Virginian-Pilot


DATE: Wednesday, March 19, 1997             TAG: 9703190503

SECTION: LOCAL                   PAGE: B9   EDITION: FINAL 

SOURCE: BY MAC DANIEL, STAFF WRITER 

DATELINE: CHESAPEAKE                        LENGTH:   40 lines




CHESAPEAKE LIKELY TO RAISE 2 FEES TO PAY FOR ITS NEW RADIO SYSTEM

The City Council appears likely to approve two local fee increases to pay for a new emergency radio system.

No action was taken Tuesday, but the issue is expected to come before the council soon.

Increases in the monthly charge for emergency 911 phone service and emergency medical service would likely go toward the first $10 million needed to get the new 800 megahertz radio system on-line. The city's current radio system was purchased in 1969.

If it uses the fee increases for the radio system, the council will have to find other sources to offset a $19 million budget shortfall over the next two years.

``We still need to consider other enhancements to balance the budget,'' said Mayor William E. Ward.

Politically, the council would like to avoid raising local fees and taxes.

But the council has been advised not to dip too deeply into the city's reserves or it could risk losing its double-A bond rating.

Chesapeake has about $50 million in its reserves; state and local laws require only $30 million.

That leaves enough in reserve to immediately wipe out the expected shortfall. However, the City Council and city officials worry that taking such a large percentage of the reserve could be disastrous if the city were to face a financial crunch down the road.

City Manager John L. Pazour said Tuesday that a jump in the monthly rate charged for emergency 911 service would rise from 50 cents a month to $1.95. This increase would raise an estimated $1.53 million.

The proposed increase in the emergency medical service fee would raise about $200,000 without affecting the indigent or elderly, according to Pazour.

Pazour has suggested using a 10-year letter of credit to fund the radio system, a move that would cost about $1.5 million annually. However, at this point the city has only a five-year letter of credit, requiring about $2.4 million per year.



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