THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Thursday, November 24, 1994 TAG: 9411230240
SECTION: PORTSMOUTH CURRENTS PAGE: 04 EDITION: FINAL
SOURCE: BY TONI WHITT, STAFF WRITER
LENGTH: Medium: 68 lines
Over the next month, the City Council will be working to reduce $34 million in potential construction projects into a concrete list costing between $8 million and $10 million.
On Monday, city staff members ran down a wish list of construction projects and then painted a depressing picture of future debt.
Finance Director J. Peter Tieg told the council that if the city continues to borrow $10 million a year, in 15 years the city will be repaying about $20.5 million a year just on building projects. Currently the city earns about $12 million a year in utility taxes, which are earmarked to repay the construction debt.
If the city reduces its Capital Improvement Plan to $8 million a year, the debt will rise to $17.7 million a year in 15 years but will then level off to about $14.3 million a year.
That poses a potential problem in a city that has $85 million in proposed building projects over the next five years.
This year alone the city has $1.7 million of mandated projects on its list, although $300,000 for a family court might be deferred until 1996 and another $150,000 in projects will be funded through federal grants.
The staff listed another $10.5 million in ongoing construction projects, including $5 million for I.C. Norcom High School and other school repairs. About $2.2 million of the ongoing construction projects would be done through Community Development Block Grants.
The council also has to decide whether t still wants to fund a $560,000 addition to the jail. Ray Gindroz, an urban design consultant, has encouraged the city to move the jail off of the waterfront and to build a city jail at the same site of the yet-to-be-built regional jail in Hattonsville.
Between mandates and ongoing projects, the city would have to issue $9.5 million in bonds - debt the city can't afford.
But the wish list doesn't stop there. The staff listed another $22 million in projects that have long been on the list but have not been funded. Those projects include road and bridge improvements, a $1.2 million athletic facility at Wilson High School, renovations and additions to the city's museums, park improvements, recreational facility improvements, a fire station, a parking lot for Tidewater Community College and electronic voting machines.
Nearly half of the $22 million would go toward completing Kings Crossing as a hotel. The cost of Kings Crossing would go down to $7.5 million if the city decides to turn the bankrupt condominium project into luxury apartments.
The best scenario for the city would be to turn it over to private developers or to enter into a private/public partnership, said Robert Creecy, management services director.
After council reviewed the projects, the city's new Chief Financial Officer Johnna Whitaker offered some financing options including private/public partnerships; selling off city-owned land to pay off building projects; bonds issued on special taxing districts; and continuing to borrow money through bonds backed by the full faith and credit of the city.
The council will discuss the projects and how to fund them during a work session Nov. 29 when City Manager V. Wayne Orton will give his recommendations for the building plan. MEMO: A complete list of proposed projects and their costs will be included in
Sunday's Currents.
KEYWORDS: PORTSMOUTH CITY COUNCIL
by CNB