THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Thursday, August 8, 1996 TAG: 9608080382
SECTION: LOCAL PAGE: B1 EDITION: FINAL
SOURCE: BY KAREN WEINTRAUB, STAFF WRITER
DATELINE: VIRGINIA BEACH LENGTH: 61 lines
Thanks to some luck and careful spending, it looks like the city will finish the 1995-96 fiscal year with a $13 million surplus.
The city had a slightly larger surplus at the end of the 1994-95 fiscal year but used almost all of it to cover the school system's $12.1 million budget gap.
This time, though, the city expects to hold onto the surplus. The school system projected last month that it would not need any money from the city to close out its 1995-96 books.
So far, the council has talked informally about using this year's surplus to buy computers for the Virginia Beach campus of Tidewater Community College and to build a multipurpose stadium that eventually could house a major league team. A small portion of the surplus likely will go to boost the city's reserve fund, city Finance Director Patricia A. Phillips said.
The current numbers are still preliminary and unaudited for the fiscal year that ended June 30, Phillips said. More definitive figures will be available by the end of the month.
The surplus would more than cover the 3.2-cent tax increase the council approved early this summer. But Phillips said it doesn't make sense to cover expenses the city knows it will have with revenues it can only project 18 months ahead of time.
For that reason, Phillips said, the City Council usually dedicates any surpluses to one-time projects, rather than regular demands.
The council probably will discuss options for using the surplus at its annual retreat Aug. 20-21, Phillips and several council members said.
Two years ago, the end-of-year surplus was used to buy the Lake Ridge property off Princess Anne Road where the Virginia Beach Amphitheater is now located. The stadium also is proposed for that land, just north of the Municipal Center.
Last year, $12.1 million of the $14 million surplus was committed to helping the school system balance its books. The system overspent its budget in the 1994-95 fiscal year and received less in state and federal revenue than it expected. Nine of the 11 School Board members and a top school official stepped down because of the financial crisis.
After tightening fiscal controls and making cutbacks, the district expects a balanced budget for the 1995-96 fiscal year.
Phillips said she won't know for sure whether the district will be in the black until later this month, when the budget numbers are finalized. The school district gets about half its money from the city, though the city has no control over how that money is spent.
If there is an end-of-year deficit or surplus, Phillips said she expects it to be only about $1 million to $2 million, out of a $358 million budget.
Phillips credits a strong economy and the city's fiscal restraint with three straight years of surpluses. For the year just ended, the city received 3.1 percent more in revenue than it projected and spent 1.3 percent less than budgeted.
``The economy is better,'' she said, ``as well as the city departments take very seriously the importance of managing their budgets.''
Most of the increase in revenue came from higher-than-expected personal property taxes - on cars, boats and recreational vehicles. That revenue is estimated well over a year before the budget is drawn up, Phillips said.
KEYWORDS: BUDGET SURPLUS
by CNB