Minutes 03/30/2015 - Laserfiche WebLink

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March 30, 2015 The impacts of tolls upon Portsmouth have been substantially (though not totally) negative and, as predicted, this negative impact easily has exceeded that experienced by any other city in Hampton Roads. Vehicle traffic through the tunnels obviously has declined (though there are multiple causes for this). Tolls have had a demonstrable negative effect upon sales tax collections in the City of Portsmouth. Furthermore, some businesses in Portsmouth have been driven to the edge and are unlikely to survive long enough to see the completion of the overall Elizabeth River Crossing project. After taking into account other factors that likely influence sales tax collections in Portsmouth, we estimate that tolls have reduced the City’s taxable sales by approximately $3.52 million quarterly; this is approximately three percent of the total. Unfortunately, the tolls have been accompanied by “negative events” - - partial or full tunnel closures, severe weather, etc. These are almost as important quantitatively as the tolls themselves in terms of discouraging or eliminating tunnel traffic. Seemingly unpredictable and/or inadequately unpublicized tunnel closings have been particularly destructive. We estimate that these “negative events” such as tunnel closures have reduced taxable sales in the City by an average of $2.49 million quarterly; this is approximately two percent of the total.  A large backlog of deferred maintenance: The City has not had the financial capacity for many years to fully fund needed maintenance of its public buildings and other infrastructure. This shortfall has resulted in a significant amount of deferred maintenance, which has not been fully quantified. The General Services Department plans to conduct a facilities assessment during Fiscal Year 2015-2016 with the support of its maintenance staff. We expect that future budgets will require a substantial ongoing capital investment to tackle the deferred maintenance issues. Budget Priorities While a tax rate increase is never popular, I sought to minimize the proposed impact by focusing on the City’s top priorities. As noted previously, there were many requests for additional funding that were justified, but which I am unable to recommend. The budget team and I focused on the most critical funding needs, which are reflected in this proposed budget. Those priorities are as follows: High Quality Public Education In order to maintain quality education in Portsmouth, I am recommending that the City provide $52.4 million in local funds for education. This recommendation makes permanent the one-time funds of $6.4 million appropriated by City Council last year. As noted earlier in this message, the $6.4 million was appropriated from one-time funds, and now requires an ongoing funding source in order make this amount part of the Schools’ base budget. That equates to a ten cent increase in the real estate tax rate. The $52.4 million in local funds along with a projected increase in State funds should provide the Portsmouth Public School system with adequate funding to address its highest priority budget initiatives for Fiscal Year 2015-2016. Quality Service Delivery Portsmouth has a strong tradition of providing basic services to our citizens with the highest level of customer service. Although we are not a service-rich community, we have added new services to the menu in recent years without increasing taxes. Our citizens lead the region in recycling participation, and our General Services team collects those recyclables with efficient and customer-friendly service. We have added two skate parks, a splash park, a 40-acre Nature Park, renovated and re-commissioned Pokey Smokey, ten new playground sets, and have acquired a new 33-acre park with great potential for recreational use by all Portsmouth citizens. We have added a new museum to our system that recognizes a challenging period of history that our African- American citizens overcame.