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Home My WebLink AboutMARCH 29, 2005 MINUTES SPEC CITY OF VIRGINIA BEACH "COMMUNITY FOR A LIFETIME" ITY COUNCIL MAYOR MEYERA E. OBERNDORF, At-Large VICE MAYOR LOUIS R. JONES, Bayside - District 4 HARRY E. DIEZEL, Kempsville - District 2 MARGARET L. EURE, Centerville - District I REBA S. McCLANAN, Rose Hall - District 3 RICHARD A. MADDOX, Beach - District 6 JIM REEVE, Princess Anne - District 7 PETER W. SCHMIDT, At-Large RON A. VILLANUEVA, At-Large ROSEMARY WILSON, At-Large JAMES L. WOOD, Lynnhaven -District 5 SPECIAL FORMAL SESSION CITY HALL BUILDING I 2401 COURTHOUSE DRIVE VIRGINiA BEACH, VIRGINIA 23456-8005 PHONE: (757) 427-4303 FAX (757) 426-5669 EMAiL:Ctycncl@vbgov.com JAMES K. SPORE, City Manager LESLIE L. UUEY, City Attorney RUTH HODGES SMITH, MMC, City Clerk 29 March 2005 I. SPECIAL FORMAL SESSION - Council Chamber - 6:00 P.M. A. CALL TO ORDER - Mayor Meyera E. Oberndorf 1. READING OF THE MAYOR'S CALL FOR FORMAL SESSION II. ROLL CALL OF CITY COUNCIL III. CITY MANAGER'S PRESENTATION BIENNIAL 2005-2006/FY 2006-2007 OPERATING BUDGET and FY 2005-200612010-2011 CAPITAL IMPROVEMENT PROGRAM James K. Spore, City Manager IV. ADJOURNMENT MINUTES VIRGINIA BEACH CITY COUNCIL Virginia Beach, Virginia 29 March 2005 Mayor Meyera E. Oberndorf called to order the SPECIAL FORMAL SESSION re City Manager's Presentation: BienniaI2005-2006/FY 2006-07 Operating Budget and FY 2005-2006/201 0-1 011 Capital Improvement Program in the City Council Chamber, City Hall, on Tuesday, March 29, 2005, at 6:00 P.M Council Members Present: Harry E. Diezel, Robert M. Dyer, Vice Mayor Louis R. Jones, Reba S. McClanan, Richard A. Maddox and Mayor Meyera E. Oberndorf, Council Members Absent: Jim Reeve [Family Vacation} Peter W. Schmidt [Entered: 6:05 P.M} Ron A. Villanueva [Family Vacation} Rosemary Wilson [Out of Town} James L. Wood [Touring on USS Roosevelt as Per Admiral Turcotte's invitation and arrived back in port late} - 2- MAYOR'S CALL TO SPECIAL SESSION: ITEM # 53744 The Mayor read the CALL TO SPECIAL FORMAL SESSION: "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 on Tuesday, March 29, 2005, at 6:00 P.M. in the City Council Chamber, City Hall Building, 2401 Courthouse Drive. The purpose of the SPECIAL FORMAL SESSION: City Manager's Presentation: Biennial 2005-2006/FY 2006-07 Operating Budget and FY 2005-2006/2010-1011 Capital Improvement Program Sincerely, s/Meyera E. Oberndorf Mayor" March 29, 2005 Citye>f Virgi:rl..ia. Bea.ch MEYERA E. OBERNDORF MAYOR March 15, 2005 MUNICIPAL CENTER BUILDING 1 2401 COURTHOUSE DRIVE VIRGINIA BEACH, VA 23456-9000 (757) 427-4581 FAX (757) 426-5699 MOBERNDO@VBGOV.COM 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 on Tuesday, March 29, 2005, at 6:00 P.M in the City Council Chamber, City Hall Building, 2401 Courthouse Drive. The purpose of the SPECIAL FORMAL SESSION: City Manager's Presentation: Biennial 2005-2006/FY 2006-07 Operating Budget and FY 2005-2006/2010-2011 Capital Improvement Program Sincerely, ~ Meyera E. Oberndorf Mayor cc: Mayor and Members of City Council James K. Spore, City Manager Leslie L. Lilley, City Attorney Ruth Hodges Smith, MMC, City Clerk Charles W. Meyer, Chief Operating Officer Susan Walston, Chief of Staff David Sullivan - Chief Information Officer Steven Thompson - Chief Financial Officer Diane Roche, Assistant to the City Manager for Communications and Media Relations - 3- Item V-2 MAYOR'S INTRODUCTION ITEM # 53745 Mayor Oberndorf RECOGNIZED the following BOY SCOUT in attendance, Clint is working on his Citizenship in the Community Merit Badge: BOY SCOUT TROOP 79 Clint Vance Accompanied by his mother, Darien Vance March 29, 2005 -4- C IT Y MANA G E R 'S PRE S E NT A T ION BIENNIAL 2005-2006/FY 2006-07 OPERATING BUDGET AND FY 2005-2006/2010-1011 CAPITAL IMPROVEMENT PROGRAM ITEM # 53746 The City Manager advised, for the first time, the Proposed Biennial Resource Management Plan will provide the City Council the opportunity to make decisions considering implications over the next two (2) fiscal years. The City Council on March 22, 2005, ADOPTED: Ordinance to establish a process for the preparation for the City's Operating Budget The City Manager and staff have tried to meet the intent of this Ordinance. Catheryn Whitesell, Director - Management Services, has included a section re the method of assembling the Operating Budget. This assemblage is not contemplating the funding available and spending "every penny". During the Mid- Year City Council Retreat, the goal was established to create a continuation of the basic services and meet commitments for various programs and projects and then create a Reserve for City Council to determine the amount of possible reduction in real estate taxes. The Operating Budget has been formatted in this matter. Catheryn Whitesell, Director - Management Services, advised it was a pleasure to submit the City's first proposed Biennial City Budget. On May 11,2004, City Council ADOPTED: Resolution ESTABLISHING a TaskForce to study the implementation of a Biennial City Budget for fiscal planning purposes. (requested by Council Members Ron Villanueva, Peter Schmidt and Jim Wood) The Biennial Budget is thought to provide a longer term focus on services and strategies, as well as build in more accountability to sustain new projects and services beyond the first year. This Biennial Resource Management Plan will also enable the City to better monitor the impact of the State and Federalfunding on the City's budget particularly next year, when in-sync with the State's budget cycle. The most important advantage is to allow discussion of strategic choices such as various community services and revenue needs over a longer horizon. This year, some of those discussions will evolve around services versus tax reduction. Funding has been set aside for a significant reduction of the real estate tax rate. However, all of the City Council's initiatives were unable to be achieved. Of the twelve (12) action targets identified in City Council's August Retreat, many were moved forward. Others, such as open space and local transportation, while receiving some additional funding, probably did not increase at levels envisioned by the City Council or the community. Relative compensation, Resource Management was able to increase the merit provided to City employees to its highest level since 2002 and the compression adjustment was nearly doubled; however, this might also not meet expectations. The main discussion will be this issue of choice: how much tax relief is enough over the two (2) years and how much should be expended on deliverance of services (both new and existing) and how much compensation should be provided to employees. The funding in City Council's Reserve, if used entirely for tax relief, will allow the real estate tax rate to be lowered by 17.3f over the two (2) years in the Biennium. This will give Virginia Beach the lowest tax rate in the Hampton Roads region and would represent the third year of consecutive rate reductions. However, this funding could also be utilized to address community concerns such as transportation improvement or additional open space acquisition. Since thisfunding is before the application of the City-School's Revenue Sharing Formula, any funding utilizedfor issues other than tax relief would need to return 53 % back to the Virginia Beach Schools. To achieve this level of Reserve, the City did have to reduce the Virginia Beach School Board's adopted Budget by $10-MILLION. March 29, 2005 - 5 - C IT Y MANA G E R 'S PRE S E NT A T ION BIENNIAL 2005-2006/FY 2006-07 OPERATING BUDGET AND FY 2005-2006/2010-1011 CAPITAL IMPROVEMENT PROGRAM ITEM # 53746 (Continued) Real Estate Tax Rate Reduction Council Reserve (in $ Millions) Tax Rate Reduction FY 2006 FY 2007 FY 2006 FY 2007 Total City Portion $18.7 $36.0 5. Of 3.1f 8.1f School Portion 21.2 40.8 5.7f 3.5f 9.2f Total Reserve $39.9 $ 76.8 10.7f 6.6f 17.3f A Community Budget meeting and Public Hearing are annually held in late September or early October. These meetings provide the opportunity for the community to express their concerns or areas in which they prefer additional resources be expended. The most frequently mentioned subject areas included Human Services, Transportation, Environmental Aesthetics, Economic Development, Public Safety and Education. All of this information is shared with the departments to aid in their budget development. Calculation of Target Funding Time Frame: August and September Salaries updated ana annualized Fringe Benefits updated Dedicated revenues reserves established Known contract increases 2% increase in other operating accounts Deletion of anyone-time expenses There are over $l-BILLION of un met needs Development of Department Budgets Time Frame: October and November Service Levell: Based on target amount - should include essential services before other current services Service Level 2: Funding needed to address current levels of services - does not expand or enhance service. Service Level 3: Commitments - additional funding and positions for capital projects. Council - approved commitments. Expansion due to population increases. Service Level 4: New or enhanced programs and projects March 29, 2005 - 6- C IT Y MANA G E R 'S PRE S E N TAT ION BIENNIAL 2005-2006/FY 2006-07 OPERATING BUDGET AND FY 2005-2006/2010-1011 CAPITAL IMPROVEMENT PROGRAM ITEM # 53746 (Continued) Review Process Time Frame: December to Early March Management Services reviews Audited for mathematical accuracy Is there a change in performance measures? Does it further a City Council goal? Does it further City's strategic plan? Is it a State or Federal mandate? Is it supported by other revenue sources? Is it a public safety or health issue? Will it provide savings in the future? Caucus reviews Management Services recommendations in light of strategic initiatives and provides recommendations to the City Manager The City Manager and his Executive Team make final funding decisions The public is provided another opportunity for comment City Council decides on the Final Resource Management Plan Development of Operating Budget FY 2004-05 Adjusted Budget $ 1,413,252,972 Service Levell Schools 54,312,527 Council Reserve (tax rate reduction) 39,946,435 Personnel and Fringes (includes salary reserve) 13,841,771 Operating Accounts 11,142,828 Debt 6,074,235 Reserves 6,868,024 Service Level 2: Current Services 4,386,709 Service Level 3: CIP & Commitments 8,447,511 Service Level 4: Expansion or New 5,035,623 TOTAL FY 2005-06 $ 1,563,308,635 Prior to any decision on the use of the City Council Reserve, the overall increase in the Operating Budget is 7.8%. If the Reserves are utilized for City and School programs, rather than tax relief, the increase in the Operating Budget would be 10.6%. March 29,2005 - 7- C IT Y MANA G E R 'S PRE S E NT A T ION BIENNIAL 2005-2006/FY 2006-07 OPERATING BUDGET AND FY 2005-2006/2010-1011 CAPITAL IMPROVEMENT PROGRAM ITEM # 53746 (Continued) Service Levell: Compensation $2.5-MILLION for a 10% increase in the City's contribution to health insurance for eligible employees $1 O.4-MILLION for compensation adjustments including a 2% structural adjustment, a 4.5% merit increase and increased compression adjustments $2. 6-MILLION for VRS life insurance in the second year At the request of the City's workforce and in reviewing other localities' Holiday schedule, the day after Thanksgiving is recommended as a City Holiday. This Operating Budget carries a 7% increase for all School employees based on the School Board's adopted Operating Budget. Service Level 2: Current Services Books for libraries Police bullet-proof vests Homeless Coordinator and Neighborhood Services Coordinator positions Juvenile Detention Center overtime Revenue loss from Aquarium renovation Revenue loss from Red Wing Golf Course renovation Existing position in City Real Estate Assessor's Office Service Level 3: Capital Improvement Program and Commitments Staffingfor First Landing Fire Station Staffing for Bayside Area Library staffing Biznet Village staffing Theatre staffing E-911 Call Center support staffing Landscaping and building maintenance for new buildings Custodial services for new convention center Memorial Day celebration Aquarium exhibit renovation Aquarium Stranding Center Princess Anne Commons Athletics staff Human Resources/Payroll System Revenue Assessment and Collection System (RACS) Housing Code Enforcement System Thirty-nine (39) new teachers Eleven (II) support positions to help high schools with reporting requirements of "No Child Left Behind" Staff and operating expenses to create a Small, Minority and Woman-Owned Business Program March 29, 2005 -8- C IT Y MANA G E R 'S PRE S E NT A T ION BIENNIAL 2005-2006/FY 2006-07 OPERATING BUDGET AND FY 2005-2006/2010-1011 CAPITAL IMPROVEMENT PROGRAM ITEM # 53746 (Continued) Service Level 4: New or Expanded Program Creeds Police Training Facility and Blackwater Contract Thirteen (13) additional Waste collection positions Eight (8) additional paramedics to enhance emergency services Local share offundingfor non-mandated Comprehensive Services Act services Seven (7) new Police Officers Five (5) additional foster care social workers One (1) position for the E- Learning program Two (2) Public Utility positions tied to proposed rate increase Staff in Human Resources and Fire, and additional funding in Police for EEO/Diversity recruiting Twenty-five (25) new bus drivers and 14,3 assistant drivers Growth in Capital Improvement Program Years 1 - 6 Approved Proposed Percent Change FY 2004-05 FY 2005-06 FY 2009-10 FY 2010-11 City General Improvements $ 425,455,315 $ 544,819,987 28,1% School Improvements 288,685,647 357,967,903 24.0% Utilities Improvements 131,384,537 202,786,609 54,3% Total 845,525,499 $1,105,574,499 30.8% New or Expanded Capital Projects Fourth Precinct Fire and Rescue Station Thalia Fire and Rescue Station Chesapeake Beach Fire and Rescue Station Blackwater Lesner Bridge Helicopter Voting Machines Rude Loop parking Animal Care Annex March 29, 2005 -9- CITY MANA GER 'S PRESENTA TION BIENNIAL 2005-2006/FY 2006-07 OPERATING BUDGET AND FY 2005-2006/2010-1011 CAPITAL IMPROVEMENT PROGRAM ITEM # 53746 (Continued) Growth in City/School Revenues Total growth in all seven (7) formula revenues is 15.2% in FY 2006 and 13.3% in the second year, If real estate growth is eliminated the remaining six (6) revenues grow by 5.7% in FY 2006 and 3.4% the next year This compares to all non-formula revenue growth of 7,27% in FY 2006 and 3.21% in FY 2007 Growth in State and Federal Revenues State Revenue is anticipated to grow by 6.1% in FY 2006 and 3% in FY 2007 FY 2007 will be the first year of the new State Biennium Federal Revenue is projected to grow by 7.6% in FY 2006 and only modestly in FY 2007 The large increase in the first year relates to public assistance payments and school funding One area of concern relating to Federal Funding is their decrease in commitment to housing programs, The Federal Budget, as currently proposed, includes the elimination of the CDBG (Community Development Block Grant) Program. Resource Management will continue to monitor the status. Mrs. Whitesell cited other fee increase adjustments: Storm Water ($3. 65 annually) , Water and Sewer ($2.53 per month) Planning (various services), E-911 (20if per month) and Parks and Recreation (various services). Real Estate Revenue Reduction Analysis FY 2005-06 FY 2006-07 Total real estate tax revenue increase $ 82,002,701 $ 86,536,903 Less Reserve for tax relief (39,946,435) (36,860,947) Less: Remaining real estate revenue (42,056,266) (49,675,956) School's portion 22,344,494 26,392,835 City's portion 19,711,772 23,283,121 March 29, 2005 - 10- CITY MANA GER 'S PRESENTA TION BIENNIAL 2005-2006/FY 2006-07 OPERATING BUDGET AND FY 2005-2006/2010-1011 CAPITAL IMPROVEMENT PROGRAM ITEM # 53746 (Continued) FY 2005-2006 RESOURCE MANAGEMENT PLAN SCHEDULE EVENT TOPIC LOCATION DATE Workshop Debt and Financial Capacity; Quality Council Conference Room April]2, 2005 Physical Environment Workshop Safe Community and Quality Council Conference Room Aprill4, 2005 Organization Workshop Quality Education & Lifelong Council Conference Room Aprill9, 2005 Learning; Constitutional Officers Public Hearing Bayside High School April2l,2005 6:00 PM Workshop Economic Vitality, Cultural and Council Conference Room April 26, 2005 Recreational Opportunities; Family and Youth Opportunities Public Hearing Council Chamber April 26, 2005 6:00 P.M. Reconciliation Council Conference Room May 3, 2005 Workshop Adoption of FY 2005- City Council Vote on Resource Council Chamber May lO, 2005 2006 Resource Management Plan 6:00 PM Management Plan March 29, 2005 -11 - Item IV. ADJOURNMENT ITEM # 53747 Mayor Meyera E. Oberndorf DECLARED the Special Formal City Council Session ADJOURNED at 6:46 P.M. ~__d~_l'-~!_~__ Beverly 0. Hooks, CMC Chief Deputy City Clerk 0h~~~ ;;Z;;;;;~es Smith, MMC City Clerk Meyera E. Oberndorf Mayor City of Virginia Beach Virginia March 29, 2005