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HomeMy WebLinkAboutOCTOBER 2, 2012 WORKSHOP MINUTESCITY OF VIRGINIA BEACH "COMMUNITY FOR A LIFETIME" CITY COUNCIL MAYOR WILLIAM D. SESSOMS, JR., At -Large VICE MAYOR LOUIS R. JONES, Bayside - District 4 GLENN R'DA VIS, Rose Hall - District 3 WILLIAM R. DeSTEPH, At -Large HARRYE. DIEZEL, Kempsville - District 2 ROBERT M. DYER, Centerville - District 1 BARBARA M. HENLEY, Princess Anne - District 7 JOHN D. MOSS, At -Large JOHN E. UHRIN, Beach - District 6 ROSEMARY WILSON, At -Large JAMES L. WOOD, Lvnnhaven -District 5 CITY COUNCIL APPOINTEES CITY MANAGER - JAMES K. SPORE CITYATTORNEY- MARK D. STILES CITY ASSESSOR - JERALD D. BANA GAN CITY AUDITOR- L YNDON S. REMIAS CITY CLERK - RUTH HODGES FRASER, MMC I. II. CITY HALL BUILDING 2401 COURTHOUSEDRIVE VIRGINIA BEACH, VIRGINIA 23456-8005 PHONE. -(757) 385-4303 FAX (75 7) 385-5669 E-MAIL: ctycncl@vbgov.com CITY COUNCIL WORKSHOP AGENDA 02 October 2012 CITY COUNCIL and SCHOOL BOARD JOINT MEETING - Building 19 - A. REVENUE SHARING FORMULA CITY MANAGER'S BRIEFINGS A. DEVELOPMENT AUTHORITY ANNUAL REPORT - Conference Room - Elizabeth "Boo" Twohy, Vice -Chair - Development Authority B. PARKS AND NATURAL AREAS - PENDING PROJECTS 4:00 PM 5:00 PM Michael Kalvort, Director - Parks and Recreation Brian Solis, Planning Design/Development Administrator - Parks and Recreation Public Hearing_4nnauncentent Virginia Beach Probation and Parole Office City Council Chamber City c4`11'irginia Beach 2.101 Courthouse Drive Virginia Beach. Virginia 23456 October 4, 2012 6:00 ].Al. -1 - VIRGINIA BEACH CITY COUNCIL Virginia Beach, Virginia October 2, 2012 Mayor William D. Sessoms, Jr., called to order the CITY COUNCIL/SCHOOL BOARD JOINT WORKSHOP, in Building 19, Tuesday, October 2, 2012, at 4:00 P.M. Council Members Present: Glenn R. Davis, William R. "Bill" DeSteph, Harry E. Diezel, Robert M. Dyer, Barbara M. Henley, Vice Mayor Louis R. Jones, John D. Moss, Mayor William D.. Sessoms, Jr., John E. Uhrin, Rosemary Wilson and James L. Wood Council Members Absent: None School Board Members Present: Vice Chairman William J. Brunke, IV, Emma L. Davis, Chairman Daniel D. Edwards, Hugh Greene, Dottie Holtz, Brent N. McKenzie, Ashley K. McLeod, Sam Reid, Patrick S. Salyer, Scott Seery and Carolyn D. Weems School Board Members Absent: hR= October 2, 2012 -z - CITY COUNCIL/SCHOOL BOARD JOINT WORKSHOP REVENUE SHARING FORMULA 4:00 P.M. A copy of the Verbatim Transcript and the Packet provided to City Council and School Board are hereby attached and made apart of this record. The City Council/School Board Joint Workshop Adjourned at 5:02 P.M. October 2, 2012 VIRGINIA BEACH CITY COUNCIL October 2, 2012 3:58 p.m. WORKSHOP SESSION CITY COUNCIL AND SCHOOL BOARD JOINT MEETING REVENUE SHARING FORMULA VERBATIM CITY COUNCIL William D. Sessoms, Jr., Mayor Louis R. Jones, Vice -Mayor Glenn R. Davis William R. DeSteph Harry E. Diezel Robert M. Dyer Barbara M. Henley John D. Moss John E. Uhrin Rosemary Wilson James L. Wood CITY MANAGER: CITY ATTORNEY: CITY ASSESSOR: CITY AUDITOR: CITY CLERK: At -Large Bayside - District 4 Rose Hall - District 3 At -Large Kempsville - District 2 Centerville - District 1 Princess Anne - District 7 At -Large Beach - District 6 At -Large Lynnhaven - District 5 James K. Spore Mark D. Stiles Jerald Banagan Lyndon S. Remias Ruth Hodges Fraser, MMC SARAH DEAL JENKINS, CMC DEPUTY CITY CLERK, II 1 2 MAYOR SESSOMS: It's always good to bring the School Board and the City Council together, and I think this is following up on our commitment to do this. If you recall some time ago, we asked Jim and Jim to see about coming up with a Revenue -Sharing Formula. And we also asked that the leadership of the School Board and the City Council meet prior to us having this meeting, which has occurred, and it was agreed by the School Board Chairman and Vice Chair and myself and the Vice Mayor and Jim Merrill and Jim Spore to get what was presented to us in front of you all, and I believe that we do recommend what is going to be presented. We look forward to a brief presentation and then some discussion. Jim and Jim, whichever Jim wants to start out? CITY MANAGER: Let me just say, we have worked on this very well together, both staffs, and recommend this new policy to you. It's pretty straightforward and consistent with what we talked about last December. The principle features, I think, that are in the policy are the expanded local revenue sources. It really opens up a lot of the additional revenue sources that had not been shared with the Schools before. It includes that in the pot. It incorporates the State SOQ computation, which is updated, as you all know, every other year, which allows us to take into account by using that mechanism changes in enrollment, changes in population, adjusted gross income changes, property value changes, and so on and so forth. So, that's a feature that I think helps. It requires that it be adopted by both bodies. Whereas, the old formula was just adopted by the Council, this one suggests that both the School Board and the City Council, if we want to have this policy, both bodies would adopt the policy. It requires that it be reviewed annually at the staff level, in terms of revenue adjustments and some unique things that have happened, like in the past couple or three years we had some enormous swings in revenues with the Federal government. As a provision that if more resources are required, the Board would enact a resolution requesting those of Council. And we're suggesting that it be good for a three-year period through June 30th, 2015, and that we have a review an reauthorization at the end of that time. So, that's a quick scan of what's in there. In the packet that you have at your place, there's a copy of the briefing that I referenced back in December. There is a copy of the draft policy, itself, in terms of the verbiage. There's a summary of how the formula would have worked, if we used it for this current budget, and I emphasize a very preliminary projection of the upcoming 2014 revenues and expenditures. 0 COUNCILMAN WOOD: -- what four things it included. CATHERYN WHITESELL: Okay. This is the real estate tax revenue that is in the budget for 113. This is the total 6 -cents tax increase that the Council provided the increase. I backed it out at this point. We also back out all dedications. The new formula says it's all local tax revenue that hasn't already been dedicated. Personal Property Tax, General Sales, Utility, Utility Consumption, you see all those revenues, we have an EDIP dedication that also needs to be backed out here, all the way down to City Tax on Wills, $70,000. So, within the formula, it's kind of a two-step and actually a three-step process with the dedication of the 4 cents in Real Estate. The first is you take all the local taxes that haven't been dedicated, then you take what's called the required SOQ match, which is determined by the State through the Local Composite Index, that's $165 million for 113, take that out, then you have a resulting revenue stream to which we're going to apply the percentage for the discretionary match, which is $592.7 million. The way I got 32.37, because if you'll notice it is different than what Dr. Merrill and Mr. Spore presented back in December, is because I knew the answer for the 113 Budget and I'm using it to set the formula. I backed into that percentage. So, that gives the discretionary match at $191.8 million. And then I added back the Schools 4 cents, the $19.2 million, to come up with the School formula, had we used it in 113, would have been $376.2 million. Now, that's different than the 387 they actually got because of these two numbers right here, which is Fund Balance use, one-time money, the School Board's decision to use the Sandbridge surplus in their Operating Budget and then the Council's decision applied $9.2 million of one-time funding. So, that's what accounts for the difference. MAYOR SESSOMS: Other questions or comments? Rosemary? COUNCIL LADY WILSON: Well, my question was answered, because that 4 cents, as you probably figured out, was pretty important to me and I wanted to make sure that was all accounted for and also to know what all the different streams were. MAYOR SESSOMS: Ashley? BOARD MEMBER MCLEOD: Thank you, Mr. Mayor. I just wanted to, I think it's important that we talk about the elephant in the middle of the room. The fact of the matter is, is that while we have already said part of this agreement is that if we need more money we'll have to ask for it. Well, Sir, I'm already asking for it. This doesn't actually meet it. So, my concern is, by agreeing with this we already know it's not going to meet our needs. One of the things it said and many people have talked about this is, and we've been out doing forums and that, is we'd like to see full-day Kindergarten. It is going to be years and years before we can do that because that is just not feasible based on this formula. That is one of the hazards of going into a formula. I have no problem if we go into this that it will be my responsibility to then ask for a tax increase specific for the formula to go towards it, but it's just the reality as quick as we agree on something like that I'll be putting forth a resolution asking for that, because we already have a shortfall, and it's hard to say we're fully funding Schools when we already know the formula doesn't meet the needs, and I just felt the need to make sure everyone heard that out loud. MAYOR SESSOMS: Thank you. John? COUNCILMAN MOSS: No surprise to anyone here that I don't support formulas. I always think these joint sessions should be more about education first and the requirement, and, secondly, about the money it takes to get that job done. So, like always, I always prepare for these events, and I have prepared remarks and I will just read. I don't want to be misquoted. This afternoon, we should be receiving a stage -setting narrative on what actions the Schools need to take, what metrics they need to improve upon to improve our scores, and the new goals we should aspire to that takes us from the Number 5 to the Number 1 Public School System in the country. Who has a business that says "I want to be Number 5"? I don't know who that is. I'm sure your bank wants to be Number 1. The story of all great-grandparents and grandparents and parents, teachers, employers, and our youth want to hear today are the non -material solutions which may be curriculum changes, scheduling changes, the self -finance initiatives through internal efficiencies, and the new initiatives that we need to make to increase the competitive edge of our students to pursue their dreams. This joint meeting should be about the needs of our education of children and talk about the money second. I can think of no greater ambitious goal to motivate the community's commitment to Public Education to have a School System where it's the personal motivation of the student, not the education of the mother or the socio-economic status of the family, that determines their educational achievement. That is a goal we should all pursue. We all know that Public Education is the single strongest engine in our culture to power upward economic mobility and personal fulfillment. Our School Board delivers across the full spectrum of diversity in our community in all of its dimensions a National top ten public performance at half the price of the best in class private schools in our region, and they should be applauded for that. All the stakeholders and our youth understand that advancing excellence in education to the next level will not be achieved by reverse engineering from a dollar figure established by a funding formula. I think that's the exact point Mrs. McLeod was mentioning. There is no need for a funding formula for Education. A funding formula is just another way to say entitlement. Entitlement shortchanged the customer they are intended to serve, the taxpayers that provide the funding, and the future that endures the opportunity costs imposed by the ineffective and inefficient investment of economic resources incentivised by the funding formula. Our obligation to properly fund education is independent of the business cycle and the availability of total municipal revenues. It is not unconstrained, but it would be truly the exceptional set of circumstances where collected revenues after Public Safety expense would not sustain public educational services. Foremost of our responsibilities and our oath of office and the Constitution and the City's Charter are Public Safety and public education. Likewise, the Members of the School Board are charged by their oath of office to be the unfettered advocate to provide quality instruction and diversity of opportunity to infuse in our youth the competencies and the proficiencies in their application to secure a competitive advantage in the world of work. The School Boards have not been granted the power to tax. The School Boards have no experience or consent of the government to judge whether or not the sum total of the City's requirements require a tax increase or not. They do not possess that perspective and we shouldn't be asking them to do it, in my opinion. The School Board's goal is to increase the critical thinking of our students. The application of N critical thinking skills to the issue before us would expose that the real estate bubble masks the underlying ills of the funding formula, and as just noticed we see here even this funding formula falls short of being able to beat even the baseline expenses of the system. A funding formula creates a firewall between public education, our Number 2 priority, and all City expenses. It means that, for example, the Strategic Growth Office does not have to compete against lowering class sizes. A funding formula means that lower City priority activities get funded while City Council want the School Board to request a tax increase to meet higher educational priorities. I think that's misguided. I recognize the majority of City Council may prefer a funding formula. And I recognize that some Members of the School Board have an affinity for a funding formula in pursuit of the false promise of funding stability when really it represents annual requests for tax increases as proposed and are even willing to endure that imposition of asking for tax increases to get what they think is a better way of being funded. I'm committed to funding the baseline requirement represented by the current Operating Budget adjusted for the legally must pays that we know about and making up for State reductions in funding should that happen. I'm committed to embracing the School Board's plan to take our School System to Number 1 and to annually collaborate on incremental funding on our journey to the next level of educational excellence, be it full-day Kindergarten or whatever that may be, but there is a plan that is within community's ability to pay if we set our prerogatives in the right place and revisit City expenses of lower priorities. It is the Council that commits itself to funding the requirement to achieve excellence of education and to invest in continuing improvement that truly provides the stability of a commitment that the School Board can trust. There is no commitment to excellence. That's a commitment to money. You and we all should be committed to excellence for the students, not committed to funding. My remarks today here, it's getting close to close, are not inconsistent with the approach I took leading up to the adoption of the current budget. I accept the majority of my peers judge that public education was a lower priority than any City proposed expenses, and therefore the Schools were attributed to a 4 -cent tax increase in the Real Estate Tax increase. I'm very proud of the five of you on the School Board that stood tall and voted against a resolution requesting a tax increase, a resolution that was not requested 6 by City Council as a body but by selected Council Members. We have a Council -Manager form of government with the Mayor as largely ceremonial, and only Council acting as a body can provide direction. When the time comes, I will not vote in favor of the School Funding Formula or a Memorandum of Agreement containing a provision whereby the School Board has to petition for tax increases. I will vote to appropriate funding to the Schools without categorical restrictions for its Operating Budget. A budgeting process based on needs just like the process that families an businesses use will best serve the present and the future. Thank you. MAYOR SESSOMS: Thank you, John. Glenn? COUNCILMAN DAVIS: Mr. Mayor, Mr. Chairman, I think that this formula is very important because it provides financial protection for our School System, and that need became no more apparent than in the budget this year. A formula like this would protect our School System against irresponsible budget cuts like those proposed by the Moss budget that would have made this year our teachers take a pay decrease compared to the prior year on top of a half -million -dollar lump -sum cut. That's why we need this. We can't afford these irresponsible cuts. We see them proposed for this budget year and we need to protect our School System against it going forward. MAYOR SESSOMS: Thank you. Bill? COUNCILMAN DESTEPH: I went through the documents we were provided, and I went through the documents we were provided and I'm having a hard time getting the numbers to match between Attachment 3, the brief, itself, and the estimate of 2013, 2012, and 2014/2013. And I'll be honest, I'm trying to go back through it again now hoping that maybe the copy I had received Friday in my package was messed up, but -- MAYOR SESSOMS: Bill, I'm going to ask Catheryn to meet with you and go through it in detail to make sure you get comfortable with the numbers. COUNCILMAN DESTEPH: Okay. Because I'll tell you right now that they're off quite a bit significantly. MAYOR SESSOMS: Maybe Farrell could come, as well. 10 FARRELL HANZAKER: We can do that later. COUNCILMAN DESTEPH: Then I'll hit a couple more questions because I'm trying to break this down as easy as possible. Then on attachment 3, Item Number 27, it says, "School Board decision to move Sandbridge surplus to budget." I wasn't quite sure that was a School Board decision. I thought it was a Council decision, but maybe I missed something. So, the School Board makes the decision to move Sandbridge surplus funds? Help me out here. What am I missing? CATHERYN WHITESELL: Under the old policy, when we declare, when Council declares surplus $7 million, we split it -- under the old policy, when the Council declared surplus $7 million, we split it 51% to the Schools. COUNCILMAN DESTEPH: Yes. CATHERYN WHITESELL: So, they got roughly $3.5 million. They made the choice. They had always gone to their CIP to support their Capital Program. With last year's budget, or the '13 budget we're in now, the School Board made the decision to pull $2 million of that and put it to their Operating Budget. That's where that number came from. COUNCILMAN DESTEPH: Okay. Got it. So, at least I understand that now. Then the way I understand it, we have five funding categories: Pupil Transportation; Administrative, Attendance and Health; Construction; Operations and Maintenance; Debt Service. I was trying to go with the information we're provided here and Friday and map this over and I just can't flat do it. So, I need some help mapping Fiscal Year 13 and Fiscal Year 14 with the five categories that we provide over. Now, as I understand it, our total City debt is roughly $1.3 billion. The total Schools debt is $320.8 million. Debt Service is $44.8 million. Is that Fiscal Year 12-13, or is that 13-14? Is that what we're projecting or is that what is actual today? CATHERYN WHITESELL: The numbers I gave you this morning were out of the 13 budget. COUNCILMAN DESTEPH: Out of the 13 budget. Can we get what's projected for Fiscal Year 14, as well? I know we've got, according to our City Manager, roughly a $60 million shortfall next year. So, what I'm trying to do is determine, break this down, what are our 11 projections and shortfalls, which areas, and then I know technology is separate from this or is put into a Special Revenue Fund, which is under this or not under the five categories? CATHERYN WHITESELL: The formula policy is silent on the category issue and has left that up to the Board and Council to decide with each budget. So, there's nothing in the new policy, itself, that speaks to whether we stay with categories or don't stay with categories. COUNCILMAN DESTEPH: Understood. CATHERYN WHITESELL: So, none of these numbers are reflective of that. COUNCILMAN DESTEPH: But I'm trying to map from here to the basic five groups that we have, and then on the technology side I know we have Special Revenue Streams or Special Revenue Technologies. CATHERYN WHITESELL: Yes, sir. I'm glad to show you that in the Operating Budget. We can do that after the meeting. COUNCILMAN DESTEPH: Okay. I'm just trying to find out where it maps to these five areas, because it should be pretty easy and pretty basic, but I can't get there from here. Then I'd like to also know what are the projected increases from last year to this year? What are the drivers? Is VRS a driver this year? These are the things that I'm trying to determine. CATHERYN WHITESELL: Two things. The very quick, very preliminary estimate, starts with the 13 budget and takes out one-time use of revenues. That's all we knew about revenues at that point. We're in the process of putting together the Five -Year Forecast, which we'll brief you on on the 20th of November. We'll go into all of the details of the revenue streams and how the projections are doing and how they're doing right now. As you all know, this is very early in the fiscal year for us. Our major revenue streams, Real Estate doesn't come in until December, so we don't get a first good look until then. We don't get a real good look on Personal Property until next June. So, we're working through some issues talking to the Commissioner of Revenue's office, the Real Estate Assessor. That detail I think that you're looking for will be available next month when we get together again. 12 COUNCILMAN DESTEPH: Okay. Well, I look forward to that. And I'll provide you my questions, because I'd like to know what the projected shortfalls are, what's the plan on the Schools side to prepare for the projected shortfalls, what are we looking at for a total cost per student between Fiscal Year 12 and 13 and Fiscal Year 13-14, but most importantly how will these drivers affect the services on our students? What will be the impact, positive or negative, and then how will it affect the quality of education, and where do we go forward from there? I know that the discussion today is "do we go with the School Funding Formula or not"? "Let's beat up the Moss-DeSteph Budget because I didn't like it", or whatever else. I'm trying to get back to the basics of what are we supposed to be doing. The core services of government are the safety and security of our people, education of our kids, and I'm trying to get back to that and better understand it. With what we're provided, I can't get there from here. And then I know there's multiple special grants and other revenues that are unaccounted for on the basic City side. I'm trying to look at total budget because we should have transparency here, and that's what I can't get to add up on any of this. So, with that, once we get there, I'd be pretty happy to say "okay, now I'm comfortable". Right now, I can tell you I'm not real comfortable, because I can't answer my basic questions, which I believe everybody in this room is responsible for answering those basic questions to those who elect us to sit in here and do this job. So, that's all I have for comments. Thank you. MAYOR SESSOMS: Thank you, Bill. Barbara? COUNCIL LADY HENLEY: Mr. DeSteph mentioned the Debt Service. Is the School Debt Service in this amount of the contribution, or was that about $44 million, is that in here? CATHERYN WHITESELL: Yes. They would be expected to pay their $44 million out of the contribution. COUNCIL LADY HENLEY: So, this $387 million from this year did include it. It wasn't in their initial request, I think. I was just confused because it comes at a different time. CATHERYN WHITESELL: Yes. 13 COUNCIL LADY HENLEY: But it is in this amount? CATHERYN WHITESELL: Yes. COUNCILMAN DESTEPH: You just can't map it over to the categories and figure out where it's -- COUNCIL LADY HENLEY: Well, it's not a category. MAYOR SESSOMS: Em? BOARD MEMBER DAVIS: Thank you. I look at this budget and I see a deficit already, as Ms. McLeod has already said. We'll never get to full-day Kindergarten under a budget like this one. However, if City Council in their list of priorities could put in full-day Kindergarten as one of their priorities and list it along with their other priorities, couldn't they then shift money to it as needed? The other thing I think about is salary increases. When you give your people a salary increase, look to give our people a salary increase. When you look to VRS for an increase in VRS, look to our people for VRS, because we have the same problems. And when you go to do an oceanfront beautification, it benefits all of us. So, if we had one list of priorities combining both School and City needs, maybe that would show us more of a direction where we need to put these extra funds. Thank you. MAYOR SESSOMS: Good point, Em. Carolyn? BOARD MEMBER WEEMS: Yes. I was kind of going to say the same thing as Em said. This budget is minimum basic need. It gives us the feeling of we're going to get that, but like Ms. McLeod said and Em has said, we're basically going to have to ask for a tax increase. But I'm thinking that we should -- we've been to these meetings and I just don't feel,like there's a lot of change and a lot of positive change after we sit here and we come to these meetings. And then we do it again a few months later, and then we do it again a few months later. And I don't know what the answer to that is, except for I think that if we're going to be, and we are on the same team looking at the same citizens, looking at the same students, we need to express our needs more than just a budget. We need to tell you why is full-day Kindergarten so important. We need to let you know why are we always talking about this full-day Kindergarten, how much it's exactly going to cost, and what are you getting for that cost. 14 Now, we're going over four-by-four scheduling versus regular scheduling. One is a budget savings, but it may not be the best thing for the students, and we need to be able to come up with we don't go that way or we do go this way because educationally it's best. We've got achievement gaps with these minimum budgets. We're not going to be able to do much to work with achievement gaps of our racial achievement gaps, socioeconomically disadvantaged, and Special Education achievement gaps. They're huge. But I think that we, as the School Board, and we did do this in a listing of priorities, but I think that we need to talk more and say "this is why we need the money because this achievement gap is ... da -da -da -da -da". This has a direct correlation to X student going to college. This has a direct correlation of this student not signing up for an AP class. This has a direct correlation of these people not getting jobs when they graduate from high school. This has a direct correlation, early education to what these students are doing by Third Grade. We need to impress that upon you folks so that you know the importance and so you can say we're trying together, like Em gave one example; there's many. We're trying together as a City and School System to go for full-day Kindergarten. So, I just think that if we keep going the way we're going, I just haven't seen many changes after these group meetings. It's just all about money. It's all about budget. We can't do this. Y'all ask more and then everybody is pointing fingers. I'm tired of it. We just need to work together and we need to somehow figure out how we're going to do that and how we're going to have the same priorities, which is very hard because y'all have many on your plate, but as my colleague here says Education and Public Safety are just up there and it should be everybody's top two priorities. So, I want to work together, but I want to maybe educate us all a little bit exactly what these programs mean and not just always have a dollar sign stuck to it; "no, we can't do it, it's too much". We might need to do it because it has such an implication to our future employees, our future workers, our future community. So, I would like to kind of see a shift change in that, Mayor, and Chairman, and hopefully y'all can facilitate that and tell us what the best way to do that is. MAYOR SESSOMS: I would sit back and say to you, I think we'd welcome hearing from the School Board, going down their priorities, and we'd welcome that, and as to why they're needed. 15 BOARD MEMBER WEEMS: We kind of do it in a list, just like y'all do, but I think it needs to be more explained instead of just "this is important and it costs this". MAYOR SESSOMS: CHAIRMAN EDWARDS: We'd welcome that. Dottie? BOARD MEMBER HOLTZ: Thank you, Mr. Chairman. Mr. Davis says this formula would provide financial protection for everybody. Of course, that's what we all want. I wonder, the 32 -plus compared to over 50 just seems to be so different, and I understand about the different revenue streams. If this particular formula were applied to the budget, which was fully funded last year and gratefully so, would it have covered everything? CHAIRMAN EDWARDS: Yes. BOARD MEMBER HOLTZ: It would? CHAIRMAN EDWARDS: That's what this came from. BOARD MEMBER HOLTZ: I don't see it. Okay. Thank you. MAYOR SESSOMS: Bill? VICE-CHAIRMAN BRUNKE: Thank you. First, I really appreciate that we are all having this conversation in October and not in February, as we did last year, regarding funding formulas, the approach to funding our budget. So, I appreciate that commitment. This meeting is an outgrowth of last year's budget cycle. And the impression that I was under going into the summer was that there was a general commitment on the part of Council, who is the only body who truly gets to decide how our Schools are going to be funded, to look towards a funding formula, and the work over the course of the summer was to provide a framework in which a formula may work. I'm going to back up from that for a second, because I do want to re -visit that, but talk about what seems to be another discussion evolving, and that is the merits of a funding formula, whether we should or shouldn't have one. I'm an advocate of the funding formula and I have been for as long as I have been involved in the Board. I think a funding formula has served our City well over the past fifteen years. Having children who have been the product of K through 12 under a 16 funding formula, I have to say they've done quite well, and they have been quite successful in a model in a system in which Schools were funded through this formula. I think it's important, also, as we talk about funding formulas, that as you set the tax rate you're in essence coming up with a funding formula. It's a funding formula that is based on a number of factors, the most significant which is Real Estate taxes, and you're not necessarily exchanging that every year. You are using that formula of "X" number of cents per hundred to develop and work to develop a budget within the constraints of that formula. I think what this does on the Schools side is it takes that and it now says as a community we have a lot of things we have to address. And there are times when we're going to have to specifically pull out one piece and maybe make some adjustments, but we will provide Schools the amount of money that falls out from this funding formula. That formula provides us with stability. It provides us with predictability. And, most importantly, it forces the School System to work within the constraints of a budget, because what's going around the table right now are all of the things we don't have, and I, frankly, don't want a repeat of last year. And if we do not put in place and maintain the integrity of this formula, and by the way, the only way this thing works is if we maintain the integrity of this formula, if we don't have that structure in place, what we're going to hear is "want, want, want, want, want". And what I love about this formula is if we as a School Board want it that bad, we have the opportunity to ask for it. We have to ask for a tax increase. Without that structure of the formula, I think it becomes a lot of wants and a lot of pittings of the Schools against the Council, and some of the stuff we've experienced over the past two or three years where, frankly, the integrity of the existing formula was undermined. We all know that, and I'm glad that we're hitting the reset button on this. So, I am an advocate of a funding formula, no different than the fact that you all on Council use funding formulas to determine your budgets, as well. I want to address the specific formula. It's awesome, if I could use that word. It is just simply awesome. I think it addresses the concerns many Council Members had about some of the changes in the School System, the increases and decreases in enrollment. It address that. It addresses the level of funding coming out from the State. It addresses the relative strength of this community as compared to the rest of the Commonwealth. It broadens the base of the revenues that the 17 School System is receiving. No longer will we have to have a debate about whether or not a good year at the Oceanfront is good for our Schools. And I don't want to have to read an advertisement in the newspaper and have people holding them up talking about this, because the fact of the matter is what's good at the Oceanfront is also good for our Schools, and this formula shows that. And I like that and I think that is a really, really important step that we broaden that base and that the entire community is on the same page with regard to where our resources are going. Again, I'm an advocate. I don't have a vote in this other than to adopt a resolution that says I support this. You all are the ones ultimately that do that, and I encourage you to support this. I won't comment on some of the alternative budgets that are out there and how they were arrived at. I'll leave that alone for now. MAYOR SESSOMS: I've got Scott, then Sam, then Rosemary. BOARD MEMBER SEERY: Thank you, Mr. Mayor. First of all, I want to say thank you to Dr. Merrill and Mr. Spore and your staff. I do think you guys did an outstanding job, and I think we are making progress. I think when I look at a formula where it does provide for adjustments based on the Local Composite Index and provides for adjustments based on increases and decreases in student enrollment, that's progress because that's input that has come from both Boards. I am concerned as has been voiced a couple of times with the fact that where we end up is with a budget where we're already looking at proposing a new tax increase, especially with an economy that we're looking at current debt. I am all for planning and predictability, but I think that Mrs. Davis brought up a good point, is that maybe progress can be further made by having joint priorities. Because I know, because I hear it all the time from Members of City Council, of your concerns about the School System and things you would like to see within the School System, and I think there is support for a full-day Kindergarten. I know that there is support to adjusted unified pay scale, and I know that we all in this room want to move from the Number 5 School System in the country to the Number 1 School System in the country, but it is going to take a joint effort. I don't know that a tax rate increase is the right way to get there, and so that's my concern with this formula is that we all have a common goal. We have common priorities. I think we need to take further steps in order to address those priorities. I think we need to do it jointly. Thank you. W:? MAYOR SESSOMS: Thank you, Scott. Sam? COUNCIL LADY WILSON: Don't forget me. MAYOR SESSOMS: I think you're right after Sam. BOARD MEMBER REID: I remember when the funding formula was looked at and everybody decided that it was going to go away. We were all upset. A lot of the community was upset. And everything that I've heard from the community and folks that I've listened to and talked to, everybody supported the old funding formula. The new one is at least data driven. It's not the arbitrary funding formula we had before. So, this one is data driven. There's more revenue streams to give us on the School Board side some stability from year to year. Doctor Merrill had a study done showing the economic benefit that the School System brings to our city. We're talking millions upon millions of dollars worth of economic growth and businesses that come to our community because of the School System. The funding formula, I like it. It gives us a baseline. It gives us something to work from and some stability within the School System on what we're going to plan for next year. The other thing is, beyond the School Board and City Council giving us the stability, it provides the families that live here in our city and their children, our students, the understanding that that money and the School System are going to go forward, and it's not going to be the contentious budget year we had this last go -round. But beyond the current students and families that live in our city, a stable School System, a stable budget, something that we can plan on, also provides other families that want to move to Virginia Beach because of the School System that that stability will be there as their children grow up through the years, starting in Kindergarten and going through High School in our city. It gives them that stability, that understanding that what's gone on since '97 will go on now as a data -driven formula and that their children, our students, will have the opportunity to get one of the best educations in the United States. And I am dedicated, I think everybody here on our School Board is absolutely dedicated, to making our School System number one. We'd all like to be number one instead of number five, but you've got to tip your hat to our staff and our administration who have done an incredible job bringing us to number 5 in the United States and doing it these last years 19 with the budget formula. So, I'm going to support this. I think it's a fantastic baseline. It gives us more revenue streams. It gives us that stability from year to year. And then we can fine tune without the contention, we can fine tune the needs that go beyond the funding formula, and we can work together. And this will provide us that baseline where we can all work together instead of having the kind of budget year we had this last go -round. Thank you, Mr. Mayor. MAYOR SESSOMS: Thank you, Sam. Rosemary? COUNCIL LADY WILSON: I know I'm the only person here that's served on both the School Board and the Council before a funding formula ever, with a formula, and then without one. And having all of those experiences, I can tell you, having the funding formula was a whole lot better than not having the formula. It gives me great comfort in knowing that our two Jims put their brilliant heads together and this is what they've come up with, they've agreed upon. They're the ones -- we're the policy makers -- they're the ones who actually have to make it work. And they're the ones who are going to have to get out there and make sure that all of it goes well. Last year was pretty painful for most of us sitting here with what we all went through with the budget. And as painful as it was for us, the really unfair part was the pain that our employees went through and our parents went through and our kids went through. And to see those children's faces who were worried about if they were going to have transportation to their programs or the different things, that was really, really terrible that they had to have that kind of suffering. I really think we owe them a lot more than what we gave them last year. We got through it and there is a difference of where we were last year where we are today, and that's $19 million and the 4 cents increase. So, we did make a pretty good stride with that. So, I continue to support the budget. I think it's the right thing to do for our citizens and also for both bodies to be able to figure out where the money is coming from and where it's going to go, and there are triggers in place. If these things don't work, we can go back and re -visit them. So, that's the really good thing. And there's also another really good thing, is both bodies are going to have to be on board this time. It's not one sided. It is where we all -- maybe it's not going to be unanimous, but we're all going to have to agree upon this. But, anyway, if the School Board will 20 support this, I'm definitely there to support it with you. VICE -MAYOR JONES: Brent? BOARD MEMBER MCKENZIE: Thank you, Vice Mayor. I just want to echo some of the thoughts from my colleagues. I, too, have been a proponent of the funding formula for a long time for all of the reasons that have been said. Stability and predictability from a School Board perspective, it gives us a better opportunity to plan and budget for the next year. The new formula seems to be a huge improvement over the last formula. It includes the enrollment issues that I know Mr. Jones has brought up many times, and the LCI and SOQ funding, it doesn't take into account the grants we get from the Federal government. So, all of those things seem to be steps forward. I do have a couple of concerns. The first one is the 4 -cent tax increase that went through last year on behalf of the Schools, 4 cents of the 6 cents. In here, it states that if the LCI is changed, basically, the State is going to give us more money through the LCI, then that 4 cents of the tax increase lowers, if we get less of that 4 -cent tax increase on a ratio basis, right? So, if they lower the LCI, then we also take a hit from the money we get through the funding formula, also. So, are we taking a hit on that twice? Just once? All right. Well, even if we're only taking a hit on it once, still if you look at next year's projections we start off with a $35 million deficit just on the Schools side, and the State is not likely to take up LCI again for another year or so. But if they did for some reason and we got more money from the State, then that money would just be taken again back from the City side, and so we would still be left with a $35 million deficit. That 4 -cent tax increase was meant to avoid us having to make those catastrophic cuts that are going to come from a $35 million deficit. So, I guess, my concern is, the citizens are going to have an expectation, we raise taxes for Schools, even if the State gives us more money, we're still going to have this huge deficit because the City is just going to take it back from US. That, I have a huge concern with. I don't know if maybe we can change it that if the Local Composite Index is below the Fiscal Year 12-13 level of .0410, I don't know if that number is negotiable or not, but I don't think that -- looking at the deficit we're going to have that an LCI change from the State can only hurt us either way. It doesn't help even if the LCI was increasing State funding, we still lose money on 21 the Schools side. So, I think that's a major tissue. The second issue I have is with the reversion of different fund balances. My understanding is, I was talking to Farrell before the meeting started, that certain funds that we have historically been able to keep a balance in things like the Athletic Fund and Technology Fund, those dollars will no longer be allowed to be kept on the Schools side; they will have to revert back to the City side, and we'll have to ask for those dollars. And obviously we have had this issue over the last few years with reversion funds, and that does the exact opposite of what the funding formula does. The funding formula allows us to have predictability in the plan but us having to rely on a decision made by the City Council on whether we're going to keep those fund balances doesn't allow us to have predictability in the plan. So, those things seem to be working against each other. So, I have some concerns with that, also. And I would hope maybe with the Athletic Fund, Technology Fund, we might be able to continue the way we have been doing that in the past. I know there have been some characterizations of that as being a slush fund or the Schools trying to put money in there to get around the reversion back to the City, but that's not the case. I don't believe that we have ever had a dollar in any fund that we didn't have a plan for, especially with the Athletic Fund, Technology Fund, Textbook Fund; these things all span more than one budget cycle at times. But we have specific plans for those items, so that's something that I would like to see changed. VICE -MAYOR JONES: Patrick, did you have your hand up? BOARD MEMBER SALYER: Yes, Sir. Thank you, Mr. Vice Mayor. This proposal represents a reasonable approach to resolution of an extremely difficult problem over the last couple of years; reasonableness by staff, and now us, the elected members. It goes without saying that we serve the same body here in Virginia Beach but under different capacities and under different legal obligations, and those obligations can't be changed. And by us working together under this agreement with both bodies having buy -in and having say-so in it is far superior to the previous formula. In the final formula inclusions, it looks reasonable. Are there going to be some tweaks? Yes. But the issues that have been suffered, and I use the word "suffered" for a reason over the last couple of years, are now rear-view mirror issues. We're now going into another budget season, and this provides the opportunity for all of us to go forward and to candidly 22 and honestly express our concerns and priorities. I think that one thing that may help in the final formula inclusions is a gas gauge, something on websites, or something that shows the different categories of funding, where they're coming from, where they're going to. And I love the LCI calculation, I do, but if we could show our public where those funds are coming from, how they're being supplied or resupplied and where they're going, I think that would provide for a more open and, the catch word is, "transparent" government. I'm going to support this. I think this is a step in the right direction. I think it has the support of the majority of the elected bodies represented here, and it's a great step forward for us to move forward for Virginia Beach, as a whole. Thank you, Mr. Vice Mayor. VICE -MAYOR JONES: Glenn? COUNCILMAN DAVIS: Mr. Vice Mayor, having been intimately involved with the language around the 4 -cent tax rate adjustment, I wanted to address that for a second. When this was first designed with the rate increase, we had explained to the citizens in Virginia Beach that it was necessary because of the poor economy and the decrease in funding from the State level. Specifically, from the education system alone in Virginia Beach, our School System had taken a reduction over, I believe, it was five years of about $30 million, or six years of about $30 million, and we were trying to cover that gap. And many of us had gone out to the public to explain the need for that 4 cents to help cover that gap in education. But we had also told them what fiscally responsible bodies should tell the citizens, which is when the economy recovers and the State gets more money and they start filling that bucket again, that money will then be reverted back to the citizens and offset that rate adjustment. That was something that was passed down to the School Board leadership that we were going to do. And in our City budget, our City Manager is directed annually to tell us what the LCI adjustment is, if it has been readjusted. And then, if there is additional funding from the State over this fiscal year, that money then comes to the Council because it's a net zero sum scenario to the Schools. And the City Manager is directed to utilize that money to decrease the Real Estate Tax adjustment that was passed in this fiscal year. So, the twenty-two of us have done something that most elected bodies don't do, which is sunset a rate increase when it's no longer necessary for the reasons you gave the tax payers to begin with. 23 VICE -MAYOR JONES: Yes, John? COUNCILMAN MOSS: Thank you, Vice Mayor. I just want to re -visit the funding formula for a moment. I certainly would agree that the funding formula provides a stable basement of funding. But if anyone thinks we have a $35 million shortfall for the '13-'14 budget that the Superintendent won't be as equally challenged to balance without $35 million without cutting things that were near and dear to all of our hearts like last time, I think all of us would be operating a land that doesn't exist because you'll have that very same -- as a matter of fact, I'd be going back to the same slides just buffing up the numbers, because I'm sure, roughly speaking, that's how he would balance. And then in turn, all the people watching those things, that's what I would do, if I were in your shoes. I'd look at that whole list and I'd say, "Oops, here's how I back down to the revenues I got. Okay, assuming we're still getting $4.5 million per penny"; but we don't do the City's budget on formula, I can assure you, at least not the ones I work on. And we would have to have about a 7.8 -cents Real Estate Tax increase to cover that $35 million shortfall for the things that Dr. Merrill would tell the Board they couldn't fit within the basement. So, I will concur that the funding formula will give stability. It will also give you a good out -sight. You can start planning now on your $35 million of reductions, and you could attach that to your tax increase resolution. And what that does is obviously Council doesn't have to raise taxes. I hope we would go in and try to find things to cut on the City side that were lower priority, but there will be as much tension on that $35 million list as there was last year. Friction is inherent to a difference between the money you have and the money you want, and you have to take it from someone else. And I remember in one of our Informal Sessions, it was the Vice Mayor who said, "You know, it doesn't make much difference whether we have a funding formula or we don't. The School Board is going to need at least the amount of money that they had last year;" because that's the minimum basic level of funding to provide, I would call my business, the readiness of education. You can't do it for much less. So, it's just a question of are we going to raise real estate taxes, as you'll ask us to do, or will the Council have to go back and look for other places to cut? But the tension represented by that $35 million, unless we really get lucky 24 with the growing economy, that tension will not go away. It will be in the same place it was last year, and we're fooling ourselves if we think this is some kind of a revenue peace accord in the community because the tension remains. VICE -MAYOR JONES: Anybody else? I think the Chairman would -- Bob? COUNCILMAN DYER: Yes, thank you. My colleagues, I think this is an opportunity for communication, collaboration, and cooperation that we really need between our two bodies. In terms of tension, there's two types of tension. There's creative tension and destructive tension. I think we need that creative tension between us now to go forward and do the right thing. That being said, I think Carolyn made a point about us, we just get together periodically and there's a gap in-between. I think one of the ways that we could simply build some bridges between us is that every member of each body has a counterpart. Dan Edwards has been my counterpart for the last eight years in Centerville, and we've met frequently. We talk on the phone. We get together for breakfast. We have hopefully a little better understanding about building some bridges, so maybe just as a habit we get in the habit of picking up the phone and maybe meeting with somebody. John meets with the person from the Beach District, Sam, right there, there you go. And once again, I think if we have an understanding, we're both in this fiscal boat together that's coming down. We are both facing this economic tsunami that's coming to us next year. And I think if we have this understanding between us, and I understand a little bit better what the School needs are, and the Board knows what we're facing as a City to keep viable, that this just might be a simple way as we go forward to build some more bridges and close the gap and make sure this is less contentious a process as it was last year. VICE -MAYOR JONES: We've got a meeting starting at five, but, Dan, I think you wanted to make some comments? CHAIRMAN EDWARDS: Very quickly, I don't think the Board's role is to be an unfettered advocate. We are elected by the same people you are, and we need to provide the best education we can within a reasonable amount of resources from which we will extract from those people that put us in office, and we need to be sensitive. 25 The fact that we have to ask and we've kind of glossed over the wording, the wording is we asked you for funds, and if and only if you cannot find it within existing resources, then we suggest you consider a tax increase. The Council will always drive that process, but if we weren't required to do that, you do turn us into an unfettered advocate. If we are completely insensitive to taxation and resources coming from our citizens, then frankly our role is not much different from the PTA. But we're put in office to ask for a reasonable amount of resources to provide a great world-class education. The other thing which has sort of been missing in our discussions, and I think it's because the two Jims truncated their presentation, appropriately because frankly this discussion I think was more important, but the basic SOQ funding is pulled out before we do all of this, and the things that are in that SOQ funding are also big variables. The SOQ positions and the local funding piece for those positions, including VRS adjustments, I believe, are in the SOQ, which is pulled out ahead of time before we then take the balance, the discretionary piece, put it out. So, that's pretty significant. We've got the LCI fixed. We've got a partial adjustment that's going to address some of the big variables like VRS and things like that. So, is it perfect? No. But I agree with Bill's assessment, it's pretty phenomenal. And the things that were ignored, including the downside stuff on enrollment and things like that potentially that you all on the Council have looked at wanting to have cranked in there and the things that we wanted in there. So, I thank the City Manager and the Superintendent. And I agree with Bobby's comment on more dialogue, whether we do it one-on-one or get together more frequently or provide you position briefs on "these are issues coming forward", maybe. Or other things that you could read that we just need to get, things that we're talking about need to get, in front of you earlier on. So, Mr. Vice Mayor, thank you. VICE -MAYOR JONES: Just before we leave, I'd just like to make a couple of comments. I'm very grateful to the City Manager and the Superintendent for the work that they've done. I think they've done a phenomenal job putting together what they have and the decisions that they've made. I think I can speak for the entire Council if I say that we are just as committed to the educational system of Virginia Beach as you are. And it is our intent to make sure that the educational system in Virginia Beach not only stays at Number 5 but goes up. And hopefully one day we'll be 26 Number 1. And I think we are open to any suggestions or ideas that the School Board has to enhance and improve the School System in Virginia Beach. And the judgment as to what those enhancements might be is going to have to be jointly between the School Board and the City Council and what funds are available and how we can make those funds available. So, with those comments, we look forward to working with all of you in the coming year. And I hope that when we get to the real budget process that we can all work together and make everything happen in a satisfactory way. The meeting is adjourned. (Whereupon, the discussion of this matter was concluded.) Included in Packet — 1. A copy of the briefing that was provided on December 6, 2011 2. A draft copy of the proposed policy to guide the formula calculation 3. A summary of how the formula would have worked if it had been used for the current Budget 4. AVERY preliminary projection for the upcoming FY 2014 Budget 5. Composite Index of Local Ability -to -Pay Formula 6. Projected FY 2013 and FY 2014 State Payments - State Department of Education (Attachment D to Superintendent's Memo No. 102-12 dated April 19, 2012) 7. History of the Composite Index for past Biennium UO LL u 0 u L) • elk N OOW-%% a-J • 4-+ -J 4-J i c6 y- .- :3 LAf c �- . — 0) _� -0 a) .— • — �, • - v O O -0•N 00 = v c� V p 4-Jo V O . N u CL 1,0 �CL cn � Q 4- cn ((.00 •- T L U b. 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CL =3 LO V) -, 0 E 4-1V m%%"moo CD • • • •rN-1 S4G1NIA-$C'�L O4 CityCouncil and v School Board Policy Title: City/School Revenue Sharing Policy Index Number: Date of Adoption: Date of Revision: Page: 1 of 5 1. Purpose: 1.1. This policy is to establish a procedure for allocating to the City and to the Public School System revenues estimated to be available in any given fiscal year. It is the intent of this policy to provide sufficient funding to maintain Virginia Beach Public Schools' academic success as well as the City's strategic goals. 1.2. This policy is designed to accomplish these goals by providing better planning for school funding by clearly and predictably sharing local revenues. It provides a balance between the funding requirements for School and City programming. This policy seeks to provide a diverse stream of revenues that mitigates dramatic changes in the economy by relying upon all local tax revenues that are under the City Council's control rather than a subset of those revenues. It also recognizes decisions by the City Council to dedicate some of these same revenues to city and school priorities outside of the formula. This policy seeks to rectify some of the concerns with the past formula by linking city funding to schools directly to the State Standards of Quality (SOQ) which periodically takes into account changes in student enrollment, true property value, adjusted gross income, taxable retail sales, and population. 2. Definitions: 2.1. City refers to the City of Virginia Beach exclusive of the Virginia Beach City Public School System. 2.2. Schools refer to the Virginia Beach City Public Schools. 2.3. Local Tax Revenues refers to all General Fund non -dedicated local taxes (Real Estate less dedications for Schools, Transportation and Outdoor Initiative; Personal Property; General Sales; Utility; Utility - Consumption; Virginia Telecommunications; Business License (BPOL); Cable Franchise; Cigarette less Page 1 of 5 dedication for Economic Development Incentive Program (EDIP); Hotel Room; Restaurant Meals; Automobile License; Bank Net Capital; City Tax on Deeds; and City Tax on Wills) 2.4. Dedicated local tax refers to taxes that have been specifically obligated by the City Council or state law to support specific projects or programs. Examples of dedicated local taxes that are excluded from this policy include, but are not limited to, taxes collected within Tax Increment Financing Districts or Special Services Districts; taxes established to support Open Space; Agricultural Reserve Program; Outdoor Initiative; Economic Development Incentive Program; Tourism Advertising Program; Tourism Investment Program; referendum related taxes; or taxes used to support the BRAC project. 2.5. Revenue Sharing Formula refers to the method of sharing local tax revenues between the City and the Schools. 2.6. Budgeted local tax revenues refer to the appropriation of revenues by City Council in May each year for the upcoming fiscal year beginning July 1. 2.7. Actual local tax revenues are the actual collected revenues reflected in the Comprehensive Annual Financial Report (CAFR). 2.8. School reversion refers to unused expenditure appropriations and end of the year adjustments to the Revenue Sharing Formula revenues based on actual collections. 3. Procedure to Calculate the Revenue Sharing Formula: 3.1. Initial Estimate 3.1.1. In October, Management Services will provide an estimate of local tax revenue for the upcoming fiscal year. 3.1.2. The Required Local Match calculation - Using the SOQ for each of the State Biennial years, Management Services will deduct this amount from the projection of local tax revenue and set it aside as the first step. 3.1.3. Discretionary Local Match calculation - Management Services will then allocate to Schools 32.37% of the remaining local tax revenues. In FY 2012-13 Operating Budget the City Council increased the real estate tax rate by four cents and dedicated it to the School's Operating Budget. This dedication amount will be added back to the Schools Discretionary Local Match. This dedication shall exist until such time as the State restores funding through a decrease in the Local Composite Index below the FY 2012-13 level of 0.410. The City Council has directed the City Manager to recommend as a part of the Proposed Operating Budget reductions in whole or in part to the four cents dedication in an amount roughly equal to the increased State funding. Page 2 of 5 3.1.4. The combination of the required local match and the discretionary local match shall comprise the total local contribution to the Schools. 3.2. Final Estimate 3.2.1. In February, Management Services will provide a final estimate of the local tax revenues. These will be the estimates to be included in the Proposed Operating Budget. 3.2.2. Required Local Match calculation - By February the final SOQ required local match should be known from the State Department of Education and this figure will be used to set aside the first allocation of revenues. 3.2.3. Discretionary Local Match calculation - Management Services will then allocate to Schools 32.37% of the remaining estimated local tax revenues. 3.2.4. The combination of the required local match and the discretionary local match shall comprise the total local funding contribution to the Schools under the Revenue Sharing Formula. In FY 2012-13 Operating Budget the City Council increased the real estate tax rate by four cents and dedicated it to the School's Operating Budget. This dedication amount will be added back to the Schools Discretionary Local Match. This dedication shall exist until such time as the State restores funding through a decrease in the Local Composite Index below the FY 2012-13 level of .0410. The City Council has directed the City Manager to recommend as a part of the Proposed Operating Budget reductions in whole or in part to the four cents dedication in an amount roughly equal to the increased State funding. 3.2.5. Estimates of the revenues contained in the Revenue Sharing Formula shall be clearly presented in the Operating Budget. 4. Procedure to Request an Increase in the Discretionary Local Funding Match: 4.1. The School Board shall notify City Council, based on the Superintendent's Estimate of Needs if they determine a need for additional local funding to maintain the current level of operations or to provide for additional initiatives. This Resolution shall state the amount of the School Board's requested increase in real estate taxes, the purpose for which the additional funding is needed along with the total amount of funding required and shall clearly articulate the School Board's willingness to support the requested Real Estate tax increase if City Council determines that is required. 4.2. If the City Council determines that additional funding is warranted to maintain the current level of City and School operations or to provide for additional initiatives, the City Council shall determine appropriate action. This action may include consideration of existing dedications, or alternative sources Page 3 of 5 of revenue or tax increases. If after deliberation and appropriate public involvement the City determines that additional tax revenues are required, City Council may adopt a tax rate increase to any revenue stream within this formula to generate additional local tax revenue. 4.3. Any increase or decrease in a local tax rate shall become part of the City/School Revenue Sharing Formula unless directed otherwise by the City Council. 5. Actual Revenue Collections deviate from Budget Local Tax Revenues: 5.1. If at the end of the fiscal year, the actual revenues exceed the budgeted revenues, the amount of excess shall be shared by the City and Schools in the same manner as they were shared for that fiscal year, provided that such excess revenues shall only be shared after the necessary resources to meet the City Council's General Fund Balance Reserve Policy have been determined and fulfilled. 5.2. If, the City anticipates at any time during the fiscal year that actual revenues will fall below budgeted revenues, the School Board, upon notification by the City Manager of such an anticipated shortfall, will be expected to take necessary actions to reduce expenditures in an amount equal to the School's portion of the shortfall. 6. Reversion of Formula Revenues: 6.1. All other sources of funding shall be expended by the Schools prior to the use of local tax revenues. 6.2. All balances of local tax revenues held by the Schools at the close of business for each fiscal year ending on June 30th (to include the accrual period) lapse into the fund balance of the General Fund. 6.3. At the end of the fiscal year, actual debt payments for the year will be compared to estimated (appropriated) payments. If the actual debt payment exceeds estimated debt payments, the amount of School reversion will be reduced by this difference. If actual debt is less than estimated debt payments, the amount of School reversion will be increased by this difference. 6.4. The School Board may request by resolution the reappropriation of these funds in the subsequent fiscal year to Schools for one-time purchases or to retain according to the policy on the School Reserve Fund (fund number 098). 6.5. Before any reappropriation of funds by City Council, Management Services shall verify that there is sufficient fund balance in the General Fund to meet the City Council Fund Balance policy. 6.6. If there is sufficient fund balance, Management Services shall prepare an ordinance for City Council's consideration of the School Board's reversion request at the earliest available City Council meeting. 6.7. If there is insufficient fund balance according to the Fund Balance policy, the City Manager shall notify the School Superintendent of this condition. Page 4 of 5 6.8. Following City Council's action Management Services shall notify the Schools of the City Council's decision and shall adjust the accounting records accordingly. 7. Revision to the City/School Revenue Sharing Policy: 7.1. The School Superintendent, City Manager, School Chief Financial Officer, and the City's Director of Management Services shall meet annually to discuss changes in State and Federal Revenues that support School operations, any use of "one-time" revenues, and any adjustments made to existing revenues affecting this formula. If they determine an adjustment is needed the City Manager and Superintendent will brief the City Council and School Board respectively. 7.2. City Council may revise the policy at its discretion after consultation with the School Board. 7.3. If no other action is taken by the City Council and School Board this policy shall remain effective until June 301h 2015 at which time it will be reviewed and considered for reauthorization. Approved As to Content: Dr. James G. Merrill Date School Superintendent James K. Spore Date City Manager As to Legal Sufficiency: Date Mark D. Stiles City Attorney Approved by School Board: Date Daniel D. Edwards School Board Chairman Approved by City Council: William D. Sessoms, Jr. Date Mayor Page 5 of 5 Attachment # 3 SUPERINTENDENT AND CITY MANAGER FORMULA CALCULATION: 25 Dedication to Schools Qf4 centsof Real Estate Tax 26 Subtotal Formula Contribution 19,200,000 376,250,328 These are one time uses in the FY 2013 Budget 27 School Board Decision to move Sandbridge Surplus to Budget 2,000,000 28 Council Decision to provide General Fund Balance 9,200,000 TOTAL GENERAL FUND NON -DEDICATED LOCAL TAXES: 1 Real Estate 438,975,636 2 Less: Schools & Transportation Dedication (28,800,000) 3 Less: Outdoor Initiative Dedication (2,264,682) 4 Personal Property 132,412,895 5 General Sales 54,098,252 6 Utility Tax 24,130,908 7 Utility Tax - Consumption 1,569,489 8 Virginia Telecommunications 19,279,076 9 Business License 42,423,932 10 Cable Franchise 7,527,233 11 Cigarette - General Fund Only 11,218,625 12 Less: EDIP Dedication (2,243,725) 13 Hotel Room 5,622,146 14 Restaurant Meals 35,146,135 15 Automobile License 9,627,435 16 Bank Net Capital 3,180,790 17 City Tax on Deeds 5,912,533 18 City Tax on Wills 70,000 19 Subtotal Local Taxes less dedications 757,886,678 20 General Fund Revenue - local non -dedicated taxes only 757,886,678 21 Less Required SOO MatchS5t3 X6,525 22 592,690,153 23 32.37% 24 Discretionary Loca Match 191,853,803 25 Dedication to Schools Qf4 centsof Real Estate Tax 26 Subtotal Formula Contribution 19,200,000 376,250,328 These are one time uses in the FY 2013 Budget 27 School Board Decision to move Sandbridge Surplus to Budget 2,000,000 28 Council Decision to provide General Fund Balance 9,200,000 rn � N l0 N M N 111 O 00 to Ln M 00 I� 00 00 M Ln ao N Lf1 M N Ci, O Ln .T-1-1 o a1 v �-1 N +� Q x LU a E T-4 W N d LL N LUL m N W N N N _O 1Z E 41 N C f6 !Z N H W O H O " Z O O O O 1Z N 000 Ln l0 N O O O 01 O Oa1 O O O M00 O O O LO O O 00LO N 0 O O O LO O O 0)LnOO tN N W r- NOO' m �W cn� 00 - 00 00 .-1 1z 01 r1 O O O t0 ai e-1 M rl Ln N a) O O O 00 M a1 00 N rl� r -I M O O Ln 1� n LI) W al O O O Ln 1- 00 Ln 00 al O LO O U o0 00 N 00 W Z, O 00 Ol r -I a -I v a -i l0 01 Cj' N a 4 RT aa) Q1 a1 0 sm 0 i N as v m M � 0 � O O rI O O O Ln r^ -I ccn -1 r 1 O O O 0) d O M O O o0 N O O O Ln M T r, O O a) tD O' O 00 m a) 00 O O Ln 00 O O O LO .-1 M O O O N o0 M ri O M r r-4 v v V n r-1 t0' a i LO N v LO r -I W dwo N L d O C 0 O � N N co F: U � O � N LL t O � U �' a_+ _ m� a u m m� i fO ) £ ° o 2 a d t0 H C u U v O CO U x w O L L u OC N (0 a C C 10 E L N G� j > 4O N a) N C fd LL LL O L. 3 � _O a ,LA 4N go m LL N f0 m J O ++ '8 '� E m = � 7 LL C 'p O O O 0) N on C 01 O N C N U O T D 41 11 C N U h L �..� m o_ d _ I , Li cn x O ar U N a� Ln O1 p C C W O V) m fN0 O M C "+3 O L t N M N CL O 01 > N Q C t (U U 00 > U V o U N N t7 Ln Ln Ln � N ° 1�1 3 •—+ E (U w N Z N U 0OC IL LCL LCL rn � N l0 N M N 111 O 00 to Ln M 00 I� 00 00 M Ln ao N Lf1 M N Ci, O Ln .T-1-1 o a1 v �-1 N +� Q x LU a E T-4 W N d LL N LUL m N W n. CO W cO vJ CO CO cu Cl) C C Ncu 1.L ryC13 LL D O 13� O 0¢ N O N O :5 U 0 _OQ O z a X c4 t� a x X 0 Vi }— 0 LL' U cu L + Nt x J E CD E a) E a E. ,... U U O U O O C C C C C C O- co U u1 N O 2 co N O N 2 cu O U a C7 Q C� Q � C� a c m m V N o m a O AN O C G COJICL co U) O v N N ca LLS. O Q -p Q -0 J Q -0O Q O 0 tII. (B X Q J (� _ fn U J ca A M M Z-. a I I I + N y m p O -0 C C f1 E = o U Q >' >O >0 co o C�_ > co � o 2 0 Q Q C ::3> � O � O E Q O x m O co U 0 L > 0 � 0 p 0J �� I I LO I n. ATTACHMENT D to Supts Memo No. 102-12 April 19, 2012 Projected FY 2013 and FY 2014 State Payments, Based on the Amendments Adopted in the 2012 Special Session I of the General Assembly to the 2012-2014 Biennial Budget as Introduced (HB 1301) Standards of Quality (Soo), Incentive, Categorical, and Lottery -Funded Programs in Direct Aid to Public Education - As of April 18, 2012 ..� ,, _„ Projected FY ?073 Projected FY 2013 Unadjusted ADM2 Adjusted ADM2 Projected fY.$014, Prajeeited FY 2014 Unadjusted ADMz- Adjusted ADiNz NUM DIVISION ' 128 VIRGINIA BEACH CITY 68,961.10 68,961 10 68,833 451- 68 833.45 51 EpiPen Grants 14 8,370 2012-2014 Cam oslte Index FY 2013 FY 2014 0.4110 FY 2013 State Share FY 2013 local Share FY 2014 State Share FY 2014 Local Share Standards of Quality Programs: 436,4001 5,624,7481 436,400 N/A1 c� Basic Aid 168,057,311 117,269,193 166,133,363 115,926,676 Sales Tax 7 69,064,589 N/A1 71,743,893 N/A1 Textbooks e 3,057,323 2,133,379 3,376,413 2,356,037 (Split funded - See Lottery section below) t�> Vocational Education 2,518,321 1,757,267 2,513,660 1,754,014 c:� Gifted Education 1,868,432 1,303,779 1,864,973 1,301,365 E:� Special Education 18,481,230 12,896,071 18,447,020 12,872,199 c:� Prevention, Intervention, & Remediation 3,330,683 2,324,127 3,324,518 2,319,825 4> VRS Retirement (Includes RHCC) a 16,815,888 11,734,007 16,784,761 11,712,287 4> Social Security 10,073,286 7,029,067 10,054,640 7,016,056 a� Group Life 649,889 453,488 648,686 452,649 Remedial Summer School 5.10 1,173,172 N/A1 1,210,783 N/A1 Subtotal - SOO Accounts' 295,090,124 156,900,3781 296,102,710 155,711,108 Academic Year Governor's School 4 0 N/A1 0 N/A1 Additional Assistance with Retirement, Inflation 3,479,228 N/A1 3,442,748 N/A1 & Preschool Costs 13 N/A1 American Indian Treaty Commitment 5 0 EpiPen Grants 14 8,370 N/A1 Not Funded in FY 2014 Technology - VPSA 6 2,182,000 436,400 2,182,0001 436,400 Subtotal - Incentive Accounts 3 5,669,5981 436,4001 5,624,7481 436,400 r f r I Pro rams Adult Education 5 59,977 N/A1 59,977 N/A1 Virtual Virginia 5 0 N/A1 0 N/A1 American Indian Treaty Commitment 5 0 N/A1 0 N/A1, School Lunch 5 298,916 N/A1 298,916 N/A1 Special Education - Homebound 5 55,766 N/A1 57,718 N/A1 Special Education - State -Operated Programs 5 955,126 N/A1 1,018,807 N/A1 Special Education - Jails 5 241,894 N/All 277,120 N/A1 Subtotal - Categorical Accounts 3 1,611,679 01 1,712,538 0 ATTACHMENT D to Supts Memo No. 102-12 A..-:1 nn -- Projected FY 2013 and FY 2014 State Payments, Based on the Amendments Adopted in the 2012 Special Session 1 of the General Assembly to the 2012-2014 Biennial Budget as Introduced (HB 1301) Standards of Quality (SOQ), Incentive, Categorical, and Lottery -Funded Programs in Direct Aid to Public Education - As of April 18, 2012 Lottery -Funded Pro rams Foster Care 5 548,362 N/A1 573,250 N/A1 At -Risk 1,954,938 1,364,142 1,951,701 1,361,883 Virginia Preschool Initiative 17 3,809,652 2,658,348 3,799,050 2,650,950 Early Reading Intervention 809,123 564,600 917,620 640,309 Mentor Teacher Program 29,356 N/A1 29,356 N/A1 K-3 Primary Class Size Reduction 3,036,295 2,118,705 3,030,517 2,114,673 School Breakfast 5 221,010 N/A1 246,616 N/A1 SOL Algebra Readiness 466,897 325,797 466,897 325,797 Alternative Education 4, 5 0 N/A1 0 N/A1 ISAEP 62,869 N/A1 62,869 N/A1 Special Education -Regional Tuition 4, 5 8,104,869 N/A1 8,139,579 N/A1 Career and Technical Education 4,5 328,986 N/A1 328,986 N/A1 Supplemental Basic Aid 0 N/A1 0 N/A1 English as a Second Language 12 599,483 418,315 622,662 434,489 Textbooks 6 (Split funded - See SOQ Programs above) 587,338 409,840 261,502 182,474 Subtotal - lottery -Funded Programs'1 20,559,1781 7,859,747 20,430,6051 7,710,575 Total State & LocalFunds $322,930,580 $165,196,525 $323,870,602 1 "N/A" = no local match required for this program. 2 ADM values shown are based on the March 31 ADM projections used in the General Assembly Budget for FY 2013 and FY 2014. 3 Columns may not add due to rounding. 4 Includes state funding for regional vocational, special, and alternative education programs and Academic Year Govemors Schools. 5 Projected state payment. Final payments will be based on actual expenditures, up to the projected state payment, subject to the availability of funds. 5 Payments for the VPSA Technology Grants are made from bond proceeds and will be made, on a reimbursement basis, after each bond sale. 7 Projected revenue estimate. Semi-monthly payments will be based on actual sales tax receipts. Pursuant to the appropriation act, the Basic Aid state payment calculation is based on the appropriated sales tax distribution and is not adjusted for actual sales tax revenues received. 6 The General Assembly assigned a portion of funding for Textbooks to the Lottery Service Area. Required Local Effort for Textbooks is based on the combined payments in the SOO and Lottery Service Areas. 9 VRS Retirement includes payments for the Retiree Health Care Credit (RHCC). Please see the Budget Variables tab for the funded RHCC rate. 10 Projected payments for Remedial Summer School are based on the enrollment projections used in the General Assembly Budget for FY 2013 and FY 2014. 11 Projected payments for the Virginia Preschool Initiative are based on the enrollment projections used in the General Assembly Budget for FY 2013 and FY 2014, 12 Projected payments for English as a Second Language are based on the enrollment projections used in the General Assembly Budget for FY 2013 and FY 2014. 13 The Additional Assistance with Retirement, Inflation & Preschool Costs account provides $55.0 million in FY 2013 and FY 2014 in one-time allocations for additional assistance to school divisions to support increased retirement employer contribution rates, inflation costs, and one-time costs associated with Virginia Preschool Initiative programs. 14 EpiPen Grants are based on $98.47 per school for all public schools, including district centers. = SOQ accounts requiring a local match for purpose of meeting Required Local Effort. BOLD = Account funding based on ADM; any changes in ADM numbers will result in a chane in the state oavment amount. X u1 kD m d m N ct 0 0 O d N lD N m Ln M O lD Q 'C tRctLn m m Tt� O E m m m m m m m U E 00 O N d lD 00 O 3 01 O O O O O r1 0 C ob O O O e0 ��•+ 061 O O O N Vf t�J Q1 D1 O O O O O� r-I e-i N N N N N O N -3 - VIRGINIA BEACH CITY COUNCIL Virginia Beach, Virginia October 2, 2012 Vice Mayor Louis R. Jones., called to order the CITYMANAGER'S BRIEFING, re DEVELOPMENT AUTHORITYANNUAL REPORT in the City Council Conference Room at 5:13 P.M. Council Members Present. Glenn R. Davis, William R. "Bill" DeSteph, Harry E. Diezel, Robert M. Dyer, Barbara M. Henley, Vice Mayor Louis R. Jones, John D. Moss, John E. Uhrin, Rosemary Wilson and James L. Wood. Council Members Absent: Mayor William D. Sessoms, Jr. October 2, 2012 -4 - CITY MANA GER'S BRIEFING DEVELOPMENT AUTHORITY ANNUAL REPORT 5:13 P.M. Vice Mayor Jones introduced and welcomed Elizabeth A. Twohy, Virginia Beach Development Authority — Vice -Chairman. Ms. Twohy expressed her appreciation to City Council for their continued support. The Briefing is incorporated and made apart of this record. Ms. Twohy stated this past year's accomplishments of the Development Authority are "BIG and BOLD in an effort to bring investment to the City. During Fiscal Year 2012, forty-seven (47) business announcements, representing more than $122 -Million Capital Investments and the creation of over 1,000 jobs were created in the City. 81 % of the announcements came from the Authority's targeted industry sectors, 8.5% being Small, Women and Minority owned companies and 15% from international companies. City Staff worked hard to ensure economic growth in the business community. In 2011, City Council took two bold steps to help increase business growth: eliminating the Machinery and Tool Tax and capping the Business License Fee for new companies for the first three (3) years of operation in the City. Also, YESOCEANA has become a national model so local governments can effectively partner with the Military to identify and protect shared interests. The City acquired the London Bridge Commerce Center, an 18 acre park, for companies that are compatible with the APZI Program. In 2002, the City opened the Advanced Technology Center. This past year, nearly 2,200 students received their Workforce Readiness Skills certifications. This plays an important role in attracting new businesses to the City. Also, in 2011 the GROWSMART program was placed in the Economic Development Department in an effort to reduce the number of kindergarten students requiring reading remediation. Additionally, in 2011, $6.1 -Million in tax revenue was generated to fund City Operations. In FY 2012, four major new construction projects began in the Princess Anne Commons Corridor. The Authority is responsible for a variety of assets in addition to its Business Park, including the Farm Bureau Live Virginia Beach Amphitheater, Virginia Beach National and the Sportsplex. The success of the Authority is a direct reflection of its three (3) year Strategic Plan. Four key initiatives have been identified for October 2, 2012 -5 - CITY MANAGER'S BRIEFING DEVELOPMENT AUTHORITY ANNUAL REPORT (Continued) continued success: Economic Gardening Program, International Consultant, Permitting Process and Transportation. The Authority is completing the evaluation of the proposal received from Comcast-Spectacor and LievNation for a state-of-the-art Arena. This partnership meets two (2) of the most important components of the Resort Area Master Plan by making the Resort Area a "year-round" destination and creating new business and job opportunities. Ms. Twohy again expressed her appreciation to the Mayor, City Council, City Manager and the entire Stafffor their continued support of the Development Authority. Vice Mayor Jones expressed his appreciation to Ms. Twohy and the entire Development Authority for their continued work and support of the City. October 2, 2012 r►G s B le Li IV. I {j D—n I:; ' J,16c 1. . a ... — T�i' _..« '.^✓:.. -.—.._ .... ':r--` x._... VIRGINIA BEACH DEVELOPMENT AUTHORITY J,F V:. RPdeon f,, Li IV. I D—n I:; ' J,16c 1. E) h. 2,,d v: ell ` P�:rott Sh,•--od C r,L,. -'I 6arthole­ew. J,. l - _ 0,thp L Mood l hr.onJ O. F. r.ench M61�H11LU In FY 12, Virginia Beach businesses GREW BIG: 11 "WE GREW 100% pnr IM P,,M —years F YWo- amm erp vre are x..,i m awda �2^ - 47 project announcements 81% within target industry sector 8.5%SWaM companies 15% international companies 122 million new capital investment - 1.000 new jobs -900 jobs retained gIG�{�[CrCr� RUE 47 marketing missions, special events, trade shows - 802 existing industry calls 1.500 participants in SWaM programs 450 participants in SCORE counseling sessions - 80 Virginia Beach entrepreneurs assisted by "ft-Bbeh MN MMWar eaMvy vdlh.n IDEAL LOCATION SBDC FOR GROWTH. - 12.1 million impressions from Google The WPW -1. rim b SWaM WW— h- WpW ua 1'.p+. an sake vs'ume [ea :Ia; keyword campaign & targeted web banners - 15 targeted email blasts 10/2/2012 2 YESOCEANACOM PhP."i':J IN G TO PRISIRVE OUR OU\LITY 0- JPE ANA - New DAVCON, Inc. building HIM - Acquisition of 18 acre London Bridge Commerce Center - Eliminated 40,000 sf of non- conforming retail/office space (13% reduction in APZ-1 commercial non -conforming inventory) - Opening of BMZ GmbH, first international company to locate US headquarters under APZ-1 program 10/2/2012 3 B I ¢110#�� BOLD YESOCEANACOM PhP."i':J IN G TO PRISIRVE OUR OU\LITY 0- JPE ANA - New DAVCON, Inc. building HIM - Acquisition of 18 acre London Bridge Commerce Center - Eliminated 40,000 sf of non- conforming retail/office space (13% reduction in APZ-1 commercial non -conforming inventory) - Opening of BMZ GmbH, first international company to locate US headquarters under APZ-1 program 10/2/2012 3 We're bean in Vilnia Beach for X years, and fo If ETT BENEFITTED ROe the military and the diverse populat w- :inu In 2002, the Virginia Beach Advanced Technology Center opened. In FY11/12: - Nearly 400 use -days by existing industry for employee training - Nearly 2,200 Workforce Readiness Skills certifications - Over 5,300 industry -recognized certifications for Virginia Beach Technical & Career Education students In FY 11/12 Virginia Beach GROWSMART program for early childhood development initiatives was placed in Economic Development: - SBDC Partnership Project: - Kindergarten Transitions 1,150 children impacted 24 new jobs created in childcare centers only 9% of kindergarten students requiring reading remediation (down from 21% in 2003) 10/2/2012 4 i IG H11LU Virginia Beach Town Center N In FY 12, four major new construction projects began in the Princess Anne Commons Corridor. - $6.1 million in tax revenues were generated to fund City operations (FY11) - Old Dominion University announced location of its new Center for Innovative Transportation Solutions - Yardhouse opened a 10,000 sf restaurant, its first in Virginia - Havana Nights restaurant, jazz & cigar club opened Delta Career Education opened their new 8,800 sf headquarters offices LifeNet Health New S21 million Center for Regenerative Medicine will open this Fall Tidewater Community College Started construction on new 89.500 sf Student Life Center scheduled to open Spring 2013 Tidewater Community College Construction on new $53 million/120.000 sf Joint Use Library nearing completion Operation Smile New 20 million global headquarters under construction 10/2/2012 5 The Virginia Beach Development Authority is responsible for a variety of assets in addition to its business parks, including the Farm Bureau Live Virginia Beach Amphitheater, Virginia Beach National, Virginia Beach Sportsplex. Virginia Beach National generated more than $198,000 in rental income with nearly 31,000 rounds of golf played (CY 11) Farm Bureau Live at Virginia Beach attracted more than 235,000 attendees for 21 live events, generating $1.26 million in new revenue for the City. Just over 75% of all tickets sold were to non -Virginia Beach residents (according to LiveNation sales records). Virginia Beach Sportsplex attracted more than 479,000 attendees for 281 events. Field Hockey National Training Center attracted nearly 164,000 attendees for 93 eve nts. Princess Anne Athletic Complex hosted 97 events for 405,000 attendees. �i1; �`i I F14 R. HIIIU 10/2/2012 2 Economic Development 3 -Year Strate is Plan Update Strengthen City's position relative to global, national and local economic realities j- Revised Target Industry Clusters: -Professional, Scientific &Technical u I was born and raised In New York, W for me, Virginia Beach �i Services MADE THING S - Information Services P SI [ BI.i - High-performance Manufacturing & It was the perfectNasfar asmybusiness - Company Enterprise Management needs and raising my family." - Defense/Security, Maritime, & Retail 10/2/2012 2 BIG[ Vail' BOLD Key Initiatives - Economic Gardening Program: providing intensive consulting resources to existing high-growth potential companies - International Consultant: to promote Virginia Beach on a daily basis to European companies in search of a new business location in the United States - Permitting Process: working with other City departments to identify ways to continually improve our ability to help companies conduct business - Transportation: identify and support improved transportation infrastructure for the movement of goods and people 31GTHING'S BOLA Virginia Beach Arena Initiatives_ _, - Continue and complete necessary due diligence of the proposal by Comcast-Spectacor and LiveNation to create a state-of-the-art 18,500 seat arena in Virginia Beach - Continue to implement City Council's approved Resort Area Master Plan that establishes a year-round destination - Create new business and job opportunities while providing enhanced quality of life amenities for the City and Commonwealth 10/2/2012 7 ash! ulliit .. .. t- �. :+.'"_. .:� - - ._, "i �'vY°+vF'•-ter. - _ . w.r -0 11 tr ? Upcoming Parks and Natural Area Projects City Council Briefing October 2, 2012 Michael J. Kalvort, CPRE, Director of Parks and Recreation Brian Solis, P & R Planning, Design & Development Administrator Providing Public access Recreational Irroprovernents t Open Space e uislt-ion Sites ■ From Past Open Space Acquisitions to Public Access and Outdoor Recreational Improvements ■ Pending Land Use Applications for City Council's consideration in November 2012 • Implementation of Virginia Beach Outdoors Plan Recommendations, Public Involvement and Overall Project Updates for: ■ Lake Lawson and Lake Smith Natural Area • Marshview Park ■ Pleasure House Point Natural Area -7 - CITY MANAGER'S BRIEFING PARKS AND NATURAL AREAS PENDING PROJECTS (Continued) Mr. Solis advised two (2) Planning Applications will be on the Agenda for consideration in November. The first project, Lake Lawson and Lake Smith Natural Area, located just off of Northampton Boulevard: Below is an aerial view of Lake Lawson and Lake Smith Natural Area: October 2, 2012 Lake Lawson-Lakeith NaWrai ,area Over forty (40) wooded acres located on Shell Road/Northampton Blvd. on Lake Lawson and Lake Smith Reservoirs in the Bayside area • Acquired in three phases from Cita of Norfolk - 2005-2009 • Stimulated by Friends of Lake Lawson & Lake Smith coalition of area civic leagues • Virginia Land and Water Conservation Funding grant Extensive Public Involvement Process in Developing the Natural foea Master Plan • Two Public Open Houses — Fall 2009 and Winter 2010 • Numerous meetings with neighborhoodJciric organi-at5ons over past four (4) years about Master Plan and Its implementation Street closure application to vacate interior "paper" streets and lot lines to be considered by Planning Commission on 10/10/12 and City Council in November 2012 Lala Lawson-LakeSmith Natural Area Phase IA (Fall/Winter 2012 -Spring 2013) Boat Ramp, Car/Trailer Parking— low impact design storm water treatment • Shoreline Stabilization — prevent erosion/re-establish native vegetation Shore Fishing Areas and Overlooks • Hard and Soft Trails with access from adjacent neighborhoods • Pedestrian Bridge — will connect North and South parcel Phase IB (Concurrent -Spring 2013) • Restroom/supervision Building, Playground and Education Shelter • Floating Dock (Additive Bid Item, based on funding) Phase II (West Parcel, currently un-fvindeci) Access improverneratS Traili Below is Master Plan: In CITY MANAGER'S BRIEFING PARKS AND NATURAL AREAS PENDING PROJECTS (Continued) October 2, 2012 -10 - CITY AIANA GER'S BRIEFING PARKS AND NATURAL AREAS PENDING PROJECTS (Continued) In areas of the Lake, the erosion is tremendous and must be addressed to preserve this natural asset: Below are a few different design solutions: October 2, 2012 -11 - CITY MANA GER'S BRIEFING PARKS AND NATURAL AREAS PENDING PROJECTS (Continued) The Marshview Park is the second area to be discussed in the Briefing. This is located on the Eastern side of the City, near the "south beach " end of the Oceanfront: This area is approximately 100 acres on Lake Rudee and Owl's Creek. Below is an aerial of the site: October 2, 2012 arshv(ew Pari. Over 100 acres of wooded, waterfront on Lake Rudee/Owls Creek surrounded by South Oceanfront neighborhoods Acquired from Navy in 2010 after 18 years, in exchange for easement over property acquired by City in Inter -facility Traffic Area (47 acres on Indian River Road) • Initial park study conducted with area residents and Navy in 2002 Park Master Planning Process 2010-12 October 2012 Public Open House (Conceptual Master Plan) -- Final Feedoack (comment) December 2012 — Final Master Plan (posted to F&R website) s � A, u M arshv(ew Pari. Over 100 acres of wooded, waterfront on Lake Rudee/Owls Creek surrounded by South Oceanfront neighborhoods Acquired from Navy in 2010 after 18 years, in exchange for easement over property acquired by City in Inter -facility Traffic Area (47 acres on Indian River Road) • Initial park study conducted with area residents and Navy in 2002 Park Master Planning Process 2010-12 October 2012 Public Open House (Conceptual Master Plan) -- Final Feedoack (comment) December 2012 — Final Master Plan (posted to F&R website) rshview Pal`[( • Public Involvement Process Spring/Summer 2012 • Numerous Public Neighborhoods or Civic Organizations — Shadowlawn , Salt Marsh Point, Seatack, Lands End Condo Association, Sea Oats Condo Association, Rudee Heights/Croatan — Owl Creek Area Plan Steering Committee, Rudee Inlet Foundation — Resort Advisory Committee {10/4/12 scheduled} — Virginia Beach Parks and Recreation Foundation — Parks & Recreation Commission, Open Space Advisory Committee, Bikeways and Trails Advisory Committee — Internet/Paper User Survey and Project Website Marshview Park, Phase IA -Main Trail (Fall/Winter 2012 -Spring 2013) • Pedestrian/Bike Trail (10' wide asphalt trail) connecting multiple neighborhoods • Small trail head - 4-5 parking spaces at Virginia Ave. to support trail use • $150,000 grant from VA Department of Conservation & Recreation, Trail must be substantially complete by July 2013. Phase IB -North Parcel (Winter 2013 -Spring 2014) • Playground & Shelter, Informal playing fields, Restroom/supervisor bldg., Parking Areas, Dog Park, Soft Trails with potential BMX areas -14- CITY MANAGER'S BRIEFING PARKS AND NATURAL AREAS PENDING PROJECTS (Continued) Below is the proposed Master Plan Concept 1: Below is the proposed Master Plan Concept 2: October 2, 2012 -15- CITY MANAGER'S BRIEFING PARKS AND NATURAL AREAS PENDING PROJECTS (Continued) October 2, 2012 -16 - CITY MANAGER'S BRIEFING PARKS AND NATURAL AREAS PENDING PROJECTS (Continued) Pleasure House Point is the third and final area to be discussed in the Briefing. This is located on the North/Central part of the City: This area is approximately 118 acres on the Lynnhaven River. Below is an aerial of the site: October 2, 2012 Pleasure House Point Natural :area 118 acres (107 City -owned), acquired in July 2012 through a partnership with Trust for Public Land and Chesapeake Bay Foundation • $2 million in grants and low-interest loan from VA Dept. of Environmenta! Quality • Tremendous grass-roots support by Shore Drive -area residents, Bayfront Advisory Committee and the Virginia Beach Parks and Recreation Foundation Extensive Public Involvement Process In Developing the Natural Area Master Plan • Four-month Master Plan Stakeholder Committee • Two public open houses — 7130/12 and 8%23/12 in coordination with CBF Numerous public forums and public meetings hosted by Bayfront Advisory Committee and Lynnhaven River NOVV Rezoning application to be considered by Planning Commission on 10/10/12 and City Council in November 2012 to downzone the property from PDH -1 to P-1 Preservation Pleasure House Poing Natural Area Phase 1 (Fall/Winter 2012) Secure property with timber guardrail Install park identification signs, regulatory signs and trail signs Establish parallel parking on the south side of Marlin Bay Drive Prepare existing trails for public use Work with Public Works and Strategic Growth Area Office to establish funding sources and project parameters for construction of Marlin Bay Extended Phase 2 (Fall 2012 -Fall 2013) Develop a management plan for Parcel 1 conservation area In partnership with Virginia Department of Game and Inland Fisheries, Chesapeake Bay Foundation, and key city stakeholders identify and develop canoe/kayak access Develop permanent, interactive website with information on wildlife and eco -systems found at Pleasure House Point Identify wetland restoration and oyster restoration projects Support Chesapeake Bay Foundation Design and Development of Education Center Pleasure House Point Natuli-al Area Future Phases (not funded) • Historic Site Interpretation — Relocate "Battle of the Capes" monuments from Fort Story to Pleasure House Point • Develop ADA accessible trail system • Develop additional park amenities related to SE Coast Paddle Trail • Continue work on wetland restoration and oyster restoration projects • Continue additional public outreach through Bayfront Advisory Committee and Lynnhaven River NOW -19 - CITY MANAGER'S BRIEFING PARKS AND NATURAL AREAS PENDING PROJECTS (Continued) Below is the proposed Master Plan for Pleasure House Point: October 2, 2012 -z0- CITYMANAGER'S BRIEFING PARKS AND NATURAL AREAS PENDING PROJECTS (Continued) Vice Mayor Jones thanked Mr. Kalvort, Mr. Solis and the entire Team for their work. October 2, 2012 -21 - ADDED BRIEFING CONSULTANT SELECTION IDENPENDENT ANALYSIS OF PROPOSED ARENA PROJECTIONS 6:00 P.M. Vice Mayor Jones welcomed Patti Phillips, Director — Finance. Ms. Phillips provided the attached Briefing, which is made apart of this record. Ms. Phillips advised the City sent out a Request For Quotation "RFQ" on September 12`x', closing on the 26`F`. Anyone could reply; however, the City targeted seventeen (17) companies, with seven (7) responses. The Scope of Services is detailed in the attached Briefing. Staff recommends selecting Convention Sports and Leisure (CS&L), and a sample of their experience is also included in the attached Briefing. After City Council discussion and informal Vote of 8-2, noting the NAY Votes from Councilman Davis and Council Lady Wilson with Mayor Sessoms being absent, Vice Mayor Jones advised Ms. Phillips to move forward with the Study. October 2, 2012 Mo c O m N - '� V N r L 0 W O M V +J O v N N 00 N N O N l0 N • W m W m W � ui W W W i W cn W cn O z • LU D 0 w I- O o Cl- •• ry LU J Q Lr) O LL ry U r) Z X X X X X X X X X X I O N _N m 4-+ 12 M Ql Ql R* i N O O O N U 00 C14 � 2 O -� cu w V . 4-J wi Q cO �O cu Ln M O 0 N U Z _O L U a� O Q 06 = m H o M = O Q' C� Q � i N e1 rO Ol Q V ,� = = T > m vi L 0_ •> Q +' U 4-J C w a) N O op N U Q ° � E j > O C O wc 2 t I- N N O GC 0 N c fLC u +� c E c wate+ 06 N a X L r- M M LL i N .1.1 3~ cn O U � L O `^ "a Q u �, Q. cn O C) O m m LL Q V V L O N + C �n m OL N> O u W M Z > > O N CM NCA c U cB F- O c d cB m J 06 4v -)i c O c u M 0 O to ca u I c U Nc 0 i = u ^ � O s +r m UA cO u f0 N O O m c O -cc c �° 4J ho m •L = ~ c w LD MO O N U }O+ OA m > m CO 06 N M— m N �- Z m vi V c O w L a �> N N l� J a; > w> m A c +r cVf O uU X O U y r--1 Ln ICT N Q L cVC 13 m c L U n. ++' N i =Q _ a� Z y OA ooc O r4 N M 4 to L6 I-� r4 N M 4 Ln l6 I-� o6 m r -i r -i r -I -4 A r4 r -I rq N U N U) y-- 0 O CL O U U) TM 0 O U Cn N ■ ■ U) .F.r V LL tQ LM Q O V . M m N 4-0U 0 c O U O cn r• FO cn cn O cn U cn cn C6 U O Jc -� 75 cn O L cn O 4-0 cn L O Ia O O 4-0 cn cn O U U co co T • O cn Cu cu -6-+ cu 0 c O =3 � U O � L •- O 40 (f) L -c: s � � V cm m O E O .c: C� .m LMC > < m N ■ ■ U) .F.r V LL tQ LM Q O V . M m N 4-0U 0 c O U O cn r• FO cn cn O cn U cn cn C6 U O Jc -� 75 cn O L cn O 4-0 cn L O Ia O O 4-0 cn cn O U U co co T • O cn Cu cu -6-+ cu 0 V, >1 U) c C6 0 � U Q .� .� O � 0 c Q� N Q N c� I � L 0 CU n, C: .0 U Z 0 O CL Co U)IZ- ' a� O v O E a� Q. 0 0 O L) U U) d: N Q O U a, 4- O ui O O O U � s v o � L CL � o 0 c� c� m0l 1, c� Now now now .,.. �� O , � U) V\, O 73 O CL O O O U U) ■ ■ U) L 4) Ja AMA 0 U) O U L O E L 0 ti cn O 4-0 0. E cn m Kai A-1 O L. CL aNC6d' N U 0 � N � Q W(n�� aNC6d' L U) O rMLO L a a O U J 06 (a) U) � 'p Q •� O U) 'U) E 2�1 c>/), > E c Q ECD •� Fu Q0)'c O a) (6 Co co V N 00 O "O � c C 70 O Q i Co O ' W L•t CU cn Q c O U > Q O = c c o U) 0 U) i m = O cu e . cu U) U) 'U) c Q > C/) Fu Q0)'c T) U) a� c c E m CU _0 (u Q Q cn CU cn Q c O U- C cl) O = c c o — a) +� N i m = O cu cu IL 0 z > AN -22 - ADJOURNMENT Vice Mayor Jones, DECLARED the City Council Meeting ADJOURNED at 6:16 P.M. Amanda Finley -Barnes, CMC Deputy City Clerk, II th Hodges Fraser, MMC City Clerk October 2, 2012