Minutes 03/25/2003 - Laserfiche WebLink

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March 25, 2003 Although the Virginia Arts Festival is listed as a new item in the budget this year, Council should be aware that the City has funded that festival for the last six years through its contract with Ports Events. We are continuing support for the Virginia Arts Festival at the level of past funding. Fiscal Considerations Our final focus area is that of fiscal considerations. The operating budget is a major tool for the City of Portsmouth as we work toward improved fiscal strength. As noted before, our challenge is to make the right choices to spend responsibly, save prudently and invest wisely. We are encouraged by the report we have received from the City Assessor that real estate values have increased in Portsmouth by $148.7 million or an average of 4.63 percent. New construction during the year will add another $50 million in real estate values, for a total increase in real estate values of 6.29 percent. That is the highest increase in Portsmouth real estate values in recent years. These increases reflect national and regional trends in increasing real estate values, which is quite good news at a time when the stock market and other investments are in decline. The increased values will produce more than $3 million in additional revenue in the next fiscal year. This news is particularly welcome in the City of Portsmouth, which, like most cities, relies on the real estate tax as its largest source of income. Because of the increase in real estate values, additional revenues attributable to City Council's wise investments in recent years, and the choices that we are recommending in the coming budget year, we are able to recommend no increases in tax rates in this budget. That is worth repeating: there are no increases in tax rates in this proposed budget. We are recommending increases in public utilities fees that were anticipated in our capital construction program. The increases are 10 cents per thousand gallons in our water rate -- from $2.80 per thousand gallons to $2.90 per thousand gallons -- and 9 cents in our sewer fee- from $2.08 per thousand gallons to $2.17 per thousand gallons. These rates will continue to be among the lowest in the region, and will cost the average residential user only 95 cents per month. The only other fee adjustments recommended in this budget are an increase of $2 in the twilight green fees at our golf courses and an increase in the monthly parking fee at City parking garages, from $55 a month to $60 a month. These small increases will help offset the cost of debt and maintenance in the golf and parking enterprise funds. Next week, I will give Council a more comprehensive report on our financial situation. It is worth noting that in the last year we have been able to add $3.8 million to our fund balance, which is one of our major fiscal strength goals. And we would also like to note at this time that the City continues to have unfunded liabilities in risk management and in health insurance, and our goal is to continue to add funding to these categories until we are able to eliminate these unfunded liabilities. Altogether, we are continuing to make progress in the area of fiscal strength, with the ultimate goal of improving our bond rating as a sign of good financial health and as a means of borrowing money in the future at a lower rate. Choices The message I have presented here today is one of challenges and choices. The City of Portsmouth has made tremendous progress over the last several years in many areas. As the Mayor said in his 2003 State of the City Address, and I quote, "The Renaissance is continuing in Portsmouth. The City and its partners are building momentum and creating an even better quality of life for the Portsmouth family." Unquote.