THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Wednesday, March 29, 1995 TAG: 9503290435
SECTION: LOCAL PAGE: B1 EDITION: FINAL
SOURCE: BY TONI WHITT, STAFF WRITER
DATELINE: PORTSMOUTH LENGTH: Medium: 84 lines
The proposed operating budget, which City Manager V. Wayne Orton unveiled Tuesday, illustrates how tenuous the city's finances have been over the past several years.
The proposal calls for a 4-cent increase in the real estate tax rate, increased fees for a number of services and a $1 million cut in the school budget. Most city workers would not get pay raises.
The tight budget is necessary, Orton said, because the city has been working on a day-to-day basis. Payments have been delayed, spending has been frozen and jobs have been unfilled for long periods, he said.
The city also has been relying on public utility income to augment regular revenues - something officials say can no longer be done because of utility construction needs and stricter federal regulations that require more revenue be reinvested in utilities.
``If we're ever going to get anywhere in this city, we have to make some tough decisions that will put us on a strong financial footing,'' said Johnna Whitaker, the city's chief financial officer.
Orton recommended increasing the real estate tax rate from $1.32 to $1.36 per $100 in value. He also suggested increasing fees for water, for building permits, for storm water management fees for businesses and for admission to the Children's Museum of Virginia.
Orton blamed some of the fee increases on stricter federal regulations, which will require the city to invest in its aging infrastructure and to pay higher landfill fees.
The real estate tax increase, which would raise $1 million a year, would be used to fund 21 new police officers, their uniforms and equipment.
Orton had promised to hire those officers in December after asking then for a 4-cent increase in the real estate tax rate to fund economic development efforts. That tax increase was not approved when the City Council adopted the city's capital improvement budget.
Both budgets are proposed by the city manager and the chief financial officer. The City Council will eventually set the operating budget after the public has an opportunity to offer its input.
Orton said the cuts in the school budget ``could be absorbed through streamlining without affecting classroom-related areas of the school system's budget.''
The cuts, Orton said, were ``not at all about stepping back from our commitment to education. . . A careful examination of the staffing and enrollment patterns, as well as administrative and non-instructional expenditures over the last several years, supports the wisdom of this recommendation.''
In the proposed budget, Orton suggests setting aside $500,000 for economic development projects and starting the city's Vision 2005 plan. He also has recommended increasing the city's financial reserves by $700,000 - a move, Orton said, that would help the city with its cash-flow problems.
``We've had to worry about making our accounts-payable,'' Whitaker said. ``We haven't been able to add the $500,000 to the reserves that were projected in previous years. The finances, they're very strapped and have been for several years.''
Under the proposed budget, most city employees will not get a raise this year. The city is expected to adopt a new pay-for-performance plan that will set a salary range for all employees based on their job descriptions. Only those employees who do not meet the minimum wages for their jobs will get salary increases. The proposed budget includes $300,000 to cover those raises.
Orton has suggested eliminating all future officers from the city's police and firefighters retirement fund. Orton said the city's proposed pay-for-performance plan should mean new officers will be paid on a scale with other local police officers, eliminating the need for the lucrative retirement plan to attract them to Portsmouth.
Orton relied on Shakespeare to get across his message that the city is in desperate straits and that this is the only way to improve the financial situation.
``There can be no doubt that Portsmouth has many challenges at hand,'' Orton told the City Council. ``Shakespeare wrote in `Romeo and Juliet' a line which reads, `All these woes shall serve for sweet discourse in times to come.' ''
An excerpted version of City Manager V. Wayne Orton's presentation to City Council on Tuesday concerning the fiscal year 1996 operating budget will be published in Friday's Currents community news tab.
KEYWORDS: PORTSMOUTH BUDGET TAXES by CNB