The following information explains some of the basic concepts and framework for the Town's annual budget.
The Town's fiscal year runs from July 1st through June 30th of each year. It is the 12-month period designated as the operating year for accounting and budgeting purposes. The tax year is the same as the calendar year (January 1st through December 31st) and is based on the January real estate assessments conducted by Loudoun County.
The process of developing the annual budget begins in September with revenue projections for the following year. In December, each department submits a budget request to the Town Manager. In January, once Loudoun County releases the new real estate tax assessments, Town budget staff calculate what is known as the equalized tax rate.
The equalized tax rate is the rate that would generate the same amount of revenue as the previous year, based on the current year’s assessments. When assessments go up, the equalized tax rate goes down. When assessments go down, the equalized tax rate goes up.
In February, the Town Manager presents a proposed budget, including a proposed real estate tax rate, to the Town Council. The Town Council then may hold one or more budget work sessions to discussion the budget with staff. In March or April, the Town Council will hold at least one public hearing on the budget before setting the tax rate and adopting the annual budget. The newly adopted budget takes effect on July 1st.
Usually when people talk about the "Town Budget," they mean the General Fund, but the Town has two other funds set up for specific uses.
The General Fund is the Town's primary operating fund and accounts for revenues and expenditures not designated for specific uses by statute or the Town Charter.
The Capital Projects Fund accounts for the purchase and/or construction of major capital facilities, such as roads, buildings and recreational facilities, and the operating budget for the Capital Projects Management Department. The revenue for this fund comes from developer proffers, grants, funding from the state and federal governments, bond proceeds and transfers from other funds.
The Utilities Fund is an "Enterprise Fund." Enterprise funds are established to account for the operations, investing and financing activities of self-supporting activities that provide services to the public on a user-fee basis.
Revenue. The Town’s revenue comes from many sources, including county/state/federal funding, real estate and other local taxes, permits, fees, fines and grants. Major categories of revenue include:
- Real Estate Taxes. In FY 2011, 74% of real estate taxes came from residential property and 26% came from commercial & agricultural property.
- Other Local Taxes. Includes motor vehicle, business licenses, meals, hotel, bank franchise, cigarette, daily rental and utility consumption taxes.
- Intergovernmental Revenue. The majority of this revenue comes from the Commonwealth of Virginia, including sales and communications taxes, funding for highway maintenance and law enforcement, and state relief for personal property tax (motor vehicles). The remainder is from Loudoun County and the federal government.
- Fees, Fines & Interest. Includes parks & recreation user fees, interest on investments, land development application fees, parking & traffic tickets, parking garage and meter revenue, and other miscellaneous charges for Town services.
- Transfers & Donations . Includes transfers from the Enterprise Funds, cash proffers from developers, and other contributions such as the A.V. Symington Bequest.
Expenditures. Just as a business or household must balance its budget, the Town's expenditures cannot exceed its revenue. The largest part of the Town's General Fund budget (almost two-thirds) is dedicated to personnel expenditures – the salaries and benefits of the Town’s full-time and part-time employees. Functional programs within the General Fund include:
- Direction & Support Services includes the Town Manager’s Office, the Town Council, the Clerk of the Council, the Town Attorney, the Economic Development Office, and the Departments of Finance, Human Resources and Information Technology. Also includes contributions to outside agencies that provide services to Leesburg citizens.
- Public Safety includes the Leesburg Police Department.
- Public Works includes the Streets, Grounds and Building Maintenance Divisions, Traffic Management, Trash Collection & Recycling, and Inspections.
- Community Development includes the Departments of Plan Review and Planning & Zoning, as well as the Boards & Commissions related to community development.
- Leisure Services includes the Parks & Recreation Department and the Thomas Balch Library.