THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Sunday, December 11, 1994 TAG: 9412090331
SECTION: PORTSMOUTH CURRENTS PAGE: 12 EDITION: FINAL
TYPE: Cover Story
SOURCE: BY TONI WHITT, STAFF WRITER
LENGTH: Long : 177 lines
THE CITY MANAGER has proposed a new way of doing business.
Rather than just borrow money for the city's building projects, City Manager V. Wayne Orton also wants to designate a 4-cent tax increase to be set aside for economic development and to borrow on future federal grants.
The City Council took a hard look at that plan last month and now it's the public's turn to have a say in how the city finances its future.
Under Orton's proposal, which will be debated Tuesday, the city would borrow less money than it has in recent years - a move the city's Municipal Finance Commission recommended last year.
Without a reduction in borrowing, the city will be using a large amount of its real-estate tax revenues to repay its debt. Currently the city uses revenues from utility taxes to pay back the bonds issued for building projects. However, those revenues fall short by nearly $585,000 of making the $12 million loan payments, so the city must transfer that money out of its day-to-day operating budget.
If the city continues to borrow $10 million a year, its debt payments will balloon to nearly $21 million within the next 15 years.
``Limiting our new debt will still result in a substantial increase,'' Orton told the council when he gave his budget recommendations. ``But the peak year for debt payment will be $17.6 million. While still placing a stress on our operating budget, the $8 million recommendation is prudent and will enable us to live more efficiently within our means.''
So what does a city with big dreams and little money do?
Orton suggested that if the city wants to get its new economic development plan off of paper and into the cityscape that the council increase taxes by 4 cents and designate that increase specifically for economic development.
This suggestion comes while the city is in the process of completing and approving a new economic development plan. That plan has been developed through a combination of ideas from citizens, politicians and experts, but has not yet received council approval.
That proposed tax would raise $1 million a year which could be used for such ideas as building a new harbor at the end of High Street; or building up Midtown, making it an attractive place for retail and residential; or entering a private/public partnership to build a commerce park and new residential area in the Fairwood Homes area.
City officials are scheduling a series of public hearings on the economic development plan in January, to get feedback from citizens and to allow them to prioritize the projects, said Matthew James, director of the city's economic development department.
``I don't think these suggestions now . . . it's not putting the cart before the horse,'' Orton said during a recent interview. ``It's recognizing that this is important and giving the council an ability to address this matter. It's my responsibility to offer administrative leadership.''
Some council members were cautious about the suggestion of a tax increase, although Councilman Cameron C. Pitts said if the tax rise means financing the city's future and reaping paybacks from the investment, he would consider it.
While several officials are linking the proposed tax to the initiatives in the proposed plan, James hopes that the money would be available for any number of economic development projects.
``I hope the proposed tax increase isn't linked directly to the economic development plan,'' James said. ``If that's the perception, it has the potential to slow the approval process (for the plan). Primarily because the natural question is what will that funding specifically be linked to and that would have to be answered.''
Orton, however, hinted that the majority of that money would be for economic development initiatives targeted in the plan. He also recommended taking another $500,000 out of the building budget and setting it aside only for those initiatives.
``This (plan) will be driven by citizen input, but I feel that it's important to put the funding mechanisms in place now and then we'll have substantial input and participation,'' Orton said.
The city manager also recommended borrowing money against future federal grants allowing the city to complete Kings Crossing as a condominium project. Rather than enter into a private/public partnership that might mean big risks for the city and little payoff, Orton wants to tailor the project to give Portsmouth a greater return. He suggested renting the condominiums until the loans are repaid and then slowly selling each unit for condominiums.
``It's most important that we complete that immediately,'' Orton said in an interview. ``It sits on the waterfront and it's a statement to visitors. The project's high-end rents will be paying back the money we're borrowing.''
Several council members, however, are reluctant to take on that project if the city could sell it to a private developer. The city has been negotiating with at least two developers interested in finishing the King's Crossing project, Pitts said.
``Industrial and economic development is our lifeblood,'' Orton told the council as he recommended that it spend another $3.6 million on other economic development projects.
He designated $575,000 for roads, sewer and water improvements to the Old Churchland High School site so that it can be sold for development.
He also designated another $3 million out of Community Development Block Grants for economic development. His recommendations include $125,000 for the Tidewater Community College Arts Center which will be leased to the state; $1 million for the Crawford Project; and $1 million so that the city can purchase and later redevelop property in Park View, Brighton, Prentis Place and Prentis Park.
Even with all the talk about economic development, the city manager did make room for a little bit of fun.
He recommended that the city spend $800,000 for recreation, including $500,000 to relocate a Little League field from St. Juliens Creek to an open field off of George Washington Highway and Victory Boulevard.
He designated another $200,000 for the second phase of construction on the new Children's Museum of Virginia. He designated another $60,000 for the Cavalier Manor Recreation center - a 20 percent match of a federal grant for renovations to the facility.
Under the $8 million proposal, Orton recommended that $3.9 million be dedicated to the construction of the new I.C. Norcom High School, rather than the $4.7 million that has been allocated for the past two years.
That means that the city will have a smaller downpayment on the $35.5 million school when it signs the construction contracts. So far the council has borrowed $10.2 million toward construction.
The manager's recommendation also sets aside $100,000 for other school repairs - down from $300,000 in previous budgets.
Several council members have voiced concern that by scaling back the budget so much, the schools will not have enough money for other construction and repairs in the existing facilities.
``We have as much, if not more money, earmarked for two recreation centers,'' said Councilman P. Ward Robinett. ``Is it realistic to think you can maintain schools for $100,000?''
Orton said the city's contribution was not the only money the schools have spent on repairs. The School Board typically takes money out of its operating budget to maintain its facilities, he said.
Other projects include:
Nearly $1 million for public safety, including a $325,000 fire truck and $573,790 for a jail addition.
Federal and state mandates of $725,000, including $25,000 for wheelchair curb cuts; $50,000 for underground storage tanks; $250,000 for phasing out the Craney Island landfill; $100,000 for bringing municipal facilities in compliance with the Americans With Disabilities Act; and $300,000 for asbestos monitoring and removal.
Drainage and street improvements of $1.5 million, including $300,000 for ditches at Cavalier Manor; $175,000 for storm drain cave-in repairs; $50,000 to replace the Clifford Street Bridge; and $200,000 each for Brighton, Simonsdale, North Truxtun; Highland-Biltmore. The city will spend another $10,000 for its share on state projects for West Norfolk Road and Tyre Neck Road.
Orton recommended spending $19 million on major construction, repair and renovations, including $8 million from general obligation bonds - a low interest loan from investors; $3.2 million in grants; and $1.4 million from other revenues. Another $6.7 million comes from revenue bonds - loans made on projected income - for public utility projects. MEMO: A public hearing on the proposed building budget will be held at 7 p.m.
Tuesday in City Council chambers, City Hall.
ILLUSTRATION: [Cover]
FUNDING THE CITY'S FUTURE
Photo illustration by MARK MITCHELL
The bottom line for residents would be a 4-cent tax increase to
finance the city's proposed building projects.
File photos
Under the $8 million proposal, the city manager recommends that $3.9
million be dedicated to the construction of the new I.C. Norcom High
School.
The site for the proposed Norcom High School is on High Street, near
Lawrence Stadium.
Staff photo by MARK MITCHELL
Of the nearly $1 million for public safety, $573,790 is earmarked
for an addition to the city jail.
Staff photo by MARK MITCHELL
The city manager's recommendations include $125,000 for the
Tidewater Community College Arts Center which will be leased to the
state.
Staff photo by MARK MITCHELL
The city would replace the aging Godwin Street water tower, part of
$6.5 million worth of planned utility improvements.
KEYWORDS: BUDGET by CNB