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<br />March 21. 2005
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<br />At a Called Meeting of the City Council on Monday, March 21,2005, there were
<br />present:
<br />
<br />*Mayor James W. Holley III, Vice Mayor William E. Moody, Jr., Charles B. Whitehurst,
<br />Sr., Marlene W. Randall, Stephen E. Heretick, *Elizabeth M. Psimas, Ray A. Smith,
<br />Sr., Interim City Manager James B. Oliver, Jr., City Attorney G. Timothy Oksman.
<br />
<br />05 - 116 - The following call for the meeting was read:
<br />
<br />"Please attend a Called Meeting of the City Council to be held in the City
<br />Council Chamber, 801 Crawford Street, 5:00 p.m., Monday, March 21, 2005 for the
<br />purpose of the proposed Annual Operating Budget and Capital Improvement Plan.
<br />
<br />In addition, you may consider a motion to go into a Closed Meeting.
<br />
<br />By order of the Mayor."
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<br />05 - 117 - The following items were discussed in Public Work Session:
<br />
<br />1. Presentation of Proposed Annual Operating Budget/Capital Improvement Plan by
<br />James B. Oliver, Jr., Interim City Manager
<br />
<br />I am very pleased to submit the City Manager's recommended fiscal year 2005-2006
<br />Operating Budget and Capital Improvement Program (CIP). I am recommending an
<br />operating budget of $448.5 million, a 5.2 percent increase over the FY05 budget, and
<br />CIP funding of $29.8 million, of which $10.3 million is City bond funding. These
<br />budgets have several major themes, including increased funding for education,
<br />progress on financial strategies, improving the City's economic prosperity,
<br />transforming neighborhoods and communities, investing in employees, leveraging
<br />technology to improve services, improving public safety capabilities, and strategically
<br />marketing Portsmouth.
<br />
<br />If approved, the operating budget will provide an additional $5 million in local support
<br />for Portsmouth Public Schools, which includes $3.4 million in increased operating
<br />funds and $1.6 million toward "market catch up" teacher pay raises. This increase
<br />represents a significant shift in the proportion of funds devoted to public schools in the
<br />City's budget and supports City Council's commitment to make education its highest
<br />priority. The budget also includes an additional $3.1 million in funding for City
<br />employees, including a 3 percent general wage increase, pay range adjustments,
<br />retirement and Social Security contributions, and health insurance increases. These
<br />increases are made possible by an improved revenue picture, largely due to an
<br />improved national economy and returns from investments made by the City in the
<br />past. As noted in the media, real estate assessments have increased 13.4 percent in
<br />Portsmouth, although this percentage is considerably lower than increases in
<br />surrounding cities. Increased revenue from reassessments will be partially offset by a
<br />one-cent rollback in the real estate tax. The cutback of one cent per year is intended
<br />to fill Council's three-year goal last year when Council increased the real estate tax by
<br />three cents. In addition, other local taxes grew by 10.7 percent.
<br />
<br />BACKGROUND
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<br />These budgets provide a detailed operating and capital "spend plan" that is directly
<br />connected to the City's strategic planning and serves as a one-year framework for
<br />driving City Council's long-range goals into day-in, day-out work. Thus, the task in
<br />developing these budgets is to address Council's commendable "dreams" for the
<br />community within the context of existing programs and services and to make
<br />appropriate adjustments as priorities are clarified or modified. It is well known that the
<br />City has a considerable backlog of needs and community expectations and it is a
<br />substantial challenge to focus limited resources for effective results. All of Virginia's
<br />cities are constrained by the Dillon Rule of state sovereignty over localities, that
<br />includes dependency on regressive taxes on property instead of more progressive
<br />taxes on income, the inability to expand or annex, and limited means for addressing
<br />aging infrastructure and population needs.
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