DATE: Wednesday, March 12, 1997             TAG: 9703120436

SECTION: LOCAL                   PAGE: B7   EDITION: FINAL  

SOURCE: BY MAC DANIEL, STAFF WRITER 

DATELINE: CHESAPEAKE                        LENGTH:   70 lines

CORRECTION/CLARIFICATION: ***************************************************************** A Chesapeake City Council vote was incorrectly listed on Wednesday's Public Life page. The Council voted 7-1-1 to approve the Ramsgate development. Councilman John M. de Triquet voted against the development. Councilman Alan P. Krasnoff abstained from the vote. Local cities require a monthly fee for emergency 911 calls from all residents. A story about Chesapeake taxes, in Wednesday's Hampton Roads section, erroneously said the fee was charged per call. Correction published Thursday, March 13, 1997. ***************************************************************** CHESAPEAKE CITY MANAGER CALLS FOR TAX BOOST TO REDUCE SHORTFALL CITY COUNCIL MULLS OVER A PACKAGE THAT WOULD BRING IN AN ADDITIONAL $4.4 MILLION.

Tax talk arrived early in Chesapeake.

At a work session Wednesday, City Manager John L. Pazour told the council it will be impossible to reduce the city's projected $19 million shortfall without an increase in some local fees and taxes.

Pazour also said the tax and fee increases should be matched with some spending reductions and a limited use of the city's reserve funds.

Chesapeake is already under a moderate hiring freeze because of the shortfall.

Pazour has also instituted a slowdown on new city department projects.

No decision was made Tuesday, and none is likely until the operating-budget wrangling begins in about a month.

In the meantime, the council will mull over the options offered by staff, which include tax and fee increases that could produce $4.4 million annually.

Some of that money has been earmarked to pay for a new 800-megahertz radio system for the city.

A proposed increase in the local emergency 911 phone fee and an increase in the charge for emergency medical service would go toward this new system, estimated to cost $14 million.

The proposed fee and tax increases include:

Increasing the emergency 911 fee from 50 cents to $1.95 a call, which the staff said is what Virginia Beach charges.

Increasing the emergency medical service fees from $150 for emergency life support to $200.

Increasing the local cigarette tax from 20 cents per pack to 25 cents.

Creating a $20 application fee for getting a building permit.

Increasing the local residential gas utility tax from 25 percent on a bill's first $7.50 to 20 percent of the first $15.

The city is still in solid financial shape despite the shortfall, Pazour said. He said Chesapeake has some $55 million in its reserves. That's about $25 million more than the city is required by state and local laws to have in its coffers.

But Pazour advised the council that most of this extra reserve should remain untouched. Once reserves are tapped, he said, they tend to diminish quickly.

City officials initially introduced the possibility of tax and fee increases in October.

The City Council has said it wants to maintain Chesapeake's affordability for both new residents and businesses.

Budget officials have said these new tax and fee increases should not affect Chesapeake's standing in the region as an affordable place to buy a home or build a business.

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