Minutes 03/28/1995 - Laserfiche WebLink

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MarCh 28, 1995 With this in mind, I san recommending that effective July 1, 1995, all new police and fire hires become members of the Virginia Retirement System and that the Portsmouth Fire and Police Retirement System become a closed system, as is the PortsmouthSupplemental Retirement SYstem. This change would have no effect on current fire and police employees. This is a fiscally responsible recommendation and is based on the recognition that with competitive salaries, a premium benefit package is no longer essential. The new benefit package our city will offer will be competitive with those offered in other Hampton Roads cities. FISCAL MANAGEMENT Debt Service During the capital budget process, you took a bold step by lowering our self-imposed debt limit from $10 million a year to $8 million. In fact, you approved an even lower capital budget of almost $7.4 million. Debt management remains as one of our more substantial challenges. Revenues in the debt service fund are no longer sufficient to completely service our debt, and the amount of additional transfer required from the general fund continues to climb. While your actions have .improved our position, debt service requirements in the coming budget have increased by $378,000. In FY 97, the transfer amount required from the general fund will exceed $2.5 million based on anticipated bond issuances. Fund Balance For at least the last five years, the Municipal Finance Commission has consistently recommended that our reserves be increased to a level of $11 million which is approximately 10% of our operating revenues, While the fund balance is $2.6 million higher than five years ago, it is still not adequate to protect against the peaks and valleys in our cash flow which occur due to the cyclical nature of the city's revenue collections and debt service payments. An increased reserve would improve our ability to better manage cash during the Iow periods and diminish the potential need to borrow funds to meet operational requirements. The FY 96 budget recommends $700,000 in appropriation to increase the fund balance. We must!continue to appropriate an increase in the fund balance until such time that our reserves are adequate. It is important that we demonstrate our recognition and resolve to effectively!address the fiscal challenges before us. Such demonstration can only serve to protect our municipal bond ratings and benefit our citizens. EDUCATION All segments of government are having to reduce costs while retaining services. The public schools will also have to face this challenge. For the last five years, the city reduced the number of employees, while maintaining the capacity to provide services. This has proven to be a sound approach. The City of Portsmouth is committed to the highest quality of public education. This commitment has beendemonstrated through the Capital Improvement Plan in which the citizens are providing for the construction of a state of the art, science and technology high school at a cost of $35 million. Also, there is no dispute that the future of this community is in large part dependent on the preparation of our children for responsible adulthood.