THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Tuesday, February 27, 1996 TAG: 9602270300
SECTION: LOCAL PAGE: B1 EDITION: FINAL
SOURCE: BY MAC DANIEL, STAFF WRITER
DATELINE: CHESAPEAKE LENGTH: Medium: 73 lines
The final public hearing on Chesapeake's five-year capital budget will be held tonight by the City Council, which has until Thursday to approve a plan.
The capital budget, which funds long-term projects and land acquisitions, totals $578,169,198, down 29.3 percent from last year.
The proposed budget recommends no tax increases. And outside of bond funding for education and public utilities, no new borrowing is proposed.
Cuts are recommended across the board. Money for community facilities is reduced 8 percent from last year; money for parks and recreation is cut 40.6 percent; transportation money is decreased about 40 percent; and money for education has been sliced about 44 percent.
Money formerly earmarked to fund the expansion of Battlefield Boulevard has been taken out of the budget because the project would extend beyond the budget's five-year time frame. That alone reduced the capital budget some 15 percent.
Still to be decided is how the city will handle an additional $48.2 million request for capital funds from the school district to build new high and middle schools.
City budget director Claude A. Wright said the council has yet to decide if it will incorporate the additional money into the budget.
The council may discuss the matter during its work session at 5:15 p.m. in the personnel training room on the fourth floor of City Hall and again during the council meeting that begins at 6:30 p.m. in the council chambers on the first floor.
As of late Monday, the only change made to the proposed capital budget involved adding $534,000 to fully fund the Chesapeake Municipal Airport, Wright said.
The airport will require shifting money from other budget areas, city officials said, including $115,000 that had been earmarked to replace a fire station and $250,000 from road projects on Providence Road and at the intersection of Shell and Galberry roads.
If the council approves the School Board's full five-year request, it could force the city to an all-time high in borrowing per citizen, Wright said. That could affect the city's bond rating, and thereby make the city pay more for the money it borrows, he said.
The situation is compounded by a drop in development, which has left the city coffers lighter than expected. The city had predicted a 3.6 percent increase in population in 1995, but the population increased only by 2.3 percent.
Chesapeake is already heavily in debt, having borrowed to build a number of capital projects, including citywide road work and major repairs to the city's Northwest River Water Treatment plant.
Even without adding the school money, by 1998 the city will exceed a council-approved debt ceiling that limits annual borrowing to $2,400 per resident.
By adding the school request, the city would wind up committing 15.8 percent of its annual revenue just to paying off debt. That would be the highest percentage of revenue committed to paying bonds in Chesapeake's history, Wright said.
The city charter requires that the city approve the capital budget by the end of February. If it is not approved, the city manager's proposed budget is automatically adopted, said Wright. MEMO: To request time to speak at the public hearing, call the City Council
office, 547-6153, or you can sign up in the council chambers before the
formal meeting begins at 6:30 p.m.
KEYWORDS: CHESAPEAKE BUDGET by CNB