[PPT] - Presentation of the Proposed FY 2014-15 Operating Budget and CIP PowerPoint Presentation

SLIDE 1

Presentation of the Proposed FY 2014-15 Operating Budget and CIP

March 25, 2014

Catheryn R. Whitesell, Director of Budget and Management Services

1

SLIDE 2

Index of Change: Budget vs CPI

2

85 90 95 100 105 110 115

FY 10 FY 11 FY 12 FY 13 FY 14 FY 15

CPI Budget

SLIDE 3

Economic Overview

2013 Actual 2014 Forecast

Real Gross Regional Product* 1.7% 2.2% Civilian Employment 2.0% 1.5% Unemployment Rate 5.9% 5.3% Taxable Sales 2.9% 3.6% Hotel Revenue

1.3%

2.4% Housing Permit Value 15.7% 7.9%

*long-term historical average is 3.1%

Old Dominion University for Hampton Roads

3

SLIDE 4

OPERATING BUDGET

4

SLIDE 5

Total Revenue By Source

Real Estate 26.3% Personal Property 7.5% General Sales 3.3% Utility Taxes 2.5% Business License 2.6% Restaurant Tax 3.3% Hotel, Amusement, & Cigarette 2.6% Charges for Service 15.1% Permits, Fines and Fees; Use of Money and Property 1.2% Other Revenue 2.5% State Revenue 25.1% Federal Revenue 6.5% Fund Balance 1.6%

5

SLIDE 6

Change in Assessed Value of Real Estate

19.2% 3.2%

2.3%
6.2%
2.8%
3.4%
0.3%

3.6%

10.0%
5.0%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 2008 2009 2010 2011 2012 2013 2014 2015 Fiscal Year

6

SLIDE 7

Real Estate Tax Revenue

Rates Virginia Beach - $0.93 Chesapeake - $1.05 Norfolk - $1.15 Portsmouth - $1.27 Suffolk - $1.03 Hampton - $1.24 Newport News - $1.22 $493.2 $504.9 $499.3 $473.6 $460.3 $474.3 $462.9 $481.0 $400.0 $420.0 $440.0 $460.0 $480.0 $500.0 $520.0 2008 2009 2010 2011 2012 2013 2014 2015 Millions Fiscal Year

7

Each penny generates $4.97 million

SLIDE 8

Change in Real Estate Revenue FY 2013-14 to FY 2014-15

FY 2013-14 FY 2014-15 Difference Schools $207,118,268 $215,907,608 $8,789,340 Parks and Recreation $18,899,332 $19,617,550 $718,218 Agriculture Reserve Program $4,311,817 $4,474,353 $162,536 Sandbridge SSD $591,675 $628,909 $37,234 Sandbridge TIF District $7,410,157 $8,139,025 $728,868 Central Business District TIF $5,208,136 $5,367,921 $159,785 Town Center SSD $1,480,463 $1,548,564 $68,101 Dredging SSDs $139,490 $370,505 $231,015 City Operations $217,704,335 $224,978,397 $7,274,062 Total $462,863,673 $481,032,832 $18,169,159

8

SLIDE 9

Average Annual Increase in Real Estate Tax Bills (all types) from FY 2003-04 through FY 2013-14

Virginia Beach 1.77% Chesapeake 2.00% Norfolk 3.55% Newport News 3.97% Hampton 4.53% Suffolk 5.00% Portsmouth 5.20% Average Excluding Virginia Beach 4.04%

9

SLIDE 10

Personal Property Tax Revenue

Rates Virginia Beach - $4.00 Chesapeake - $4.08 Norfolk - $4.33 Portsmouth - $5.00 Suffolk - $4.25 Hampton - $4.25 Newport News - $4.50

10 cents produces $3.3 million annually

10

$138.5 $136.9 $119.9 $118.6 $123.7 $132.4 $138.6 $137.2 $80.0 $90.0 $100.0 $110.0 $120.0 $130.0 $140.0 $150.0 2008 2009 2010 2011 2012 2013 2014 2015 Millions Fiscal Year

SLIDE 11

General Sales Tax Revenue

11

$55.7 $56.0 $51.1 $50.6 $53.0 $54.1 $58.0 $60.0 $40.0 $45.0 $50.0 $55.0 $60.0 $65.0 2008 2009 2010 2011 2012 2013 2014 2015 Millions Fiscal Year

SLIDE 12

BPOL Tax Revenue

12

$45.0 $43.2 $40.6 $40.8 $41.3 $42.4 $42.8 $47.6 $25.0 $30.0 $35.0 $40.0 $45.0 $50.0 2008 2009 2010 2011 2012 2013 2014 2015 Millions Fiscal Year

SLIDE 13

Restaurant and Hotel Tax Revenues

13

$23.1 $24.1 $23.9 $22.7 $25.3 $26.6 $28.1 $27.9 $49.1 $48.7 $49.8 $48.2 $51.8 $55.2 $58.1 $59.6 $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 2008 2009 2010 2011 2012 2013 2014 2015 Millions Fiscal Year

Hotel Tax Meal Tax

Restaurant Tax Rates Virginia Beach - 5.5% Chesapeake – 5.5% Portsmouth – 6.5% Suffolk – 6.5% Hampton – 7.5% Newport News – 7.5% Hotel Tax Rate All – 8.0%

SLIDE 14

Charges for Services

14

$0.0 $50.0 $100.0 $150.0 $200.0 $250.0 $300.0 2009 2010 2011 2012 2013 2014 2015 Millions Fiscal Year

Storm Water Fees Solid Waste Collection Fees Water and Sewer Fees Medicaid Fees Other Fees

SLIDE 15

State and Federal Revenues

15

$496.4 $513.6 $458.7 $439.0 $435.3 $442.4 $447.3 $459.8 $111.1 $106.9 $140.1 $128.5 $153.0 $121.4 $119.5 $119.1 $0.0 $100.0 $200.0 $300.0 $400.0 $500.0 $600.0 $700.0 2008 2009 2010 2011 2012 2013 2014 2015 Millions

State Revenue Federal Revenue

SLIDE 16

Local Contribution to Schools

(in millions)

FY 2013-14 FY 2014-15 Variance Required SOQ Match $163.6 $171.0 $7.4 Discretionary Local Match $193.1 $195.9 $2.8 Total Formula Contribution 356.7 $366.9 $10.2 Dedicated 4¢ Real Estate Tax $19.2 $19.9 $0.7 Hold Harmless in R.E. Tax reduction to $0.93 $3.1 $3.2 $0.1 Sandbridge Surplus used in School Budget $3.1 $2.0 ($1.1) Total Local Contribution $382.1 $392.0 $9.9

16

SLIDE 17

Expenditures By Service Areas

Public Safety 12.0% Convention & Visitor, Economic Development, SGA 4.1% City General Fund Debt Service 2.6%

Education 47.0%

Financial/General Government 5.8% Human Services/Health/ Housing 7.7% Parks & Recreation, Libraries, Museums, & Cultural Affairs 4.4% Planning/Public Works/Public Utilities 13.4% City Capital Projects 3.0%

17

SLIDE 18

Expenditures By Category

Note: The City's "Personnel" figure includes the 1% required VRS salary increase and a 0.34% general

increase. The City’s proposed 1.66% general increase is in a "Reserve" account. The Schools entire 2.79%

salary increase is included in "Personnel".

FY 2013-14 FY 2014-15 Variance

Personnel $803.5 $817.0 $13.5 Fringe Benefits $299.4 $315.0 $15.6 Operating & Supply Accounts $443.3 $448.6 $5.3 Capital Outlay (equipment) $14.7 $13.5 ($1.2) Debt Service $153.4 $164.9 $11.5 Pay-as-you-go to CIP $51.6 $47.1 ($4.5) Reserve for Contingencies $14.8 $23.8 $9.0 Total Operating Budget $1,780.7 $1,829.9 $49.2

18

SLIDE 19

Compensation

 All full-time City and School employees will receive a

1.34% salary adjustment

1% is the mandated offset to the required VRS employee contribution (this is

the third year of this phase-in)

0.34% is to offset the impact of the pay increase on employee’s taxes

All full and part-time City Employees will receive a 1.66%

General Increase on October 1st

All School Employees will receive a 1.45% General Increase

n September 1st

City - $1.49 million to address pay compression Schools - $1.1 million to address pay inequities in the

unified scale

19

SLIDE 20

 Incorporates City Council and School Board guidance from

the March 4th meeting.

 City and School’s cost share is 77% with employees

contributing 23%

 Three plan choices :

POS plan - deductible of $500/$1,500
Plus PPO - deductible of $1,000/$2,000
PPO - deductible of $1,500/$3,000.

 The employer’s contribution for all plans is based on the PPO  Spouses with access to another plan no longer eligible  A one-time contribution of $500 to a Health Savings Account

provided to current employees who choose the PPO plan

 $500 charge for not participating in vbWellnessforLife

Health Insurance

20

SLIDE 21

Major Initiatives



Virginia Storm Water Management Mandate:

Adds 17 new positions
Increase Storm Water ERU fee by 1.7 cents & various Planning Review Fees



Human Services Mandates and Initiatives

Adds 21.8 new positions
Revenue from Medicaid Fees increased $1.1 million to offset costs.

 Public Safety Equipment and Staffing

Adds 4 new positions to E911, 6.4 FTEs for police oceanfront cameras, and

address major public safety equipment replacements

Increases Personal Property Tax rate by 30 cents



Technology Strategic Plan

Adds 3 new positions



School Literacy Programs

Adds 6.5 new positions

21

SLIDE 22

Sustainability & Efficiency Efforts

 Police Department renegotiated two contracts:

PhotoRed red light camera contract - saving $140,000
Lease of the Police Firing Range - saving $30,228 - $1.9 million
ver the next 10 years

 EMS – working with private ambulance companies to

shift non-emergency transports to them

 Automating materials and handling at the Central

Library and five branches reduced staff by 4

positions. In total Libraries eliminated 9 positions as

a result of this technology.

 Public Works continues to realign solid waste routes

resulting in 4 staff reductions.

22

SLIDE 23

CAPTIAL IMPROVEMENT PROGRAM

23

SLIDE 24

Summary of Project Estimates

Project Type

Capital Budget Year 1 FY 2014-15 Years 2 through 6 Programmed 6 Year Funding Schools $ 34,566,000 $ 184,955,000 $ 219,521,000 Roadways 65,578,105 81,875,496 147,453,601 Buildings 18,880,027 93,554,918 112,434,945 Parks and Recreation 24,587,750 60,789,772 85,377,522 Utilities 58,514,582 276,280,136 334,794,718 Coastal 11,125,047 43,189,917 54,314,964 Economic & Tourism Development 22,771,581 27,595,124 50,366,705 Communications & Information Technology 22,179,017 25,576,866 47,755,883 Total CIP $ 258,202,109 $ 793,817,229 $ 1,052,019,338

24

SLIDE 25

Capital Projects by Project Type

Site Acquisition 1.5% New Facilities 24.5% Technology 4.5% Replacement, Expansion, Maintenance, Equipment 69.5%

25

SLIDE 26

CIP Means of Financing

Type of Financing Capital Budget Year 1 FY 2014-15 Years 2 through 6 Total 6 Year Funding Pay-As-You-Go $ 47,048,957 $ 264,624,518 $ 311,673,475 General Fund Balance 21,678,524 55,597,908 77,276,432 Other Fund Balance/ Retained Earnings 10,525,853 23,500,000 34,025,853 Bonds & Lease Purchases 131,841,678 407,497,239 539,338,917 State & Federal Funds 32,799,118 37,579,319 70,378,437 Other Sources 14,307,979 5,018,245 19,326,224 Total CIP Financing $ 258,202,109 $ 793,817,229 $ 1,052,019,338

26

SLIDE 27

Significant Project Reductions

Change Projects Amount Reduced

2-045 Pacific Ave. Improvements

($ 2,700,000) Reduced

2-156 Laskin Road- Phase I

(1,000,000) Reduced

2-401 Greenwich Rd Crossover & Cleveland St

(3,454,750) Deleted

2-041 Dam Neck – Phase I

(2,321,778) Deleted

2-413 Dam Neck Road- Phase II

(1,940,408) Deleted

2-034 South Independence/Silverleaf Dr Intersection

(1,000,000) Deleted

2-033 Princess Anne Road – Phase VIIA

(1,105,000) Deleted

9-095 Arctic Ave Parking Facility

(19,499,500) Deleted

9-505 Cleveland Street- Phase I

(6,902,656) Deleted

9-504 Parliament- Greenwich Connector

(3,563,240) Reduced

7-029 & 7-151 Eastern Shore Drive Drainage-Phases I & II

(37,000,000) Total: ($ 80,487,332)

27

SLIDE 28

Projects Under Way in FY 2014-15

 Housing Resource Center  Police Oceanfront Cameras  Replace Voting Machines  Metropolitan Area Network (MAN)  Self Contained Breathing Apparatus (SCBA)

Replacement

 Holland Road Water & Sewer Improvements

28

SLIDE 29

Workshops & Public Meetings

Tuesday, April 1st Budget Workshop Conference Room Tuesday, April 8th Budget Workshop Conference Room Tuesday, April 15th Budget Workshop Conference Room Tuesday, April 22nd Budget Workshop Public Hearing Conference Room Council Chambers Thursday May 1st Public Hearing Kempsville High School Tuesday, May 6th Reconciliation Workshop Conference Room Tuesday, May 13th Vote on the Operating and Capital Budgets

29