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 April 3, 2012 Fiscal Year 2013 Budget The Council of the City of Fredericksburg, Virginia held a work session on Thursday, April 3, 2012, beginning at 5:30 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, Beatrice R. Paolucci and George C. Solley. Also Present. City Manager Beverly Cameron, Assistant City Manager Mark Whitley, Budget Manager Amanda Lickey, and Clerk of Council Tonya B. Lacey. Fiscal Year Budget 2013. General Property Reassessment - Assistant City Manager Whitley reviewed the general property reassessment. There were six different classes: Single-family Residential, single-family residential suburban, multi-family residential, commercial-industrial, agricultural (20-99 acres), agricultural (99+ acres). Class 1 – single-family residential analysis; there are 6,087 parcels they include townhomes and single-family homes. 4,816 parcels will be lowered and 1,248 will be raised if the real estate rate is re-set to $0.74/$100. 4,358 will see lower taxes and 1,706 will see higher taxes. Class 3 – multi-family residential analysis; includes apartment buildings and there are 533 parcels with 373 being lowered and 158 being raised with a re-set in the real estate tax rate. 345 will see lower taxes and 187 will see higher taxes. The assessor found that if there was a high value apartment complex there will be a lot of strength in those buildings. Councilor Paolucci asked which class the single-family homes that have been converted into two units fall under. Mr. Whitley said he would look it up and get back with Council. 1  Class 4 – commercial/industrial analysis; included medical offices and there are 1,199 parcels and 937 will be lowered and 243 will be raised with a re-set in the real estate tax rate. 900 would see lower taxes and 283 would see higher taxes. The higher taxes subset includes significant increases for medical office buildings. Class 2 – single-family (suburban); there are 29 parcels and only two parcels change more than 4%. Class 5 – small agricultural, there are 13 parcels and only one had a significant change. Class 6 – large agricultural, there is only one parcel and it did not change. Councilor Solley asked the difference between Class 1 and Class 2 and Mr. Whitley said he was not sure, but he would get the class definitions for Council. Mr. Whitley stated that based on the new construction value, the equalized tax rate will be $0.74 per $100 valuation and he stated that Mr. Fred Pearson with Pearson Appraisal wants to make the real estate assessments at fair market value. Councilor Howe also requested that staff provide and explanation of the equalized tax rate. City Manager Cameron also noted that both the old and the proposed new tax rates are on the GIS system. Outside Agencies – Outside agencies were level funded except for a few increases to the Central Rappahannock Regional Library who received an increase of $58,485 for cost of living adjustments and real books based on the City circulation. The Juvenile Court Service Unit received and increase of $11,655 base on case loads and state cuts. The Rappahannock EMS Council will receive and increase of $1,840, prior to the recession there was a funding agreement and this increase will bring the City back to the original payment agreement. The Rappahannock Community Services Board will receive and increase of $5,740 for the day to day operations. The Fredericksburg Area Food Bank was not funded last year, but staff recommends funding in the amount of $5,000. The George Washington Regional Commission requested to be funded $1,530 less than that of the 2012 budget. The agencies that were funded in FY 2012, but not being recommended for FY 2013 are Tri-County/City Conservation District and Bragg Hill Family Life Center, which did not submit a request. There were also three agencies that were not funded in FY 2011 or FY 2012 the Fredericksburg Volunteer Fire Company, Rappahannock Big Brothers Big Sisters and S.E.R.V.E. Councilor Ellis asked if there was any insight on how many City residents S.E.R.V.E. assists. Mayor Tomzak explained that there are several programs within the City and this is 2 another independent agency. Mayor Tomzak felt there needed to be more of a unified approach. Councilor Howe stated that he would like to make a pitch for the volunteer Firefighters. He would like to see the schools provide the EMS and fire training to encourage regeneration of the program. He would like to have funding provided for that purpose. Councilor Devine reminded Council of the discussion not to add any additional groups who were asking for funding and she wanted to know whether there was any policy on it. She also explained that funding the volunteer fire department was totally different from funding the program to train students through the high school. Councilor Howe asked that the City Manager look at a way to provide funding for the Fire and EMS training program within the high school. Councilor Ellis asked about the funding for the Heritage Festival and Mr. Cameron explained that the existing budget included a recommendation of $4,000 and they were requesting an additional $8,500 from the City to match the Stafford donation. Councilor Howe suggested that pro-active conversations begin with the Heritage festival to determine where the money would be coming from for the fireworks. Mr. Cameron suggested that Council add that item as a wish list item to be added to the budget. Councilor Ellis said he understood the funding request from the City and Stafford to be the amount needed for the fireworks and the festival. Mayor Tomzak explained that he had a problem with the City and Stafford funding on an equal basis when Stafford’s financial power dwarfs the City’s. Water and Sewer Study – the water and sewer study had key recommendations: to create a utility division within Public Works, increase water rates, increase wastewater rates, increase availability fees by changing the methodology for smaller meter “change of use”, increase connection fees, increase penalties for late payments by changing the calendar for cut- offs for non-payment (more time). Mr. Whitley also reviewed the water rate recommended increase of 9.9% and 10.7% for wastewater rates. The availability fees will be changed from charging per equivalent dwelling unit (EDU) they will start charging per meter size. The connection fees will be based on the size of the connection. Mr. Whitley explained that the city does not do many of these but the price would be increased. The penalty for late payment will go from $3.00 to 10% of the outstanding bill. Mr. Whitely asked Council for a decision on the tax rate and the water and sewer rates. He explained that there will be a public hearing on the water and sewer rates on April 24. 3  Councilor Howe asked for a clarification of the cost for new home water and sewer connection fees. Staff determined that the cost would be approximately $15,700 for the installation an increase of approximate 1/3%. This cost is for first time connections. Propositions – Councilor Devine suggested rather than reviving the rental housing program she suggested hiring a maintenance and zoning inspector to take care of the true issues with rental properties. This person would take care of the trash and noise issues and deal directly with the person living in the home and not the owner. Councilor Ellis stated that he had originally proposed 1-2 new full-time employees for the rental housing program, but he would support Councilor Devine’s request in lieu of the 1-2 new full-time employees. Councilor Howe would like to have a truancy officer for the school system to save tax dollars on those students who are not part of the AP program. Mr. Cameron stated that this would be a School Board initiative and he didn’t think the City should get involved with what new positions the School Board should add. He said he would like to add funding for the program with the understanding the School Board would have to institute it. Councilor Ellis would like to add $400,000 for schools to combine with the $600,000 they already have saved to get the $1,000,000 needed for the Original Walker-Grant architectural fees. Vice-Mayor Greenlaw added that the Comprehensive Plan was going on six years in age and she would like to encourage updating it or addressing it and encouraging the EDA to address the Jumpstart Plan because the economic landscape has changed since it was developed. Mr. Cameron stated that the Comprehensive Plan update was requested by the department, but it was not recommended for funding this year. Councilor Solley added that the State suggest updating the Comp Plan every five years, but it does not say you have to rewrite it but update it. He said he would like to see an update done. Councilor Howe would like to also add to the discussion with Dr. Melton the classes for the fireman training and what needs to be done to reinstitute it. He said this is a vocational opportunity. Councilor Paolucci asked if the organizational study was funded and Mr. Cameron stated that it was funded in this year’s budget and would be carried over to next year. Tax Rate – Mr. Cameron stated to Council that they needed to make a decision on the advertised tax rate and staff recommended $0.74, which is the equalized rate. Council also 4 needed to confirm whether they wanted to advertise the consultant’s recommendations for the water and sewer rates increases. He also reminded them that they could advertise a higher tax rate then lower it but they could not advertise a lower rate than increase it. Councilor Paolucci asked if the City could advertise $0.75 and start setting aside money for projects that will be coming up. Mr. Cameron said that could be done. Mr. Whitley said there are two ways to go about saving, one would be to increase the taxes by a penny the other is taking the savings at the end of the FY and placing them in reserves. Council agreed to advertise the water and sewer rates as proposed by the consultant. Discussion ensued on the advertised tax rate on whether to advertise the $0.74 or $0.75. Councilor Howe noted that he would like to have staff show where the revenues will be coming from during the public hearing. Mr. Cameron said he could add it to the public hearing. Councilor Ellis said he could support advertising the tax rate at $0.75, but suggested having the dialogue during the public hearing stating that the $0.01 increase will be set aside for capital improvement projects and some of the schools capital projects. Councilor Devine said the dialogue would inform citizens that the City wanted to raise funds, but the dialogue about where the funds will be spent would come later. She added that she would love to see the funding go to schools, but there are other projects that citizens would like to see completed as well. Councilor Howe asked if the state budget was finalized and Mr. Cameron explained that it was not and they are waiting on the Virginia Retirement decision. He said the City would be covered if Council decided on the $0.74 increase. Vice-Mayor Greenlaw said she would be uncomfortable with adding the additional $0.01 to the taxes because there was not a consensus with Council on where the money would go and she said the City has seen a healthy financial situation of the City and an improving economy where we have been able to afford things and where the City has been able to anticipate major capital expenses. She said she would like to see it as a policy going forward. Councilor Paolucci said the $0.01 increase was just a thought, but she said maybe it would be jumping the gun since it is not defined where the money would be spent, but she would like to have Council determine a list of projects and rate them by importance shortly after the FY 2013 budget is approved. Councilor Paolucci agreed to advertise at $0.74 if Council agreed to discuss the list of projects after the budget process. 5  Councilor Howe stated that if you advertise the rate at $0.75 and go through the public hearing and make that part of the dialogue with the public Council would be able to institute that rate, but if the rate was advertised at $0.74 then it cannot be instituted. Councilor Howe proposed to advertise at $0.75 with the understanding of having the dialogue with the public. Councilor Solley said he wouldn’t mind advertising at $0.75 because it could be lowered. Councilor Ellis said he agreed with Vice-Mayor Greenlaw and would like to move forward with a policy going forward. He stated that he was support of the $0.74 because of the propositions made. Councilor Solley said he did not think advertising at $0.75 should be tied to anything, because Council does not have all the answers at this point. Councilor Devine said staff does a good job with bringing projects forward when there are funds available. She wanted to make it clear that when funds are available staff and Council know what the funds are earmarked for and the projects are prioritized. Councilor Solley also added that if the rate was advertised at $0.75 then they must be ready to answer why. Mayor Tomzak and Councilors Greenlaw, Devine, Howe and Paolucci agreed to advertise the tax rate at $0.74. Adjournment. There being no further business to come before the Council at this time, the meeting was declared officially adjourned at 7:45 p.m. _____Tonya B. Lacey_____ Tonya B. Lacey Clerk of Council City of Fredericksburg 6  BUDGET WORK SESSION THREE FISCAL YEAR 2013  TOPICS FOR DISCUSSION • General Property Re-assessment • Outside Agencies • Water & Sewer Study Recommendations GENERAL PROPERTY ASSESSMENT DETAILS APRIL 3, 2012  TAXABLE LAND BOOK RESULTS (NEW CONSTRUCTION INCLUDED) Class July 2011 Tax Value Prelim New Tax % Value Change Single-family Res 1,547,176,700 1,446,171,700 (6.53%) SF Res – 7,263,100 7,219,200 (0.6%) Suburban Multi-family Res 442,302,100 550,152,800 24.38% Commercial / 1,554,379,200 1,522,764,700 (2.03%) Indus. Agric (20-99 40,868,400 41,123,300 0.62% acres) Agric (99+ 14,750,000 14,750,000 0% acres) Total 3,606,739,500 3,582,171,700 (0.68%) • New Construction added $63,738,554 to taxable values this cycle (deducting this yields a 2.45% decline in taxable value) • Preliminary Values are subject to appeals to the assessor  CLASS ANALYSIS • Class 1 – Single-family residential • 6,087 Parcels • 4,816 (79.12%) lowered • 1,248 (20.5%) raised • If real estate rate re-set to $0.74 /$100 • 4,358 (71.6%) would see lower taxes • 1,706 (28.03%) would see higher taxes  CLASS ANALYSIS • Class 3 Multi-family residential • 533 Parcels • 373 (69.98%) lowered • 158 (29.64%) raised • If real estate rate re-set to $0.74 /$100 • 345 (64.73%) would see lower taxes • 187 (35.08%) would see higher taxes • The “higher taxes” subset includes significant increases for higher value developments  CLASS ANALYSIS • Class 4 Commercial / Industrial • 1,199 Parcels • 937 (78.15%) lowered • 243 (20.27%) raised • If real estate rate re-set to $0.74 /$100 • 900 (75.06%) would see lower taxes • 283 (23.6%) would see higher taxes • The “higher taxes” subset includes significant increases for medical office buildings  CLASS ANALYSIS • Class 2 – Single-family (suburban) • 29 parcels • Only two parcels changed more than 4% • Class 5 – Small agricultural • 13 parcels, one with a significant change • Class 6 – Large agricultural (99+ acres) • 1 parcel no change  EQUALIZED TAX RATE • Based on the new construction value, equalized tax rate is $0.74 / $100 valuation OUTSIDE AGENCY DETAILS APRIL 3, 2012  OUTSIDE AGENCIES • Agencies were level funded except for the following: • Increases from FY 2012 • Central Rappahannock Regional Library: $1,238,785 an increase of $58,485 • Juvenile Court Services Unit: $74,605 an increase of $11,655 • Rappahannock EMS Council: $7,040 an increase of $1,840 • Rappahannock Community Services Board: $197,065 an increase of $5,740 • Fredericksburg Area Food Bank: $5,000 an increase of $5,000 • Decreases from FY 2012 • George Washington Regional Commission: funded at FY 2013 request a decrease of $1,530 from FY 2012  OUTSIDE AGENCIES • Agencies funded in FY 2012 but not FY 2013 • Tri-County/City Conservation District • Bragg Hill Family Life Center: no request • Agencies not funded in FY 2012 or FY 2013 • Fredericksburg Volunteer Fire Company • Rappahannock Big Brothers Big Sisters • S.E.R.V.E WATER AND SEWER APRIL 3, 2012  WATER & SEWER STUDY • Key Recommendations • Create a Utility Division within Public Works • Increase Water rates • Increase Wastewater rates • Increase availability fees • Change the methodology for small meter “change of use” • Increase connection fees • Increase penalties for late payment • Change the calendar for cut-offs for non-payment • Highlights will follow  WATER RATE RECOMMENDED INCREASE 9.9% (BLENDED) Meter Size Current Rate Proposed Rate 5/8” Fixed Fee $7.45 $8.31 ¾” Fixed Fee $9.82 $10.96 1” Fixed Fee $19.39 $21.64 1 1/4 & 1 ½ Fixed Fee $43.05 $48.04 2” Fixed Fee $77.56 $86.55 3” Fixed Fee $183.82 $205.12 4” Fixed Fee $310.34 $346.31 6” Fixed Fee $698.25 $779.18 8” Fixed Fee $1,190.11 $1,328.05 Commodity Fee per $1.90 $2.08 1000 gallons  WASTEWATER RATES RECOMMENDED INCREASE 10.7% Meter Size Current Rate Proposed Rate 5/8” Fixed Fee $8.56 $11.76 ¾” Fixed Fee $11.28 $15.49 1” Fixed Fee $22.28 $30.59 1 1/4 & 1 ½ Fixed Fee $49.46 $68.70 2” Fixed Fee $89.12 $122.31 3” Fixed Fee $211.21 $289.87 4” Fixed Fee $356.58 $489.37 6” Fixed Fee $802.28 $1,101.00 8” Fixed Fee $1,367.43 $1,807.41 Commodity Fee per $4.00 $4.23 1000 gallons  AVAILABILITY FEES Water Wastewater Current Proposed Current Proposed Per EDU 2,250 4,750 5/8” 3,000 5,000 ¾” 4,000 6,600 1” 7,800 13,000 1 ½” 17,300 29,200 >1 ½ Per EDU 3,000 5,000  CONNECTION FEES Current Proposed Water Line Size ¾” 1,050 2,600 1” 1,250 2,900 2” 2,300 3,100 Sewer Lateral Size 4” 2,100 5,100 6” 2,500 5,300  PENALTY FOR LATE PAYMENT • $3.00 to 10% of outstanding bill  DECISIONS • Tax Rate to Advertise • Water and Sewer Rates to Advertise  PROPOSITIONS • Council Initiated Additions and Deletions to the FY 2013 Budget