City Council

CITY OF FREDERICKSBURG, VIRGINIA HON. THOMAS J. TOMZAK, MAYOR HON. MARY KATHERINE GREENLAW, VICE MAYOR CITY COUNCIL HON. KERRY P. DEVINE, AT-LARGE HON. BRADFORD C. ELLIS, WARD ONE HON. GEORGE C. SOLLEY, WARD TWO HON. FREDERIC N. HOWE, III, WARD THREE Council Chambers, 715 Princess Anne Street HON. BEATRICE R. PAOLUCCI, WARD FOUR Fredericksburg, Virginia 22401 Council Work Session March 22, 2011 Recommended Budget for Fiscal Year 2012 The Council of the City of Fredericksburg, Virginia held a work session on Tuesday, March 22, 2011, beginning at 6:00 p.m. in City Hall Conference Room. Council Present. Mayor Thomas J. Tomzak, presiding. Vice-Mayor Mary Katherine Greenlaw. Councilors Kerry P. Devine, Bradford C. Ellis, Frederic N. Howe, III, and Beatrice R. Paolucci. Council Absent. Councilor George C. Solley, business trip. Also Present. City Manager Beverly Cameron, Assistant City Manager Mark Whitley, City Attorney Kathleen Dooley, Planning Director Ray Ocel and Clerk of Council Tonya B. Lacey. Recommended Budget for Fiscal Year 2012 – Assistant City Manager Whitley began the presentation with a PowerPoint that labeled the theme of the budget as Rebuilding and Stewardship. He explained that the main factors increasing expenditures are City Schools, increase in capital outlay and transfer to capital, employee bonuses, and new personnel. The increase in the general fund is in the amount of $3.4 million. On the revenue side there is an additional base for revenues and transfers totaling $0.96 million, Real Estate increase of $1.38 million and the fund balance for Capital & Contingency is $1.1 million. On the expenditure side, the transfers to schools and capital amount to $2.1 million, the increase in salaries and benefits equal $1.1 million, which includes the bonuses and new positions, Capital outlay increase of $0.2 million and other activity in the amount of $25,000. He also discussed the revenues: base revenue, transfers into the general fund, the use of balance, and the real estate tax increase. He explained that for each penny increased in taxes is worth approximately $345,000. The July 2011 taxable value is $3.542 billion and the forecast for July 2012 is 1 $3.565 billion this is an increase of about $23 million. The revenue forecast that is built into the budget is $24,780,000. Mr. Whitley discussed stewardship and rebuilding and he stated a few of the main factors are providing additional resources to City schools in the amount of $900,000, due to the enrollment increase and providing bonuses to City employees which would amount to about $367,750. Mr. Cameron also clarified that the school funding does include a 2.5% increase for their employees. Other items listed as rebuilding were purchasing of police cars, paving, courts, buildings and parks and rebuilding staff in key areas. Mr. Whitley said there were a couple of major unresolved items in the budget and they are the need to increase the HB 599 funding and personal property base, which will not be available until late March. (See attached documents for more information). Staff stated that if Council had any changes they wanted made that they be put as propositions to be determined later if Council agreed on them. Council was asked and series of questions and they were as follows: 1. What are your preliminary thoughts on the recommended budget as it has been summarized in the transmittal letter? -Mayor Tomzak stated that he thought it was adequate straight forward and needed and the key word was stewardship. -Vice-Mayor Greenlaw said she liked the budget the way it is. She said she was concerned about the deferred maintenance and she’s stated that she was glad to see it being picked up and she said something absolutely had to be done for the employees. She has no problems with the budget as it’s presented. She applauded staff and the departments for being frugal. -Councilor Devine agreed that the deferred maintenance had been a concern and she too was glad to see it being added. She said she had no problems with advertising $.72 as the tax rate, because of what’s coming up down the road. She is concerned with increasing the taxes knowing that down the road it will have to be increased again. -Councilor Howe agreed that staff did a great job on the budget, but wanted to address the comparative municipality. He would like to see the comparison so that he can gauge the City’s expenditures with the statewide levels. He also wanted to know how many organizations have similar issues with the pay parity according to 2  the Marshall’s report for the sheriff’s employees. He also wanted to make sure there was pay parity throughout the City for all employees. He said that before additional employees were hired he thought an assessment was going to be done to determine if the City needed to move employees around. He also mentioned Court security he said that to improve court security it would cost nearly $1 million and there is only $200,000 proposed in the budget. -Councilor Ellis stated that the City had been cutting for three years and he said it’s time to see how to fund the services. He said he would like to see the schools fully funded to fund the 5 new teachers that are needed. He said he was hoping to see an A,B,C budget option, one to include all of the needs for Sheriff. Councilor Ellis said if additional funds could be identified he would like to see a lower tax increase because of what is to come from the courts project. The outside agencies, he was interested in why some are increased as much as $6,000. He said it was interesting that the City did not contribute anything to organizations like the Friends of the Rappahannock, yet the River is such an asset to the City. -Councilor Paolucci said staff has done a great job on the budget. She said she does not have an issue with the $.72 tax rate at this time. She does have concerns with adding staff before a consultant is hired to come in and assess our current positions. She said she had some concerns on the outside agencies and she wanted clarification on why we fund some and not others. She also said she would like to see the impact if the City fully funded the Sheriff’s needs. 2. Based on the first impression of the spending plan, does it appear to accurately reflect City Council’s Goals and Initiatives? If not, please explain where it does not meet your expectations. - Councilor Howe said outside court security he thought it reflected the goals and initiatives. He said Council all agreed that the pay increase was important and they all understood there would be a tax increase. -Councilor Ellis said he agreed that he thought everyone wanted to give staff a raise this time around. He said a bonus is good but he said it’s finally time to give raises unless the City cannot afford it. He said he’s afraid the City would start losing good employees to other localities. Councilor Devine added that the City was also paying the entire cost of the employees VRS. Mr. Cameron also noted that the 3  reason for the bonus was to contain the overall payroll expense this year. He said there is a large contribution rate for VRS of 16%. 3. What can City Staff do to provide information and analysis that you need in order to understand and evaluate the budget? -Councilor Howe felt the City needed to do a comparison to the municipalities that function comparable to the City. He pointed out that there was a significant per capita percentage in the comparative report of local expenditures between the City and other municipalities. He questioned why the City’s operations are so much higher than other localities. He said he would like a cursory review of data. Mr. Cameron suggested using Winchester, Staunton, Manassas and Fairfax City as comparison Cities. Councilor Howe suggested looking at the citizen count and similar real estate. Councilor Ellis suggested citizen count and average income. -Mayor Tomzak said he would like the opinion of Economic Development on the City’s participation in the contribution to the Fredericksburg Regional Alliance position on whether the funding should come from the City or the Economic Development Authority (EDA). Mr. Whitley stated that half is supposed to come from the City and the other half is to come from the EDA. -Councilor Ellis asked about the revenue estimates, whether they were conservative and what they were based on. Mr. Whitley said they are based on last year’s performance and this year’s performance. He said the estimates are relatively conservative. Councilor Ellis asked if the meals tax declined after the increase last year. Mr. Whitley stated that they went up. -Councilor Howe said he would also like the staff to look at the cost of fully funding the security issue, the parity issue across all departments and what it does to the tax increase number. He would like to see if the proposed amount should be left at $200,000. 4. If additional revenue can be identified during the next 2 months, would you prefer to: a. Lower the recommended tax increase, B. Invest in more capital maintenance, C. Provide a higher compensation reward to employees or D. Do something else (what?). -Mayor Tomzak would like to invest in more capital maintenance. -Councilor Devine would like to lower the recommended tax increase and invest in more capital maintenance. 4  - Councilor Ellis would like to lower the recommended tax increase. -Councilor Howe would like to lower the recommended tax increase. -Councilor Paolucci would like to invest more in capital maintenance and provide a higher compensation reward to employees. -Vice-Mayor Greenlaw would like to invest more in capital maintenance and provide a higher compensation reward to employees. Councilor Howe asked if staff thought it would cause problems with the school employees receiving a 2.5% increase and the City staff only receiving an $850 bonus. He said if it is, he would rather the fund be used to provide a higher compensation reward to employees as well as lower the recommended tax increase. 5. In recent years, the City has spent an inordinate amount of time debating the merits of funding specific outside/partner agencies. This year, can the Council agree to limit discussion of outside agency funding to one work session? -Mayor Tomzak said he agree with one work session. -Vice-Mayor Greenlaw said the amount is so minuscule to the budget that she can’t see second guessing each of them. -Councilor Devine said that the reason agencies such as F.O.R. don’t receive funding is because they don’t request it. She said some agencies don’t request funding because they fundraise. Mr. Cameron said that if there are any questions on any of the agencies the applications are available in Mr. Whitley’s office. Majority of Council agreed that they didn’t really need to discuss the funding for the agencies because they felt it was staff’s responsibility. Councilor Paolucci had questions on why some agencies had increases and others did not. Mayor suggested Council contact staff on any questions in regards to outside agencies. Councilor Ellis suggested a better discussion would be on capital improvement cost. He would like to debate and prioritized them for staff, so staff can have a better understanding of Council’s priorities. Mayor Tomzak said he would like to have one meeting on the outside agencies. Councilor Howe requested a tax impact based on the CIP projects and he said he would like to limit it to a 5-year forecast. He would like it to include any funding sources such as Federal, State, private and he would like any risk factors listed. He also requested to see any undesignated funding that are left over from anywhere. 5 Mayor Tomzak asked if everyone was in agreement with advertising the $.72 for the public hearing. Councilor Howe said he thought they were going to look at $.76 to address the court security issue in the Marshal’s report. Mayor Tomzak clarified that would be a $.08 tax increase. Councilor Paolucci asked how much of an increase that would be per household and she was told for a $.04 increase it would be $101 per year and for a $.08 increase it would be $202 per year. Councilor Devine and Vice-Mayor Greenlaw were not comfortable with that type of increase. Vice-Mayor Greenlaw went further to say she was not comfortable with spending that type of money fixing the security problems, she would rather see the Courthouse built. Councilor Howe explained that it’s not all security, but manpower as well. He suggested giving a $.06 window on the tax rate. Discussion continued with whether to move forward on the new courthouse or spend the $1.2 million on the Sheriff’s report. Councilor Howe stated that he would like to have the Sheriff meet with Council to clarify whether he would rather see the Courts built or the security measures addressed. Councilor Ellis suggested finding out how much it would cost to bring the Sheriff’s employees up to a comparable rate. Councilor Devine stated that the comprehensive board should be paying part of the salary. Councilor Howe said he agreed, but if an employee is expected to do a job the City should pay the employee a salary that’s compensable for the job and that’s the reason for the parity review. Mr. Cameron asked that the assumption not be made that nothing has been done to pay employees their worth. He said the City has a pay plan and a classification plan that was completed in 1998 and revised in the early 2000. Staff completed a survey; they were evaluated on their knowledge, skill and abilities of the jobs. He said they established parity then but he didn’t want the impression that this is a work group that is being treated unfairly and singled out for special treatment, which is not true. Councilor Howe wanted to make sure all were in agreement, that a comphensive review for comparable municipalities, was to be done and Mr. Cameron agreed that would be done. He said that pay parity was going to be completed across the board. Mr. Cameron stated that in order to get that accomplished it would cost anywhere from $30,000 to $50,000 and take at least 9 months to complete. Councilor Howe suggested getting the Sheriff to provide the pay parity so that the budget question could be answered. It was determined that Council was not in agreement with the pay parity of the sheriff department. Vice-Mayor Greenlaw said she understood the goal to be a review of staff and Councilor Paolucci said she thought that before any new staff was hired a review would be done to see if the City still needed all its positions 6 or if it should consolidate any positions and determine if the City had any duplicate positions in any of the departments. Councilor Howe suggested having the Sheriff meet with Council and provide the pay parity. Mayor Tomzak asked why that would be done for one department and not all. Councilor Howe suggested making it available to all departments. Mr. Cameron stated that Council would have every department director and constitutional officer coming. Adjournment. There being no further business to come before the Council at this time, the meeting was declared officially adjourned at 7:20 p.m. ___Tonya B. Lacey__ Tonya B. Lacey Clerk of Council City of Fredericksburg 7