DATE: Wednesday, April 9, 1997              TAG: 9704090600

SECTION: LOCAL                   PAGE: B7   EDITION: FINAL 

                                            LENGTH:   50 lines

MUNICIPAL BUDGETS: [STATUS REPORT: VIRGINIA BEACH]

MUNICIPAL BUDGETS

New developments: The council learned Tuesday that it has a choice: it can hold off on projects financed by borrowing, raise taxes or cut back on day-to-day services. The city must pay back its debt before it pays other bills, budget director E. Dean Block explained, and there isn't enough money in the city's coffers to keep adding to debt while maintaining city services. Block and City Manager James K. Spore recommended a ``pause'' in new debt-spending at least for this year, deferring several school and city building renovations and the upgrade of Pacific Avenue and Rudee Loop at the Oceanfront. After the Lake Gaston pipeline is completed, Block said, the city may be able to borrow more money without risking its credit rating.

The council also reviewed budgets Tuesday for the departments of Social Services, Health, Mental Health/Mental Retardation/Substance Abuse and Comprehensive Services Act.

Background: Virginia Beach was built on its great school system, middle class values and seemingly endless potential for growth. But after 33 years, social problems are mounting, infrastructure is aging and development isn't the cure-all it once was. To meet new demands, the city is proposing a 5.5 percent increase in spending for next year, and the smallest increase in long-term spending since the recession of 1991. The biggest decision the council faces this budget season is whether to dramatically increase school funding, which would require a real estate tax increase. With nine school board and council seats set to expire next year, the politics in this budget battle could get ugly.

The proposed budget: The city plans to spend $957 million next year on day-to-day operations and add just under $100 million to its six-year capital plan. The city manager has proposed raising taxes on water, electric, phone and gas bills, which would amount to an additional $21 to $29 annually for most residential customers. He has also suggested raising the stormwater management fee by $5.76 next year to help reduce a backlog of drainage projects. He did not propose a real estate tax increase, although the council may opt for one to provide more money to the schools. The operating budget, which is $50 million higher than last year's, includes money for 15 new police officers, a 4 1/2-percent pay increase for most city workers, a new curbside recycling program and a $13 million increase for schools.

To get involved: Call City Council or School Board members or voice your opinion at one of the two public hearings, at 7 p.m. April 17 at Princess Anne High School, and at 2 p.m. May 6 in council chambers. Copies of the proposed budget are available in Virginia Beach public libraries. The council will hold its next budget workshop Thursday from 3 p.m. to 6 p.m. to talk about the proposed School Board budget. The meeting will be aired on the municipal channel, Channel 48.

Send Suggestions or Comments to webmaster@scholar.lib.vt.edu