Minutes 03/31/2014 - Laserfiche WebLink

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March 31, 2014 financial estimates of these impacts on our tax revenue, we expect the tolls to dampen our economy in Portsmouth, at least in the short run. We have not applied any reduction due to tolls to our revenue estimates for this budget, particularly because the initial toll amounts are significantly less than originally planned. However, we will monitor revenues closely, and we will adjust for any unusual variances. • The City is a member of the Hampton Roads Regional Jail, along with the cities of Hampton, Newport News and Norfolk. The Jail's proposed Fiscal Year 2014- 2015 Budget includes significant cost increases for its member cities as a result of two changes o The loss of a decade-long reliable revenue source from housing up to 400 low-cost ICE (U. S. Immigration and Customs Enforcement) detainees o The depletion of the Rate Stabilization Fund, primarily as a result of the loss of federal revenue The Jail Board is pursuing alternatives to lessen the cost increase, but based on current information, we expect Portsmouth's cost to increase by $10 per diem, or $912,500 for Fiscal Year 2014-2015. • Beginning with the Fiscal Year 2012-2013 Budget, the Virginia Retirement System (VRS) offered those employers who participate in VRS the option to pay a retirement contribution rate that was less than the VRS Board certified rate. This reduced rate was 70% of the VRS certified rate for the State's Fiscal Year 2012-14 biennial budget, then increases to 80% for the 2014-2016 biennium, 90% for the 2016-2018 biennium and reaches 100% beginning July 1, 2018.The City elected to take the reduced rate. As a result, our VRS rate will increase by 17% in Fiscal Year 2014-2015, from 9.67% to 9.81 % of VRS eligible compensation. For the General Fund, this increased cost is just under $1 million. • In September 2012, the City opened a new $78 million Courts facility to house all three levels of courts as well as the offices of the Commonwealth's Attorney and Sheriff. The City issued $74.6 million in bonds to pay for the cost of this facility. At the time the City developed the financing plan for the new courts facility, the City structured the debt service to minimize the budget impact. Even with this structuring, the General Fund debt service costs will increase each year from Fiscal Year 2014- 2015 through Fiscal Year 2017-2018, rising $3.6 million from the current budgeted level of $25.6 million to $29.2 million in Fiscal Year 2017-2018. Debt service will decline to $24.6 million in Fiscal Year 2021-2022 if the City does not issue any more debt. Significant Budget Initiatives The City's overall budget strategy centers on actions to strengthen Portsmouth's financial position, to support a healthy community, and to invest in our employees, schools, critical systems and infrastructure. These actions include: • Investing in our neighborhoods • Providing raises for our employees and retirees • Ensuring quality service delivery • Maintaining the City's support for education