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JUNE 1, 2010 MINUTESCITY OF VIRGINIA BEACH "COMMUNITY FOR A LIFETIME" CITY COUNCIL MAYOR WILLIAM D. SF.SSOM$ JR., At-Large VICE MAYOR LOUIS R. JONES, Bayside -District 4 RITA SWF.EI' BE'I,I.ITI'O, At-/,arge G/.F,NN R. DAMS, Rose Hall -District 3 WILLIAM R. DeSTE'PH, At-Large H,1RRY F,. DIEZE/, Kempsville -District 2 ROBERT M. DYER„ Centerville -District I B,4RBARA M. HENLEY, Princess Anne -District 7 JOHN E. UHRIN, Beach -District 6 ROSEMARY WILSON, At-Large JAMES 1,. WOOD, l,ynnhaven -District 5 CITY COUNCIL APPOINTEES C'II'Y MANAGER - .JAMES K. SPORE CIIYAITORNEY- MARK D. STILES CITY ASSESSOR - .JERALD BANAGAN CITYAUDITOR- LYNDONS. REM/AS CITY CLERK - RUTH HODGF,S FRASER, MMC CITY COUNCIL WORKSHOP AGENDA 1 JUNE 2010 I. CITY MANAGER'S BRIEFINGS -Conference Room - A. VIRGINIA BEACH - A YEAR-ROUND DESTINATION Jim Ricketts, Director -Convention and Visitors Bureau B. RESORT AREA SUPPORT Mark Gemender, Operations Engineer -Public Works II. CITY COUNCIL A. COMMUNITY SUSTAINABILITY I. BLUE RIBBON COMMITTEE RECOMMENDATIONS 2. FINANCIAL POLICIES a. Capital Improvements Program b. Operating Budget CITYHALL BU/LDING 2401 COURTHOUSE DRIVE VIRGINIA BEACH, VIRGINIA 23456-8005 PHONE.•(757) 385-4303 FAh' (757) 385-5669 E-MAIL: ctycncl@vbgov.com 4:00 PM Catheryn Whitesell, Director -Management Services -1- MINUTES VIRGINIA BEACH CITY COUNCIL Virginia Beach, Virginia June 1, 2010 Mayor William D. Sessoms, Jr., called to order the CITY COUNCIL WORKSHOP in the City Council Conference Room, re VIRGINIA BEACH-A YEAR-ROUND DESTINATION, on Tuesday, June 1, 2010, at 4:00 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 ,Julie 1, 2010 -z- CIT YMANA GER `S BRIEFINGS VIRGINIA BEACH-A YEAR-ROUND DESTINATION 4:00 P.M. Jinr Ricketts, Director -Convention and Visitors Bureau, advised he wished to concentrate on the development of City Council's Vision: "Virginia Beach to Become a First Class Year-Round Resort Destination': The focus the past year has been on multiple market segments. - ~ "~~.. ,~ .. . ~ , ,. ~ G ~ ., ,. ~_ "~ x ~ r~ o Year-Round Resort Destination Market Segments 'Leisure Northeast Corridor of US Canada "' ~ Europe • Virginia Beach Convention Center 'Meetings/Conventions Convention Center City-wade Hotels • Sports Marketing • Business Trade • Experiential Packages • Group Tour • Reunions • Events and Festivals • EcoTourism ._ ~«_ ~~ _"~ Mr. Ricketts cited preliminary results from Old Dominion University regarding the annual impact study. In 2008 and 2009, the economy has certainly impacted the business. 2007 was Virginia Beach's peak year. The most important part of this chart is the actual tax revenue generated back to the City by the Tourism Industry which remains even in 2007 and 2008. Key Tourism Indicators 2007. 2008. 2009 2007 2008 2009 Spending in Millions 890.0 864.0 816.0 Tax Revenue in Millions 78.4 78.4 77.9 Jobs ll, 000 9, 700 9,000 Net Return on Investment 17.7% 14.6% 13.4% Ju»c 1, 2010 -3- CITYMANAGER`S BRIEFINGS VIRGINIA BEACH-A YEAR-ROUND DESTINATION (Continued) Key Indicators 2009 versus 2008 Hotel Revenue - 2.2% (From Smith Travel Research) All Lodging Revenue - 3.2% Including Cottages and Campgrounds (From Virginia Beach Commissioner of Revenue) Inquiries + 12% (From Virginia Beach Visitor Information Center Hotel Revenue Calendar Year 2009 vs. 2008 -Tourism Set 0 -5 -10 -15 -20 ~f -25 ~, ~ v° m °' o ~ °' o ~ m c ~' ~ 1 v ~ ~ E w ~' d ~ ~ d coo p ~ af6i m z ~ m m o m ~ ~ ~ ~ •~ Q a ~ ~ ~ ° O ~ LL ~ Sot' ce ;md~ 7r~e vgl `~-~~_ _ z Hotel Revenue Calendar Year 2009 vs. 2008 -Convention Set O ' T ~~ ' t ~ ~T ~' 10 ~ .8 2 -7.8 -6:8 _ 10 15 -- 13.$ -i3.8 -i3.6 ...12.1.. 12 .. •i6 3 -20 -- --_ _._ -- -____~.~ ____.__ ~ ~ W ~ C fn ~ ~ l0 ~ t U O L c m w E m« r N c E ~ d L N ~ ~ L as m ~ ~ a ~ A U u m ~ ~ 2 ~ ~ ¢I ~ ~ F f~ d c ~ ~ ~ 1 .-_ - Source S,~ith Tra vef '~ "~ .. _'~_ _ ,June 1, 2010 -4- CITYMANAGER `S BRIEFINGS VIRGINIA BEACH-A YEAR-ROUND DESTINATION (Continued) Spring-Summer-Fall-Winter. 2.5 Miifion EstimatecE Qvernight Visitors to Virginia Beach aooooo 995; 831 -- - 350000 __ _! 300000 - -- r 1250000 _I ', 200000 150000 ', 100000 ', 50000 ', 0 __ m LL ~ a ~ c j a v°', o ° °' - z o 2)09 OOt/ Etr~nomw Impact S°uU~ ..- .- ~ _- ~€r 59 % of visitors, 52 % of percent of spending, and 62 % of room nights generated occur between September -May ,Jul~c 1, 201 D -5- CITYMANAGER `S BRIEFINGS VIRGINIA BEACH-A YEAR-ROUND DESTINATION (Continued) e ~: `~ ~ Increase in Lodging Sales 2000-2009 ~_~~ -~ Spring Lodging Sales 60.1% ~~ Summer Lodging Sales 53.3% Fall Lodging Sales 65.7% Winter Lodging Sales 47.0% ?C red eiid bassi on far ~1IK10~7Q-ZOr9 ~ ~ =5 t m ~ *`. '~e*~'" T - - u - `` The Length of Stay (days) Spring 3.8 Summer 4.6 Fall 3.9 ,June 1, 2010 -6- CITYMANAGER `S BRIEFINGS VIRGINIA BEACH-A YEAR-ROUND DESTINATION (Continued) ~S The Convention and Sports Marketing Business encompasses approximately twenty-five (25%) of the City's business. This is under the direction of Al Hutchinson -Director -Convention Sales and Marketing. Juue 1, 2010 r~...~: - - .._ _ -_- - ~- CITYMANAGER `S BRIEFINGS VIRGINIA BEACH - A YEAR-ROUND DESTINATION (Continued) Plan to Return Spring 94.6 Summer 9I.0% Fall 93.I Ron Kuhlman, Director of Tourism, Marketing and Sales , concentrated on the new program of Experiential Travel, among the top trends in tourism concepts today. "Experiential Tourism " is basically packaging what already exists in a manner that is sellable and acceptable to individuals looking for new experiences and destinations through Group Tour operators and Motorcoach owners and operators. Toward the end of the year, these experiences will be offered to individual consumers, as well. Three (3) City Departments have partnered with Convention and Visitors Bureau to make this Experiential Tourism a reality: TheAquarium - Virginia Beach Marine Science Center; Virginia Beach Department of Agriculture and, Virginia Musical Theatre/Sandler Center for the Performing Arts. The Tourism Marketing and Sales Division main activities are to support a booming City to a year round destination. Tourism Marketing and Sales Out of Market Public Relations Motorcoach /Group Tour Sales International Marketing Experiential Tour Packages A film was displayed entitled "Live the Life Adventures in Virginia Beach ", which is also displayed ro Group Tours. Courtney Dyer, Convention Center -General Manager, advised statistics re the Virginia Beach Convention Center • Average 350-400 events per year • 125,000 -150,000 average room nights per year • $40-$SO-Million in spending from out of town visitors attending events • Most of this comes from: - Meetings/Conventions - Trade Shows - Participatory Sports Community use is also high through weddings and receptions, banquets, consumer shows, fund raising events and political rallies. Beginning June 14, 2010, high-school students from eleven (I1) high schools and four° specialty centers, faculty and guests will attend graduation ceremonies at the Convention Center. Approximately 6S, 000 people will be passing through the building over a period of seven (7) days. fu~le 1, 2010 -8- CITY MANAGER `S BRIEFINGS VIRGINIA BEACH-A YEAR-ROUND DESTINATION (Continued) Hybrid-Electric Shuttle Buses and Oceanfront Recycling were depicted. Over sixty (60) Virginia Green Certified Virginia Beach Hospitality Businesses! (LEED -Leadership and Environmental Energy Design, the premier rating system for commercial buildings). Virginia Beach Convention Center is the first Convention Center in the country to certify gold under the existing building categories. Recycling f-1 Glass, steel, aluminum, plastic, paper, cardboard, batteries ~7 Mercury captured from fluorescent lamps 'Renewable resources used in construction Waste Reduction i;=; Elimination of Styrofoam Cl Disposable containers made of recycled content and bio-based materials ^ Use of water pitchers instead of bottled water Food overages donated to local shelter ^ Purchasing policy to include environmentally;fricndly office supplies and cleaning products tulle 1, '1010 Virginia Beach Convention Center Takes the Gold! -9- CITY MANA GER `S BRIEFINGS VIRGINIA BEACH-A YEAR-ROUND DESTINATION (Continued) ^ Water Efficiency !~ Low flow toilets and faucets with auto sensors ^ Landscaped property with effective stormwater management u High efficiency dishwashers ^ Microfiber technology mops Energy Efficiency ^ Compact energy-efficient florescent lighting ^ Glass system that limits UV light penetration in pre function areas ^ Programmable lighting and HVAC ^ Tracking of energy use Al Hutchinson, Director -Convention Sales and Marketing, advised the Industry Trends: Corporate Business Has Evaporated GovernmentlMilitary Business is King (Again) Sports Marketing Continues to Flourish Social Media is Front & Center Corporate Social Responsibility Green Initiatives -First LEED Existing Building Meetings & Conventions and Sports Marketing ; Future Room Nights Booked 240,000 _.._-_.---- ------- ----.. ....... .----._....-- ----------------- 220,000 218,266-~ -223-872 zoo,ooo ____._.__- .-_ 2oo,52a 180,000 -a ---- ..~_: - 175,652. ___._. _ _...----- ~- 178,671 160,000 . -_._.-_______._-_....._____.._.....___.. __ 163,673 1ao,ooo .) _ ------ - ~ ~ ~ - 1zo,ooo _. _-_-- _ _ __--- -- -__ __ 100,000 - - -- ~ --- _ -- ~ - -~- -- FY OS FY 06 FY 07 FY 08 FY 09 FY 10 (YTD ) ,June 1, 2010 -10- CITYMANAGER `S BRIEFINGS VIRGINIA BEACH-A YEAR-ROUND DESTINATION (Continued) Gonvent~a~~~~~i'~~~"~~3~~k~~nc~s`~i~i~'F~I ig hts FY 2008-2009 Group ~ Meeting I Date ~ Nights Nationat High School Coaches 2010 Senior National ~ March 2010 8,200 ~ Championship j National Forum for 81ack Public 2012 Annual Forum Aprll 2012 3 75 Administrators i i ;~~ Christian Counseling .& ~ CCEF2010Annual 'Nov. 2010 1,515 ~ Educational Foundation ~ Conference - - -- ~ _ _ __ _ _ _--- _ ----~ ------ 1 j Association for ; 2009 Joint War- ;May 2010 ~ 2,230 Gommunications, Electronics, ~ Fighting Conference Intelligence 8~ Information 'Systems Professionals ~ ~ T ._ . ~. _ _--1- - - - Marine Technology Society ;OCEANS' Oct.. 2012 2,085 ~; 1 12MTSlIEEE Virginia Association of Realtors .2011 Annual Oct. 2011 1,150 Convention I j _~.. June 1, 2010 Louisville, Kentucky is the Number One Competitor to Virginia Beach. -11- CITY MANA GER `S BRIEFINGS VIRGINL4 BEACH-A YEAR-ROUND DESTINATION (Continued) «~ ,,, t; The Competitive. Set Picture... -.City HQ Hotel Flag inventory _ _ . Open ~ _= Baltimore 2008 Hilton 757 rooms Charlotte 2003 Westin 700 rooms Louisville 2005 Marriott 616 rooms Myrtle Beach 2003 Sheraton 402 rooms ~; .Raleigh 2008 Marriott 400 rooms ~. Richmond 2004 Marriott 389 rooms Savannah 1999 Westin 403 rooms .Washington DC 2008 Gaylord 2,000 rooms ~~ National The only City that does not have a headquarters hotel is Virginia Beach. Future Development • Dome Site Entertainment Venue • Head Quarters Hotel Development • 19r" Street Corridor Development • Rudee Loop Development • Laskin Road Gateway Development (Underway) Costs relative the public private percentage of the Headquarters Hotels, the total cost and ratio will be provided. Council Lady Bellitto inquired re the requirements to attain the LEED Certification. In order to receive the LEED Certification, the Convention Center saved over $200, 000 a year in energy costs. All of the mechanical systems were fine tuned and verified by outside consultants. Over `half of everything that "goes out the back door " has been recycled. It is actually a systems approach, better management of the landscaping, better indoor air quality. This is a comprehensive program verified by a third parry. Mr. Ricketts presented afive-minute video entitled "Opportunity Virginia Beach': Mr. Ricketts complimented Warren Harris, Director of Economic Development, for his assistance in compiling this video. Virginia Beach is located in the Southeastern Corner of Virginia, where the Atlantic Ocean meets the Chesapeake Bay, i~irginia Beach encompasses 370 square miles and boasts a vibrant oceanfront and home of several state parks, distinctive cultural centers, inviting neighborhoods and a rapidly growing urban center. One of the primary economic engines is travel and tourism. ,ju»c 1, 2010 -12- CITY MANAGER `S BRIEFINGS VIRGINIA BEACH-A YEAR-ROUND DESTINATION (Continued) The State has made significant investments to fuel this growth, a state of the art Convention Center, Sports Resort attracting athletes from all over the Country, development of Town Center's eclectic mix ofshopping, dining, entertainment and living options. In addition, a rise in overall investment in Virginia Beach has fueled development. Virginia Beach markets itself aggressively to ensure the City remains ayear-round destination for leisure, meetings, conventions and business travelers. Virginia Beach is a true year-round destination and our residents and visitors support that with continued demand for outdoor activities and seasonal offerings throughout the year. In addition to the support of visitors and local residents, businesses in Virginia Beach enjoy one of the most equitable tax structures in the United States, spectacular natural assets, a thriving economy, city investment and growth that improves the quality of life for visitors and residents alike. It all adds up to Virginia Beach's unique appeal and national media has developed from this. Virginia Beach has exciting plans for this whole area. The Resort Area Master Plan identifies districts for development, each with a distinctive identity to compliment the area: Laskin Gateway, the 31 S` Street area, Central Beach along the 19'" Street Corridor and the Rudee Loop and Marina District. This multi faceted plan envisions the Resort Area as a vibrant, diverse neighborhood and destination. Virginia Beach's future also includes mass transit linking this City to the rest of the region and enabling easy access to future development will minimize the impact on both the environment and existing infrastructure. Relative Myrtle Beach, Mr. Ricketts advised their marketing budget used to be $3-Million with a 1 % general sales tax on Myrtle Beach. The General Assembly of South Carolina approved this, which is a ten year commitment, with 100% funding for the first two years to be utilized toward marketing Myrtle Beach. For the next eight (8) years, 20% would go to the residents to help offset real estate taxes. Myrtle Beach just completed their strategic planning process. Myrtle Beach wishes to have the largest convention center on the East Coast. A one-mile long boardwalk (actual boardwalk) has just been completed. Their airport and transportation system have been improved. It is obvious; they wish to be the Number 1 Resort Beach Destination in the United States. .Iu~le 1, 2010 -13- CITY MANAGER `S BRIEFINGS RESORT AREA SUPPORT 4:48 P.M. The City Manager introduced Mark Gemender, Operations Engineer -Public Works, to provide information re maintaining the Resort area. Mark Gemender advised aYear-Round Destination Demands Year-Round Support. What levels of maintenance does it take to keep the Resort Area attractive, clean and functioning? • The Resort Area beach has been rated among the nation's cleanest by the Clean Beaches Council • Tourist and citizen surveys have rated the Resort beach cleanliness in 88.6 percentile of satisfaction Mr. Gemender advised there are fifty-five (SS) traffic signals in the Resort Area. Pre-season maintenance occurs on the traffic signals as well as the signal structures. Traffic Management Operations placed 27, 985 linear feet of pavement marking and 100 water barriers in preparation for the tourist season. Traffic Management Operations throughout the year, in support of ten (10) major special events, places annually.• • 9000 cones • 1200 crowd control barricades • 900 signs • 1 S00 traffic barricades • 300 drums • 120 sign stands ,June 1, 2010 -14- CITY MANAGER `S BRIEFINGS RESORT AREA SUPPORT Traffic Management Operations is also responsible for all the vertical work for Holiday Lights (mounting of all the lights on Atlantic and Pacific, as well as the decorative items on the Beach). Relative the Beach Operations Program, Resort Beach requires servicing 1310 containers 1-2 times daily, including collection of Solid Waste and transportation to the SPSA Transfer Station Disposal. These employees rise before dawn and their work is complete by 10: 00 A.M. Beach Operations also is responsible for street cleaning, the boardwalk and connector parks. Beach Access Cleaning and Grooming The 2.5 miles of resort beach are raked and groomed daily. Neighborhood beaches are groomed bi-monthly There are forty-two (42) beach access stairs and ramps which are cleaned daily. Mr. Gemender displayed "before" and "after" beach grooming photographs, as well as Holiday Light preparations, ADA access to the Beach, and the crew of Beach Operations. Building Maintenance has a huge responsibility at the Resort area: Custodial services for the 24`", 30`" and 31S` Street Public Restrooms Street and pedestrian light poles (2400 street lamps) Electrical infrastructure and connections The Teak Benches (630) Information and path signage Stages at 7`", 17`", 24`" and 31S` Streets Sidewalks on Atlantic Ave between I7`" and 31S` Streets Pressure Washing Maintenance and repair of the sculptures in the connector parks Maintains and repairs Beach walkovers from 59`" through 88`" Street Foot washers, showers and water fountains (45) Graffiti removal from public facilities in the Resort Area Street Maintenance is responsible for the Boardwalk, expansion joint replacement, beach stairway access repair and replacements. Parks and Recreation Landscape Management contributes substantial effort towards maintenance. Landscape Management is responsible for Sand Removal and Mulching. Resort Landscape removes 30 to SO tons of sand from the Boardwalk landscape every year "by hand" due to high winds. The team mulch 's 40 blocks of landscaped beds on the Boardwalk twice ayear -May and August! On 31 S` Street, there are over twenty (20) palm trees requiring annual pruning with approximately one-third being replaced due to environmental damage. With over 200 events yearly, the ResortLandscape Team has established an aggressive turfprogram at 1 f", 24`" and 31S` Entertainment Parks. The Resort Landscape Team plants over 13,000 beautiful annuals, grasses, perennials, shrubs and trees every year to the delight of all visitors. They are also responsible for the Banners and Flags on the Boardwalk. ful~e 1, 2010 -15- CITY MANAGER `S BRIEFINGS RESORT AREA SUPPORT Resort Landscape maintains three (3) playgrounds on the beach -including the soon to be opened handicap accessible Grommet Island at 2"d Street. Landscape Management Supports the Neptune Festival • The Resort team installs the intricate water supply system for the Sand Sculptors • They install 10 Spigots and 100 Yards of PVC pipe into the sand • A two person team works lam to 7pm for 3 days to support this event Landscape Management also is responsible: • Holiday Lights on the beach -prune plant material for optimum viewing of various displays • Shamrock Marathon -install crowd control fencing • Transport the officials to the Finish Line at the Rock and Roll '/ Marathon The Landscape Team maintains many other areas of the Resort totaling over one hundred (100) acres. ,Jule 1, 2010 -16- CITY COUNCIL COMMENTS S: 08 P.M. Vice Mayor and Councilman Wood, distributed correspondence re the Shore Drive Speed Limit. Several years ago, as the City Council representatives for the Bayfront Area, Vice Mayor Jones and Councilman Wood instituted the Shore Drive Safety Task Force and voted in support of the $1-MILLION in improvements. Last year, they requested a trial speed limit reduction be instituted at the eastern end of Shore Drive. Based on observations and reports from the residents, these actions have had a positive impact on the community. Vice Mayor Jones and Councilman Wood jointly requested the Mayor to request the City Manager direct City staff to lower the speed limit from 45 MPH to 35 MPH from Pleasure House Road eastward to join the existing 35 MPH zone. The City is requested to use all reasonable methods to notify the residents and motorists in advance of the change in speed limit. It is not their desire to create a "speed trap ", but they do expect the police department to enforce the speed limit in this area as throughout the rest of the City. Vice Mayor Jones and Councilman Wood also requested over the next six months staff evaluate the reductions in speed limit and provide empirical data on traffic safety changes and impact on traffic flow. Councilman DeSteph advised he had also received concerns relative this speed limit. BY CONSENSUS, the City Council concurred in the recommendation for the City Manager to direct stuff to lower the speed limit on Shore Drive to 35 MPHfrom Pleasure House Road eastward. Councilman DeSteph distributed a Briefing Paper relative the Grass and Tree Ordinance (current and proposed) Ordinance to AMEND City Code X23-SO pertaining to Excessive Growth of Weeds or Grass and Ordinance to AMEND City Code X23-50.1 pertaining to removal of certain trees. Councilman DeSteph also distributed ~¢23-46, Nuisance generally. Council Lady Henley advised as June First is the beginning of Hurricane Season, she requested a Briefing re Emergency Preparedness 2010 Hurricane Season. It is important the citizens are prepared. The City Manager advised working with the Television Stations and The Virginian-Pilot concerning providing the information to the citizens in a timely manner. Jurre 1, 2010 IA• ~4 ~~~ '~ ~ v~~~~ L~~ @i ~ Q5 ~ a~ '~ ;c 'Z 3~a ~~ o~9 t~ ,~_ ~z ~ v r . dy~~~ `~~~ NS O 9~s O F OUR NATO LOUIS R. JONES VICE MAYOR -DISTRICT 4- BAYSIDE JAMES L. WOOD COUNCILMAN -DISTRICT 5 - LYNNHAVEN May 26, 2010 Mr. James K. Spore, City Manager City of Virginia Beach 2401 Courthouse Drive Virginia Beach, Virginia 23456 RE: Shore Drive Speed Limit Dear Mr. Spore: City of Vi rgi_nia Beach VBgov.cam OFFICE OF THE CITY COUNCIL MUNICIPAL :ENTER CITY HALL, BU~LDING 1 2401 COURTHOUSE DRIVE VIRGINIA BEACH, 4A 23456 Several years ago, as the council representatives for the Bayfront Area, we instituted the Shore Drive Safety Task Force and voted in support of the $1 million in improvements. Last year we asked that a trial speed limit reduction be instituted at the eastern end of Shore Drive. Based on our observations and reports from the residents, these actions have had a positive impact on the community. It is our joint request that you direct city staff to lower the speed limit from 45 MPH to 35 MPH from Pleasure House Road eastward to join the existing 35 MPH zone. Further we request that the city use all reasonable methods to notify the residents and motorists in advance of the change in speed limit. It is not our desire to create a "speed trap" but we do expect the police department to enforce the speed limit in this area as they do throughout the rest of the city. Finally, we request that over the next six months staff evaluate the reductions in speed limit and provide empirical data on traffic safety changes and impact on traffic flow. Sincerely, ~~ f •~ ~; ~ ~ Louis R. Jones Vice Mayor & ouncilmember Bayside District Ja e L. Wood Co cilmember Lynnhaven District -17- CITY COUNCIL `S BRIEFING BLUE RIBBON COMMITTEE RECOMMENDATIONS 5:14 P.M. Catheryn Whitesell, Director -Management Services, advised the Blue Ribbon Committee was formed by City Council in 2007 to review the City's Operating Budget Process, Expenditure Strategies and reliance on the real estate tax revenue. The staff continues to try to utilize this report and it is included in the Operating Budget. Expenditure Subcommittee's Recommendations: Biue Ribbon Task ~orcecommendatians Revised for_~X -11 Complete On• going city Council Decision EXPENDITURE SUBCOMMITEE'S RECOMMENDATIONS: 3.1 Strategic Plan •Ciry Council involved Plan with community input X •Link all City Plans (Comprehensive Plan, Budget, CIP, etc.) to the Strategic Plan x •Objedively measure the success of programs linked to the Strategic Plan X 3.2 Cap on Spending •City Council should keep spending in line wRh overall economy rather than rely on an absolute spending cap X X 3.3 Revise Budget Process •Make budget process easier for City Council and Stakeholders to comprehend X •Incorporate a fixed and variable expenditure anarysis of all budget line Rems X •Increase efforts to obtain citizen input and participation early in the budget process X •Improve efforts to educate cttizens X •Direct staff to provide quarterly reports to City Council and stakeholders X •Review funding formulas annually X •Require new ordinances to identify funding sources X •Create on-going budget wmmission to assist City Council X •Encourage School System to conduct similar review of their budgetary and business processes X •Institute an integrated automated system for tracking expenditures X ....._ __. ----___.._.._... ,,,...~°" _ Complete "- On- going City Council Decision EXPENDITURE SUBCOMMITEE'S RECOMMENDATIONS (continued): 3.4 BusinessProcesses, Efticlency, and increased Labor •Adopt Lean Six Sigma approach X •Set specific benchmarks for wntinual increases in process efficiency and productivity gains X X •Consider consolidating cost centers X X •Increase the use of automation and technology to simplify processes and improve efficiency x •Engage public and staff to identify and resolve problems on anon-going basis X •Streamline the process for implementing new technology X •Apply a sunset clause to all programs X •Ensure that all budget policies are in writing and reviewed regulariy X •Reward efficientprectices and suggestions X •Encourage entrepreneurial innovation rather than traditional bureaucracy X •Create a hotline whereby the public and city employees can suggest specific ideas X •Identify and remove factors or policies that encourage counter-productive behavior X 3.5 "Green" Processes and Energy Efilciency •Conduct comprehensive energy audit of all City and School resources X •Provide rewards and incentives for staff to save energy X •Encourage staff and public to identify potential cost saving solutions X •Adopt "green roof' technology in renovations and new construction ofgovernment buildings X •Evaluate potential benefits of moving to variable-rate pricing with peak load management. This strategy would help reduce overall electricity bills. X ,June 1, 2010 -18- CITY COUNCIL `S BRIEFING BLUE RIBBON COMMITTEE RECOMMENDATIONS -~~ _ Complete On- going ~~y Couneil Decision EXPENDITURE SUBCOMMITEE'S RECOMMENDATIONS (continued): 3.S Economic Devslopment •Develop an economic plan that evaluates workforce needs and business growth incentives X •Link funding of economic development to defined outcomes X •Encourage private-sector entities to invest in economic development efforts X •Encourage businesses within each region of the City to compete for City's limited resources X 3.7 Decision-Making PFOCeases •Proffers should identify any increased maintenance costs x •Require that all major construction or redevelopment projects include an analysis for financial impacts on public safety and infrastructure X •Evaluate "best practices" nationally from both the public and private sectors X 3,8 Underdunded Matxltdos •Make a request for funding unfunded or untlerfunded mantlates a part of the City's legislative package each year X S.9 Capital Expandilvras •Integrate CIP projects with Schools X •Proactively plan future for capital expenditures X •Pertonn a wst/banefit analysis for any new program or capital expenditure in excess of $500,000 X Complete On- going City Council Decision EXPENDITURE SUBCOMMITEE'S RECOMMENDATIONS (continued): - J.70 Miscellarreoua •Freeze salary supplements for City Treasurer and Commissioner of the Revenue and evaluate combining functions under the City finance Department X •Evaluate combining administrative functions of Fire and Emergency Medical Services u •Introduce a cost recovery program for lost or damaged equipment X •Appoint a comptroller to provide accounting review and assistance to the City Council X 9r1Y Next 8teps.. •Use consultants to obtain an independent antl objective analysis of ideas presented by the Blue Ribbon Taskforce x •Consider phasing in the implementation of a Homestead Provision and identify potential savings to offset anticipated revenue shortfalls X N'A •Develop policies to address fiscal impact of Virginia Beach's aging population X •Identify examples of what other communities have done to improve their budget process X •Study financial impact of addressing City's aging infrastructure X Expenditure Subcommittee's Recommendations on Compensation: Jude I, 2010 -19- CITY COUNCIL `S BRIEFING BLUE RIBBON COMMITTEE RECOMMENDATIONS ---'"" Clty On- Council Complete going Decision EXPENDITURE SUBCOMMITEE'S RECOMMENDATIONS (continued): ' 4.2 Employee Compensation •Bring compensation plans more in line with the private sector x •Replace "best paid employees" policy with "attract and retain qualified and motivated X employees" •Limit total direct salary expenditures including merit increases X •Change policies underwhich employees receive merit pay (approximately 97%curtently X receive merit pay) •End the curtent policy of providing uniform pay increases to all city employees-tie pay to X performance •Provide City Manager with flexibility to recognize and differentiate levels or employee X perfortnence •For State positions, pass through State pay raises, but apply the City's new performance X based program to the City portion of these salaries •Gradually shift from defined benefits to defined contribution benefits as used in the X private sector •Unfunded obligation should be disGosed as a part of the budget x •Consider capping the City's contribution of retiree's health insurance premiums as a an X absolute dollar value in budget •Consider Health Savings Accounts (HSAs) and Health Retirement Accounts (HRAs) as used X in the private sector •Reduce overall number of city employees (1 % reduction in full-time employees would save $3 X million) _`' Ctty - - ~ On- Council - ~~ Complete going Decision EXPENDITURE SUBCOM MITEE'S RECOMMENDATIONS (continued): a 2 Employee Compersation (doMinued) •Evaluate opportunities to outsource City services X •Undertake a Commercial Activities Program or Competitive Source Program (require city X services to compete with private sector companies) •Explore recruitment of retired public employees to return on a part-time or corrtractual X basis •Maintain and expand the City's current volunteer programs which actively reduce costs X •Review each position that has been vacated or is to be vacated before rehiring X •Tesk the City Manager with increasing staff productivity by one percent each year X •Review overtime costs antl determine ways to control them X X •Evaluate the City's curtent "NO Layoff Policy° X •Create a process for review of disability retirements and worker's compensation claims X •Require parties that are disabled from one type of work in the City to seek other available City X A jobs rather than retire •Reduce the number of paid holidays provided to city employees from 11.5 to 10 to match X federal employees (Note: City only has 9.5 holidays curtently) •Discontinue policy of giving employees a paid day off on their birthday X •Conduct a cosUbenefit analysis of combining sick and annual leave into a universal leave X system •Request that the State Legislature require the State Compensation Board to realistically adjust X pay scales and benefits to match compatible salaries in the region •Cap City salary and benefits contributions to existing State positions at their current level X ,Ju~m 1, 2010 -20- CITY COUNCIL `S BRIEFING BLUE RIBBON COMMITTEE RECOMMENDATIONS Revenue Subcommittee's Recommendations: -- ~;. --""'"" _ ~ complete on- going c~ council Decision REVENUE SUBCOMMITTEE'S RECOMMENDATIONS: 8.1 and 8.2 Homestead Provision •Regardless of the passage of the Homestead Provision City Council should consider options to lower the real estate tax rate X NtA •Offset some real estate tax revenue loss through expenditure reductions X •Pursue General Assembly authority to have a local income or sales tax to generate revenue to partially offset the reduction X •Do not attempt the Homestead Provision without identifying a strategy to address the impacts eilherthrough expenditure reductions or offsetting revenues X rtc~7 8.3 Surplus Property •Consider selling surplus property for Capttal investments X X 8.4'Equity Concerns •W here there are equity issues, identified by the Committee, the City Council needs to consider making those revenue adjustments x 8:5 Fees and Charges •Fees should be adjusted at least biennially for inflation to ensure cost recovery X X 8.6 Stimulate Economic Growth •Work with strategic partners X •identify needed assets: transportation, land, and buildings X X •Use fret rate advisors in analysis and negotiation of investment opportunities A Recommendations were made to review the Budget process, one of which was to increase citizen participation. Again„ the staff has responded with four (4) Town Hall Meetings, as well as staff attended individual Town Meetings of the City Council Members. Staff has continued to attend various group and Civic League meetings and improve the presence on the City's web site. Financial Briefings have been increased. Funding formulas have been reviewed. Catheryn Whitesell introduced the City Staff in attendance: Patricia Phillips, Director -Finance; David A. Bradley, Resources and Management ServicesAdminisirator, John Grook- Risk ManagementAdministrator, Trish Donahue - Financial Analyst, and Meredith Ching - Management and Budget Analyst Council Lady Henley inquired re Employee Compensation. On a regular basis a market salary study was performed to compare with other municipalities. The City Manager advised the market survey is conducted every three (3) years and the latest market salary survey was conducted last October. There are no salary funds to adjust to market. The City is starting to fall behind in some key job areas, which is a concern. The other cities have thirty (30) days to still act, but, to-date, Virginia Beach is the only City in the region that is requiring payment on the retirement. Susan Walston, Deputy City Manager, commented re the compression issue and advised there was funding approved by City Council and a stipulation that the issue of compression would be reviewed every three (3) years. Council Lady Wilson referenced the news article re Chesapeake school employees are reviewing a pharmacy with a different provider to save funding. Susan Walston, advised the last time health care was bid out, the City reviewed carving out pharmacy with a different provider. The Benefits Executive Committee meets tomorrow June 2, 2010, to compile their recommendation for City Council. In Chesapeake, it is only Schools (not City and Schools as Virginia Beach) so they may be starting it on a small scale. The City has examined other options to reduce cost. In the region, the City appears to be the lowest trend increase in their health plan cost. ,Jude 1, 2010 - z~ - CITY COUNCIL `S BRIEFING FINANCIAL POLICIES CAPITAL IMPROVEMENTS PROGRAM and OPERATING BUDGET 5:35 P.M. Vice Mayor Jones PRESIDED, as Mayor Sessoms left to attend an Employee Retirement. _~ --F nancial Policies Many types of regulations, policies and practices that govern and guide the City's financial structure, management and functions. LEGAL REQUIREMENTS INTERNAL CONTROLS AND CITY COUNCIL AUDITING CITY POLICIES & PRACTICES FINANCIAL ORDINANCES STRUCTURE & PURCHASING & MANAGEMENT ACCEPTED PROCUREMENT GOVERNMENT REQUIREMENTS MANAGEMENT ADMINISTRATIVE PRACTICES POLICIES AND PROCEDURES LEGAL A UTHORITY: • State and City Code Requirements • Operating Budget and Capital Improvement Program Ordinances CITY COUNCIL: CITYMANAGER: • City-School Revenue Sharing Policy • Administrative Directives • Revenue Dedication Ordinance • Resource Administration • Non-Supplanting Policy • Grant Management • Maintenance & Repair of Aging City • Sponsorships Infrastructure • Donations • Debt Management Policies • Procurement • Fund Balance Policy • Internal Control Procedures • Budgetary Appropriation & Control • Petty Cash and Change Funds • Capital Project Appropriation & Control • Food, Beverage and Refreshment • Revenue Policies Expense Guidelines • Employee and Department Payroll ,Iu»c I, 2010 -22- CITY COUNCIL `S BRIEFING FINANCIAL POLICIES (Continued) CAPITAL IMPROVEMENTS PROGRAM and OPERATING BUDGET Accounting Framework Fund Appropriation Unit (Department or Capital Projects) Program Unit/ {Personnel Accounts Sub projects {Operating Accounts {Equipment (Capital) Accounts Capital Improvements Program Policies • CIP Projects had a minimum cost of $50,000, for the last several years and require multi year financing • New projects should be recommended only if there are new revenues to support the construction and operations • "Adequately maintain what the City has before constructing new facilities " • Only City Council can authorize a new CIP Project or change the scope • Projects are prioritized for funding based on City Council priorities and set criteria. • Approach to financing: • Cash first -debt is the source of "last resort" • Project must have a longer life than 20 years to be bond financed • Pay-as you-go funding should balance the impact on services against the benefit of reducing debt • Account for operating budget impacts Debt Management Policies • The City issues bonds for capital improvements that exceed $250, 000, or which cannot be financed from current revenues • Debt funding is the last source of financing to be considered • Debt financing is most appropriate for projects with a minimum useful life of 20 years Indicators: • Debt service for general government debt should not exceed 10% of general government expenditures • Total General Obligation Net Debt will not exceed 3. S% of assessed value • Net Debt Per Capital is set at $2,400 • Net Debt to Income Per Capita should not exceed 6. S% Types of Financing • Charter Bonds • Referendum Bonds • Public Facility Revenue Bonds • Lease/Purchase Agreements Jule 1, 2010 -23- CITY COUNCIL `S BRIEFING FINANCIAL POLICIES (Continued) CAPITAL IMPROVEMENTS PROGRAM and OPERATING BUDGET Fund Balance Policy • The General Fund will maintain an undesignated balance equal to 8% to 12% of the following year's estimated revenues with a goal of 10% • Fund balance shall not be used to ftnance continuing expenditures • The Operating Budget will contain an estimate of the undesignated balance at June 30`" • Program fund balance annually, but not in future years of the CIP Revenue Policies • The City will seek a diversified and stable revenue system to support programs, debt service, and capital construction • Taxes will be equitable to various groups of taxpayers to the extent allowed by law • The City will use fees and user charges to offset the cost of operating the service to the community • In the case of Enterprise Funds, fees must be set sufficient to recoup the operation, maintenance, capital replacement, indirect costs, depreciation and debt service related to that business • Tax rates and fees will be reviewed annually with City Council and will be set sufficient to cover current expenses Budget Policies • The highest level of budgetary controls are at the appropriation units authorized by City Council - generally a Department or Capital Project • Only City Council can approve new, full-time positions • Only City Council can appropriate new revenues, regardless of the amount • Transfers between appropriation units greater than $100, 000, or which starts a new program or expands an existing one, must go to City Council ,Ju»c 1, 2010 -24- CITY COUNCIL `S BRIEFING FINANCIAL POLICIES (Continued) CAPITAL IMPROVEMENTS PROGRAM and OPERATING BUDGET Budget Policies (Continued) • The Ciry Manager sets further controls for: • Personnel Accounts • Operating Accounts • Equipment Over $S, 000 (each piece) • Transfers between $25, 000 & $100, 000 require the City Manager's approval (and are reported to City Council) • Transfers $25, 000 and under must be approved by Management Services Mrs. Whitesell provided examples of Budget Changes: Example 1 The Aquarium budgeted $250, 000 for feeding the marine animals, but fish food prices increased 10% because of the Gulf Oil Spill What happens next? Nothing -the Department had enough funding budgeted in other operating accounts that no transfers are required Example 2 The General Registrar must hold a Special Election to fill a General Assembly seat. The Department could not budgetfor the additional $55, 000 in expenses because the seat was vacated unexpectedly What happens next? The Department is small and unable to absorb the expense; therefore, a transfer of appropriations is necessary. The City Manager must approve a transfer for $SS, 000 from the Reserve for Contingencies and report it to the City Council 1 Example 3 The Department ofHuman Services has received an $85, 000grantfrom the State to fund a new full-time position to provide additional mental health services What happens next? City Council would have to accept and appropriate the grant funding and authorize the new position Jude 1, 2010 -25- CITY COUNCIL `S BRIEFING FINANCIAL POLICIES (Continued) CAPITAL IMPROVEMENTS PROGRAM and OPERATING BUDGET Grant Management Policies • All grants must be reviewed by Management Services Staff and forwarded to the City Manager for approval prior to submission • City Council acceptance and appropriation is required for grants • The City will not supplant grant funds; therefore, all grant programs and positions are expected to discontinue once the grant funding expires • Employees of grant funded positions are notified of this policy when hired • Grants must comply with the City's and Grantor's financial policies and requirements Procurement Policies • Enforce the requirements of the Virginia Public Procurement Act (VPPA) that governs the purchasing transactions of localities • The Purchasing Agent and the City Manager have authority to execute contracts for the City • Requires that funds be available at the time of purchase • Requires purchase requisition for all transactions over $1, 000 • Requires competitive process for services greater than $30, 000 Financial Policies • Ensure financial integrity and provide a framework for responsible fiscal decisions • The City has effective financial controls and policies to guide decisions and operations • The goal of the City's financial policies is to strike a balance between flexibility in providing services and accountability to taxpayers • The City's policies work well and are adapted to the changing environment The AAA Bond Rating is a measure of the City's strong financial management The meeting ADJOURNED at 6:03 P.M. ,Jude 1, 2010