Minutes 03/21/2006 - Laserfiche WebLink

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March 21. 2006 Funding for New Court Complex Our most significant capital challenge is the development of a new court complex, which is the largest capital project in Portsmouth's modern history. We need approximately $6.25 million to undertake the planning, preliminary engineering, and project design for this project. This phase of the project will span two budget years. The current estimate for courthouse construction and furnishings is another $58 million, and this number is subject to change based on a number of variables. I am recommending that we designate two cents ($0.02) of the recommended $1.38 real estate tax rate in the FY07 and future budgets to provide the initial financial support for this project. With the implementation of the courts complex, we must discuss the future of the Portsmouth City Jail, and I recommend that we initiate this discussion during the next fiscal year. Cost of Priorities Our priorities are both very noble and necessary, but they carry a cost. The work that we will undertake in the above priority areas will require significant new funding in the budget for the next fiscal year and beyond, including: . $6 million for increased funding for education . $5.5 million to support the employee compensation package . $3.2 million in additional debt service for capital projects . $1.0 million from the two cents on the real estate tax rate to support the courthouse development project These are significant increases that we must include in the appropriations to support the FY07 budget. At the same time, we are taking a number of actions to contain costs. For example, the general fund budget includes no new net positions, our budget team trimmed $2.2 million from requests submitted by our operating departments, and we have budgeted $8.1 million in anticipated savings through projected employee turnover. Revenue Resources We can support the appropriation increase for priorities from a number of increases in revenues in our budget. These include natural increases in established taxes and fees through improvements in the economy and other forces, and new tax revenues as major projects come on line, such as New Port, the APM Terminals of Virginia (also known as Maersk), and the new Wal-Mart store scheduled to open later this year in Midtown. The proposed budget also includes increases in water and sewer rates, the residential solid waste fee, and the stormwater management fee to continue our investment in repairing and replacing these facilities and improving services. Portsmouth's water and sewer system is one of our greatest assets, and it provides a strong foundation for implementing Council's Vision Statement, particularly the Robust and Prospering Economy and the Neighborhood and Community Transformation elements of the vision statement. Many of the components of our water and sewer system are beyond their useful life and are in need of replacement. This is especially true in our neighborhoods where some 75 percent are in such condition. Replacement of these lines is a long-term, costly endeavor that will require us to gradually increase water and sewer rates for years to come. To continue to meet our system's long-term replacement needs, this budget recommends that we increase both the water and sewer rates by $0.23 per 1,000 gallons. For the average residential customer using just over 5,000 gallons per month, the average monthly increase is approximately $27.60 per year or $2.30 a month.