03302010 FY 2010-2011 PRESENTATIONFY X010-201 1
RESOURCE 1161~N~GEIVIENT PLAN
Annual Operating Budget
and
Six-Year Capital Improvement Program
March 30, 2010
Introduction ...
"Budgets are always
difficult. I have worked in
municipal government for
40 yea rs a n d I h ave yet to
see a budget that was
easy to compile. Having
said that, THIS was the
hardest budget I have
worked on in all my years
of experience". James K. Spore
~~~
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The Problem ...
o Our revenues have decreased for a second year in a
row and its very possible we could face this again
next year.
a We must balance the budget - we either cut
services or we raise fees and taxes. None of the
choices are easy.
0 5% and 15% reductions would have eliminated 363
positions and nearly $37 million in programs.
a Schools were hit hard by State budget reductions.
Local revenues to Schools only decreased by $13
million.
3
a Strives to not increase the tax burden local
government places on taxpayers beyond current
levels.
o Focuses on critical services this government
provides to the community to retain quality-of-life.
a Identify and initiate efficiencies which reduce
resource requirements.
o Does not add to the unemployment rolls and further
erode the local economy.
a Preserves basic capabilities in anticipation of an
economic recovery.
4
First Step ...
D Continue to look for efficiencies.
^ We do this every year, all the time.
^ Saved or avoided over $10 million in costs last year. (Striving
For Excellence Report -March 2010)
^ Will save another $2.6 million upon adoption of this budget.
^ We are studying the savings potential of contracting out for
yard waste and hazardous household waste product
disposal -could save an additional $1 million through a
reduction to the tipping fee.
5
Second Step ...
D Examine Fund Balances & City Council Dedications
^ Last year used $23.5 million in Fund Balance as a one-time
strategy to balance the budget while the economy
recovered -Not available this year.
^ Budget proposes a 2-year moratorium on open space
acquisition and diverts $1.6 million per year.
^ CIP uses $8 million in surplus funding from the Sandbridge
TI F to support City a nd School projects.
6
Third Step -Service Reductions ...
Quality
Organization
($5.4)
Economic Vitality
($1.0)
Safe Community
($4.1)
Cu Itu ra I &
Family&Youth
Opportunities
($2.4)
Quality Education
& Lifelong
Learning
($1.6)
Recreational
Opportunities
($3.8)
Quality Physical
Environment
($1.5)
Service Reductions
eliminate 200 positions and
over $19 million from the
Proposed Budget.
(Chart shown in millions) ~
Third Step - Ser~ize Rezlu~ti~ons ...
(Complete list begins on page 55)
a Eliminate the 3 remaining staff in the Consumer Affairs Office anal. rely
on State office. ($215,588) ~~
a Reduce Fire Life Safety Education program by 1 leaving 4 st~f~~to~ ~.:.~ s
continue a reduced program. ($52,323) ~~;~
~h bPP~~fiq!gii .
a Reduce Traffic Enforcement throughout the City by eliminating 3 vacant
Police Officer positions. ($163,416)
a Reduce Mounted Patrol by 7 Police Officer positions thereby cutting the
program in half. ($600,226)
a Reduce 1 position to support the Citizen Emergency Response Team
(CERT) leaving existing staff to support the team. ($50,774)
a Reduce fire code enforcement by 1 position leaving 12 staff. ($52,802)
a Reduce the number of detectives in the Police Department by 6
positions. ($317,951)
a Reduce Crime Prevention program, including 6 Police Officer positions.
($594,718)
a Eliminate 2 Storm Water Engineers. ($143,302)
s
Third Step -Service R~~u~ti~ns ...
o Eliminate 9 positions in Planning. ($706,816)
o Reduce roadside and park mowing from every 18 days to every 23-days
which will result in higher grass levels. ($773,152) ~ > ~ ~-
~~'
o Reduce playground maintenance. ($285,249)
a Eliminate 2.85 positions in therapeutic recreation programs and 1.55
positions in specialized recreation center sport camps. ($102,071)
a Reduce 5.4 positions at golf courses due to declining rounds. ($210,868)
a Reduce contract mowing and landscape maintenance of resort area,
which will impact overall aesthetics for visitors. ($691,597)
a Eliminate the Incentive Grants portion of the Community Organization
Grant program (COG) and 1 position. ($191,696)
a Close Kempsville branch of the Treasurer's Office and eliminate 4
positions. ($244,035)
9
Third Step -Service Re~lu~ti~ns ...
a Eliminate 6 Human Service positions, which determine eligibility faro;
housing assistance and referrals for emergency assistance. ($403,026)
a Eliminate 7.36 positions at the Pendleton Child Care Center, d-~~r-
operations from 7 days per week to only 5. ($210,536} ~ ~~"~~m~~~Nr~r~~
a Red uce the n u m ber of opportunities for su pervised work for residents of
the City's SkillQuest program. ($122,180)
a Reduce by 1 position staff in the Respite Care program; 14-20 fewer
disabled children will be assisted which may mean decreased
em ployment opportu n ities for ca regivers. ($165,899)
a Eliminate 37 positions throughout the Libraries, resulting in the closure
of all but Central Library on Sundays, and reduced hours at the
remaining Libraries. ($1.1 million)
a Reduce contractual staff in the General Registrar's Office resulting in
increased lines at polling locations. ($50,143)
a Red uce 10.68 assessment positions i n the Com m issioner of the
Revenue's Office, impacting personal property and business revenues.
($472,212)
10
Improve
Efficiency
Increase
Revenues Cut Services
ii
revenue. (Complete Liston page 44)
a Raise taxes under arevenue-neutral strategy - The average taxpa
would not pay more than the current .year.
^ Real Estate Tax rate would increase from 89~ to 92~ raising $15.5 million
in revenue. Rate is still lower than it was in 2004.
^ Personal Property Tax rate on vehicles would increase from $3.70 to $3.80
per $100 of assessed value, raising $1.55 million. Rate was last adjusted
in 1995, when it was lowered 10~.
^ Cigarette Tax rate would increase from 61~ per pack to 65~ raising
$780,000.
^ Various departmental fees would increase in total $2.6 million
^ Water Utility Bills would increase by an average of $1.86 per month and
Public Utilities will reimburse the City for the use of right-of-way.
Note: per the City/School Revenue Sharing Policy the tax rate increases are not being split with Schools 12
We are Recommending:
o That we reduce services and programs
by $19 million and eliminate 200
positions.
o That fees and tax rates be increased to
avoid cutting an additional $17.4
million in services and 164jobs.
Examples of the programs restored are shown on the next three slides.
13
•~~ ^ ^ ^
{complete list I~egir~s on ~ ~-
a Reduce the number of firefighters by 30 which may take fire trucks out of service.
($2.2 million)
a Eliminate 17 deputies that book inmates into the Jail. ($966,139)
a Eliminate VB Alert (reverse 911) and rely on local media outlets to notify residents
of emergency situations. ($92,000)
a Eliminate funding for 12 School Resource Police Officers in middle and high
schools. ($846,768)
a Further reduce detectives in the Police Department by 12 positions. ($704,250)
a Eliminate 36 positions that provide yard debris collection for homeowners. ($3.3
million)
a Reduce the number of HRT bus routes throughout the City. ($437,395)
a Cut 9 positions from beach operations which results in the elimination of trash
collection and beach cleaning on the non-resort area beaches. ($1.2 million)
a Eliminate the Lake Edward Summer Program. ($60,000) i4
The Path ~1a~ Taken .. .
a Eliminate support for the Old Coast Guard Station, the Atlantic Wildfowl Museum, the
Sandler Center for the Performing Arts and the new Union Kempsville Museum.
($354,628)
a Eliminate one Auditor position and reduce the mandated External Audit. ($92,703)
a Defer park maintenance which could shut down certain parks and facilities.
($825,000)
a Cut back on food and care of the animals at the Aquarium. ($25,000)
a Reduce 2 staff and support costs for Substance Abuse Outpatient Services reducing
counseling and treatment for over 650 people. ($242,757)
a Eliminate transportation services to mental health clients which would reduce access
to doctors, care coordination and work opportunities. ($229,927)
a Eliminate the Maternity Program in the Health Department that provides a continuum
of care for women who otherwise would receive no prenatal care. ($49,877)
a Cut Library materials and 3 collection management staff. ($401,989)
a Reduce advertising outside of Hampton Roads to attract businesses and jobs.
($126,911)
15
^ ^ ^
a Eliminate 2 positions that support various wetland programs and plan reviews
lengthening the time for reviews. ($155,045)
a Reduce the overall cleanliness, appearance, and aesthetics throughout the City.
($520,450)
a Reduce 3 staff for diversity programs throughout the City which would eliminate some
of the strides the City has made in attracting diverse businesses and employees.
($259.259)
a Close the parking lots for the Aquarium and for Croatan Beach. ($274,329)
a Eliminate the City's computer replacement program and 1 position, which will impact
service delivery throughout the organization if machines fail. ($977,107)
a Reduce 7 positions that provide technology repair and operational software support
to various departments, including public safety. ($994,103)
a Reduced support to various regional agencies such as the Eastern Virginia Medical
School, Hampton Roads Planning District Commission, Economic Development
Alliance, and Militaryand Federal Facility Alliance. ($246,180)
16
Operating Budget
Schools
Improve
Efficiency ~
Baseline
Reductions
Fund Balance
State Budget
Reduction
17
^ Held harmless for one year on the Composite Index.
^ Retirement system rate reduction saved the system roughly $10.2 million.
^ The City's Budget includes an adjustment entitled "State Revenue
Reduction" of $35.8 million. (The School Board will need to make
adjustments to match to the final State budget which increased funding.)
o City/School Revenue Sharing Formula reductions totaled $13.3
million.
^ An adjustment entitled "City Manager Adjustment" is shown in the amount
of $4.9 million to reflect unallocated Revenue Sharing Funds.
o Schools used $16.9 million in various Fund Balances
^ $3.9 million in unused GASB 45 payment.
^ $4.2 million from the School Reserve Fund.
^ $8.8 million in last year's Reversion Funds.
is
School Eacpenditures ...
o Improved energy efficiencies by $2.4 million
o Eliminated 59.6 positions, but through grants was able to
add 79.5 for a net increase of 19.9.
a "Baseline" reductions
^ Reduced all non- personnel accounts by 3% which will impact
Sc hool s a bil ity to purc hase instructional suppl ies and material s.
^ Increase attrition calculation, overtime and adjustments to salary
and benefit accounts to bring closer to actual expenses.
^ No layoffs or furloughs
a School Board will need to resolve the decrease in State
Revenues, either by additional use of fund balances or by
additional service and staff reductions.
19
Summary of the
Proposed
Operating budget
20
Operating Revenues
Real Estate' $ 499,340,166 $ 255,030,017 $ 233,872,784 $ 488,902,801 -2.1%
Personal Property 119,922,496 59,323,890 60,800,854 120,124,744 0.2%
General Sales 51,129,941 2-1,6-10,371 25,955,7-1 50,596,2-15 -1.0°0
Utility- Tax 25,737,575 12,332,626 12,902,674 25,235,300 -2.0°0
~'~ Teleconuntulications~~~~ 23,655,-131 1-1,05,197 7,959,722 22,017,919 -6.9°0
Business License -10,556,906 19,55,791 20,915,53 -10,771,6-1-1 0.5°0
Cable Franchise 5,873,378 3,1~-1,-165 3,35-1,-17 6,538,9-13 11.3°0
Pestaurant Tax -19,829,621 -18,188,033 - -18,188,033 -3.3°0
~llluselllellt TdX 5,300,732 5,700,550 - 5,700,J~50 7.5%
Hotel Pooin Tax 23,891,018 22,659,486 - 22,659,-186 -5.2°0
Cigarette Tax 12,935,527 12,721,345 - 12,721,345 -1.7%
Ftuul Balance 5-1,-113,152 13,712,3-16 22,779,89-1 36,-192,2-10 -32.9°0
Utility Fees 113,131,574 118,141,476 - 118,141,476 4.4%
Other Pe~-enue 1-13,627,745 108,765,689 31,218,595 139,98-1,28-1 -2.5°0
State Pe~-enue 458,681,685 111,753,103 309,310,591 -121,063,694 -8.2°0
Federal Pe~-enue 1-10,069,677 -1-1,65-1,8-19 8-1,026,132 128,680,981 -8.1°0
Total $ 1,768,096,624 $ 874,722,234 $ 813,097,451 $1,687,819,685 -4.5%
~i~,,i~~~i~~~ r~~~,i E~<<,~~~ r~~"~~~,~~~~ ~~~~~~„ Ti F~. a~ ~, ~~~~~~~i~, r~~~,i E~<<,<<~ ~~, ~i,~~ ~i~~F,i~~~~ ~~ ~,~,~ ~~~~ri~~,~~~~~~ ~,r ~i,~~ c~~~-; s,i,~,~,i ~~~~~~~~~,~~~~ ~i,~,~~ ~~,,~
r~,~~~„~~i~,.
"A F~cn~li~n~ ~~I lhr ~'ir,~,inia Trlrrc~mmunir ~ili~n~~ inrlu~l~~5 rr~~rnur~ l~~ tiu F~F~~~rl lh~~ Cile'S E-~~11 ~~F~raili~n~5.
21
~~erat~ng f~e~/~n~,Je$ (in millions) ...
$1,soo
$1,600
$1,400
$1,200
$1,000 ~ 1 %
$800
24.9
$600
$400
29
$200
$0
Other
Auto Licenses
Federal
' Fees & Charges
Cigarette
~ Restaurant & Hotel
Business License
Utility
General Sales
Personal Property
State
Real Estate
a Fe es a n d C h a rges a re u p
slightly from 13.6% to 14%.
a State revenue as a percent
of t h e tota I budget h a s
decreased from 28% to
24.9% -primarily in School
Funding.
22
Operating Expenses ...
Persoiuzel $ 802,180,021 $ 310,509,-~~ $ -~b8,6(~3,89(~ $ 779,173,33-~ -2.9°'
Fri~zge Benefits 267,437,284 110,551,862 161,056,119 271,607,981 1.6 °io
C?perating Expenses 469,146,200 279,210,615 165,824,501 445,035,116 -5.1 °'o
Capital «itlay 11,33-x,071 7,530,676 -x,679,769 12,210,-~-~5 7.7°'
Debt Service 1-X6,432,893 103,367,74 -X3,859,978 1-X7,227,722 0.5°'0
Pay-As-You-Goy 54,508,892 -1-1,479,571 - x,479,571 -18.-1°'0
Reserves 17,056,663 19,072,3 - 19,072,328 11.8°%
City Manager Adjustment - - 4,858,102 4,858,102 0.0°'0
State Revenue Reduction - - 35,84-1,914 35,844,914 0.0°'0
$1,768,096,624 $ 874,722,234 $ 813,097,451 $1,687,819,685 -4.5%
`This r~~fl~ti is lhr~~m~~unl ~~f annu~~l <<~sh lundins; ~~E~}~r~~~~ri~~h~~1 l~~ lhr CIP
a 200 City positions being eliminated while only 6 are being added.
a $15 million reduction to planned City capital project pay-as-you-go
financing.
a School system will need to determine how to resolve State budget
reductions.
23
Ope
~~,800.00
$1,600.00
$1,400.00
$1,200.00
$1,000.00
$800.00
$600.00
rating Expenses (in millions) ...
$400.00 48.2%
$200.00
$-
Convention & Eco.
Development
Capital Projects
Financial & General
Government
Libraries & Recreation
Debt Service
Public Works &
Utilities
Family & Youth
Services
Public Safety
Schools
Schools City
$813.1 $874.7
Total Budget $1.687 Billion
Note: City is now 51.8% of the
Total Budget (compared to 50%
in FY10) due to State reductions
to School funding.
24
Operating Budget ...
The Proposed Operating Budget decreases from
$1,768 billion to $1,687 billion -
a decrease of 4.5% or $80.3 million even
with proposed revenue increases.
25
Capital
Improvement
Program
26
Project Financing ...
Pay-As-You-Go ::Y
General Fund Undesi~nated Fund
Balance
Other Fund Balance/ Retai~zed
Earni~zgs
State
Federal
Bonds/Lxase Purchases
Other
$ (~7(~,-X00,-~(~3 $ 3-X1,80-x,375 $ -~-x,479,571 $ 290,116,517
140,03,902 85,981,678 9,1=X2,224 44,950,000
136,528,195 113,663,008 22,665,187 200,000
2=17,206,7(} 169,077,059 10,481,450 67,648,195
55,-X03,2-~5 -X9,095?-~5 6,3~~,000
937,937,882 393,911,189 68,014,722 476,011,971
40,879,230 29,887,905 9,426,325 1,565,000
Total Financing -All Sources $ 2,234,429,621 $ 1,183,420,459 $ 170,517,479 $ 880,491,683
A~~~~r~~~~riali~~ns lc~dalc~ rrflrrlallcx~ili~u~s fr~~m ~~rr~i~~usv<'~~rs,nwrh cal ~~~hirh hasalrra~ly hrrn s~~c~nl.
"~ ~rl Ic~r is E~a~~-a5-v ~ni-~ ~~~ I i na nr in, ~ s u ~~ ~x~ r 1r~1 rcwrn uc~s i n l hr O~u~ra li n ~ ~ 6u ~1~ ~c~ l lh ~il a rc~ ~1 c~di r~~ lr ~I a n ~1 / o r S I~~ lr m vrn u r
lha l is h~a ns Ir rrr~1 l~~ lh c~ CI P.
a $Z5 million reduction in pay-as-you-go funding from the
amount planned for FY 2011.
a $2.75 million reduction in funds to Storm Water projects.
a $5 m i I I ion shift of bonds from Schools to City.
a Reduced use of Fund Balance by $24.5 million.
a No additional Federal stimulus funds.
27
Capital Bu~lyet
^ ^ ^
Schools $ 62,669,308 $ 35,016,800 $ (27,652,508)
Roadways 66,303,747 48,377,725 (17,926,022)
Buildings 16,778,606 13,774,748 (3,003,858)
Parks and Recreation 10,325,175 8,931,858 (1,393,317)
Utilities 46,526,159 33,626,574 (12,899,585)
Coastal 7,690,938 6,355,842 (1,335,096)
Economic and Tourism Development 20,880,578 19,798,556 (1,082,022)
Communications & Information Technology 5,254,598 4,635,376 (619,222
Total Capital Budget $ 236,429,109 $ 170,517,479 $ (65,911,630)
a Road and School projects are being delayed.
28
Projects by Type ...
Major
Equipment
X2.2%
New Facilities
25.2%
Study/ Design &
Other
1.2%
Renovation/
Replacement/
Expansion
61.8%
Site Acquisition
9.6%
29
Focus on City Council Priorities ...
o Princess Anne Road/Kempsville Intersection.
o N i m mo Parkway Phase V-A.
a Lynnhaven Parkway Phase XI -from Indian River Road to
Centerville Turnpike.
a Laskin Road Gateway Phase I-A.
o Economic Development Incentive Program (EDIP) to attract
new employment opportunities.
a Of the Z3 Priority Buildings Renovations these are funded:
^ Large Vehicle Repair Shop (Fire Apparatus)
^ Thalia Fire and Rescue Station
^ POlice Special Operations & Evidence Storage
^ Chesapeake Beach Fire and Rescue Station
^ City-wide complex is funded for design only.
30
Delayed Projects -City...
0 3 Storm Water Projects are delayed beyond 2016
^ Cape Henry Beach Drainage (#7-151)
^ North Lake Holly Watershed (#7-005)
^ South Lake Holly Watershed (#7-016)
o Road Projects delayed beyond 2016
^ Elbow Road Extended Ph II (#2-152)
^ Indian River Road - Ph VII (#2-256)
^ Witchduck Road - Ph II (#2-025)
^ First Colonial/Virginia Beach Boulevard Intersection
^ Shore Drive Phases II and II
31
Projects -Schools
o School Board Priorities:
^ Replacement of Kellam High School
^ College Park Elementary
^ Continuing to address renovation and replacement projects
(roofs, HVAC, energy)
o Delayed Projects:
^ Princess Anne Middle
^ Thoroughgood Elementary
^ John B. Dey Elementary
^ Princess Anne High School
32
Projects Not Included in the CIP ...
a Williams Farm Community Recreation Center
^ $24.6 million in construction costs
^ $2.6 million in annual operating and staffing costs which will be
partially offset by $750,000 in program revenues.
^ Would require a 7 tenths of one cent increase on the Real
Estate tax rate.
a Animal Care and Adoption Center
^ Requires an additional $9.8 million in construction costs ($2.7
million is available in the project)
^ $ 1.3 million in additional operating and staffing costs
^ Would require a 4 tenths of one cent increase on Real Estate
tax rate.
Both of these options would require 1.1~ in addition to
the recommended real estate tax increase.
33
Capital Bu~lyet ...
The Capital Budget decreases from $236.4
million to $170.5 million -
a decrease of 28% or nearly $66 million
34
Conclusion
35
Impact to Ta~cpa~~rs ...
a Goal was to keep local government's burden to the
average taxpayer at or below the current level.
a Even with increases in the rates of real estate (3~),
personal property (10~), and water ($1.86/per
month):
^ The "average" family of four with a home valued at
$290,324, with two cars and eats out occasionally wild paX
less in taxes than they are currentlypaying by roughly $52.
^ The portion of household income that goes to support local
government will decrease from 5.7% to 5.5%.
^ The majority of taxpayers should see a decrease between
their real estate tax and personal property tax bills.
36
;average Real Estate Tax Burden ...
Average FY 2009
Real Estate Tax Bill
$ 2,912.08
Average FY 2010
Real Estate Tax Bill
$ 2,776.80
Average FY 2011
Real Estate Tax Bill
$ 2,705.35*
* Includes proposed tax increase to 92¢ without it the bill would have dropped to $2,583.88
37
average Tax burden ...
Real Estate Tax $ 2,912.08 $ 2, 776.80 $ 2, 705.35
Personal Property Tax 219.70 133.99 123.85
Electric Utility Tax 36.00 36.00 36.00
Gas Uti I ity Tax 36.00 36.00 36.00
Virginia Telecommunications Tax 70.68 70.68 70.68
Water Uti I ity Tax 36.00 36.00 36.00
Restaurant Meals Tax 251.48 251.48 251.48
Admissions Tax 25.69 25.69 25.69
Vehicle License Decal 50.00 50.00 50.00
Storm Water Utility Fee 73.37 80.67 87.97
Water & Sewer Utility Fee 509.52 529.68 552.00
Residential Refuse Fee None None None
Total Tax Impact $ 4,220.52 $ 4,026.99 $ 3,975.02
Change in Taxes ($ 193.53) ($ 51.97)
38
Conclusion ...
~~~
This O eratin Bud et ~~~~~~~
p g g
. - ~~
decreases $80.3 million
and the Ca ital Bud et ~ ~ ~ ` k~
p
. . ~,~.
another $66 million. y ~ ~a~ ~~
Without the proposed tax
increases the City would ~.
need to cut an additional',
$17 million and another
4~
164 positions.
39
Workshop & Public Hearings ...
Tu~sdey; March-3Ct~ - - - - - - - Compensation/Benefits CityCouncil Chambers
@ 4:~J0 PM State Budget Council Conference Roor~n
• City Council Revenue Dedications
• Revenues
• Review of t~lorkshop Schedule
Tuesday, April 13~'' ~~* Cult~,ral and Recreational opportunities Council Conference Room
T~ Be Determined ~~• Quality Physical Environment
Thursday, April 22~'d Public Hearing Tallwood High School
Q 6:00 PM
Tuesday, April 27~" Public Hearing City Council Chambers
@ 6:00 PM
Tuesday, May 11~'~ Public Hearing and Adoption City Council Char~~bers
@ x:00 PM
~~