THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Wednesday, May 10, 1995 TAG: 9505100436
SECTION: LOCAL PAGE: B1 EDITION: FINAL
SOURCE: BY FRANCIE LATOUR, STAFF WRITER
DATELINE: CHESAPEAKE LENGTH: Medium: 89 lines
Calling for a new level of fiscal restraint, Chesapeake City Council unanimously cut the city's real estate tax rate and approved a $402 million operating budget Tuesday.
Council members lowered the city's basic tax rate from $1.27 to $1.26 per $100 of assessed value.
Nearly all properties, however, are in mosquito control districts, and the council cut the tax rate there as well, from 2.5 to 2 cents per $100. So the average Chesapeake homeowner will pay $1.28 per $100, down from $1.295. That translates to $1,280 for a house worth $100,000, or a savings of $15 in taxes to the city.
The tax rate cut sliced the proposed budget by $800,000.
Council members called the approval process one of the smoothest in recent years and said they struck the right balance between returning savings to homeowners and protecting the city's economic integrity for the future.
``I think the council has entered a new era,'' said Councilman John M. de Triquet after the vote.
De Triquet was among the most vocal critics in the budget process, questioning costs and advocating that the city put money into reserves rather than rolling back the tax rate.
A 3 percent increase this year in overall property assessments promised to drive up the tax bills for many homeowners, eventhough the city never considered raising the actual tax rate.
Council members would have had to cut the tax rate by 2.75 cents per $100 to compensate for the jump in assessments and keep the basic real estate tax revenue level.
While the council fell short of that goal, de Triquet said the one-cent decrease was a compromise that would give citizens some relief while protecting the city as it faces $150 million in debt for building schools, roads and a jail.
``We have a new resolve now,'' de Triquet said, ``and that is to be extremely critical of every capital and internal expenditure, and that goes across the board. The hard part begins now, as we continue to apply that scrutinty to every cost that comes before us.''
Vice Mayor Robert T. Nance said it was time for city officials to think more seriously about cost cutting.
Nance shocked top officials in various departments in a work session Monday, when he proposed $1.5 million in major reductions that included halving the budget for overtime and staff travel.
In a compromise reached by Nance and Mayor William E. Ward on Tuesday, $300,000 of Nance's cuts were included in the final budget.
The city also cut $367,000 from the school budget and trimmed $500,000 from its self-insurance reserve.
The council also added $62,000 for two deputies in the sheriff's department; shifted $100,000 from a contingency fund to hire additional police officers; moved $20,000 from Chesapeake Jubilee funds to Fun Forest maintenance; added $22,000 to the Community Services budget and added $7,000 to cover postage increases.
``I wanted the manager to see that there are things that can be cut if you need to do it,'' Nance said.
The move to cut the tax rate went against the repeated warnings of City Manger James W. Rein and Budget Director Claude A. Wright. In numerous work sessions and public hearings since Rein introduced the plan April 19, Rein and Wright warned of ``the crunch year'' in 1996-97. That is when the city will have only a $2 million cushion once it pays back the interest on debts and the cost of running the city.
Chesapeake will be spending $35 million more this year for its basic, day-to-day needs, an increase of 9.6 percent over last year's operating budget.
Much of that increase will be used to pay back $150 million the city has borrowed to fund new schools, roads, a new jail and other big-ticket items.
The city will pay $11 million next year in debt service.
At the same time, the city must spend money to staff the new facilities when they come on line.
Running the new Thurgood Marshall Elementary School, a new gymnasium in Deep Creek's Camelot section, a jail annex and a juvenile detention facility will cost $4.4 million.
The new jail alone will require 85 new deputies at a cost of about $1.2 million. It is scheduled to open in April 1996.
The budget also projects an additional 900 students to come into the school system this year, costing the city another $2.3 million. ILLUSTRATION: GRAPHIC
TRACKING THE BUDGET
KEYWORDS: CHESAPEAKE CITY COUNCIL BUDGET by CNB