MARCH 30, 2010 SPECIAL FORMAL SESSIONCITY OF VIRGINIA BEACH
"COMMUNITY FOR A LIFETIME"
CITY COUNCIL
MAYOR W!/.LIAM D. SF.SSOMS, JR., At-Large
VICF, MAYOR LOUlS R. JON6:S, Bayside -District 4
RITA SWEET BF,'Ll./TTO, At-Large
GLENN R. DAMS, Rase Hall -District 3
WILL/AM R. DeSThPH, At-Large
HARRY E. DlI:'7F,L, Kemp.eville -District 1
ROBERT M. DYER, Centerville -District /
BARBARA M HENLEY, Princess Anne -District 7
JOHN E. UHRIN, Beach -District 6
ROSEMARY WILSON, At-Large
./AMES I. WOOD, Lynnhaven -District 5
CITY COUNCIL
SPECIAL FORMAL SESSION
('/TY MANAGER -JAMES K. SPORE'
CITY A7TORNF.Y - MARK ST/LES
C!/YASSESSOR - JERALD BANAGAN
C/7Y A(JDITOR - LYNDON S. REM/AS
CITY C/.ERK - R t /TH HODGE.S FRASER, MMC
30 MARCH 2010
C/TY HALL BU/LD/NG
240/ COURTHOUSE DRIVE
VIRGIN/A BEACH, V/RG/N/A 23456-8005
PHONE: (757) 385-4303
FAX (757J 385-5669
E- MAIL: Ctycncl@vbgov. com
I. SPECIAL FORMAL SESSION -City Council Conference Room - 4:00 PM
A. CALL TO ORDER -Mayor William D. Sessoms, Jr.
1. READING OF THE MAYOR'S CALL FOR FORMAL SESSION
B. ROLL CALL OF CITY COUNCIL
C. PROPOSED FY 2010-2011 OPERATING BUDGET and
CAPITAL IMPROVEMENT PROGRAM
James K. Spore, City Manager
Catheryn Whitesell, Director -Management Services
D. COMPENSATIONBENEFITS
Fagan Stackhouse, Director -Human Resources
E. STATE BUDGET IMPACTS
Catheryn Whitesell, Director -Management Services
II. REVIEW OF SPECIAL MEETING AGENDA 5:30 PM
III. LED SIGN ORDINANCE -Council Chamber - 6:00 PM
Ordinance to AMEND § 111 and ADD §217 of the City Zoning Ordinance (CZO) re requirements for
monument and electronic display signs (LED) (deferred February 9, March 9 and March 23, 2010).
IV. ADJOURNMENT
-1-
MINUTES
VIRGINIA BEACH CITY COUNCIL
Virginia Beach, Virginia
March 30, 2010
Mayor William D. Sessoms, Jr. called to order the Virginia Beach City Council's SPECIAL FORMAL
SESSION, in the City Council Conference Room, Tuesday, March 30, 2010, at 4:00 P.M.
Council Members Present:
Rita Sweet Bellitto, Glenn R. Davis, William R. "Bill" DeSteph,
Harry E. Diezel, Barbara M. Henley, Vice Mayor Louis R. Jones,
Mayor William D. Sessoms, Jr., John E. Uhrin, Rosemary Wilson
and James L. Wood
Council Members Absent:
Robert M. Dyer [Late entering -caught
in tra~cJ
March 30, 2010
-2-
MAYOR'S CALL FOR
FORMAL SESSION ITEM # 59784
Mayor Sessoms read the Mayor's Call for Special Formal Session:
March 25, 2010
"THE HONORABLE MEMBERS OF CITY CO UNCIL
In accordance with the Virginia Beach City Code Section 2-21, and by
the authority vested in me as Mayor of the City of Virginia Beach, 1 hereby call
for a SPECIAL FORMAL SESSION of the VIRGINL4 BEACH CITY
COUNCIL in the City Council Conference Room, March 30, 2010, 4:00
P.M., for the following purposes:
City Manager's Presentation:
PROPOSED FY 2010-2011 Operating Budget and
Capital Improvement Program
Compensation/Benefits
State Budget Impacts
After which to RECONVENE into the City Council Chamber, at 6:00 P.M. for
the following purpose:
Ordinance to AMEND X111 and ADD ,¢217 of the City Zoning
Ordinance (CZO) re requirements for monument and electronic
display signs (LED) (deferred February 9 and March 9, 2010).
Sincerely,
s/
William D. Sessoms, Jr.
Mayor "
cc: Mayor and Members of City Council
James K Spore, City Manager
Mark D. Stiles, City Attorney
Lyndon S. Remias, City Auditor
Ruth Hodges Fraser, MMC, City Clerk
Susan D. Walston, Deputy City Manager
Robert S. Herbert, Deputy City Manager
David L. Hansen, Deputy City Manager
Catheryn Whitesell, Director of Management Services
Mary Hancock, Media and Communications Administrator
Matt Cernigliaro, Director of Multimedia Services
March 30, 2010
-3-
CITY COUNCIL `SBRIEFINGS
PROPOSED FY 2010-2011 OPERATING B UDGET and
CAPITAL IMPROVEMENT PROGRAM
4:00 P.M.
ITEM # 59785
The Mayor introduced James K. Spore, City Manager, to present the FY 2010-2011 Resource
Management Plan in five (S) parts:
1. Formal presentation of the Budget and the distribution of the documents;
2. Compensation/Benefits;
3. Stale Budget Impacts;
4. Review of fourteen (l4) dedications
S. Discussion of Revenues
Mr. Spore introduced, Catheryn Whitesell, Director -Management Services
Mrs. Whitesell discussed various notebooks/handouts given to City Council. In November, the City
was expecting an $84.4-MILLION deficit. As this budget came together, the decrease in home values
greater than anticipated; the economic recovery was slower than projected; and, the State's Budget
deficit actually worsenecb This is the second year in a row that revenues have declined and the Real
Estate Assessor's Office is estimating next year's assessments may be down another S%. That
information led to seek permanent solutions rather than temporary ones. Mrs. Whitesell stated that
when approaching this Budget, the City sat five (S) goals:
1. Not to increase the costs of services to most taxpayers beyond the 2010 level
2. Focus on maintaining critical services
3. Make all services as efficient as they can be
4. Attempt to minimize the City's impact on the economy by trying to avoid lay-offs
of City Employees
S. Look to the future, position services appropriately and ensure that we have basic
capabilities to move forward
The Problem
O Revenues have decreased for a second year in a row and it is very possible we could face
this again next year.
~ We must balance the budget - we either cut services or raise fees and taxes. None of the
choices are easy.
~ S% and 15% reductions would have eliminated 363 positions and nearly $37-Million in
programs.
~ Schools were hit hard by State Budget reductions. Local revenues to Schools only
decreased by $13-Million.
March 30, 2010
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CITY COUNCIL`S BRIEFINGS
PROPOSED FY 2010-2011 OPERATING BUDGET and
CAPITAL IMPROVEMENT PROGRAM
ITEM # 59785 (Continued)
Strategy for Developing a Balanced Budget
~ Strive to not increase the tax burden local government places on taxpayers beyond current
levels
D Focus on critical services this government provides to the community to retain quality-of-
life
~ Identify and initiate efficiencies which reduce resource requirements
~ Nol add to the unemployment rolls and further erode the local economy
~ Preserve basic capabilities in anticipation of an economic recovery
First Step
O 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
^ Study the savings potential of contracting yard waste and hazardous household waste
product disposal -could save an additional $1-Million through a reduction to the
tipping fee
Second Step
D Examine Fund Balances and City Council Dedications
^ Last year the City 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 surplus funding from the Sandbridge TIF to support City and
March 30, 2010
-5-
CITY COUNCIL`S BRIEFINGS
PROPOSED FY2010-2011 OPERATING BUDGET and
CAPITAL IMPROVEMENT PROGRAM
March 30, 2010
ITEM # 59785 (Continued)
-6-
CITY COUNCIL`S BRIEFINGS
PROPOSED FY 2010-2011 OPERATING BUDGET and
CAPITAL IMPROVEMENT PROGRAM
ITEM # 59785 (Continued)
The full list of recommended education totals over $19-Million and effects two hundred (200) positions.
March 30, 2010
-~-
CITY COUNCIL`S BRIEFINGS
PROPOSED FY 2010-2011 OPERATING BUDGET and
CAPITAL IMPROVEMENT PROGRAM
ITEM # 59785 (Continued)
An additional $2.6-Million in official savings is identified in this Budget. One of the items which is not
on the list (on page 55) states the City rebid its copier contract saving over $600, 000. Two (2) of the
items moving forward will be the disposal of yard debris and hazardous household waste (contract
purposes) combined could save the City approximately $1-Million. After this Briefing, David Bradley
reviewed the dedications.
The Path Not Taken
~ Reduce services and programs by $19-Million and eliminate 200 positions
~ Ffee and tax rates be increased to avoid cutting an additional $17.4-Million,
in services and 164 jobs. ~
~ Reduce the number of firefighters by 30 which may take fire trucks out of service ($2.2-
Million)
~ Eliminate 17 Deputies that book inmates into the Jail ($966,139)
~ Eliminate VB Alert (Reverse 911) and rely on local media outlets to notify residents of
emergency situations. ($92,000)
~ Eliminate funding for 12 School Resource Police Officers in middle and high schools
($846, 768)
~ Further reduce Detectives in the Police Department by 12 positions ($704,250)
~ Eliminate 36 positions that provide yard debris collection for homeowners ($3.3-Million)
D Reduce the number of HRT bus routes throughout the City ($437,395)
March 30, 2010
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CITY COUNCIL`S BRIEFINGS
PROPOSED FY2010-2011 OPERATING BUDGET and
CAPITAL IMPROVEMENT PROGRAM
ITEM # 59785 (Continued)
The Path Not Taken (Continued)
~ Cut 9 positions from Beach Operations which results in the elimination ojtrash collection and
beach cleaning on the non-resort area beaches ($1.2 million)
~ Eliminate the Lake Edward Summer Program. ($60,000)
~ 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)
~ Eliminate one Auditor position and reduce the mandated External Audit ($92, 703)
~ Defer park maintenance which could shut down certain parks and facilities ($825,000)
D Cut back on food and care of the animals at the Aquarium ($25,000)
D Reduce 2 staff and support costs for Substance Abuse Outpatient Services reducing counseling
and treatment for over 650 people ($242, 757)
D Eliminate transportation services to mental health clients which would reduce access to
doctors, care coordination and work opportunities ($229,927)
D 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)
O Cut Library materials and 3 collection management staff ($401,989)
O Reduce advertising outside of Hampton Roads to attract businesses and jobs ($126,911)
~ Eliminate 2 positions that support various Wetland programs and plan reviews lengthening the
time for reviews ($1 SS, 045)
D Reduce the overall cleanliness, appearance and aesthetics throughout the City ($520,450)
~ 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)
~ Close the parking lots for the Aquarium and for Croatan Beach ($274,329)
~ Eliminate the City's computer replacement program and 1 position, which will impact service
delivery throughout the organization if machines fail ($977,107)
~ Reduce 7 positions that provide technology repair and operational software support to various
departments, including public safety ($994,103)
~ Reduce support to various regional agencies such as the Eastern Virginia Medical School,
Hampton Roads Planning District Commission, Economic Development Alliance and Military
and Federal Facility Alliance ($246,180)
A small tri fold "pocket budget" FYIO-11 Resource Management Plan was distributed.
Two Paths to Balancing the Budget - An Alternative Not Taken is detailed (commencing on page 9)
March 30, 2010
-9-
Revenues for Schools
D State budget reductions totaled $51.6-Million
^ Hold 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 match to the final
State Budget which increased funding)
D 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
~ 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
School Expenditures
~ Improved energy efficiencies by $2.4-Million
D Eliminated 59.6 positions, but through grants was able to add 79. S for a net increase of 19.9.
D "Baseline" reductions
^ Reduced all non personnel accounts by 3% which will impact Schools' ability to
purchase instructional supplies and materials
^ Increase attrition calculation, overtime and adjustments to salary and benefit accounts
to bring closer to actual expense.
^ No layoffs or furloughs
D 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
March 30, 2010
CITY COUNCIL`S BRIEFINGS
PROPOSED FY 2010-2011 OPERATING BUDGET and
CAPITAL IMPROVEMENT PROGRAM
ITEM # 59785 (Continued)
-10-
CITY COUNCIL`S BRIEFINGS
PROPOSED FY 2010-2011 OPERATING BUDGET and
CAPITAL IMPROVEMENT PROGRAM
ITEM # 59786
Total Compensation Update
4:30 P.M.
The City Manager introduced Fagan Stackhouse, Director -Human Resources, to provide information
re Total Compensation and the results of the latest Market Salary Survey. The City has a policy to
perform a Market Salary Survey every three (3) years.
Today's Goal: Information Sharing on
-Salary
- Benefits
Comparison base: Area Cities
(Norfolk, Portsmouth, Chesapeake, Hampton, Newport News)
FY2011- No salary or benefit changes recommended
Salary: Base Pay Increases
Previously Established Goal: 4.5% Merit Increase
Salary: Base Pay Increases
FY 07/08: 1. S % General Increase
2% Merit Increase
FY 08/09: 2. S % General Increase (1 % Public Safety)
0% Merit Increase
FY 09/10: 0% General and Merit Increase
FY 10/11: 0 % Proposed
Market Salary Survey
• Originally conducted Market Salary Survey annually, changed to every three (3) years in 2004
• Last survey implementation: July 2004
• 1, 700 employees received pay range upgrades
Survey conducted to assess market. Preliminary survey results:
Up to 2,328 employees impacted
Cost: $7.4-Million if implemented
- pay range increase if 2.5% below highest market midpoint
- employee receives pay increase with market adjustment
Note
x Market adjustment if S% below highest market midpoint:
Impacts 1,286 employees Cost: $4.7-Million
x Market adjustment if position ranked 3'd or lower:
Impacts 1, 063 employees Cost: $3.4- Million
March 30, 2010
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CITY COUNCIL`S BRIEFINGS
PROPOSED FY 2010-2011 OPERATING B UDGET and
CAPITAL IMPROVEMENT PROGRAM
ITEM # 59786 (Continued)
Total Compensation Update
Comparison of Total Salary Increases in Local Market
as
a~
c
w
a~
Ci
^Chesapeake
^Hampton
^ Newport News
^Norfolk
^ Portsmouth
^Virginia Beach
18 and
y
."~c~,°t ~"'s`.±~;+ ,.~ 1`~~(1:_ ~~`~E'i't1C'<'l~~ :~~ls~,"•~ ~.~!tl.Tl};;~`C"'S1t)1'1
Vertical pay compression occurs when a supervisor makes less than a subordinate
Supervisor's Pay Range
...Min Max
$38,484 42,250 $50,554
1 1
Subordinate's Pay Range
Min Max
$30,063 43000 $43,591
1 1
Typical causes: Supervisor less senior than subordinate,
promotions. Common occurrence in most pay plans.
', 2001 thru 2008 Compression
~djustmrnt Curt = ~12.9~,~1
5x~
~.vv'io _- _----- -- -
4.54%
4.44%
3.54%
Y
3.44% -
~ ~,
2.54% _
1.54%
1.44% -
4.54% -
4.44%
FY 47-48
FY 48-49
FY 49-14
FY 14-11
^Chesapeake 4.54% 3.44% 4.44"/0 4.44"/0
^Hampton 4.44% 2.81% 4.44% 4.44%
^Newport News 4.44% 3.44% 4.44% 4.44t'/o
^Norfolk 4.54% 3.54% 4.44% 4.44%
^Portsmouth 4.54% 3.44% 4.44"/0 4.44"/0
OVirginia Beach 3.54% 2.54% 4.44% 4.44%
March 30, 2010
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CITY COUNCIL`S BRIEFINGS
PROPOSED FY 2010-2011 OPERATING BUDGET and
CAPITAL IMPROVEMENT PROGRAM
ITEM # 59786 (Continued)
Total Compensation Update
City Council Resolution: Address supervisory pay compression
within three (3) years ojidentification
2010 Supervisory Compression Review
Total Number of Employees Impacted: 119
Total Cost if Implemented: $611,927
Note: Horizontal salary compression is building at the minimum of pay ranges due to
lack of merit increases
s ~„'..,~~ ~ ~.;:r~l,r ~ ~
E _ _ _ _ g _. __.. a
_~~ - ~~~~r~~~~®
Benefit Formula:
-General Employees AFC x YR5 Service x .0170 No Change
-Public Safety AFC x YRS Service x .0185 No Change
AFC Calculation 3 Highest Years 5 Highest Years
Unreduced Retirement:
-General Employees 50 Years OId/30 Years Service Age and Service = 90
-Public Safety 50 Years Old/25 Years Service No Change
Normal Retirement 65 Years Old/5 Years Service Conform to Social Security
COLA First 39'0 of CPI First 2% of CPI
+ Next 4% of CPI x 0.5 + Next 8% of CPI x 0.5
Cap of 59'0 Cap of 69'0
Local Employee Contribution Currently 5% paid by city
Optional 0-5% Optional 0-59'0
Note: State Budget (HB3o) does not impose employee contribution on current state
employees; doire ~% contribution for new State employees.
~~... Y:~+rt~nvacac-'_h d4~''h`Il kri^imNl`x4 ~~pr,1Croz~~kF rvm^~'T:5'~.':".,,""fAP~'~A~#~~"~"~'!t°YM ~~'q .SrR~~~~ui~"pd4~19B".''r'}
- ~r Y?~ ~
Benefits Overview
Virginia Retirement System (VRS)
• S% Employee Contribution Currently paid by City
• Prior to Jan. 1, 1978, employees paid S% contribution
• Since Jan. 1, 1978, City contributes employer and employee rates
• VRS rate of 17.58% of Payroll (7-1-10) amounts to $50.3-Million in FYIl. (Current rate =
16.48%)
• City of Virginia Beach VRS Employer Plan has unfunded liability of $275.1-Million
• Acturial Study project rate to increase 1. S % more in FY 13 to total of 19.13
March 30, 2010
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CITY COUNCIL`S BRIEFINGS
PROPOSED FY 2010-2011 OPERATING BUDGET and
CAPITAL IMPROVEMENT PROGRAM
ITEM # 59786 (Continued)
Total Compensation Update
New Employees -Local Option
Employee Contribution 0% - S%
Advantages
x Reduces Cityls annual costs over time -not large savings initially, but with
future retirements, impacts could be substantial
x Preserves Defined Benefit Plan for employees
Disadvantages
x Potential negative impact on employer competitiveness
x Creates two-tier system of employee benefits
(Note: New State Employees Must Contribute S%)
Existing Employees -Local Option
Employee Contribution of 0 % to OS
Advantages
• Preserves Defined Benefit Plan for employees
• Reduces City annual costs
- 1 % $2.86-Million
- 2 % $S. 72-Million
- 3 % $8.58-Million
- 4 % $11.44-Million
- S % $14.3-Million
Disadvantages
• Potential negative impact on employer competitiveness
• Reduces employee pay if no salary increase
Employee Contribution
0% - S%
Recommendation:
All Employees pay S% employee share over time once economy
recovers and pay increases can be reinstituted
No Changes Recommended for FY2011
Annual Leave -Accrual Based on Years of Service
Sick Leave -One Day/Month
Major Holidays -11.5/Year (Includes lwo flex days)
Retirement/Virginia Retirement System (VRS)
March 30, 2010
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CITY COUNCIL`S BRIEFINGS
PROPOSED FY 2010-2011 OPERATING B UDGET and
CAPITAL IMPROVEMENT PROGRAM
ITEM # 59786 (Continued)
Total Compensation Update
Summary
• We are still competitive in our market. However,
x We must continue to show our employees, who deliver services to our citizens,
that they are our most valuable resource
x We must be mindful of market trends and changes in pay and benefits
x Pay increases need to be competitive for both recruitment and retention
x We need to move employees within their pay range to mitigate salary
compression
Benefits Overview
Number of Annual Leave/Paid Personal Leave Days Accrued Based on Service
Chesapeak Newport Virginia State of
e Ham ton News Norfolk Portsmouth Beach Vir inia Av Med
From 12 12 13 12 14.1 12 12 12.62 12
1 Year
to 5
From 5 15 15 16 15 15 15 15 15.20 15
years to
10
From 10 1$ 18 18 18 17.1 18 18 17.82 18
Years to
15
From 15 21 21 19 20 19.1 21 21 20.02 20
Years to
20
From 20 24 24 20 23 21 24 24 22.40 23
Years to
25
From 25 24 24 20 23 21 24 27 22.40 23
Years
and
above
Benefits Overview
Mnrimum Arrnin/ fnr Anmin/ /.onva/Pnid Porcnnn/ /.onvo Anizc Rncad nn .Caroira
Newport Virginia State of
Chesa eake Ham ton News Norfolk Portsmouth Beach Vir inia Av Med
From 36 24 80 48 44 50 24 46.40 44
1 year
to 5
From 5 36 30 80 48 44 50 30 47.6. 44
years to
10
From 10 36 36 80 48 44 50 36 48.80 44
Years to
15
From 15 36 42 80 48 44 50 36 50 44
Years to
20
From 20 36 48 80 48 44 50 42 51.20 48
Years to
25
From 25 36 48 80 48 44 50 42 51.20 48
Years
and
above
March 30, 2010
-15-
CITY COUNCIL`S BRIEFINGS
PROPOSED FY 2010-2011 OPERATING BUDGET and
CAPITAL IMPROVEMENT PROGRAM
ITEM # 59785 (Continued)
Summary Impacts
of General Assembly
S:OS P.M.
599 Monies
Catheryn Whitesell, FY 2010-11 reduction is $1,180,344 from the FY 2009-10 budgeted amount.
This actually represents less of a reduction than Governor Kaine originally proposed a
-($2,329,295).
In FY 2011-12: the General Assembly will reduce this funding by an additional
$1,184,370.
• The City has experienced a cumulative reduction oj$4,458,002 in 599 Funding since FY 2000
(unadjusted for inflation)
this equates to almost one cent on the Real Estate Tax
Reduction in Aid to Localities
• The final State Budget increased this general reduction in State Aid to Localities from $SO-
Million to $60-Million
For Virginia Beach, this reduction increases from the current $2.2-Million to $2.65-
Million.
• The State allows localities to determine which revenue streams to reduce or send the State a
check.
We have not made either selection allowing the State to determine where to apply their
cut
Constitulutional Officers
• Commissioner of the Revenue: -$173,404 (further reduction needed is $48,404)
• Treasurer: -$192,479 (further reduction needed is $79,505)
• Clerk of the Circuit Court: $179,023 (no further reduction)
• Commonwealth Attorney: -$222,294 (further reduction needed is $193,977)
• Sheriff.• -$3,139,566 (further reduction needed is $1,089,566)
The State is no longer providing the same level of support for "locally responsible
prisoners" costing the City $1.3-Million -reducing the daily rate to $4.
They are redefining "state responsible"from sentenced to 12 months to sentenced to
longer than 2 years, meaning more prisoners are now local
• Per the Non-Supplanting Policy, these Constitutional Offices are expected to absorb these
additional decreases. For many this will mean additional staff reductions.
March 30, 2010
-16-
CITY COUNCIL`S BRIEFINGS
PROPOSED FY 2010-2011 OPERATING BUDGET and
CAPITAL IMPROVEMENT PROGRAM
ITEM # 59785 (Continued)
Summary Impacts
of General Assembly
Human Services
• Total reductions to Mental Health/Mental Retardation, Social Services and Juvenile
Probation: $506,996.
• If Congress extends ARRA FMAP, the Department of Human Services would receive an
additional $201,689 in Federal revenue which will partially offset the State reduction.
Importantly, if Congress does not extend this Federal aid, the City would experience a
more significant reduction than the aforementioned $500,000.
State Aid to Libraries
• -$41,897 reduction
State Aid to Education
• To balance the State budget ,the General Assembly reduced, for teachers and other
educational positions, the employer payment to VRS from 10.49% to 3.93% for FY 2011 and to
5.16% in FY 2012. Eventually rates will have to rise to fully fund VRS.
• Covers the increased cost of the Composite Index totally in FY 2011 and SO% in FY 2012
saves $14.9-Million in FY 2011
Reduces Basic Aid for Virginia Beach by $51.8-Million.
Total State Reductions from FY 09-10 to FY 10-11
• S. 7-Million for the City
• $51.8-Million for Schools
• This equates to 11.1 cents of the City's Real Estate Tax.
PPTRA Funding was Restored
• The General Assembly fully funded reimbursement for Personal Property
• City receives $53.4-Million and this will provide a 70% reduction on taxpayer's Personal
Property bills
VRS Life Insurance Rate
• The Life Insurance rate in FY 2010 Budget was 1.02 % of salaries. The recommended Budget
reduces this rate to 0.69%
• The final State Budget further reduced the rate to 0.33% for an additional savings of $800,000
STATE BRAC Funding
• The $7.5-Million was restored for FY 2010-11, but is unfunded for the second year of the
State's Biennium (FY20I1-12)
March 30, 2010
-17-
CITY COUNCIL`S BRIEFINGS
PROPOSED FY 2010-2011 OPERATING BUDGET and
CAPITAL IMPROVEMENT PROGRAM
ITEM # 59785 (Continued)
State Fee Increases
• The State will increase the charge for Deeds as well as the Four for-Life charge
• Normally, these are shared with local governments. The State Budget changes this
relationship allowing neither to be shared
Reduction in Dealer Discount for General Sales
The Mayor and City Manager introduced Fagan Stackhouse, Director -Human Resources,
• The Dealer Discount only applies to the first 3 % of sales tax collected and allows
retailers/dealers to retain a portion of this tax. The complete elimination of this discount
would have resulted in an additional $65-Million in General Sales Tax Revenue
• The adopted compromise was to retain 40% of the Dealer Discount for retailers that do not e-
file (those that manually tabulate the General Sales tax), which will generate $49.0-Million in
General Sales tax revenue to the State
• This could generate $1-Million for Schools which would be available as additional State Share
Sales Tax in future budgets
Elimination of Dealer Discount for Virginia Telecom Tax
• The State will completely eliminate the Dealer Discount for the Virginia Telecommunication Tax,
which costs the City approximately $312, 000 per year.
Virginia Telecommunication Tax
• The House proposed siphoning over $20.6-Million from the local Virginia Telecommunication
Tax to restore funding to Constitutional Officers.
• The House/Senate Conference Budget eliminated this shift; however, the final Budget for the
first time treats the Virginia Telecommunication Tax as a State General Fund Revenue rather
than a local revenue, which represents an undesirable precedent for local governments
The Second Year of the Biennium
• FY 2011-12 Concerns:
599: As previously noted, the State's Biennial Budget includes a reduction in 599 funding
for FY I1-12 (City's reduction will be $1,184, 370)
Line of Duty Charge: The State has historically funded. In FY 2011, this cost will be
shifted to the VRS Life Insurance Fund. In FY 2012, this cost will be shifted to localities.
The minimum budget impact will be $325,000, but it could be as high as $1-Million
BRAC : As previously noted, the State 's Biennial Budget does not include funding for FY
2011-2012.
March 30, 2010
-18-
CITY COUNCIL`S BRIEFINGS
PROPOSED FY 2010-2011 OPERATING B UDGET and
CAPITAL IMPROi~EMENT PROGRAM
ITEM # 59786
5:24 P.M.
DEDICATIONS
David A. Bradley, Resources and Management Services Administrator, detailed information re
Dedications. These major dedications are approximately 28% of the Budget.
SUMMARY OF MAJOR CITY COUNCIL DEDICATIONS
Parks and Recreation/Recreation Centers „ $17.7-MILLION
Parks and Recreation/Outdoor Initiative ~ $2.4 million
Open Space ~ $5.3 million
Tourism Growth investment Fund (TGIF) I $13.8 million
MaJor Projects - ~ $21 million
Tourism Advertising Program ~ $9.1 million
Agriculture Reserve Program I $4.6 mihlon
`LynnhavenMaIITIF ~ $2.1mlllion
~SandbridgeTlF ~ $8.3mlUton
Sandbridge Special Service District ~ $4.6 million
Central Business District -South T1F ~ $6.2 mtllion
Town Center Special Service District I $2.1 million
f Economic Development Investment Program (EDIP) ~ $2.3 mlNion
City/School Revenue Sharing Formula - X365.8-Million
Purpose:
Provides local support for education, including debt service and pay-as you-go financing
Maior Dedicated Source:
51.3% of real estate, personal property, sales, utility, telecommunications/cellular, business license,
and cable franchise is dedicated to Schools (before proposed tax increases)
- FY 2010-11 amount of $365.8-Million is less than what was transferred in FY 2006-07
- 3.6% less than FY 2009-10 amount of X379.4-Million and 7.2% less than FY 2008-09
- 8.8-Million of Reversion Funds requested in Schools FY 2010-11 Budget proposal
Parks and Recreation Centers - $17.7-Million
Purpose:
Provides staffing, operations and maintenance, and renewal and replacement of 6 Recreation Centers.
Maior Dedicated Source:
3.48 cents of real estate tax dedication
June 30, 2009 Fund Balance -$S.1-Million
Projection of Fund Balance and .3 tenths of proposed real estate tax increase used to renovate Bow
Creek and Kempsville Recreation Centers
March 30, 2010
-19-
CITY COUNCIL`S BRIEFINGS
PROPOSED FY2010-2011 OPERATING BUDGET and
CAPITAL IMPROVEMENT PROGRAM
ITEM # 59786 (Continued)
DEDICATIONS
Outdoor Initiative - $2.4-Million
Purpose:
Provides funding to Parks and Recreation CIP
Maior Dedicated Source:
.47 cents of real estate tax dedication
No Fund Balance
All dedicated to Parks and Recreation CIP projects like 4-074 City Bikeways and Trails and 4-303
Greenways, Scenic Waterways and Natural Areas
Open Space - $5.3-Million
Purpose:
Provides funding for acquisition and maintenance of open space.
Maior Dedicated Source:
.44% ojthe S.S% restaurant ta.~
- FY 2010-11 Operating Budget proposes a two (2) year moratorium of Open Space acquisition
funding
- $2.SMillion for debt service
- $1.2-Million for open space development and maintenance
- $825, 000 for park infrastructure repairs
- $616,000 for various site acquisitions
- $149,000 to General Fund for issues such as landscape maintenance of new roadways
June 30, 2009 Fund Balance - $S-Million
Tourism Growth Investment Fund (TGIF) $13.8-Million
Purpose:
Provides operation and maintenance costs for the Resort Area; beach events such as holiday lights
and the Neptune Festival; resort area trolleys; and, provides pay-as you-go and debt service costs for
Resort Area projects.
Maior Dedicated Sources:
- .S% of the S.S% restaurant tax
- 2.5% of the 8% hotel tax
- 2% of the 10% amusement tax (or 1 % of the S%)
June 30, 2009 Fund Balance -$1.8-Million
(used $1 Million to balance FY 2010 Budget). In the long run, may have capacity to address future
Resort area projects
March 30, 2010
-20-
CITY COUNCIL`S BRIEFINGS
PROPOSED FY2010-2011 OPERATING BUDGET and
CAPITAL IMPROVEMENT PROGRAM
ITEM # 59786 (Continued)
DEDICATIONS
Major Projects - $21-Million
Purpose:
Provides funding stream to pay debt service for the Convention Center, Sandler Center, Virginia
Aquarium Parking and Phase II of the Virginia Aquarium
Major Dedicated Sources:
- . 56 % of the S. S cents restaurant tax.
- 2.5% of the 8% hotel tax.
- 8% of the 10% amusement tax (or 4% of the S%).
- Scents of the 65 cents cigarette tax.
June 30, 2009 Fund Balance - $14.5-Million
With a projection of minimal fund balance by FY 2012-13 (used $1-Million to balance FY 2010
Budget).
Tourism Advertising Program (TAP) - $9.1-Million
Purpose:
Provides funding for advertising Virginia Beach as a "tourist destination" and operation of the Visitor
Center
Major Dedicated Sources:
- .S% of S.S% restaurant tax
- I % oJ8% dedicated hotel tax
June 30, 2009 Fund Balance - $185,000.
Agriculture Reserve Program (ARP) - $4.6-Million
Purpose:
Acquires development rights to farmland
Major Dedicated Source:
.9 of 1 cent of the real estate tax
June 30, 2009 Fund Balance -$1 S-Million.
(used $4.2-Million in the FY 2009-10 Operating Budget and CIP)
March 30, 2010
-21 -
CITY COUNCIL`S BRIEFINGS
PROPOSED FY2010-2011 OPERATING BUDGET and
CAPITAL IMPROVEMENT PROGRAM
ITEM # 59786 (Continued)
DEDICATIONS
Sandbridge TIF and SSD - $12.9-Million
Purpose'
Beach replenishment at Sandbridge
Ma%or Dedicated Sources:
- TIFs -Incremental real estate tax revenue
- SSD -
- 6 cents additional real estate tax revenue
- 2.S% additional hotel tax
- Other Sandbridge revenue
Combined June 30, 2009 Fund Balance - $11.1-Million
Town Center TIF, SSD and Lynnhaven Mall TIF- $10.4-Million
Purpose:
- Central Business District TIF -Debt associated with public parking facilities
- Town Center SSD - O & Mfor parking facilities, sidewalks, streets, etc
- Lynnhaven TIF-Transit in Lynnhaven Mall area and obligation to the Developer
Ma%or Dedicated Sources:
- TIFs -Incremental real estate tax revenue.
- Town Center SSD - 45 cents additional real estate tax rate.
Combined June 30, 2009 Fund Balance - $2.8-Million
Economic Development Investment Program - $2.3-Million
Purpose:
Attract additional economic development to the City
Ma%or Dedicated Source:
12 cents of the 65 cents cigarette tax (including Z cents proposed in FY 2010-11 budget).
Funds transferred to Economic Development Authority
March 30, 2010
-22-
ITEM # 59787
Ciry Council RECESSED at 5:53 P.M. to RECONVENE into CITY COUNCIL CHAMBER to
CONDUCT THE SPECL4L FORMAL SESSION.
March 30, 2010
-23-
SPECIAL FORMAL SESSION
VIRGINIA BEACH CITY COUNCIL
March 30, 2010
6:00 P.M.
Mayor William D. Sessoms, Jr. called to order the FORMAL SESSION of the VIRGINIA BEACH CITY
COUNCIL in the Council Chamber, City Hall Building, on Tuesday, March 30, 2010, at 6:00 P.M.
Council Members Present:
Rita Sweet Bellitto, Glenn R. Davis, William R. "Bill " DeSteph
Harry E. Diezel, Robert M. Dyer, Barbara M. Henley, Vice Mayor
Louis R. Jones, Mayor William D. Sessoms, Jr., John E. Uhrin,
Rosemary Wilson and James L. Wood.
Council Members Absent:
None
Mayor Sessoms read the Mayor's Call for the Special Formal Session:
March 25, 2010
"THE HONORABLE MEMBERS OF CITY COUNCIL
In accordance with the Virginia Beach City Code Section 2-21, and by
the authority vested in me as Mayor of the City of Virginia Beach, I hereby call
for a SPECIAL FORMAL SESSION of the VIRGINIA BEACH CITY
COUNCIL in the City Council Conference Room, March 30, 2010, 4:00
P.M., for the following purposes:
City Manager's Presentation:
PROPOSED FY 2010-2011 Operating Budget and
Capital Improvement Program
Compensation/Benefits
State Budget Impacts
After which to RECONVENE in the City Council Chamber, 6:00 P.M. for
the following purpose:
Ordinance to AMEND X111 and ADD x'217 of the City Zoning
Ordinance (CZO) re requirements for monument and electronic
display signs (LED) (deferred February 9 and March 9, 2010).
Sincerely,
s/
William D. Sessoms, Jr.
Mayor "
March 30, 2010
-24-
Item III
PUBLIC COMMENT
ITEM # 59788
Mayor Sessoms INVITED PUBLIC COMMENT:
MONUMENT AND LED SIGNS
The following registered to speak in SUPPORT.•
Dr. Rick Klobuchar, 758 Suffolk Lane Phone: 463-4885, strong proponent of LED's as they are great
attention getters and he displayed examples of underwater lights for caving, an example with a flashing
siren and a LED utilized to emphasize a "flat tine ".
John Wilson, 3213 Virginia Beach Boulevard, Phone: 340-0028, Chair -Virginia Beach Division of
Chamber of Commerce, advised the Planning Commission came to the Chamber in December with a
proposed Ordinance of Councilman Villanueva with this change and requested their opinion. A proposal
with modifications was formed and delivered to the Planning Commission. The Business Community
referenced their recommendation re policing: "there should be restrictions on scrolling, flashing,
blinking or any other types of intermittent elimination ". The Business owners do not want a restriction of
"no LED signs "; however, the City needs some type of ordinance with regulations and compromise of
restrictions.
Chandler Scarborough, 1248 Green Garden Circle, Phone: 427-2600, respects the value of the Garden
Club representatives. He did not envision the LED signs being flashing billboards. He understands the
City Council is going to create a work group re the Ordinance so all representative organizations may
provide comments. As latest versions have not been published, he recommended deferral of the
Ordinance to allow publication and further comment.
Chris Wiemken, 1248 Green Garden Circle, Phone: 472-2845, current President of the Green Run
Homes Association. Mr. Wiemken urged City Council not to take action, but to DEFER and allow
consideration from all stakeholders. He understands a work group has been proposed to make
recommendations re an LED Ordinance that reflects interest of all citizens.
The following registered in OPPOSITION:
Elizabeth Ann Brown, served as President -Council of Garden Clubs, from 1987 - 1989. Ms. Brown
served on several committees which wrote the Ordinances: "Banning New Billboards ", "Tree
Ordinance ", "Landscape Ordinance ". Although she did not serve on the Committee that banned the
overhanging signs and regulated the size and height of signage, this Ordinance probably did more that
any other accomplishment. These Ordinances made a great deal of difference in the appearance of the
City. All worked together to accomplish the goal of a better looking city. Restrictions can be developed
with the business representatives that will still allow them to advertise.
Glenda Knowles, represented Council of Garden Clubs, referenced correspondence to City Council.
Representatives of the Council of Garden Clubs and Virginia Beautification Commission reviewed the
latest version of the LED Ordinance, dated March 17, 2010. It was determined there should be
additional changes to allow the City Council more oversight and control during the interim period prior
to when the Citizens Study Committee could bring forward their recommendations. Ms. Knowles stressed
[line 141J "which discusses the size of the electronic display as recommended by the Planning
Commission in their December 4, 2009, consideration of the Ordinance ". This is SO% of the total area or
32-square feet per face, whichever is less. The representatives are in support of this and line 170d8,
"recommendation of the 24-hour dwell time (as proposed by Mayor Sessoms).
March 30, 2010
-25-
ITEM III
PUBLIC COMMENT
ITEM # 59788 (Continued)
The following registered in OPPOSITION.• (Continued)
Admiral Tom Ward, 201 78`" Street. Admiral Ward also a Past President of the Virginia Beach
Beautification Commission and currently Member of their Board of Directors. Mayor Sessoms advised it
is his intent to propose an Ordinance that would contain the 24-hour dwell time. He does not believe the
smaller businesses can afford these expensive signs.
Reba McClanan, 3224 Burnt Mill Road, advised the President of the Virginia Beach Garden Clubs and
members are in attendance. Scenic Virginia should have forwarded correspondence re their opinion on
LED's. Said information is hereby made a part of the record. With the Federal Legislation, once a
Billboard is established, one cannot afford to buy a billboard. The City cannot afford to buy the ones on
Shore Drive.
Betty Kennedy, 2700 Cattayle Run, represented the Chesopeian Colony Garden Club. She supports the
Beautification Committee and is totally against all large signs or lights. The LED signs are a distraction
to drivers. Ms. Kennedy urged the erection of these signs be ceased.
Robert G. Jones, former Mayor, advised the LED signs do not add value to the City in terms of its
appearance nor value to the businesses against the existing signage Ordinances. LED signs do not create
wealth in the City. Actually, this creates a burden on the small business. A $60, 000 expenditure would
add greatly to the cost of doing business. Attorney Jones represents approximately fifty (50) small
businesses.
March 30, 2010
-26-
III LED SIGN ORDINANCE
ITEM # 59789
A MOTION was made by Councilman DeSteph, seconded by Councilman Wood to ADOPT:
Mayor's Alternative -Line 181 through 185: "All electronic displays
shall remain static jor a period of at least e~re~-key twenty-four
24 hours:
Ordinance to AMEND X111 and ADD X217 of the City Zoning Ordinance (CZO)
re requirements for monument and electronic display signs (LED) (deferred
February 9 and March 9, 2010).
Upon SUBSTITUTE MOTION by Councilman Davis, seconded by Councilman Uhrin, City Council
DEFERRED INDEFINITELY the Alternative Ordinance, in order to receive comments.
Ordinance to AMEND ~I11 and ADD X217 of the City Zoning Ordinance (CZO)
re requirements for monument and electronic display signs (LED) (deferred
February 9 and March 9, 2010).
Voting.• 6-S
Council Members Voting Aye:
Glenn R. Davis, William R. "Bill "DeSteph, Harry E. Diezel, Robert M. Dyer,
Vice Mayor Louis R. Jones, John E. Uhrin,
Council Members Voting Nay:
Rita Sweet Bellitto, Barbara M. Henley, Mayor William D. Sessoms, Jr.
Rosemary Wilson and James L. Wood
Council Members Absent:
None
March 30, 2010
-27-
III LED SIGN ORDINANCE
ITEM # 59789 (Continued)
Upon motion by Council Lady Henley, seconded by Councilman Diezel, City Council in the Interim shall
REFER to the Planning Commission consideration of a ban re LED signs.
City Attorney Stiles advised in the Interim there is no prohibition on LED signs and applications made
will have to be considered based on the existing law.
Voting.• 11-0
Council Members Voting Aye:
Rita Sweet Bellitto, Glenn R. Davis, William R. "Bill " DeSteph, Harry E.
Diezel, Robert M. Dyer, Barbara M. Henley, Vice Mayor Louis R. Jones,
Mayor William D. Sessoms, Jr., John E. Uhrin, Rosemary Wilson and James
L. Wood
Council Members Voting Nay:
None
Council Members Absent:
None
March 30, 2010
-28-
Items M-O.
ADJOURNMENT
ITEM # 59790
Mayor William D. Sessoms DECLARED the City Council Meeting ADJOURNED at 6:42 P.M.
- ------- --------- ---------
Beverly O. Hooks, CMC
Chief Deputy City Clerk
Ruth Hodges Fraser, MMC
City Clerk
City of Virginia Beach
Virginia
William D. Sessoms, Jr.
Mayor
March 30, 2010
-zg-
Items M-O.
ADJOURNMENT
ITEM # 59790
Mayor William D. Sessoms DECLARED the City Council Meeting ADJOURNED at 6:42 P.M.
Beverly O. Hooks, CMC
Chief Deputy City Clerk
- -- ----- - - .,~r5-s-~cJ
uth Hodges Fraser, MMC
City Clerk
City of Iirginia Beach
Virginia
~~~~t=~~! ---------------
William D. Sessoms, Jr.
Mayor
March 30, 2010