Minutes 03/30/2015 - Laserfiche WebLink

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March 30, 2015 We estimate that the annual cost of the program is $225,000 in lost revenues. This estimate assumes the City will abate 100% of the personal property tax for one vehicle for qualifying veterans or for their surviving spouses. In addition, this estimate assumes the average taxable value for each vehicle is $15,000. The amount of lost revenue increases as the vehicle value increase. As you know, the City already has several real estate tax relief programs for certain qualifying veterans, for the elderly and for disabled property owners. These existing tax relief programs equate to $2.25 million dollars in lost tax revenues. If the City implements this personal property tax exemption for disabled veterans, then the total cost of these programs is $2.5 million. This is equivalent to 3.6¢ on the real estate tax rate. Support of a Regional Public Transit System Our regional transit organization is funded by a fragile framework of pledged member contributions based on the estimated service hours. There is no dedicated funding stream for transit from the sales tax or gas tax as in most metropolitan areas. The largest portion of Hampton Roads Transit revenue comes from local government, and that portion increases proportionately to declines in state and federal grants. The nationwide average for the local share of transit is 9%. In contrast, the Hampton Roads cities contribute 40% of HRT total revenues. HRT is facing a $4.5 million loss in state revenues for Fiscal Year 2015-2016 and an additional $500,000 reduction in federal grants. As a result, each member city will see corresponding increases in its share without increases in service. HRT’s budget has not yet been finalized, but we expect Portsmouth’s share will increase by $349,116 in Fiscal Year 2015-2016. The Cost and Benefits of Hosting the Regional Jail As the host city, Portsmouth receives an annual Payment In Lieu Of Taxes (PILOT). Our most recent PILOT payment was $486,556. We also benefit from a per diem discount that is currently 11.5% less than the per diems paid by the other four cities, which equates to a savings of about $450,000 in this fiscal year. The combined PILOT and per diem discount is therefore worth almost a million dollars to the bottom line of our budget. Add to that the intangible benefits of cost-efficient inmate transport, economic benefits to local businesses supplying materials and services, the economy of scale cost advantage to the City Jail, its value as a major water and sewer customer; hosting the Regional Jail is a distinct benefit to the City. The per diem rate will increase by $10 in Fiscal Year 2014-2015; however, if you recall, we were all looking at a $25 increase until the City of Chesapeake became a member and began contributing to total per diem revenue. The calculation of the Portsmouth per diem discount is complex and is prescribed in the Service Agreement that is executed by all member cities. It is not a straight percentage, but is based on equity in the facility and separate proportions of the debt service on the land and the project. The addition of the fifth member to the Authority reduced our equity share, which in turn, reduced slightly the host city per diem discount. Therefore, while the other member cities will not have any change to their per diem ($63) for Fiscal Year 2015-2016, Portsmouth’s will increase by $1.58 to $58.08, which increases the City’s budgeted costs by $112,237 for Fiscal Year 2015-2016. Raises for Employees and Retirees The City is a service industry, and our employees are our most important asset. They ensure that our residents receive a high level of customer service and responsiveness. As a result of the severe economic downturn, our general employees did not receive raises for four years, from Fiscal Year 2009-2010 through Fiscal Year 2012-2013. During that same time period, we implemented a new pay plan for our sworn Police and Fire employees. With that new pay plan, we gave our sworn public safety officers pay increases each year except for Fiscal Year 2011-2012 and Fiscal Year 2012-2013.