest of the city debt and for other municipal expenses and purposes. Section 3. That Section 3-2-222 of The Code of the City of Alexandria, Virginia, 1981, as amended, be, and the same hereby is, amended and reordained to read as follows: Sec. 3-2-222 Levied on machinery and tools used in mining or manufacturing business; amount. There shall be levied and collected for the calendar year 2007 on all machinery and tools used in a mining or manufacturing business taxable on capital and subject to taxation for city purposes under the constitution and laws of this state and city, a tax of $4.50 on each $100 of assessed value thereof, for the support of the city government, for the payment of principal and interest of the city debt and for other municipal expenses and purposes. Section 4. That Section 3-2-223 of The Code of the City of Alexandria, Virginia, 1981, as amended, be, and the same hereby is, amended and reordained to read as follows: Sec. 3-2-223 Levied on mobile homes; amount. There shall be levied and collected for the calendar year 2007 on all vehicles without motor power, used or designed to be used as mobile homes as defined in section 46.2-100 of the Code of Virginia, owned or held by residents or citizens of the city or located within the territorial boundaries of the city or otherwise having a situs within the city and subject to taxation for city purposes under the constitution and laws of this state and city, a tax of $.830 on each $100 of assessed value thereof, for the support of the city government, for the payment of principal and interest of the city debt and for other municipal expenses and purposes. Section 5. That Section 3-2-224 of The Code of the City of Alexandria, Virginia, 1981, as amended, be, and the same hereby is, amended and reordained to read as follows: Sec. 3-2-224Levied on automobiles, trucks, trailers, semi-trailers, antique motor vehicles, taxicabs, motorcycles, campers and other recreational vehicles, boats and trailers; amount. (a) Except as provided in subsections (b), (c) and (d), there shall be levied and collected for the calendar year 2007 on all automobiles, trucks, trailers, semi-trailers, antique motor vehicles (as defined in section 46.2-100 of the Code of Virginia, 1950, as amended, which may be used for general transportation purposes as provided in subsection C of section 46.2-730 of the Code of Virginia, 1950, as amended), taxicabs, motorcycles, campers and other recreational vehicles, boats and boat trailers owned or held by residents or citizens of the city or located within the territorial boundaries of the city or otherwise having a situs for taxation in the city, a tax of $4.75 on every $100 of assessed value thereof, for the support of the city government, for the payment of principal and interest of the city debt and for other municipal expenses and purposes. (b) There shall be levied on and collected for the calendar year 2007 on all automobiles, trucks, trailers and semi-trailers with a gross vehicle weight of 10,000 pounds or more which are used to transport property for hire by a motor carrier engaged in interstate commerce, and are owned or held by residents or citizens of the city, are located within the territorial boundaries of the city or otherwise have a situs for taxation in the city, a tax of $4.50 on every $100 of assessed value thereof, for the support of the city government, for the payment of principal and interest of the city debt and for other municipal expenses and purposes. (c) There shall be levied on and collected for the calendar year 2007 on all automobiles and trucks which are equipped with specially designed equipment for use by the handicapped and are owned or held by residents or citizens of the city, are located within the territorial boundaries of the city or otherwise have a situs for taxation in the city, a tax of $3.55 on every $100 of assessed value thereof, for the support of the city government, for the payment of principal and interest of the city debt and for other municipal expenses and purposes. (d) There shall be levied on and collected for the calendar year 2007 on all privately owned pleasure boats and watercraft, which are used for recreational purposes only, and are owned or held by residents or citizens of the city, or are located within the territorial boundaries of the city or otherwise have a situs for taxation in the city, a tax of $.01 on every $100 of assessed value thereof, for the support of the city government, for the payment of principal and interest of the city debt and for other municipal expenses and purposes. (e) For tax years commencing in 2006, the City adopts the provisions of Item 503.E of Chapter 951 of the 2005 Acts of Assembly (the 2005 revisions to the 2004-06 Appropriations Act, the “2005 Appropriations Act”), providing for the computation of tax relief under the Personal Property Tax Relief Act of 1998, sections 58.1-3523 et seq. of the Code of Virginia, as amended, as a specific dollar amount to be offset against the total taxes that would otherwise be due but for the Personal Property Tax Relief Act of 1998, sections 58.1-3523 et seq. of the Code of Virginia, as amended, and the reporting of such specific dollar relief on the tax bill.