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

Presentation of the Proposed FY 2014-15 Operating Budget and CIP March 25, 2014 Catheryn R. Whitesell, Director of Budget and Management Services 1

Index of Change: Budget vs CPI 115 CPI 110 105 Budget 100 95 90 85 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 2

Economic Overview Old Dominion University for Hampton Roads 2013 2014 Actual 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% 3

OPERATING BUDGET 4

Total Revenue By Source Fund Balance Federal Revenue 1.6% 6.5% Real Estate 26.3% State Revenue 25.1% Personal Property 7.5% Charges for Service General Sales 15.1% 3.3% Other Revenue 2.5% Utility Taxes Permits, Fines and 2.5% Fees; Use of Money Business License Hotel, Amusement, and Property 2.6% 1.2% & Cigarette Restaurant Tax 2.6% 3.3% 5

Change in Assessed Value of Real Estate 25.0% 19.2% 20.0% 15.0% 10.0% 3.6% 5.0% 3.2% 0.0% -0.3% -2.3% -2.8% -5.0% -3.4% -6.2% -10.0% 2008 2009 2010 2011 2012 2013 2014 2015 Fiscal Year 6

Real Estate Tax Revenue Each penny generates $4.97 million $520.0 $504.9 $499.3 $500.0 $493.2 $481.0 Rates $480.0 $474.3 $473.6 Virginia Beach - $0.93 $462.9 $460.3 Millions Chesapeake - $1.05 $460.0 Norfolk - $1.15 Portsmouth - $1.27 $440.0 Suffolk - $1.03 Hampton - $1.24 $420.0 Newport News - $1.22 $400.0 2008 2009 2010 2011 2012 2013 2014 2015 Fiscal Year 7

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

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

Personal Property Tax Revenue 10 cents produces $3.3 million annually $150.0 $138.6 $137.2 $138.5 $136.9 $140.0 $132.4 $130.0 $123.7 Rates $119.9 $118.6 Virginia Beach - $4.00 $120.0 Millions Chesapeake - $4.08 Norfolk - $4.33 $110.0 Portsmouth - $5.00 Suffolk - $4.25 $100.0 Hampton - $4.25 Newport News - $4.50 $90.0 $80.0 2008 2009 2010 2011 2012 2013 2014 2015 Fiscal Year 10

General Sales Tax Revenue $65.0 $60.0 $60.0 $58.0 $56.0 $55.7 $54.1 $55.0 $53.0 Millions $51.1 $50.6 $50.0 $45.0 $40.0 2008 2009 2010 2011 2012 2013 2014 2015 Fiscal Year 11

BPOL Tax Revenue $50.0 $47.6 $45.0 $45.0 $43.2 $42.8 $42.4 $41.3 $40.8 $40.6 $40.0 Millions $35.0 $30.0 $25.0 2008 2009 2010 2011 2012 2013 2014 2015 Fiscal Year 12

Restaurant and Hotel Tax Revenues $100.0 Restaurant Tax Rates $80.0 Virginia Beach - 5.5% Chesapeake – 5.5% Portsmouth – 6.5% $60.0 Millions $59.6 Suffolk – 6.5% $58.1 $55.2 $51.8 Hampton – 7.5% $49.8 $48.7 $49.1 $48.2 Newport News – 7.5% $40.0 Hotel Tax Rate All – 8.0% $20.0 $28.1 $27.9 $26.6 $25.3 $24.1 $23.9 $23.1 $22.7 $0.0 2008 2009 2010 2011 2012 2013 2014 2015 Fiscal Year Hotel Tax Meal Tax 13

Charges for Services $300.0 $250.0 $200.0 Millions $150.0 $100.0 $50.0 $0.0 2009 2010 2011 2012 2013 2014 2015 Fiscal Year Storm Water Fees Solid Waste Collection Fees Water and Sewer Fees Medicaid Fees Other Fees 14

State and Federal Revenues $700.0 $600.0 $106.9 $111.1 $140.1 $119.1 $153.0 $119.5 $128.5 $500.0 $121.4 $400.0 Millions $300.0 $513.6 $496.4 $459.8 $458.7 $447.3 $439.0 $442.4 $435.3 $200.0 $100.0 $0.0 2008 2009 2010 2011 2012 2013 2014 2015 State Revenue Federal Revenue 15

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

Expenditures By Service Areas Planning/Public Parks & Recreation, City Capital Convention & Works/Public Libraries, Public Safety Projects Visitor, Economic Utilities Museums, & 12.0% 3.0% Development, SGA 13.4% Cultural Affairs 4.1% 4.4% City General Fund Debt Service Human 2.6% Services/Health/ Housing 7.7% Education 47.0% Financial/General Government 5.8% 17

Expenditures By Category 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 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". 18

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 1 st  All School Employees will receive a 1.45% General Increase on September 1 st  City - $1.49 million to address pay compression  Schools - $1.1 million to address pay inequities in the unified scale 19

Health Insurance  Incorporates City Council and School Board guidance from the March 4 th 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 vb Wellness for Life 20

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

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 over 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

CAPTIAL IMPROVEMENT PROGRAM 23

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

Capital Projects by Project Type Site Acquisition 1.5% New Facilities 24.5% Replacement, Expansion, Maintenance, Equipment Technology 69.5% 4.5% 25