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HomeMy WebLinkAboutMARCH 31, 1982 MINUTES March 22, 1982 The Honorable Mayor Members of City Council In accordance with Section 2-21 of the Virginia Beach City Code, I hereby respectfully request a Special Meeting of the Virginia Beach City Council to bc held in the Council Chambers at 5:00 P.M. Wednesday, March 31, 1982. The purpose of the Special Meeting is to present for your consideration the FY '1982-83 Operating Budget for the City of Virginia Beach. As prescribed by Section 2-22 and by copy of this letter,, the press is hereby advised. fully, Dodd Interim City Manager GGD:etd M I N U T E S S P E C I A L M E E T I N G VIRGINIA BEACH CITY COUNCIL Virginia Beach, Virginia 31 March 1982 In accordance with Sections 2-21 and 2-22 of the Code of the City of Virginia Beach, the Special Meeting of the Council of the City of Virginia Beach, Virginia, was called to order by Mayor J. Henry McCoy, Jr., D.D.S., in the Council Chambers, City Hall Building, on Wednesday, March 31, 1982, at 5:08 p.m., for the presentation of the Fiscal Year 1982-83 Operating Budget. Council Members Present: John A. Baum, Vice Mayor Harold Heischober, Barbara M. Henley, W. H. Kitchin, III, Reba S. McClaanan, Mayor J. Henry McCoy, Jr., D.D.S., Meyera E. Oberndorf, and Patrick L. Standing Council Members Absent: E. T. Buchanan, F. Reid Ervin, and Clarence A. Holland, M.D. INVOCATION: Reverend Malcolm Yaple Nimmo United Methodist Church PLEDGE OF ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA - 2- ITEM #17992 The City Manager advised that in accordance with Section 5.02 of the City Charter, he was pleased to transmit and recommend the proposed Operating Budget for the City of Virginia Beach for fiscal year 1983. The budget is balanced and conforms with accepted principles of municipal accounting, budgetary procedures and techniques. It has been prepared on a basis consistent with his perception of Council's wishes: 1. Existing services be maintained, 2. These services be provided at the lowest possible cost to the citizens of this CitY. BUDGET IN BRIEF Rovenue Summary From the Commonwealth $ 84,863,430 32.30% General Property Taxes 75,495,467 28.73% Other Local Taxes 54,645,508 20.79% Other Local Sources (fines, service charges, etc.) 39,367,601 15.00% From Federal Government 5,993,836 2.28% From Fund Balances (1981-82) 2,364,453 .90% $262,730,295 100.00% Appropriation Summary School Operations $112,861,812 42.96% City Operations 104,294,780 39.70% Debt Service (City and School) 20,238,796 7.70 Self Supporting: Water and Sewer Operations 16,858,271 6.42% Water and Sewer Debt Service 7,867,359 2.99% Other 609,277 .23% $262,730,295 100.00% GROWTH ANALYSIS 1 981 - 8 2 1 2- 31 - 81 1 98 2- 83 Original Adjusted Proposed Budget Budget Budget $238,076,358 $242,453,271 $262,730,295 1982-83 Increase Over Original 1981-82 Budget - 10.3% 1982-83 Increase Over Adjusted 1981-82 Budget - 8.4% - 3- The City Manager advised that the City will be unable to finance the present level of services with existing revenue rates. Although the City has held the cost projections to austere levels, three factors cause the need for additional revenue: 1. Federal Budget Cuts, which have forced the projected reduction in impact aid to education; 2. Inadequate state revenues to fund stated teacher salary raises; and, 3. Slowing in the growth of City revenues caused partially by a reduced growth rate in assessments. The factors are further compounded by large increases in the budget over which the City has little or no control: 1. A projected VEPCO rate increase of approximately 500%; 2. Forty-Two percent (42%) increase in the rate of contribution to the retirement system; and, 3. Anticipated increased costs for health care coverage and debt service. Prior to fiscal year 1982, City Council had been able to reduce the real estate tax rate for several years primarily as a result of the growth rate in assessments attributable to new construction. I n fiscal year 1982, this growth rate slowed to 3.9% from 5.2% in fiscal year 1981. In fiscal 1983, the City Assessor has projected the rate of growth will be only 2.6%. TAX RATE INCREASES In order to compensate for reduced growth and the other factors discussed, during next year the City will be looking at all City fee schedules for possible adjustments and, in addition, the City Manager reluctantly recommended increases in the following tax rates: Real Estate Taxes: Increase in Real Estate Tax Rate by I per $100 Assessed Value. Old Rate: 72cts per $100 Assessed Value Peoposed Rate: 82cts per $100 Assessed Value Motor Vehicle and Trailer Licenses: Increase the licenses of cars, trucks an trailers by $5 each The City Manaager advised he plans to recommend changes in the City Ordinances relating to tax relief for the elderly and disabled in the near future, to lessen the impact of the tax increases on those who qualify for tax exemption and to forward to Council an Ordinance which would permit a more equitable method of personal property taxation as recently authorized by the General Assembly. It will allow property owners to pay taxes on motor vehicles and trailers for only that portion of the year such property is actually owned. - 4- REAL ESTATE TAX SURVEY OF VIRGINIA CITIES WITH A POPULATION GREATER THAN 25,000 Census 1980 City: POpUlation Rate Virginia Beach (FY 1982) 262,199 .72 Proposed (FY 1983) .82 Danvi 1 1 e 45,642 . 7 6 Chesapeake 114,226 .95 Suffolk (Suffolk Borough) 47,621 1.11 (Nansemond Borough) .93 Lynchburg 66,743 1.12 Charlottesville 45,010 1.13 N o r f o I k 2 66 , 9 79 1.30 Newport News 144,903 1.34 Portsmouth 104,577 1.35 Alexandria 103,217 1.37 Roanoke 1 00 , 4 2 7 1. 38 Hampton 122,617 1.40 Richmond 219,214 1.58 Petersburg 41 O 5 5 1. 6 5 GENERAL FUND BALANCE To complete the financing of this budget, a part of the General Fund Balance will be used. Projections show that an undesignated General Fund Balance of $8.8-Million will be available on July 1, 1982. Of this amount, $2.1-Million will be used to help finance General Fund operations in the proposed budget. This will leave an emergency reserve of $6.7-Million. Officials of the Bond Rating Agencies have expressed concern about our double-A rating because the large fund balances of recent years have eroded. The City should do nothing to endanger this outstanding rating. GENERAL GOVERNMENT SERVICES The City expects to maintain City services at levels approximating the existing ones even though considerable funds have been trimmed from departmental requests. During initial budget meetings, the requests were reduced by amounts totaling in excess of $6.5-Million, and additional cuts amounting to $1.6-Million and 57 new positions from funds which had been requested for improved services. This budget being presented has 74 fewer City positions than those approved in the FY 1982 budget. In 1982 there were 4,800 positions approved whereas 4,726 are recommended in this budget. All of the eliminated positions were vacant and will not require personnel layoffs. - 5- EDUCATION BUDGET The City has the reputation of having one of the finest school systems in Virginia, perhaps in the nation. For this, plaudits must be given to the City Council which has provided the necessary funds, and to the outstanding leadership of the Division Superintendent and the Virginia Beach School Board. The School Budget of $114,830,944 proposed by the School Board for fiscal 1983 is a good budget designed to promote and offer educational initiatives and training for the youth of this City. Realizing this, it was difficult but necessary to recommend a $1.97-Million reduction in the School Board budget for a total budget of $112,861,812 of which the local share is $60,441,144 (includes sales taxes designated for educational purposes). The local share is 20.5% larger than that approved for Fiscal Year 1982. MUNICIPAL EMPLOYEES The City Manager advised he cannot recommend a wage and salary adjustment sufficient to keep up with the projected inflation rate and proposed a 2.5% cost-of-living increase for classified employees which is the same percentage that the School Board has approved for its non- instructional employees. The rate projected on health care coverage with Blue Cross/Blue Shield for fiscal 1983 appeared to be excessive and, therefore, unacceptable. The City was offered rates by Blue Cross/Blue Shield for next year with increases ranging up to 91% over the current year. The City is now in the process of drafting specifications to request proposals on a competitive bid basis for the health care coverage. REFUSE COLLECTION SERVICES After a thorough review of the once-a-week refuse collection policy, the City Manager is unable to recommend that the City return to twice- a-week collection because of the cost. The City Manager made the following recommendation in order to eliminate some of the special problems that warm weather brings. 1. As soon as schools close for the summer their trash containers be moved to more accessible locations on the school grounds so citizens can take their trash to them between regular scheduled collections. Commercial haulers will make collections from these locations three times a week.* City inspectors will carefully monitor these locations to ensure cleanliness. 2. In North Virginia Beach where there are no schools, the City shall seek alternate sites for the placement of trash containers. The cost for returning to twice-a-week trash collection for one year would be $2,400,000, and for the summer months only would be $1,900,000. *The cost for the commercial haulers would be approximately $36,000 per year. - 6- RESTAURANT MEAL TAX The City Manager advised he cannot recommend any change in the restaurant meal tax at this time because receipts reported by the restaurant industry do not show that the current tax has had an adverse effect on overall restaurant business. Council may, however, wish to given further consideration to this matter. if a reduction is desired, then additional revenues will have to be found. 1979 over 1978 (3%) 10.6% 1980 over 1979 (3%) 16.3% 1981 over 1980 (6%) 122.1% LONG-RANGE RECOMMENDATIONS Since become Interim City Manager, he and the City Staff have made concerted efforts to reduce the level of spending through the remainder of fiscal 1982 and into fiscal 1983. It is difficult, however, to make substantial cuts without a complete review of programs and services offered by the City. We are now in a period of "cut back management". We must find solutions to problems through means other than increasing costs. To this end, during fiscal 1983 it is recommended that the City Manager begin a sustained review of every City program with the intention of reducing, scaling down or eliminating marginal programs. At the same time, the City should study employee benefits such as the educational incentive program, service awards, tuition reimbursement, hospitalization benefits and oiher fringes to ensure that these costs and benefits are commensurate with those offered by employees in other municipalities and in the private sector. The City should examine those local service areas which could, and prehaps should, be provided by the Commonwealth. Juvenile Probation and Weights and Measures are two such examples. During the coming year, the City Manager proposes that a thorough analysis and review of the Mosquito Control functions be undertaken to determine if these functions might be more economically carried on by the City. In this budget, the amounts requested by the Mosquito Control Commissions have been reduced by 5%. The formula for which the City allocates funds for advertising should be re-evaluated to determine if it is the appropriate method to set the amount of funds for advertising. Further, the City Manager should no longer permit City vehicles to be driven home except in those instances where the use of the vehicles has been demonstrated to be a necessity for the City. To preclude the possibility of unnecessary hirings, the City Manager should establish within the City administration a "Personnel Requisition Committee" to review all requests for hirings and rehirings. It is also necessary, in the opinion of the City Manager, that we establish a temporary labor pool so that we may hire people from this pool only on the days they are needed in lieu of hiring permanent staff. This type of temporary labor pool would be particularly advantageous in the Departments of General Services, Public Works, Public Utilities and Parks and Recreation. - 7- MANAGEMENT STUDY Considerable discussion has taken place in the past concerning the need for an overall management study of the City administration. Should Council desire to pursue this, it may be advantageous if the intent is to ensure a table of organization which would engender the greatest productivity while at the same time easing the tax burden on our citizens. The City Manager advised that on March 8, 1982 there was a revenue gap of $16,100,000. After receiving the School Budget it was discovered that the amount estimated, which would be required from the local tax dollar, was $1,100,000 higher than it should have been. When the School Budget was received the City removed $1,100,000 which left a $15,000,000 revenue gap. Thereafter, $5.5-Million was removed (the $6.5-Million removed was included in this). The City is showing new revenues from the Real Estate Tax $6,800,000 and expecting $800,000 from the increase in decals. Revenues were "rechecked", adjustments were made to estimates in the amount of $600,000. The City is using from the General Fund Balance $2,100,000 to provide the City with $16,100,000 for balancing the budget. The impact of the 10-cent tax rate: Value of Home to be Taxed (or Property Assessment) Tax $40,000 $60,000 $80,000 $100,000 Current Rate: $. 72 $ 288 $ 43 2 $ 5 7 6 $ 7 20 Proposed Rate: $.82 $ 328 $ 492 $ 656 $ 820 Net Increase Per Year* $ 40 $ 60 $ 80 $ 100 Monthly Cost of Increase $ 3. 3 3 $ 5. 0 0 $ 6. 6 7 $ 8. 3 3 WORK SESSIONS AND PUBLIC HEARINGS The City Manager advised that Council has established work sessions for review of this budget on April 6, 13 and 22, and the Public Hearing has been scheduled for April 26, 1982. The City Manager recommended the proposed budget for Council's review, consideration and subsequent adoption. *This increase does not include additional taxes as a result of increased assessments. - 8- ITEM #17993 Upon motion by Councilman Baum, City Council adjourned at 5:40 p.m. Ruth Hoages Ymitn, L;mu, City er Mayor J. Henry McCoy, Jr., D.D.S. City of Virginia Beach, Virginia 31 March 1982 - Special Meeting