MAY 7, 2020 SPECIAL SESSION MINUTES •
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VIRGINL4 BEACH CITY COUNCIL
Virginia Beach, Virginia
May 7, 2020
Mayor Dyer called to order the SPECIAL MEETING of the VIRGINL4 BEACH CITY COUNCIL, on
Thursday, May 7, 2020, at 4:00 P.M
Council Members Present:
Jessica P. Abbott, Michael F. Berlucchi, Mayor Robert M. Dyer,
Barbara M.Henley,Louis R.Jones,John D.Moss,Aaron R.Rouse, Guy
K. Tower, Rosemary Wilson, Vice Mayor James L. Wood and Sabrina
D. Wooten
Council Members Absent:
None
2
MAYOR'S CALL FOR
SPECIAL FORMAL SESSION
ITEM#70215
Mayor Dyer read the Mayor's Call for the SPECIAL MEETING:
May 4, 2020
"HONORABLE MEMBERS OF CITY COUNCIL
In accordance with the Virginia Beach City Code Section 2-21 and Virginia Code§2.2-3708.2(A)(3),
and by the authority vested in me as Mayor of the City of Virginia Beach,I hereby call for a SPECIAL
MEETING of the VIRGINIA BEACH CITY COUNCIL
Thursday,May 7, 2020
4:00 P.M.
City Council Chamber
Building 1, City Hall, 2"d Floor
2401 Courthouse Drive
The purpose of this SPECIAL SESSION is for City Council to conduct a workshop to discuss the
SEARCH FOR THE CITY MANAGER and THE MONITORING OF THE FY2020-2021
BUDGET.
No public comment will be taken at this meeting; however, because it is expected that three (3) or
more Members of Council will be physically present at the meeting, limited seating for the public will
be available in the Council Chamber. Members of Council may participate via electronic
communication means provided that a quorum of Council is physically present at the meeting
location and the Council Member provides notice that he or she is unable to physically attend the
meetingfor a reason setforth in the City Council Policy for Remote Participation by Councilmembers
in Council Meetings adopted March 31, 2020 (attached). Appropriate social distancing should be
observed, and citizens are encouraged to wear a protective face covering.
This Special Meeting will be broadcast on cable tv, www.vbgov.com and Facebook Live. Citizens
are encouraged to submit their comments to the City Council prior to the Special Meeting via email
at CityCouncil(c,vbgov.com.
Sincerely,
s/
Robert M. Dyer
Mayor"
Cc: City Manager
City Attorney
City Clerk
Deputy City Managers
FOIA Officer
Communications Office
May 7, 2020
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ROBERT M."BOBBY"DYER MUNICIPAL CENTER
MAYOR BUILDING 1,ROOM 234
2401 COURTHOUSE DRIVE
VIRGINIA BEACH,VA 23456-9000
(757)385-4581
FAX(757)3855699
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May 4, 2020
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 MEETING of the VIRGINIA BEACH CITY
COUNCIL
Thursday,May 7, 2020
4:00 P.M.
City Council Chamber
Building 1, City Hall, 2"d Floor
2401 Courthouse Drive
The purpose of this SPECIAL SESSION is for City Council to conduct a workshop to discuss the SEARCH
FOR THE CITY MANAGER and THE MONITORING OF THE FY2020-2021 BUDGET.
No public comment will be taken at this meeting; however, because it is expected that three (3) or more
Members of Council will be physically present at the meeting, limited seating for the public will be available
in the Council Chamber. Members of Council may participate via electronic communication means provided
that a quorum of Council is physically present at the meeting location and the Council Member provides
notice that he or she is unable to physically attend the meeting for a reason set forth in the City Council
Policy for Remote Participation by Councilmembers in Council Meetings adopted March 31, 2020
(attached). Appropriate social distancing should be observed, and citizens are encouraged to wear a
protective face covering.
This Special Meeting will be broadcast on cable tv, www.vbgov.com and Facebook Live. Citizens are
encouraged to submit their comments to the City Council prior to the Special Meeting via email at
CityCouncil@vbgov.corn.
Sincerely,
S�j�-c/
Robert M. Dyer
Mayor
Cc: City Manager
City Attorney
City Clerk
Deputy City Managers
FOIA Officer
Communications Office
3
CITY COUNCIL DISCUSSION
CITY MANAGER SEARCH
ITEM#70216
4:04 P.M.
Mayor Dyer welcomed Regina Hilliard, Director-Human Resources Department to provide an update on
the process for hiring a City Manager.
Mrs. Hilliard advised interviews were planned but have been placed on hold due to COVID-19. Mrs.
Hilliard has been in contact with the consultant and they are ready to move forward; however, she needs
direction on how to hold the interviews either by WebEx or in person.
Council Member Wilson advised she feels it is safe to have the interviews in person with appropriate
distancing and asked if applicants are able and willing to travel?
Mrs. Hilliard advised she will ask and suggested one option is to have the initial interviews virtually and
then hold the in person interviews with the applicants selected.
Council Member Berlucchi asked for information concerning the confidentiality and what cyber security
measures will be in place should the interviews be held virtually?
Council Member Wooten asked if any applicants have withdrawn their application since the COVID-19
pandemic?
Mrs. Hilliard advised there has not.
Council Member Rouse expressed the necessity in hiring a City Manager and encouraged the interviews
be scheduled as soon as possible.
Council Member Abbott suggested holding initial interviews with all Council Members physically together
and applicants participating virtually. Council Member Abbott advised she did not think it was fair to ask
the applicants to travel especially if they would be required to fly.
Council Member Moss requested to know what the cyber security measures are, adding, he would like to
know the encryption standard. Council Member Moss suggested having the applicants present and
providing those from out of town, a windshield tour of the City to help level the playing field.
Council Member Henley advised she does not want to rely on virtual interviews and feels it should be a last
resort.
Council Member Jones advised he feels it is important to have in person interviews. While he recognizes
the need to hire a City Manager, Council Member Jones does not feel it is an emergency and can wait to
allow the candidates time to prepare and travel here so they can have the best interview possible.
Mayor Dyer asked Mrs. Hilliard to contact the consultant and provide feedback by May 12th, if the
applicants feel they can travel.
May 7, 2020
4
CITY COUNCIL DISCUSSION
THE MONITORING OF THE FY2020-21 BUDGET
ITEM#70217
4:23 P.M.
Mayor Dyer opened the discussion requesting the Monitoring of the FY2020-21 Budget and requested Vice
Mayor Wood read into the record, the revised budget reconciliation language, attached hereto and made
a part of the record.
Mayor Dyer advised going forward, the budget will be monitored and discussed monthly based on the
economy.
Council Member Henley asked what impact the revisions will make to the flooding initiatives?
Mr. Bradley advised the Stormwater Fund will have no impact except that forty-five (45) vacant positions
will not be filled due to the hiring freeze. The actual positions have not been specifically identified because
they need to be carefully determined. This will allow the Fund Balance to remain at 8.1%.
Council Member Henley asked how the $2-Million dedicated to the Tax Relief Program will be
administered.
Mr. Bradley advised it will be funded by the Parks and Recreation Special Revenue Fund Balance and the
Department of Human Services will administer the program.
Council Member Henley advised it is important to note other localities are not providing tax relief or at
least none that could be found. Council Member Henley wants to ensure this program is administered in a
way to reach the citizens who most need it.
Mayor Dyer is hopeful businesses in the City will be able to re-open next week but many of them are already
financially behind. It is important to recognize the financial strain many of the businesses are under and
look at all options available to help them survive.
Council Member Tower advised many of the tax relief programs being discussed now, were already in
place and the budget adjustments made only provide a small portion. Council Member Tower will continue
to look at ways to help businesses as well as stay updated on State and Federal initiatives.
Council Member Jones advised other beach communities will be opening on May 16`"and asked Mr. Leahy
what plans are in place for the City to be competitive?
Mr. Leahy advised Ronald H. Williams,Jr.,Deputy City Manager, will provide a brieffor plans to re-open
the beach on May 12'.
Mr. Williams advised Governor Northam's guidelines were released a couple of weeks ago and the beaches
will not be part of the re-opening in Phase I but hopeful to be included in Phase II. Mr. Williams advised
an integrated workforce plan proposal was provided to the Governor's task force and the Governor was
receptive so a Request for Proposal (RFP) was released to hire and train people to monitor social
distancing on the beaches.
May 7, 2020
5
CITY COUNCIL DISCUSSION
THE MONITORING OF THE FY2020-21 BUDGET
ITEM#70217
(Continued)
Council Member Henley asked if that would apply to all beaches?
Mr. Williams advised there will be measures in place at all beaches.
Council Member Henley advised she would like more information on the pandemic and not just the number
of people infected. Council Member Henley is aware of citizen concerns within residential beach
communities that visitors from hotspot areas will expose them and their neighbors. Council Member Henley
does not have the knowledge to answer the concerns on how the City can open in a safe way.
Mr. Williams advised the restrictions and regulations are enforced by either the City, State or Federal
Government and as the restrictions are lifted, the City has less autonomy for enforcement. Mr. Williams
advised the lowest risk area for spreading the virus, according to the risk matrix, is on the beach due to the
outside atmosphere.
Council Member Tower received information that lifesaving services are ready to provide lifeguard
services now and advised every day the resort area is bleeding money, the sooner the City can open safely,
the better. Council Member Tower advised the City competes with Myrtle Beach, Ocean City and Outer
Banks and they are all either open now or will be shortly.
Steve Cover,Deputy City Manager, advised lifeguard staffing is a graduated process beginning with roving
patrols initially to a limited number of lifeguards assigned, and by Memorial Day weekend, a full staff is in
place. Mr. Cover advised at this time, lifeguard services are on track.
Council Member Berlucchi advised the Resort Advisory Commission (RAC) are among the principle
stakeholders for the resort and would like to know what their views are on these issues.
Mr. Williams advised work between the IT Department and the City Attorney's Office are in process to find
solutions for the several Boards and Commissions to hold meetings.
Council Member Rouse asked if there is a plan in place to open the beaches and would like to know what
it is so it can be provided to the public.
Council Member Moss asked, regarding opening the beaches, what metrics the Governor has in place to
rescind what he grants?
Mr. Williams advised there has not been any metrics released.
Mayor Dyer requested Council Members to provide any input regarding ways to improve the budget,
enforcement, compliance or accountability.
Vice Mayor Wood advised it has been reiterated in each Reconciliation Letter to have monthly budget
updates and requested to know if staff has created a way to provide the necessary information.
May 7, 2020
6
CITY COUNCIL DISCUSSION
THE MONITORING OF THE FY2020-21 BUDGET
ITEM#70217
(Continued)
Alice Kelly, Director— Finance, advised each month a finance report is prepared and provided to City
Council as well as a quarterly briefing. Ms. Kelly advised the April 30`" book closed and she received the
revenue report today and here are the current key points. The FY20 Budget is at $1.183-Million, $674-
Million has been received. Last year, $643-Million was received which is a variance of$31-Million. The
Sales Tax has been collected through February 2020 and Trustee Taxes have been collected through March
2020. Ms. Kelly advised Hotel, Meal and Amusement Taxes were combined for the months of March and
April and then compared to last years total collections for the same two months to determine the revised
projections. Ms. Kelly advised the actual amount collected is higher than what was estimated but advised
the effects of the pandemic are not being seen at this point and there will be a time lag in having that
information. Ms. Kelly advised the actions taken to reduce expenditures include the hiring freeze,
canceling or delaying requisitions, encumbrance review and limiting controlling costs such as office
supplies, travel, training and contractual manpower. Ms. Kelly advised the savings is still hard to
accurately provide because bills are still coming in for purchases made in January and February but
believes by June an accurate amount will be provided. Ms. Kelly advised the General Fund Expenditures
are budgeted at $1.25-Million and projected to total $1.18-Million with a projected variance of$64.6-
Million. Ms. Kelly advised every purchase and revenue stream is being constantly monitored and with the
new finance system being implemented July 131, that will provide more granular information.
Council Member Moss expressed his appreciation to Vice Mayor Wood for the hard work on the budget.
Vice Mayor Wood advised it is a collaborative effort and is a compromise where everyone has to give up
some things they want but also get some of the other things they want and expressed his appreciation to all
Council Members participation.
Mayor Dyer expressed his appreciation for all of the hard work and discussion.
May 7, 2020
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ROBERT M."BOBBY"DYER
MAYOR MUNICIPAL CENTER
BUILDING 1
2401 COURTHOUSE DRIVE
VIRGNIA BEACH,VA 23456-9000
(757)385-4581
FAX(757)426-5699
May 7, 2020
Members of City Council
Subject: FY 2020-21 Operating Budget and CIP Reconciliation
Dear City Council Members:
On March 24, 2020, the Acting City Manager presented his original Proposed FY 2020-21
Operating Budget and Capital Improvement Program (CIP). Due to the economic impacts of
COVID-19 on our City, the City Manager provided a Revised FY 2020-21 Operating Budget and
CIP on April 10, 2020. The Revised Budget outlined reductions associated with decreases in tax
revenue as a result of the COVID-19 pandemic and returned services to FY 2019-20 levels.
These reductions are highlighted in green on Attachment A.
Last Tuesday, we provided additional proposals for reconciliation of the Proposed Budget and
CIP. The letter provided on Tuesday incorporated some of the concerns addressed at the previous
budget workshop and included tax relief for businesses and citizens as well as an additional
strategy to meet revenue shortfalls in FY 2020-21, if revenue is not meeting estimates. As
previously discussed, two tax/fee relief programs have already been addressed in the letter below
- see items 4 (personal property tax relief for volunteer Emergency Medical Services and
volunteer fire personnel) and 11 (assistance monthly City Services Bill).
Since Tuesday's meeting, two additional changes are recommended to be incorporated in the FY
2020-21 Operating Budget and CIP. The first includes the suspension of the previously approved
3.50 increase in the Stormwater Equivalent Residential Unit (ERU)rate to be effective on July 1,
2020. This increase was year two of a six-year planned rate increase of 3.50 per year to address
critical stormwater needs. As a result of the one-year suspension of this ERU plan, the rate
increase will now be reinstated in FY 2025-26. This results in a decline of $3,140,041 in
revenue, which will be offset by position reductions supported by the General Fund (through a
negative reserve); thereby, creating capacity for a pay-as-you-go transfer to the Stormwater CIP.
Based on average salary and benefits, the total position reductions will be approximately 45
positions. The City Manager is directed to send a summary of the actual position reductions to
City Council by July. In years two through five of the Stormwater CIP, the following projects
will be reduced by these approximate amounts: 7-415 "Lake Management II" by $1.6 million,
CIP# 7-416 "SW Infrastructure Rehabilitation& Improvements II" by $750,000, and CIP# 7-023
"Primary System Infrastructure Improvements II" $750,000. Since years two through five are
Members of City Council
FY 2020-21 Operating Budget and CIP Reconciliation
Page I 2
for planning purposes, additional refinement may occur before next year's Operating Budget and
CIP review.
The second modification is the restoration of local funding to Virginia Beach City Public
Schools (VBCPS). As a result of the COVID-19 pandemic and declining revenues, VBCPS's
share of local revenues via the City School Revenue Sharing Formula declined. Of the original
reduction, $7,766,223 is restored with $7,266,223 allocated to CIP #1-182 "Renovations and
Replacements — Various III" and $500,000 to CIP #1-107 "Princess Anne High School
Replacement". This increase in pay-as-you-go funding to the Schools CIP is offset with a
negative reserve of vacancy savings in the General Fund resulting from the hiring freeze.
At the same time we vote for the Budget and CIP next week, we recommend that City Council
consider a$3 million tax relief plan to take effect within the current fiscal year(FY 2019-20): $2
million for providing both real estate and personal property tax relief for citizens in need and $1
million to provide additional business tax relief through the Small Business Emergency
Assistance Program implemented by the Virginia Beach Development Authority (VBDA).
Supporting these tax relief initiatives will be the appropriation of fund balance from the Parks
and Recreation Special Revenue Fund.
As we begin the new fiscal year with economic uncertainty, it is critical that the City Manager
and staff provide monthly financial updates on revenues and expenditures. The Revised FY
2020-21 Operating Budget has created a great deal of flexibility; however, it is possible that
additional City Council action could be required should revenues decline below current
estimates. To provide extra flexibility and preserve the City's cash position during these
uncertain times, it is recommended that appropriations within the following Capital Improvement
Projects (CIP)be placed in a reserve entitled "COVID-19 Revenue Shortfall Stabilization." This
reserve totals $21.8 million and can only be utilized after City Council approval. If FY 2020-21
revenue is meeting estimates after quarterly reviews, funding can be returned to the CIP projects
listed below with City Council approval. If revenue is not meeting estimates, the reserve can be
used to offset revenue shortfalls. The following is the list of projects totaling$21.8 million:
• CIP # 8-025 "Beach Replenishment II" ($2,550,000)
• CIP #3-718 "Police Radio Encryption" ($3,302,428) Partial ATD
• CIP #2-094 "Bus Stop Infrastructure and Accessibility Improvements" ($648,969)
Partial ATD
• CIP #2-414"Shipps Corner Road Improvements" ($2,100,000)ATD
• CIP #2-047 "Upton Drive Extended and Dam Neck Stations Imp." ($1,286,780)ATD
• CIP #3-153 "Various Site Acquisitions III" ($343,644)
• CIP #3-132 "Heritage Building Maintenance II" ($575,000)
• CIP #4-300"Community Recreation Centers Repairs and Renovations III" ($1,000,000)
• CIP #4-301 "Parks and Special Use Facilities Development/Reno" ($950,000)
• CIP #3-703 "PD—Special Investigations Video Storage" ($400,000)
• CIP #2-056 "Pleasure House Road Street Imp. —Phase I" ($150,000)
• CIP #2-057 "Pleasure House Road Street Imp. —Phase II" ($357,376)
• CIP #9-006 "Winston-Salem Avenue Improvements"($7,565,191)ATD
• CIP #3-184"Virginia Aquarium Monument Signs" ($600,000)ATD
Members of City Council
FY 2020-21 Operating Budget and CIP Reconciliation
Page 13
When combined with the total anticipated salary vacancy savings from the position freeze
(which we recommend continuing into FY 2020-21) and fully funding full-time salaries (not
budgeting for attrition), a minimum of $10 million of vacancy savings (compared to previous
years) should be available to offset potential revenue shortfalls. Between these two initiatives,
over $30 million should be available to offset revenue shortfalls if the economy does not
improve.
Please note we also recommend placing CIP # 3-174 "Operations Facilities Renovations"
($30,000,000) in a reserve until City Council approves the release of funds. This project is
anticipated to be funded by bonds and the resulting debt service will impact the budget beyond
FY 2020-21. While this project (renovations of buildings 1, 2 and 11) is important in the
aftermath of the 5/31 tragedy, we believe the City should not initially expend these funds to
ensure that our cash flow is sufficient pending improvement of the economy.
We also recommend that the City Manager continue limiting expenditures to essential services
only as we begin the new fiscal year.
As noted on page 22 of the April 10 letter, the City Manager's Revised Budget provided a
balancing strategy for most funds; however, additional analysis was required to determine the
best strategy for balancing both the Tourism Investment Program (TIP) and the Tourism
Advertising Program (TAP) Funds. These funds are projected to have their original FY 2020-21
revenue estimates reduced by a combined $16 million. Balancing these funds through
expenditure reductions alone would result in almost a complete elimination of current services
provided through the TIP Fund (programs such as beach maintenance, trash collection, beach
events, etc.) and a reduction of 25%in TAP Fund advertising and marketing efforts.
As the economy begins to reopen, TIP and TAP programs and services will be essential to the
recovery of the local tourism industry. For that reason, it is recommended that the primary
balancing strategy of the TIP and the TAP funds include the use of$14.8 million of fund balance
from the TIP Fund. Of this use, $9.8 million will be appropriated within the TIP Fund and $5
million will be transferred to the TAP Fund. Additional funding within the TAP Fund will allow
the City to not only maintain current services but also enhance marketing and advertising efforts
across the City. The enhanced marketing and advertising campaign plan will occur in two
phases. The first phase includes an additional $2 million between now and July 1 with City
Council action anticipated in May. The second phase will include an additional $1.6 million
appropriated on July 1 as a part of the FY 2020-21 Operating Budget. The projected fund
balance of the TIP Fund at year end FY 2020-21 is $1.7 million, or 4% of the following year's
revenue estimate. This results in an overall increase to the net budget change as reflected in the
April 10 presentation. These recommendations are highlighted in blue on Attachment A.
Also noted within both the letter (page 22) and presentation, additional refinements were needed
as a result of department specific revenue reductions. These reductions resulted in the additional
elimination of nearly 24 FTEs and are highlighted orange on Attachment A. In total, the City
Manager's Revised FY 2020-21 Operating Budget includes a net reduction of 58.02 FTEs when
compared to the FY 2019-20 Operating Budget.
Members of City Council
FY 2020-21 Operating Budget and CIP Reconciliation
Page 14
The modification of FY 2020-21 revenue estimates resulted in the reduction of$20.4 million in
local revenue shared with Schools. On page 22 of the April 10th letter as a part of the process
moving forward, it was noted that City staff was continuing to work with School staff to modify
the Schools FY 2020-21 Operating Budget accordingly. On April 28, the School Board reduced
approximately $28 million in their FY 2020-21 Operating Budget. In order to incorporate the
budget amendment adopted by the Virginia Beach School Board, the following adjustments were
necessary:
1) Reduce the transfer from the City's General Fund by $20,372,434 and reduce estimated
revenue from the Commonwealth by $6,926,614. These reductions in revenue are offset
with the elimination of the following appropriations:
a. $19,532,825 originally approved for a 0.5% experience step increase and 3.0%
cost of living adjustment (COLA).
b. Elimination of 69.55 FTEs and $4,492,077 in related salaries and operating
supplies.
c. $2,774,146 in other operating cost within the School Operating Fund.
d. $500,000 transfer to the Schools' Capital Improvement Program.
2) Reduce School's CIP Project # 1-107 "Princess Anne High School Replacement" by $26
million over the six-year CIP period. This results in a corresponding reduction in the
School's CIP means of pay-as-you-go financings in year 2 by $1 million and by $1.5
million each of the remaining years 3 through 6. Also reduced is the School's use of fund
balance from the School Reserve Special Revenue Fund in the CIP by $3.6 million in
year 2, $3.7 million in year 3, $3.8 million in year 4, $3.9 million in year 5 and $4 million
in year 6.
The City Manager's Revised FY 2020-21 Operating Budget retained several proposals that
should help in hiring and retaining our valued workforce, including:
• Increasing the Hybrid Employee Paid Time Off(PTO) accrual of an additional 1.5 days
per year and expanding the maximum allowable carryover by six days.
• Expansion of the City's Maternity/Paternity leave program from three to six weeks.
After listening to public input at the public hearings and via email as well as discussions with
City Council members, it is recommended that the City Manager's Revised FY 2020-21
Operating Budget and CIP, as reflected on Attachment A, be adopted with the following
adjustments:
1) Reinstatement of the originally proposed initiatives to implement recommendations of the
2018 Disparity Study. This increases the Department of Finance's budget by $366,541
including one additional position.
2) Reinstatement of the following compensation initiatives previously approved by City
Council:
a. Year 2 Public Safety Workforce Development
Members of City Council
FY 2020-21 Operating Budget and CIP Reconciliation
Page 15
b. Year 2 phase-in of moving supervisors to their pay range mid-point
Through these initiatives, the City will continue to address critical compensation needs
and continue to build off previous efforts to address compression across the City. A
compensation reserve of$1,188,714 in the General Fund is established to address these
initiatives.
3) Elimination of the 2%planned increase in City employee health insurance premium rates
scheduled to take place on January 1, 2021. City employee premium rates will remain at
the same level as 2020 health insurance premium rates. The Schools also eliminated their
2% planned increase. Since both the City and Schools will be eliminating pay increases,
we believe this will help reduce the financial impacts to City and School employees with
no pay increases planned for FY 2020-21. The total impact to the Health Insurance Fund
is approximately $630,000. The 3% employer increase remains in both the Schools and
City budget.
4) Provide personal property tax relief for volunteer Emergency Medical Services and
volunteer fire personnel. To provide this tax relief, qualifying personal property will be
taxed at a lowered rate of one millionth of one cent ($.000001) on each one hundred
dollars ($100) of assessed valuation. This reduction will result in the projected loss of
$60,000 in personal property tax revenue.
5) Reinstatement of the originally proposed funding increases of $7,000 to the Atlantic
Wildfowl Heritage Museum and $15,000 to the Virginia Beach Surf and Rescue
Museum.
6) Move the $135,000 Museum of Contemporary Arts (MOCA) education grant from the
Department of Cultural Affairs to Non-Departmental Organization Grants. This will
provide additional transparency in the future budgeting of this grant initiative.
7) Even during these tough economic times, it is critical to address the safety and security of
our employees and citizens. We recommend beginning the implementation of the Hillard
Heintze recommendations including the centralization of Human Resources and
establishing a Security Office as follows:
a. Four Human Resource positions to begin the phased centralization of Human
Resource functions. This increases the department's operating budget by
$397,373.
b. One Security Office position to begin conducting facility security assessment
needs. This increases the Office of Emergency Management's operating budget
by$64,504.
Starting these two initiatives in FY 2020-21 will allow staff to determine the type and
amount of resources necessary to further implement the recommendations. If revenues
are performing favorably based on a mid-year review by staff, additional consideration
will be given to funding more of these recommendations in FY 2020-21.
8) Increase funding contribution to the African American Cultural Center by$50,000.
•
Members of City Council
FY 2020-21 Operating Budget and CIP Reconciliation
Page 16
9) Based on updated fuel cost projections, additional savings are likely to occur in FY 2020-
21 due to lower fuel prices. General Fund budgeted fuel cost are reduced by$299,132.
10)Increase General Fund VDOT Roadway Maintenance funding by $1,850,000. The FY
2020-21 Commonwealth of Virginia's Budget reflects a 3.7% increase for Financial Aid
for City Road Maintenance resulting in the estimated increase of funding. Virginia
Beach's portion of this revenue source has historically been 13% of the state's budget.
Estimating this additional revenue to the Department of Public Works creates capacity to
redirect other local revenue sources to fund the previously identified General Fund
initiatives.
•
11)The Department of Public Utilities is developing a program to assist individuals recently
unemployed due to the COVID-19 pandemic with their monthly City Services Bill
(water, sewer, stormwater and waste management fees). Working with the Department
of Human Services and Information Technology, Public Utilities is developing criteria
and the appropriate technology platform for participation in the program with an
implementation goal of July 1, 2020. The fee relief program totals $4 million and will be
in place until funding is exhausted. Once all program details have been finalized,
information will be shared with City Council and our citizens prior to implementation.
Funding for this one-time program consists of$2.4 million from the Fund Balance of the
Water and Sewer Fund and $1.6 million from the Fund Balance of the General Fund.
Until a final implementation plan is developed, these appropriations will be placed into a
dedicated reserve for future allocation which could include the transfer of appropriations
between funds.
12)Provide $2 million to CIP project 4-059 "Southern Rivers Watershed Site Acquisition
Program" in year one of the CIP. This is a new project in the FY 2020-21 CIP. This
project is one of the strategies to reduce the impact of flooding in the southern part of our
city. This appropriation will be supported through the use of Fund Balance from the
General Fund.
Some City Council members have requested reestablishment of part or all of the 2.5% pay
increases originally included in the City Manager's Proposed Budget. Before implementing
compensation increases or other items, we recommend reviewing FY 2020-21 revenue estimates
in January 2021 after the accounting records are finalized for revenue collection through
December 31, 2020. At that point, we should have a better understanding of the financial
impacts of the COVID-19 pandemic on our local economy as well as any federal/state financial
support that may be provided. Please note if revenue decreases beyond estimates additional City
Council action might be required to adjust the budget accordingly.
The details for the funding sources and City Council adjustments provided above are reflected on
Attachment B.
Members of City Council
FY 2020-21 Operating Budget and CIP Reconciliation
Page 17
We want to thank the public who participated in public hearings to offer their comments on the
FY 2020-21 Operating Budget and CIP as well as staff for their efforts to provide answers to our
various questions. If you have any questions, please contact us directly.
Sincerel ,
4,//(//
Robert`Robb ' M. Dyer, Mayor Jam s L. od, Vice Mayor
Attachments
Attachment A
Attachment B
Attachment A:City Manager's Revised FY 2020-21 Operating Budget and CIP
Operating Budget Changes:
Fund Department Description Revenue Appropriations FTE
1 General General Real Estate $ (7,240,507) - -
2 General General Personal Property $ (11,283,871) - -
3 General General General Sales
$ (6,431,248) - -
4 General General Business Licenses
$ (5,143,283) - -
5 General General Bank Net Capital Tax $ (406,121) - -
6 General General City Tax on Deeds $ (802,043) - -
7 General General Hotel
$ (2,577,421) - -
8 General General Restaurant
$ (10,038,792) - -
9 General General Interest on Bank Deposits $ (1,847,163) - -
10 General General Recordation Fee
$ (1,985,167) - -
11 General Budget and Management Eliminate an existing but vacant Account Clerk (38,660) (1.00)
12 General City Manager Eliminate an existing Executive Assistant (70,107) (1.00)
13 General Commissioner of Revenue Unfund increased part time executive assistants (33,479) (0.80)
COVID-19 Revenue Loss-Reduction of professional development,training,
14 General CVB Sports Center overflow parking contract and Hampton Roads Sports (342,592) (342,592) -
15 General Courts Unfund creation of a part-time position that was new in the original proposed budget (23,261) (0.63)
16 General Courts Restore 30 hours of contracted manpower that was eliminated in the original proposed budget 21,690 -
17 General Courts Remove Court Salary Supplements from the General District and 1DR Courts that was approved in FY (120,414) -
18 General Cultural Affairs Unfund creation of a Account Clerk Ill (49,680) (1.00)
19 General Cultural Affairs Unfund creation of an Event Coordinator (56,533) (1.00)
20 General Cultural Affairs Remove the revenue that would be generated by the Event Coordinator (23,181) -
21 General Cultural Affairs Restore contracted manpower that was eliminated in the original proposed budget 55,641 -
22 General Cultural Affairs Revert funding to the Virginia Beach Surf and Rescue Museum to FY 2020 levels (15,000) -
23 General Cultural Affairs Revert funding to the Atlantic Wildfowl Heritage Museum to FY 2020 levels (7,000) -
24 General ECCS Eliminate two existing but vacant Master PSET positions (134,790) (2.00)
25 General Emergency Management Unfund the creation of 4 positions related to the recommendations of the Hillard Heintze Report(Fa (1,000,000) (4.00)
26 General EMS Unfund expansion of Sandbridge Life Guard coverage for the months of May,September,and Octob (49,999) (1.75)
27 General EMS Eliminate two existing but unfilled paramedics intended for Burton Station (117,296) (2.00)
28 General Finance Unfund the creation of a new financial specialist (64,504) (1.00)
29 General Finance Unfund an annual disparity study that would follow up on evaluation of the (366,541) (1.00)
30 General Fire Unfund 15 existing but unfilled firefighters intended for Burton Station (1,060,692) (15.00)
31 General Housing Unfund creation of a Code Enforcement position (45,642) (1.00)
32 General Housing Restore contracted manpower that was eliminated in the original proposed budget 44,902 -
33 General Housing Unfund creation of a Administrative Specialist for homeless services (69,309) (1.00)
34 General Human Resources Unfund the creation of 15 positions related to the recommendations of the Hillard Heintze Report(C (1,490,147) (15.00)
35 General Human Resources Unfund a market salary survey (200,000) -
36 General Human Resources Eliminate an existing but vacant HR Analyst (71,645) (1.00)
37 General Human Resources Eliminate expansion of Automatic External Defibrillator replacements (20,000) -
38 General Human Resources Eliminate expansion of vaccine administration for employees (35,000) -
1
Attachment A:City Manager's Revised FY 2020-21 Operating Budget and CIP
Operating Budget Changes:
Fund Department Description Revenue Appropriations FTE
39 General Human Resources Eliminate Phase II renovations for Building 19 HR Training Room (54,464) -
40 General Human Resources Unfund the creation of a registered nurse (80,658) (1.00)
Unfund the creation of two FSSI positions in the Child Welfare Division
41 General Human Services that are partially reimbursed by the Virginia Department of Social Services (92,306) (142,010) (2.00)
42 General Human Services Unfund the creation of two dedicated positions for the Mobile Co-Responder Team (186,516) (2.00)
43 General Information Technology Unfund creation of a mail services clerk (38,660) (1.00)
44 General Information Technology Restore contracted manpower that were eliminated in the original proposed budget 23,200 -
45 General Information Technology Unfund creation of a Timekeeping Systems Analyst (209,622) (2.00)
46 General Library Unfund creation of a new library assistant supervisor at the Oceanfront Library (68,280) (1.00)
47 General Library COVID-19 Revenue Loss-Reduction of professional development and training (53,321) (53,321) -
48 General Non-Department Reduce or eliminate Regional Grants for Virginia Arts Festival,STOP,HR Pride,Eggleston,and African (246,300) -
49 General Non-Department Reduce the General Fund Vehicle Replacement budget by$1 million (1,000,000) -
50 General Parks and Recreation Eliminate contractual landscape increases related to the completion of new capital projects (48,608) -
51 General Parks and Recreation Eliminate expansion of the Urban Forestry Management Program (50,000) -
52 General Planning Unfund a dedicated planner position for Short Term Rentals (72,416) (1.00)
53 General Planning Unfund an additional customer service desk planning technician (55,451) (1.00)
54 General Planning Unfund three additional inspectors for Short Term Rentals (181,017) (3.00)
Reduce the HRT Budget from the budget that was included in the original
proposed budget
55 General Planning according to a regionally agreed upon solution to compensate for City revenue (1,994,172) -
56 General Police Eliminate an additional 8 existing but vacant police officer recruits (479,648) (8.00)
57 General Public Works Unfund the creation of a 5 member BMP Maintenance Crew (269,322) (5.00)
58 General Public Works Unfund the creation of 2 Water Quality Engineers (235,662) (2.00)
59 General Public Works Unfund the purchase of an asset management software system (150,000) -
60 General Public Works Unfund the General Fund contribution towards the purchase of a horizontal grinder (200,000) -
61 General Real Estate Assessor Unfund creation of a new Real Estate Appraiser (65,886) (1.00)
62 General Virginia Aquarium Unfund 3 new FTEs that were to create programming for the re-opened Marsh Pavilion (223,804) (3.00)
63 General Virginia Aquarium Eliminate purchase of a forklift for the Darden Marine Animal Center (27,000) -
64 General Virginia Aquarium Restore Virginia Aquarium Marketing to its previous levels (50,000) -
65 General Virginia Aquarium COVID-19 Revenue Loss-Reduction of 6.55 FTEs and cease operation of the 3D (877,003) (877,003) (6.55)
66 General Reserves Eliminate Salary Increases that were included in the original proposed budget (5,000,000) -
67 General Reserves Eliminate the Engineer Recruitment and Retention Program (667,230) -
68 General Reserves Eliminate enhanced Courtroom audiovisual equipment to display body camera footage (215,000) -
69 General Reserves Eliminate new participation in the Public Safety Workforce Development Program and for the Sheriff (2,861,829) -
70 General Reserves Unfund recommendations of the Hillard Heintze Report(Emergency Training/Exercises) (200,000) -
71 General Reserves Unfund recommendations of the Hillard Heintze Report(Public Safety Building Access) (150,000) -
72 General Reserves Unfund recommendations of the Hillard Heintze Report(Employee Training) (200,000) -
73 General General Fund Transfers Reduction of transfer to Schools as a result of COVID-19 revenue reductions (20,398,009)
74 General General Fund Transfers Reduce Transfer to Sheriff Special Revenue Fund (134,688)
2
Attachment A:City Manager's Revised FY 2020-21 Operating Budget and CIP
Operating Budget Changes:
Fund Department Description Revenue Appropriations FTE
75 General General Fund Transfers Reduce pay-as-you-go to CIP for 2-184(Roadways) (500,000)
76 General General Fund Transfers Reduce pay-as-you-go to CIP for 3-135(Buildings) (1,400,000)
77 General General Fund Transfers Reduce pay-as-you-go to CIP for 3-166(Buildings) (300,000)
78 General General Fund Transfers Reduce pay-as-you-go to CIP for 3-183(Buildings) (2,220,585)
79 General General Fund Transfers Reduce pay-as-you-go to CIP for 3-697(IT) (1,000,000)
80 General General Fund Transfers Reduce pay-as-you-go to CIP for 9-063(Econ and Tourism) (1,000,000)
81 General General Fund Transfers Reduce pay-as-you-go to CIP for 9-081(Econ and Tourism) (500,000)
I Total General Fund Changes (49,144,019) (49,144,019) (89.73)
82 School Fund School Fund Reduce City Manager's Reserve $ (25,575)
83 School Fund School Fund Reduce Transfer from the City General Fund $ (25,575)
84 School Fund School Fund Reduce Transfer from the City General Fund $ (20,372,434)
85 School Fund School Fund Reduce Revenue from the Commonwealth $ (6,926,614)
86 School Fund School Fund Reduce Step Increase and Compensation Increase $ (19,532,825)
87 School Fund School Fund Reduce Salaries,Fringes,Operating Cost and 69.55 FTEs $ (4,492,077) (69.55)
88 School Fund School Fund Reduce Operating Cost $ (2,774,146)
89 School Fund School Transfer Reduce Transfer to School CIP $ (500,000)
90 School Capital Project Fund School Capital Project Fund Reduce Pay-as-you-go $ (500,000)
91 School Capital Project Fund School Pay-as-you-go Reduce CIP Project#1-107 Princess Anne High School Replacement $ (500,000)
Total School Changes (27,824,623) (27,824,623) (69.55)
92 Sheriff SRF Sheriff SRF Reduce Revenue from a reduction in the General Fund Transfer (134,688)
93 Sheriff SRF Sheriff SRF Unfund PT Positions (134,688) (3.68)
Total Sheriff Special Revenue Fund Changes (134,688) (134,688) (3.68)
94 P&R P&R Fund Reduce P&R Real Estate Dedication (209,990)
95 P&R P&R Fund Reduce P&R Reserves and Operating Account (209,990)
96 P&R P&R Fund COVID-19 Revenue Loss-Reduction of 17.42 FTEs,professional development,tr (1,451,152) (1,451,152) (17.42)
Total P&R Special Revenue Fund Changes (1,661,142) (1,661,142) (17.42)
97 TIP TIP Fund Defund creation of 4 new positions and their related equipment for PW Beach $ (297,469) (4.00)
98 TIP TIP Fund Defund creation of 3 new positions and their related equipment for a CVB $ (305,403) (3.00)
99 TIP TIP Fund Reduce Reserve (1,432,048)
100 TIP TIP Fund Reduce TIP Transfer to CIP (300,000)
101 TIP TIP Fund Reduce Capital Replacement(Grinder) (200,000)
102 TIP TIP Fund Transfer to TAP Fund for Marketing 5,000,000
103 TIP TIP Fund Amusement (3,518,225)
104 TIP TIP Fund Hotel (5,847,827)
3
Attachment A:City Manager's Revised FY 2020-21 Operating Budget and CIP
Operating Budget Changes:
Fund Department Description Revenue Appropriations FTE
105 TIP TIP Fund Restaurant (3,017,606)
106 TIP TIP Fund Increase use of Fund Balance 14,848,738
Total TIP Fund Changes 2,465,080 2,465,080 (7.00)
107 Sandbridge SSD Sandbridge SSD Hotel Tax (1,993,419) -
108 Sandbridge SSD Sandbridge SSD Reduce pay-as-you-go to CIP for 8-026(Coastal) (1,993,419)
Total Sandbridge SSD Fund Changes (1,993,419) (1,993,419) -
109 ARP ARP Real Estate Revenue (54,371)
110 ARP ARP Reduce Reserves (2,655)
111 ARP ARP Reduce Treasury Strip Purchase (51,716)
Total ARP Special Revenue Fund Changes (54,371) (54,371) -
112 TAP TAP Transfer from TIP Fund for Marketing 5,000,000
113 TAP TAP Hotel (2,211,352)
114 TAP TAP Restaurant (1,423,400)
115 TAP TAP Reduce Compensation Reserve for elimination of Salary Increases (32,297)
116 TAP TAP Reduce Convention Center Marketing (169,101)
117 TAP TAP Increase Marketing and Advertising efforts in response to COVID-19 $ 1,566,646
Total TAP Fund Changes 1,365,248 1,365,248 -
118 Open Space Open Space Restaurant (1,252,591)
119 Open Space Open Space Reduce pay-as-you-go to CIP for 4-306(P&R) (1,252,591)
Total Open Space Fund Changes (1,252,591) (1,252,591) -
120 Capital Projects Fund General Fund Pay-go Reduce 540 Revenue(CIP 2-184)(Roadways) (500,000) (500,000)
121 Capital Projects Fund General Fund Pay-go Reduce 540 Revenue(CIP 3-135)(Buildings) (1,400,000) (1,400,000)
122 Capital Projects Fund General Fund Pay-go Reduce 540 Revenue (CIP 3-166)(Buildings) (300,000) (300,000)
123 Capital Projects Fund General Fund Pay-go Reduce 540 Revenue(CIP 3-183)(Buildings) (2,220,585) (2,220,585)
124 Capital Projects Fund General Fund Pay-go Reduce 540 Revenue(CIP 3-697)(IT) (1,000,000) (1,000,000)
125 Capital Projects Fund General Fund Pay-go Reduce 540 Revenue(CIP 9-063)(Econ and Tourism) (1,000,000) (1,000,000)
126 Capital Projects Fund General Fund Pay-go Reduce 540 Revenue(CIP for 9-081)(Econ and Tourism) (500,000) (500,000)
127 Capital Projects Fund TIP Pay-go Reduce540 Revenue from TIP Transfer for 9-073(E&T) (300,000) (300,000)
128 Capital Projects Fund Sandbridge SSD Pay-go Reduce 540 revenue(CIP 8-026)(Coastal) (1,993,419) (1,993,419)
129 Capital Projects Fund Open Space Pay-go Reduce 540 revenue(CIP 4-306)(P&R) (1,252,591) (1,252,591)
Total Pay-go Reductions to Capital Project Fund (10,466,595) (10,466,595) -
Total Gross Budget Changes (88,701,120) (88,701,120) (187.38)
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7
ADJOURNMENT
ITEM#70218
Mayor Robert M. Dyer DECLARED the City Council SPECIAL MEETING ADJOURNED at 5:33
P.M
erri . ( helius
Chief Deputy City Clerk
Amy*`a arnes, MC RobertM. Dyer
City Clerk Mayor
May 7, 2020