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Home My WebLink AboutAPRIL 7, 2020 SPECIAL FORMAL SESSION MINUTES ii,,, ,„.....,..., ...„0.0 ,.„...„ , „,.. .... 41 0 .by a.`'4e t 4y .Q VIRGINIA BEACH CITY COUNCIL Virginia Beach, Virginia April 7, 2020 Mayor Dyer called to order the SPECIAL MEETING BY ELECTRONIC MEANS of the VIRGINL4 BEACH CITY COUNCIL, on Tuesday,April 7, 2020, at 3:08 P.M Mayor Dyer personally opened in the City Council Chamber while all other members of City Council appeared electronically via WebEx. Council Members Present: Jessica P. Abbott, Michael F. Berlucchi, Mayor Robert M. Dyer, Barbara M.Henley,Louis R.Jones,John D.Moss,Aaron R.Rouse, Guy K. Tower, Rosemary Wilson, Vice Mayor James L. Wood and Sabrina D. Wooten Council Members Absent: None 2 ITEM LA MAYOR'S CALL FOR SPECIAL FORMAL SESSION ITEM#70180 Mayor Dyer read the Mayor's Call for the SPECIAL MEETING: April 2, 2020 "HONORABLE MEMBERS OF CITY COUNCIL On March 12, 2020, Governor Northam declared a state of emergency due to COVID-19. Because of the catastrophic nature of the declared emergency, it is impracticable and unsafe to assemble a quorum of the City Council in a single location. In accordance with the Virginia Beach City Code Section 2-21 and Virginia Code§2.2-3708.2(A)(3), and by the authority vested in me as Mayor of the City of Virginia Beach,I hereby call for a SPECIAL MEETING BY ELECTRONIC COMMUNICATION MEANS of the VIRGINIA BEACH CITY COUNCIL Tuesday,April 7, 2020 3:00 P.M. In accordance with Virginia Code § 2.2-3708.2(A)(3), this SPECIAL MEETING BY ELECTRONIC COMMUNICATION MEANS will be held virtually with Council Members participating via video/audio conference. The purpose of this Special Meeting is for the City Council Discussion of the following: Tax Deferrals; Suspension of the Meal Tax; Reduction of the Personal Property Tax Rate; Areas for expenditure reductions; and Provide guidance to stafffor preparation of any necessary Resolutions or(Ordinances for Council's consideration at a subsequent City Council Special Session. Following the discussion, the Council may CONSIDER the adoption of an item to address tax relief necessitated by the COVID-19 Pandemic in the form of an Ordinance to Suspend Provisions of the City Code Regarding Penalties and Interest upon Certain Local Taxes During the COVID-19 Pandemic, which is sponsored by Councilmember Moss. This Special Meeting will be broadcast on cable, vbgov.com and Facebook Live. Citizens are encouraged to submit their comments to the City Council prior to the Special Meeting via email at CityCouncil(a,vbgov.com. Sincerely, s/ Robert M. Dyer Mayor" Cc: City Manager City Attorney City Clerk Deputy City Managers FOIA Officer Communications Office April 7, 2020 3 ADD ON CITY MANAGER'S BRIEFING CORONA VIRUS(COVID-19) UPDATE ITEM#70181 3:16 P.M. Mayor Dyer welcomed Dr. Demetria Lindsay, Director — Virginia Beach Health Department and Erin Sutton, Director—Emergency Management. Dr. Lindsay expressed her appreciation to City Council for their continued support. Dr. Lindsay advised as of April 6, 2020, there are 3,333 confirmed COVID-19 cases in Virginia with 563 hospitalized and sixty-three(63)deaths. There are 211 confirmed COVID-19 cases in the City with twenty- three (23) cases cleared from isolation and four(4) deaths. Of these twenty-three (23) confirmed cases in the City, the average age is 51 years old with 53%female and 47% male; the ethnicity/race: is 56% Caucasian, 31%African American, 9%Asian and 63%is unknown; 40%of cases are community acquired with no direct source identified. Dr. Lindsay advised the City is experiencing a widespread community transmission. Dr. Lindsay advised the Health Department currently investigates each case to determine the source and exposure; however, due to the significant amount of time required, a process to prioritize the investigation of low risk cases is being developed in the event not every case can be investigated. Dr. Lindsay urged all citizens to stay home and follow social distancing guidelines when it is critically required to go out in the public. Dr.Lindsay turned the brief over to Ms. Sutton. Ms. Sutton advised the City has established a procurement unit and streamlined the purchasing process for personal protective equipment (PPE). The market has become saturated causing the purchase of PPE to be centralized. The state will be receiving some PPE orders to be allocated to certain localities. Ms. Sutton advised the Commonwealth has directed localities to order locally when possible. Ms. Sutton advised Occupational Health staff are working on guidance to conserve PPE and identify vendors who are selling certified PPE. Ms. Sutton further advised the City's Response Team will be transitioning to a formal incident command structure and assigning roles and responsibilities to Directors and Division Supervisors to accommodate a long-term operational response in the event the situation worsens and through the recovery period. Ms. Sutton advised City Public Schools provided children with 90,000 meals during the week of March 30`h and are now providing meals each Friday to cover meals over the weekends. During the regularly scheduled spring break period, meal services will be modified to two (2)pick-up dates on Monday, April 13th and Thursday, April 16`h. Ms. Sutton advised Linkhorn and Landstown Elementary Schools are preparing to provide childcare services for Sentara's health care employees to begin on April 13`h. Ms. Sutton further advised the Special Events Group has canceled events through June 10, 2020. Mayor Dyer expressed his appreciation to Dr. Lindsay and Ms. Sutton for the presentation. April 7, 2020 4 ADD ON CITY COUNCIL BRIEFING CASH FLOW—COVID-19 IMPACTS ITEM#70182 3:23 P.M. Mayor Dyer welcomed David Bradley, Deputy City Manager and Alice Kelly, Director—Finance. Ms. Kelly expressed her appreciation to City Council for their continued support: Cash F COVID- 19 Impacts ALICE M.KELLY,DIRECTOR DEPARTMENT OF FINANCE APRIL 7,2020 Ms. Kelly advised the Finance and Management Services Departments have been working diligently with the City's financial advisors,participating in webinars with other financial advisors and conference calls with GFOA, VGFOA, Finance Directors for large cities around the country, as well as reviewing ODU economic data and evaluating the Federal Stimulus Act to determine the financial impact of the COVID- 19 Pandemic: Importance of Cash 2 ► Cash to provide essential city services during emergency period ► Level of cash on hand to pay obligations (payroll, debt service, emergency expenses) is the most important financial indicator during this crisis ► Best practice for local governments- two months of operating cash on hand during normal economic conditions ► Long-term CIP cash is Municipal Bond market Closed last three weeks as investors cashed out investments and showed increasing focus on potential credit concerns April 7, 2020 5 ADD ON CITY COUNCIL BRIEFING CASH FLOW—COVID-19 IMPACTS ITEM#70182 (Continued) Here are the Cash Flow Analysis Assumptions: Cash Flow Analysis Assumptions 3 r- Based on current cash balances and projected revenue collection and payments of expenditures Cash flows are not predicated on budget but actual cash in and out of the City regardless of the budget year ► Prior year encumbrances and multi-year capital improvement projects as well as receipts of last fiscal year revenues affect cash balances Cash Flow Analysis Assumptions 4 ► Cash in certain funds may only be available for use for certain, legally restricted purposes )self-insurance, health care, water sewer, storm water and certain grants) ► Assumed lower collection rates, higher emergency expenditures and lowering non-essential service expenditures April 7, 2020 6 ADD ON CITY COUNCIL BRIEFING CASH FLOW—COVID-19 IMPACTS ITEM#70182 (Continued) This chart provides a comparison of cash balance from 2019 to the 2020 projected year showing the City has less cash overall and particularly for the General Fund: General Fund and Total Cash Balances(Operating plus Investments) 2019 vs 2020(Projected) 5 11,200 51,000 S800 $500 44,4`,�_..�` 6400 $100 % S1200) $(a00) gyp'' Fd / `¢,,rl 4/ dp t¢ GF 2019 — —GC 2010 hnRtted T0tat(0pnating Investments)2019 .4 Total(cRerating Duo kwestments)-2020 Ptojected This chart provides the projected Cash Balance by Type: 6 Projected Cash Balance by Type shoo° Operating Funds should have 2 month cash balance between 5800 vow_ $235 Ni and$335 M $600 E N$a0o E $1200) Apr-20 May 70 Jun 20Jul 20Aug 20 Sep 20 Oct-20 Nov20 Dec 20 Ian 21 feb21 Mar 21 Apv 21 —Operating Funds(01,School,Special Rev,Oternal service) Capital Projects(City&Schools) --Reurkted(Water&Sewer,Storrnwater,Health Inavrance,SNAP) =-^—Total April 7, 2020 7 ADD ON CITY COUNCIL BRIEFING CASH FLOW—COVID-19 IMPACTS ITEM#70182 (Continued) Here are the Impacts of COVID-19 and Tax Relief Impacts of COVID-19 and Tax Relief ► Impacts of projected year end trustee taxes including proposed 3-month holiday for meals tax(May 1 -July 30,2020) - Loss of$26.5M to: - Gen Fund$8.5M Schools $4.4M TIP/TAP $11.4m - Open Space$1.4M Sandbridge SSD$800k ► Add in Real Estate and Personal Property tax deferral and penalty and interest elimination,total loss in tax revenues estimated at$64.5M for GF in FY 2020 ► Revenue reduction offset by$60.8M in expenditure reductions and$3.7M from unassigned fund balance Here is the FY2020 General Fund Revenues and Expenditures: FY2020 GENERAL FUND REVENUES AND EXPENDITURES 8 ew PROIEC1FD REVENUES YED•S1.122.4 M/S1,186.9 M i �S)M ew PROIECITD EXPENDITURES STD.51,1932M/S1,254.0 M �MM 1610. -I aaw Mee S9.3K 53.11Y KOK IS]M veN 10.1% nem 13.11e lldle Lie 5.ave )1M N ay Mr 00 IMr Vac 1.0 r.e Mr 4 eM 1.• MMre»MIeotUaNa r-MefN10]O Sow �•M Notes: -Budgeted use of Fund Balance in FY2020 was S67.I M Revenue loss of 564.5 million is offset by expenditures savings of$60.8 M -FY 2020 use of unassigned fund balance is estimated to be$3.7 M as of April 3.2020 -October and May expenditures Include 3 Pay periods for City April 7, 2020 8 ADD ON CITY COUNCIL BRIEFING CASH FLOW—COVID-19 IMPACTS ITEM#70182 (Continued) Here is the advice from City financial advisors to Preserve Liquidity and Flexibility: Preserve Liquidity and Flexibility 9 ► Advice from City's financial advisors: ► COVID-19 Tax Relief Impact on Credit Rating: Delay or lowering of RE and PP tax would have a major adverse impact on City cash flow and could negatively impact credit rating ► Credit Rating analysts want the City to preserve flexibility and liquidity to deal with unknown revenue shortfalls and higher expenses related to COVID-19 ► Credit negative:Leisure industry is a large part of VB's economy(2nd largest industry) and makes the City more vulnerable to economic downturns ► Economic impact unknown for Federal action including the CARES Act stimulus bill, additional federal support for small businesses and public health agencies,and enhanced Medicaid funding and unemployment insurance stimulus bills ► Do not take any action that limits City management's flexibility and cash management options in dealing with the potential financial stress Here is Recent Rating Reports on COVID-19: Recent Rating Reports on COVID-19 10 ► S&P"The COVID-19 Outbreak Weakens U.S.State and Local Government Credit Conditions"(April 2,2020): ► Given the abruptness and scale of the economic decline in the U.S.,we anticipate broad budgetary pressure as expenditures escalate and revenues streams contract. ► Local communities whose employment composition is concentrated in sectors including tourism are doubly exposed to the current credit stress. ► While we anticipate the current situation will remain fluid,active management and access to liquidity will remain key credit considerations to address developments on the ground and the subsequent secondary effects as they materialize. ► Concentrated economic activities,particularly in leisure,energy,and trade,are more likely to see revenue declines. ► Ftch"U.S.Local Government Liquidity to Face Stress Due to Coronavirus"(April 3, 2020): ► Ftch considers liquidity to be the most significant near-term risk to local government credit quality related to the pandemic. ► Local governments with a disproportionately large exposure to economically-sensitive revenues such as sales and income taxes,or economies with significant tounsm and retail sector dependence,are also considered more vulnerable. ► Fitch is reviewing the adequacy of each issuer's available tools as well as management's willingness to utilize them. Mayor Dyer expressed his appreciation to Mr. Bradley and Ms.Kelly for the presentation. April 7, 2020 9 ADD ON ORDINANCE ITEM#70183 Upon motion by Vice Mayor Wood, seconded by Council Member Jones, City Council ADDED Ordinance to AMEND the City's Continuity of Government Ordinance re virtual budget hearings Voting: 11-0 Council Members Voting Aye: Jessica P. Abbott, Michael F. Berlucchi, Mayor Robert M. Dyer, Barbara M.Henley,Louis R.Jones,John D.Moss,Aaron R.Rouse, Guy K. Tower, Rosemary Wilson, Vice Mayor James L. Wood and Sabrina D. Wooten Council Members Absent: None April 7, 2020 10 ADD ON ORDINANCE ITEM#70184 Upon motion by Vice Mayor Wood, seconded by Council Member Moss, City Council ADDED Ordinance to SUSPEND meals tax for the months of May,June and July and provide offsets for such tax suspension during the COVID-19 Pandemic Voting: 8-3 Council Members Voting Aye: Jessica P. Abbott, Michael F. Berlucchi, Mayor Robert M. Dyer, John D. Moss, Guy K. Tower, Rosemary Wilson, Vice Mayor James L. Wood and Sabrina D. Wooten Council Members Voting Nay: Barbara M. Henley Louis R. Jones Aaron R. Rouse Council Members Absent: None April 7, 2020 11 ITEM I.C.1 CITY COUNCIL DISCUSSION TAX DEFERRALS ITEM#70185 4:31 P.M. Council Member Moss advised he supports tax deferrals, but believes some citizens may not be able to pay even on the deferred date of August Is`. Council Member Moss advised he would like to have insight from the Real Estate Assessor on how assessments will be impacted based on the long term carry over effect. April 7, 2020 12 ITEMLC.2 CITY COUNCIL DISCUSSION SUSPENSION OF MEALS TAX ITEM#70186 4:34 P.M. Mayor Dyer advised this discussion will be held during the vote on the proposed Ordinance to SUSPEND Meals Tax for the months of May, June and July and provide offsets for such tax suspension during the COVID-19 Pandemic(Sponsored by Vice Mayor Wood). April 7, 2020 13 ITEM I.C.3 CITY COUNCIL DISCUSSION REDUCTION OF PERSONAL PROPERTY TAX RATE ITEM#70187 4:35 P.M. Mayor Dyer advised this discussion will be held during the vote on the proposed Ordinance to SUSPEND provisions of the City Code re Penalties and Interest upon certain local taxes during the COVID-19 Pandemic(Sponsored by Council Members Moss and Tower). April 7, 2020 14 ITEM I.C.4 CITY COUNCIL DISCUSSION AREAS FOR EXPENDITURE REDUCTION ITEM#70188 4:36 P.M. Council Member Moss began the discussion and advised he would recommend a much more aggressive look to reduce expenditures such as construction and capital expenditures. Council Member Moss believes the City cannot look away from furloughs should the libraries and recreation centers remain closed to the end of June. Council Member Moss believes the City should set a goal to provide 10% reduction on personal property taxes. Council Member Moss advised there is plenty of room for reducing expenditures including eliminating vacancies within the City and reducing the operating budget by 10%. Council Member Moss advised he disagrees with insulating the City at the cost of citizens and small business owners. Council Member Berlucchi advised he would like to look at less austere reductions that do not include furloughs such as purchasing, travel, professional development costs, hiring freeze and renovations. Council Member Berlucchi requested Tom Leahy, Acting City Manager, provide information on what measures have been taken. Mr. Leahy advised the City has a hiring freeze in effect as well as a ban on travel and non-essential professional development training. Mr.Leahy advised the cost savings of those measures taken during the month of March will not be realized until May. Council Member Jones advised he is also concerned but is not ready to make a decision on reductions until he receives more information on the dollar amount needed to be cut. Council Member Jones advised he believes there is an opportunity to have a balanced budget for FY 2020-2021. Council Member Wilson advised during this time, with so many uncertainties, it is important to know what additional services are needed for citizens and ensuring the City is providing those services. Vice Mayor Wood expressed furloughs should not be considered as they would only add additional problems for City staff who are working hard. Council Member Tower requested to know if City staff were to be furloughed, would they still receive benefits? Mr. Leahy advised any City stafffurloughed would still receive their benefits. Mayor Dyer closed the discussion and expressed his appreciation to Council Members for the discussion and advised going forward it will be necessary to have an incremental approach while short- and long- term plans are developed. April 7, 2020 15 ITEM L C.5 CITY COUNCIL DISCUSSION PROVIDE GUIDANCE TO STAFF FOR PREPARATION OF ANY NECESSARY RESOLUTIONS OR ORDINANCES FOR COUNCIL'S CONSIDERATION AT A SUBSEQUENT CITY COUNCIL SPECIAL SESSION ITEM#70189 4:49 P.M. Mayor Dyer advised this discussion will not be held. April 7, 2020 16 ITEM I.D.1 ORDINANCES ITEM#70190 Upon motion by Council Member Moss, seconded by Council Member Tower, City Council ADOPTED Ordinance to SUSPEND provisions of the City Code re Penalties and Interest upon certain local taxes during the COVID-19 Pandemic(Sponsored by Council Members Moss and Tower) Voting: 11-0 Council Members Voting Aye: Jessica P. Abbott, Michael F. Berlucchi, Mayor Robert M. Dyer, Barbara M.Henley,Louis R.Jones,John D.Moss,Aaron R.Rouse, Guy K. Tower, Rosemary Wilson, Vice Mayor James L. Wood and Sabrina D. Wooten Council Members Absent: None April 7, 2020 REQUESTED BY COUNCILMEMBERS MOSS AND TOWER 1 AN ORDINANCE TO SUSPEND PROVISIONS OF 2 THE CITY CODE REGARDING PENALTIES AND 3 INTEREST UPON CERTAIN LOCAL TAXES 4 DURING THE COVID-19 PANDEMIC 5 6 WHEREAS, the Virginia Code empowers a local governing body to impose 7 penalties and interest for late filing or late payment of local taxes, and implicit in such 8 power is the ability to suspend penalties and interest; 9 10 WHEREAS, the City Manager has declared a local emergency during the current 11 COVID-19 Pandemic (the "Emergency"); 12 13 WHEREAS, widespread closures, social distancing, and recommendations to 14 avoid public gatherings have created financial burdens all of the taxpayers of the City; 15 16 WHEREAS,the City Council desires to provide additional time for taxpayers to pay 17 certain taxes without penalty and interest, which may give taxpayers the option to delay 18 payment when cash flow is adversely affected by the financial impact of the Emergency; 19 20 NOW, THEREFORE, BE IT ORDAINED, BY THE CITY COUNCIL OF THE CITY 21 OF VIRGINIA BEACH, VIRGINIA THAT: 22 23 1. The City Council hereby suspends the late payment and late remittance penalties 24 set forth in City Code for meals taxes, admissions taxes, and transient occupancy 25 taxes due in April 2020, May 2020 and June 2020, and no penalty will be assessed 26 until 60 days after the applicable due date of such taxes. Timely filing is still 27 required. 28 29 2. The City Council hereby suspends late payment penalties and interest for failure 30 to pay real estate and personal property taxes from the date prescribed in the City 31 Code until August 1, 2020. Any payment of such taxes after August 1, 2020 may 32 incur a late payment penalty and interest upon such payment would begin accruing 33 on August 2, 2020. Adopted by the City Council of the City of Virginia Beach, Virginia, on this 7 t h day of April , 2020. APPROVED AS TO LEGAL SUFFICIENCY: City Attorney's Office CA 15038 R-9 April 3,2020 17 ITEM I.D.2 ORDINANCES ITEM#70191 Upon motion by Vice Mayor Wood, seconded by Council Member Jones, City Council ADOPTED Ordinance to AMEND the City's Continuity of Government Ordinance re virtual budget hearings Voting: 11-0 Council Members Voting Aye: Jessica P. Abbott, Michael F. Berlucchi, Mayor Robert M. Dyer, Barbara M.Henley,Louis R.Jones,John D.Moss,Aaron R.Rouse, Guy K. Tower, Rosemary Wilson, Vice Mayor James L. Wood and Sabrina D. Wooten Council Members Absent: None April 7, 2020 REQUESTED BY VICE MAYOR WOOD 1 AN ORDINANCE TO AMEND THE CITY'S CONTINUITY OF 2 GOVERNMENT ORDINANCE TO SET FORTH THE 3 MANNER AND FORM OF THE BUDGET HEARINGS 4 5 WHEREAS, the City Manager has declared a local emergency during the current 6 COVID-19 Pandemic (the "Emergency"); 7 8 WHEREAS, the Governor has issued three executive orders, EO 51, EO 53, EO 9 55, that have increasingly focused on the need for the residents of the Commonwealth to 10 stay at home during the Emergency; 11 12 WHEREAS, although the executive orders exempt the operation of government 13 from their restrictions, the City Council does not desire people leave their homes to attend 14 a public hearing if there are opportunities to meaningfully participate in public hearings 15 through alternative means; 16 17 WHEREAS, Executive Order 55 is in effect until June 10th, which does not allow 18 simply postponing the City's scheduled public hearings for the budget and allow the City 19 to comply with the requirement in § 22.1-93 of the Code of Virginia to fund Schools by 20 May 15th; 21 22 WHEREAS, the City is required to hold at least two public hearings during the 23 budget process if the Council is to provide the revenues to support the City Manager's 24 Proposed Budget; 25 26 WHEREAS, the public hearing required for the adoption of the City's Operating 27 Budget and Capital Improvement Program (CIP) and the bonds required for the CIP is to 28 be held on April 22, 2020, at 6:30 p.m.; 29 30 WHEREAS, the public hearing required for the City to enact the proposed tax rate 31 in the City Manager's Proposed Budget is to be held on April 28, 2020, at 6:00 p.m.; 32 33 WHEREAS, the City Council believes that it is consistent with its purposes of 34 protecting the public health and general welfare to provide for participation by means 35 other than physical gatherings; 36 37 NOW, THEREFORE, BE IT ORDAINED, BY THE CITY COUNCIL OF THE CITY 38 OF VIRGINIA BEACH, VIRGINIA THAT: 39 40 Because of the limitations and restrictions set forth in executive orders by the 41 Virginia Governor, the City Council hereby amends its previously adopted Continuity of 42 Government Ordinance to provide for the holding of public hearings as required to enact 43 the City's FY2021 Operating Budget and CIP. The holding of such public hearings in the 44 previously announced and advertised locations is inconsistent with the current stay at 45 home order issued for the Emergency. The funding of government is a requirement for 46 the continuing functioning of the City. The following shall apply to such public hearings: 47 48 a. The required hearings for the City's FY2021 Operating Budget and CIP shall 49 be held virtually and without a quorum of the Council assembled at a given 50 place. The City shall retain the dates and times for the required budget public 51 hearings as were previously announced and advertised. 52 b. Public comment may be solicited by electronic means in advance and shall also 53 be solicited through telephonic or other electronic means during the course of 54 the hearing. All such public comments will be provided to members of the 55 Council at or before the virtual meeting and made part of the record for such 56 meeting. 57 c. The City Clerk shall cause a notice of such hearing to be posted prominently 58 on the City's website. Such notice shall include a statement informing the 59 public that the hearing will not be conducted at the location provided at the 60 location stated in the published notice. Adopted by the City Council of the City of Virginia Beach, Virginia, on this 7 t h day of April , 2020. APPROVED AS TO LEGAL SUFFICIENCY: . ii.x44,e.0,4 K_______ City Attorney's Office CA15045 R-2 April 6, 2020 18 ITEM I.D.3 ORDINANCES ITEM#70192 Upon motion by Council Member Wilson, seconded by Vice Mayor Wood, City Council ADOPTED,AS AMENDED, Ordinance to SUSPEND meals tax for the months of May and June and provide offsets for such tax suspension during the COVID-19 Pandemic Voting: 9-2 Council Members Voting Aye: Jessica P. Abbott, Michael F. Berlucchi, Mayor Robert M. Dyer, John D.Moss,Aaron R.Rouse, Guy K. Tower,Rosemary Wilson, Vice Mayor James L. Wood and Sabrina D. Wooten Council Members Voting Nay: Barbara M. Henley Louis R.Jones Council Members Absent: None April 7, 2020 REQUESTED BY MAYOR DYER AND VICE MAYOR WOOD AMENDED BY MOTION 1 AN ORDINANCE TO SUSPEND MEALS TAX FOR 2 THE MONTHS OF MAY AND JUNE AND TO 3 PROVIDE OFFSETS FOR SUCH TAX 4 SUSPENSION DURING THE COVID-19 5 PANDEMIC 6 7 WHEREAS, the Virginia Code empowers the governing body of a City to impose 8 a meals tax upon prepared food sold in the City, and the Council can prescribe the rate 9 of such meals tax; 10 11 WHEREAS, the City Manager has declared, and the City Council has confirmed, 12 a local emergency during the current COVID-19 Pandemic (the "Emergency"); 13 14 WHEREAS, widespread closures, social distancing, and recommendations to 15 avoid public gatherings have limited restaurants to takeout or delivery only; 16 17 WHEREAS, the City Council desires to provide an economic incentive for the 18 residents of the City to utilize restaurants for takeout or delivery during the Emergency; 19 20 NOW, THEREFORE, BE IT ORDAINED, BY THE CITY COUNCIL OF THE CITY 21 OF VIRGINIA BEACH, VIRGINIA THAT: 22 23 1. The meals tax rate set forth in § 35-137 of the City Code shall be reduced from 5.5 24 percent to 0 percent for applicable transactions occurring in May 2020 and June 25 2020. 26 27 2. If, notwithstanding the prior section, any food establishment collects meals taxes 28 during May 2020 and June 2020 from the patrons of food establishments, as that 29 term is defined in § 35-136 of the City Code, then those taxes shall be remitted to 30 the City. Food establishments are not entitled to a refund for such amounts 31 collected as a meals tax notwithstanding the change in rate set forth in Section 1, 32 supra. 33 34 3. To provide offsets in Fiscal Year 2019-20 for the reduced revenues from the 35 change in rate set forth in Section 1, supra, the Council makes the following 36 reductions: 37 38 a. For the TIP Fund, a reduction of $1,077,720 in the Future CIP Reserve; 39 b. For the TAP Fund, a reduction of $508,359; provided however, if year-end 40 obligations for advertisement contracts do not allow for the full reduction, 41 such resulting shortfall shall be made by further reduction in Future CIP 42 Reserve in the TIP Fund; 43 c. For the Open Space Fund, a reduction in the transfer to the CIP by 44 $447,356. This transfer reduction shall apply to pay-as-you-go financing, 45 which shall be reduced $447,356, in CIP #4-306, "Open Space & Parks 46 Infrastructure Development & Maintenance II." 47 d. For the General Fund, a reduction of$2,352,610 to be taken from vacancy 48 savings in the following departments and estimated amounts, and such 49 amounts may be adjusted from the named department amounts to allow the 50 total reduction to equal $2,352,610: 51 i. Department of Human Services $784,204; 52 ii. Police Department $784,203; and 53 iii. Department of Public Works $784,203. 54 55 4. The City Council requests the Virginia Beach School Board provide offsets for the 56 amount of meals taxes that would be subject to the City and Schools Revenue 57 Sharing Formula in the amount of $1,217,901 . If no such offset is provided, the 58 City Council directs the City Manager to make a reservation in the General Fund's 59 undesignated fund balance. The City Council reserves the right to capture such 60 offset from any fiscal year reversion occurring after the adoption of this ordinance. Adopted by the City Council of the City of Virginia Beach, Virginia, on this 7th day of April , 2020. APP D AS TO LEGAL SUFFICIENCY: (t) y ney s Office CA15051 R-4 (Motion) April 7. 2020 19 ITEM I.E ADJOURNMENT ITEM#70193 Mayor Robert M. Dyer DECLARED the City Council SPECIAL MEETING ADJOURNED at 5:50 P.M 'us Chief Deputy City Clerk A nda Barnes, MMC Robert M. Dyer City Clerk Mayor April 7, 2020