THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Friday, March 31, 1995 TAG: 9503290165
SECTION: PORTSMOUTH CURRENTS PAGE: 10 EDITION: FINAL
TYPE: Cover Story
LENGTH: Long : 380 lines
The following is an excerpted version of an advance text of City Manager V. Wayne Orton's presentation to City Council on Tuesday concerning the fiscal year 1996 operation budget.
...the budget presented today addresses our budgetary needs for the next two fiscal years. While this approach departs from our past practice, it is a prudent measure which will keep us focused on our long-term objectives.
. . . The proposed (fiscal year) 96 general fund operating budget of approximately $120 million that I submit to you today represents a 1.2 percent increase over the prior year's budget of approximately $118 million. Factoring out increases recommended in public safety, debt service transfers and refuse collection, the FY 96 proposed budget represents a 0.5 percent decrease over FY 95. Of 56 general fund cost centers, 27 show a reduction in proposed expenditures below FY 95, with 17 of those having been reduced 5 percent or more. In addition, the FY 96 proposed budget includes a net decrease of 11 positions for all funds, despite 46 new public safety positions.
. . . As I have stated publicly many times before, I am not a subscriber to the notion that more police officers are the solution to our city's, or America's, crime problem. We do, however, need to add resources and work those resources differently and smarter. At the same time, we must continue the leisure, community, educational and social service programs which hold the keys to solving our crime problem.
We have realized much success in economic development . . . To continue this success, a focused strategy must be developed to attract new retail ventures while retaining, enabling and nurturing our existing retail businesses. Retail development is vital to the economic rebirth of Portsmouth. General sales tax revenues over the last 10 years have continued to decline, diminishing a major revenue source. With these factors in mind, efforts are currently under way to recruit a retail specialist to carry out this strategy.
. . . As revealed in City Council's one- and five-year goals and objectives, clear themes of Portsmouth priorities emerge to include broadly: positive city image; public safety; community and economic development; effective codes enforcement; citizen involvement and partnership; neighborhood improvement; tourism; effective, efficient, responsible and responsive service delivery; a stable financial condition; and quality education.
This is the scope of our challenge. The budget discussion which follows will reveal recommendations on how we meet these challenges and realize our goals.
VISION 2005
``Vision 2005,'' our city's plan for economic and community development into the 21st century, is the guiding directive and blueprint for many important decisions which must be made if we are to make the vision become a reality. Time is of the essence, and we must move quickly on the priority actions which are identified in the first phase of the plan.
The proposed FY 96 budget includes $500,000 to provide the necessary public funds to stimulate private investment for the initiatives specified in the ``Vision 2005'' plan. This appropriation is made possible by a planned continuation of ``right-sizing'' of city staff through restructuring of certain departments and re-engineering city services. This funding, and the $500,000 already approved by you in the Community Development Block Grant (CDBG) program, provides $1 million in resources for economic development. Also you have authorized borrowing through the CDBG 108 Loan Program, which could allow a loan of up to $10 million for economic development in CDBG-eligible areas. A portion of the annual CDBG entitlement would be used for repayment of the 108 loan.
Resources identified from CDBG and the operating budget total $11 million, which could be directed toward ``Vision 2005'' projects in the very first year. This funding could provide the spark to ignite our move toward altering our economic future and changing the image of Portsmouth. Projects already under way include:
Creating an inlet at the foot of High Street
Revitalizing the 600 blocks of London Boulevard and High Street
Including the Frederick Boulevard project in the State Highway Urban Allocation Program
Positioning the new I.C. Norcom High School to include a new civic center area
Designing a site plan for the redevelopment of River Edge as a single-family neighborhood
A proposed ``Vision 2005'' Steering Committee will facilitate these public-private partnerships. The committee will consist of local business representatives, civic and community groups and city staff. . . . This committee will provide the attention and support needed to maintain the momentum and build on the actions already in progress.
During the development of the Vision 2005 Plan, the concept of moving police operations to the Midtown area was explored and endorsed. Moving the police department to the Midtown corridor will centralize six different police locations, as well as show merchants and citizens that the city is committed to ``Vision 2005'' in its entirety and not just in revitalization efforts Downtown. This move will bring 300 employees into Midtown and give this important area the needed ``jump start'' to stimulate its economic rebirth.
Additionally, the sheriff's and magistrate's offices will relocate to the spaces currently occupied by the police department. The space needs of these offices have been overlooked and given a lesser priority. The time has come to address their needs . . .
PUBLIC SAFETY
Police
The budget recommends an addition of 21 new positions . . . and the establishment of a community policing effort to aggressively address the crime problem in our city.
. . . To give the police department the organizational and structural thrust needed for a successful community policing effort, I am recommending the addition of a bureau commander. This position will provide the ability to restructure, and place primary emphasis on the community policing program without detracting from other police operations.
To support these personnel additions, relocations and other public safety needs, I am recommending a 3 percent increase in our city's real estate tax rate, from $1.32 per $100 to $1.36 per $100. The new tax dollars generated will be specifically used for public safety.
Fire
As part of the ``Portsmouth Fire Department Vision 2005 Strategic Plan,'' the fire chief has recommended the consolidation of the Jamestown Avenue and Port Norfolk fire stations. By consolidating these two stations, the fire chief plans to reassign staff to provide increased manpower throughout the city. The area serviced by the Jamestown Avenue fire station will be covered by Engine 4 (Port Norfolk), Engine 7 (Grove Park) and Engine 1 (fire headquarters).
This action will provide additional manning on each pumper and eliminate the need for a third engine company on fire calls. With the closing of this station, the fire chief has recommended the renovation of the existing Cedar Lane fire station in order to house one engine company and one medic unit. This will increase coverage of fire demand zones by 17.1 percent.
Since approximately 70 percent of all calls for assistance require emergency medical response, I am recommending that the fire department manage and operate the emergency ambulance service. A staff of nine paramedics will be added to operate two ambulances 24 hours a day, with a third ambulance to supplement as needed.
The staff analysis indicates that the consolidation of fire stations and a city-operated ambulance service will save the taxpayers approximately $150,000.
Public Utilities
In the past year, the city has experienced declining in-town water sales and increases in chemical and electrical costs. Measures have been taken to reduce personnel and operating costs to hold the increase in the water rate to 5 cents per 1,000 gallons for FY 96. This increase would add ($3.14) per year to an average customer's bill.
The utility fund will need to raise more than $1.5 million in additional funding in FY 96 to service the debt required to renovate the Lake Kilby Water Treatment Plan and maintain the aging water and sewer infrastructure. These mandates will have a significant impact in coming years which may result in rates rising in excess of 25 percent. An estimated increase of $0.05 is proposed for FY 97 . . .
Storm Water
Management Program
The Federal Clean Water Act mandates that municipalities implement a comprehensive storm water program to include water quality monitoring, operation and maintenance of the program, stormwater master planning and system inventory. In response to this mandate, the city of Portsmouth implemented a storm water utility to provide a funding source for this program.
Since 1992, the city has charged monthly fees of $3.50 for residential and $7 for commercial customers. These interim rates have not been sufficient to provide the necessary funding for compliance with federal mandates.
Effective July 1, I am recommending a single rate of $$3.50 per equivalent residential unit (ERU) for both residential and commercial customers. . . . All residential customers will be billed for one ERU and will experience no change in the current fee amount.
Commercial customers will be billed based on their number of ERUs. The maximum impervious area to be assessed is 250,000 square feet. Approximately 84 percent of commercial properties will be assessed a fee between $3.50 and $10 per month, with the remaining 16 percent assessed between $50 and $466 monthly.
Waste Management - SPSA
As a result of the United States Supreme Court's decision on waste-flow control, the power of localities to control the flow of refuse within their communities has been eliminated. The Southeastern Public Service Authority (SPSA) has seen a steady decline in waste hauled to its disposal facilities by private waste haulers. This has reduced SPSA's tipping fee for revenues while operational costs have remained constant.
Due to these impacts, it is projected that our disposal fee will increase by more than $500,000 for FY 96. SPSA is projecting that the tipping fee will go from $34 per ton to more than $48 per ton. I am recommending an increase of $2 per month in the city's waste management charge for FY 96 and an additional $1 in FY 97. As costs will continue to escalate, adjustments to this fee will be required.
Code Compliance
In response to City Council's increasing concern over code enforcement issues, the Department of Environmental Services has already made some code and policy changes. Some of these changes include the following:
Inoperative motor vehicles on private property will now be referred directly to a towing company
Code compliance period on vehicles was reduced from 20 days to 10 days
A stronger weed ordinance will reduce repetitive notification requirements to owners
Mowing issues are being clarified to reduce duplication of staff efforts in addressing citizen concerns
An Environmental Code Advisory Committee will explore opportunities for greater neighborhood and civic league involvement
Four new positions are needed to address enforcement of code issues in Portsmouth. Two inspectors will be assigned to each of the departments of Environmental Services and General Services. Additionally, these new inspectors will conduct more systematic code sweeps in neighborhoods and educate citizens regarding the schedule of bulk refuse collection and the type of items eligible for pickup . . .
CHANGES TO FEES AND TAXES
Permit Fees
For the first time in several years, increases in building permit fees are recommended. These changes are modest and clearly do not exceed the scale for the region. I am also recommending that the 1 percent surcharge imposed by the Commonwealth to support the Building Code Academy be added to the contractors' fees. These surcharges are incorporated in the proposed fees and are already paid by contractors in every other Hampton Roads city.
Other Fees and Taxes
In addition to the fees mentioned above, the following increases are proposed:
Effective July 1:
Cigarette tax to increase by $0.05
Certain golf and recreation fees to increase, and
Effective Jan. 1, 1996:
Children's Museum of Virginia admission fee to increase by $1 . . . to $4
PERSONNEL
The comprehensive Classification and Pay Plan study has been an ongoing process throughout this fiscal year. Employees have had an opportunity to participate in the development of their job descriptions with the firm conducting the job analysis and evaluation. Portsmouth will no longer have a longevity-based pay system. The proposed pay plan will include a three-level range consisting of a minimum, mid-point and maximum. The mid-point is the competitive or average rate being paid for the position in the regional labor market.
Upon implementation of this new system during FY 96, employees covered under the Portsmouth Classification and Pay Plan who earn less than the minimum of their new range, will have their compensation adjusted to the minimum level. Included in this budget is an appropriation of $300,000 for this purpose.
Plans for the future include moving pay toward the mid-point and development of a new pay-for-performance system. Implementation of pay-for-performance will include a revised appraisal system which will allow outstanding performers to receive additional compensation.
Police and Fire Retirement
Over the last two years, you have improved the retirement benefit packages of our police officers and firefighters. Recognizing that our salaries were not competitive, the retirement benefits package was enhanced to assist in recruiting and retaining competent public safety personnel. With implementation of the new Classification and Pay Plan, police officers' and firefighters' salaries will now be more regionally competitive as we continue our movement toward market mid-point.
With this in mind, I am recommending that effective July 1, all new police and fire hires become members of the Virginia Retirement System and that the Portsmouth Fire and Police Retirement System become a closed system, as is the Portsmouth Supplemental Retirement System. This change would have no effect on current fire and police employees. . . .
FISCAL MANAGEMENT
Debt Service
During the capital budget process, you took a bold step by lowering our self-imposed debt limit from $10 million a year to $8 million. In fact, you approved an even lower capital budget of almost $7.4 million. Debt management remains as one of the our more substantial challenges. Revenues in the debt service fund are no longer sufficient to completely service our debt, and the amount of additional transfer required from the general fund continues to climb.
While your actions have improved our position, debt service requirements in the coming budget have increased by $378,000. In FY 97, the transfer amount required from the general fund will exceed $2.5 million based on anticipated bond issuances.
Fund Balance
For at least the last five years, the Municipal Finance Commission has consistently recommended that our reserves be increased to a level of $11 million, which is approximately 10 percent of our operating revenues. While the fund balance is $2.6 million higher than five years ago, it is still not adequate to protect against the peaks and valleys in our cash flow, which occur due to the cyclical nature of the city's revenue collections and debt service payments.
An increased reserve would improve our ability to better manage cash during the low periods and diminish the potential need to borrow funds to meet operational requirements. The FY 96 budget recommends $700,000 in appropriation to increase the fund balance. We must continue to appropriate an increase in the fund balance until such time that our reserves are adequate .
EDUCATION
All segments of government are having to reduce cost while retaining services. The public schools will also have to face this challenge. For the last five years, the city reduced the number of employees, while main taining the capacity to provide services. This has proven to be a sound approach.
The city . . . is committed to the highest quality of public education. This commitment has been demonstrated through the capital improvement plan in which the citizens are providing for the construction of a state-of-the-art science and technology high school at a cost of $35 million . . .
This budget recommends reducing the amount of local appropriation to our schools by 4 percent, a cut of less than 1.2 percent of the school's proposed operating budget. This recommendation is not at all about stepping back from our commitment to education, but is about the resource base needed by the schools to manage its operations. A careful examination of the staffing and enrollment patterns, as well as administrative and non-instructional expenditures over the last several years, supports the necessity and wisdom of this recommendation. While the dollar amount of the funding for the public schools is lower, the impact of this reduction could be absorbed through streamlining efforts without affecting classroom-related areas of the school system's budget. My recommendation asks no more of the school system than has been asked of all other city departments.
. . . The school administration and the board must make a focused and deliberate effort to create a smaller, more efficient organization while continuing to provide better pay for teachers and increased resources in the classroom. This will be a painful process requiring commitment and determination, just as it has been for many other governmental and private sector employees who have had to re-engineer their work forces. Nonetheless, I am confident that it can be done, and I offer the willing assistance of my staff.
CONCLUSION
There can be no doubt that Portsmouth has many challenges at hand. Shakespeare wrote in Romeo and Juliet a line which reads, ``All these woes shall serve for sweet discourses in our times to come.'' The recommendations included in the FY 96 operating budget presented to you today represent the toughest ordeals which, when mastered by well-focused and goal-directed leadership, will provide use with lasting memories of a city that met its challenges. ILLUSTRATION: [Cover]
FUNDING THE FUTURE
File photo by MIKE WILLIAMS
``There can be no doubt that Portsmouth has many challenges at
hand,'' says City Manager V. Wayne Orton about the proposed budget
for fiscal year 1996.
Photo by DAVID STERLING
City Manager V. Wayne Orton presented the proposed budget for fiscal
year 1996 to City Council on Tuesday.
PROPOSED BUDGET HIGHLIGHTS
Increases include:
A 4-cent real estate tax increase; from $1.32 to $1.36; tax
increase, which would raise $1 million, is designed to fund 21 new
police officers, their uniforms and equipment.
A 5-cent increase per 1,000 gallons of water used; increase would
increase homeowners' water bills about $3.15 a year.
A $2 per month increase in fees for garbage collection.
A 1 percent surcharge to the cost of all building permits.
Increasing the price of admission to the Children's Museum from
$3 per person to $4.
A new stormwater management fee structure that would affect
businesses; rates would depend on size of the business and could
increase some fees by more than $400 a month. Currently fees for
businesses are $7.00. If the increases are passed, fees will range
from $3.50 to $465.
A 5-cent increase to the cigarette tax.
A variety of fee increases for recreation and golf.
Cuts include:
A 4 percent cut in local contribution to public school system;
would reduce the overall budget for the schools by 1.2 percent.
Phasing out the police and fire retirement system for any new
hires, forcing them to join the Virginia Retirement System instead.
AVERAGE IMPACT
Real estate tax:
($70,000 house)
$2.33 monthly/$27.96 yearly
Refuse:
$2.00 monthly/$24.00 yearly
Water:
$0.26 monthly/$3.12 yearly
-----------------------------
Total:
$4.59 monthly/$55.08 yearly
PROCESS SCHEDULE
April 4: Public work session at 5 p.m.
April 11: Public hearing at 7 p.m.
April 18: Public work session at 5 p.m.
April 25: Adoption of operating budget at 7 p.m.
For further information, call the city's Public Affairs
Department at 393-8062.
BUSINESS IMPACT
Real estate tax:
$9.33 monthly/$111.96 yearly
Refuse:
$2.00 monthly/$24.00 yearly
Water:
$2.31 monthly/$27.72 yearly
Stormwater Management:
$30.45 monthly/$365.40 yearly
Total:
$44.09 monthly/$529.08 yearly
KEYWORDS: BUDGET CITY MANAGER V. WAYNE ORTON PORTSMOUTH CITY COUNCIL
by CNB