City Council Agendas & Minutes

City of Hampton, VA 22 Lincoln Street Meeting Minutes Hampton, VA 23669 www.hampton.gov City Council Randall A. Gilliland Joseph H. Spencer, II Ross A. Kearney, II George E. Wallace Angela Lee Leary Paige V. Washington, Jr. Molly Joseph Ward, Mayor Staff: Mary Bunting, City Manager Cynthia Hudson, City Attorney Katherine K. Glass, Clerk of Council Brenda J. Vaccarelli, Deputy Clerk Wednesday, April 14, 2010 12:58 PM Council Chambers, 8th Floor, City Hall CALL TO ORDER/ROLL CALL Molly Joseph Ward presided Present: Randall A. Gilliland, Ross A. Kearney, II, Joseph H. Spencer, II, George E. Wallace, Paige V. Washington, Jr. Absent: Angela Lee Leary MAYOR’S COMMENTS Mayor Ward stated that Vice Mayor Spencer has something to share with the community. Vice Mayor Spencer said he was pleased to attend the Annual HELP dinner. He said it was well attended by all the representatives from various churches in the community. Vice Mayor Spencer said because of the special relationship HELP has with the City of Hampton, he was asked to receive the Outstanding Teamwork Award for the City. Councilman Kearney thanked Vice Mayor Spencer for attending. Councilman Wallace asked Vice Mayor Spencer to explain what HELP is. In response, Vice Mayor Spencer explained that Hampton Roads Ecumenical Lodgings and Provisions is best know for A Night’s Welcome where churches in the community host the homeless. He said he has been involved with HELP for a long time and HELP has been serving the community for 28 years and he believes it is a worthwhile project. Vice Mayor Spencer said HELP also has a dental clinic and a medical clinic. He said they also have some homes that are transition housing. He said HELP is a wonderful organization that shows what can be done by dedicated volunteers with a little bit of seed money from the City. Ms. Mary Bunting, City Manager, said this year the City endeavored in a new partnership with HELP and she believes HELP should be receiving the award. She explained that as the City experienced more severe weather this winter, they were able to expand City of Hampton, VA Page 1 of 17 Printed on 5/28/2010 City Council Meeting Minutes services through the Night’s Welcome Program to be a Day’s Welcome Program during extreme weather events. The City Manager said after meeting with Ms. Charlotte Dillow, Executive Director of HELP, and the churches, they were willing to cover day sheltering. She said that was a significant expansion for the homeless in the community and she is very proud that HELP and the church volunteers are willing to immediately respond to the City’s call. Vice Mayor Spencer said there were several instances due to weather that there was 24 hour sheltering. He said he and the City Manager went to Community Presbyterian in Fox Hill and that shelter and others stayed open when the need arose. Vice Mayor Spencer said the Hampton Veteran’s Administration (VA) Hospital provided assistance because there are a significant number of veterans that also are served by HELP. The City Manager said an outreach van came out and did assessments in the sheltering. Vice Mayor Spencer said it was very productive. He noted that Hampton Social Services is also very involved as well in assisting HELP on a daily basis. Agenda 1. 10-0124 2010 Virginia General Assembly Session Legislative Wrap Up Ms. Mary Bunting, City Manager, stated Ms. Laura Bateman, with Patton, Wornom, Hatten and Diamonstein Capital Consulting, answered the City’s call when they needed quick General Assembly representation. The City Manager said she believes Ms. Bateman did a phenomenal job on a very short notice and felt it was important to provide Council with a public report on the efforts of the City’s legislative package in the General Assembly session and some of the larger issues the State took on. Ms. Bateman thanked Council for the opportunity to provide an update on the actions of the 2010 General Assembly. She said the Veto session next week and her information is not final although she has good news on a couple of things. Ms. Bateman said it is has been an honor and privilege to represent Hampton during the past two months. Ms. Bateman said this session is an inordinately grueling General Assembly session and budgetary pressures were enormous and the jockeying associated with balancing the budget, a new Governor and newly elected members of the House of Delegates. Ms. Bateman divided her presentation into three sections focusing on the legislative agenda that Council endorsed, the State budget and looking towards the 2011 General Assembly session. House Bill 467 Ms. Bateman said the legislative agenda that Council endorsed included HB 467 which was patroned by Delegate Jeion Ward. She said the Bill went through the General Assembly very smoothly although there were a few bumps in the road due to a legislative drafting problem and once that was worked out the Bill passed as of midnight last night and Governor McDonnell signed it and it will become law on July 1, 2010. Ms. Bateman noted that HB 467 expanded the Hampton Federal Area Development Authority (FADA) from 7 to 9 members. City of Hampton, VA Page 2 of 17 Printed on 5/28/2010 City Council Meeting Minutes House Bill 881 Ms. Bateman stated HB 881, patroned by Delegate Mamye BaCote, would open up homeowners associations to allow the use of solar panels. She said this bill was carried over into the next session and there are several groups interested in working on its successful passage in the 2011 General Assembly session. Senate Bill 143 Ms. Bateman explained that Senate Bill 143 is the Green Energy Tax Bill which would have provided a $500 tax credit for each company that creates jobs paying in excess of $50,000, paying a credit available for five years. She noted that Senator John Miller was the patron. Ms. Bateman said through the machinations and the legislative process, the bill ultimately passed, they just didn’t choose Senator Miller’s bill. She explained that a duplicate of a Senate Republican bill and a House Republican bill. She further explained that the meat of what the Council endorsed was passed and it was one of the first bills Governor McDonnell signed. Senate Bill 217 Ms. Bateman said Senate Bill 217, patroned by Senator Maime Locke, was the new motor boat license fee. She said it sailed through the Senate but was hung up in the House with a committee chairman concerned about the imposition of what he saw as a new tax. Ms. Bateman said there were almost 3,000 bills that were introduced and roughly 1,600 passed and 273 were continued to the 2011 session. Ms. Bateman said she actively tracked and sought comments on 210 pieces of legislation on behalf of the City of Hampton and sent this information out to Hampton staff for comments. She said she received comments and communicated with members of the General Assembly based on the feedback she received. Ms. Bateman said Governor McDonnell came in to office with his priorities which broadly can be described as a Charter School agenda, $50 million economic development funding for new programs and preservation of the $1.9 billion car tax reimbursement for the biennium without any other tax increase. Councilman Kearney said the concern they had with charter schools 12 years ago was who would control the actual school and would it come under the school board or would it be alone and independent. He asked if that was clarified in that particular bill. In response, Ms. Bateman said she would have to research and get back to Council with that information. Ms. Bateman said she believes in the waning days of the General Assembly session there was a compromise struck between local school boards and the State Department of Education. Councilman Kearney explained that if a dollar was going to be sent here for education and 25 cents was to go to a charter school, then the actual school system would be denied and only receive 75 cents. City of Hampton, VA Page 3 of 17 Printed on 5/28/2010 City Council Meeting Minutes Ms. Bateman explained that she would need to research and get back with Council with the answer. Councilman Kearney said he has no objection to charter schools but it is going to affect the City when it comes to the funding. Ms. Bateman said she would contact with Ms. Anne Bane, representative of Hampton City Schools. Ms. Bateman said $120 million in flexible cuts to local government was one of the first things the General Assembly did. She said they did a hold harmless provision to soften the blow of the composite index changes that will decrease school funding but almost $4.5 million a year for Hampton. She said the General Assembly reduced the HB 599 funding that will provide Hampton $6.7 million in 2011. She said they added language to restore state reimbursements to local government for the Virginia Retirement Services (VRS) and Group Life Insurance premium amounts. Ms. Bateman explained that it is payable on reimbursement salaries for Constitutional Officers and their employees. She further explained that was in both years of the budget. She said the General Assembly restored $5.2 million for all Constitutional Officers and employee career development programs. She said the General Assembly provided $7.5 million in the first year only to assist localities to implement the recommendations of the 2005 Base Realignment and Closure (BRAC) Commission. Ms. Bateman said in FY2011, Line of Duty payments will be paid from VRS Group Life Insurance Program and in FY2012, the State shifts the cost of the benefit for local employees to the local governments. She noted that in FY2012 localities will be charged a premium based on the number of employees eligible for the benefit and localities have the option of opting out of the State program on or before July 1, 2011. She explained that localities that opt out of the State Program will have to provide the Line of Duty benefits to its employees. She said it is fair to say that that particular budget amendment is another example of the State expending benefits to selective classes of local employees with the promise that the State will pay the cost. She said as was the case with teachers, retiree healthcare credits and enhanced retirement for deputy sheriffs, the State shifts the cost to the local government when it is encountering fiscal difficulties. Ms. Bateman stated Governor McDonnell proposed to strike language from the adopted State budget that would allow localities to shift a portion of their annual pension contribution to employees. She said school teachers, law enforcement officers, firefighters and other local government employees might not have to worry about paying more for retirement. She stated the budget introduced by Governor Timothy Kaine’s administration called for current State employees to contribute 1% of their payroll to their pensions in 2011 and 2% in 2012. She noted that Governor McDonnell opposed those changes. Ms. Bateman stated there is a local early retirement program and the General Assembly passed budget that allows political subdivisions to participate in a workforce transition program to allow greater retirement benefits from employees who are involuntarily terminated or laid off due to budget reductions and downsizings. She noted that local governments have the authority to offer some types of incentives for early retirement without this legislation. Ms. Bateman said it also allows the workforce transition program City of Hampton, VA Page 4 of 17 Printed on 5/28/2010 City Council Meeting Minutes that is adopted once the local governing body adopts a resolution to participate in that program. Ms. Bateman said the State has indicated they will continue funding 50% of the liability and surety bond premiums paid on behalf of Constitutional Officers and for reimbursement of retirement and Group Life Insurance premiums. Ms. Bateman said in other budget actions that were announced on April 13, 2010, Governor McDonnell voted to restore a $30 million tax break for domestic manufacturers. She noted that former Governor Kaine proposed to eliminate this. She said Governor McDonnell pointed to the job creation benefits and keeping this tax break and economic development competitiveness. She said Governor McDonnell also opted to spend an additional $700,000 over the next two years for the Commercial Space Flight Authority at Wallops Island on the Eastern Shore. Ms. Bateman said the Governor didn’t announce where he is taking money from to fund these programs but she believes all will be revealed next week at the Veto session. Ms. Bateman said almost $270 million in cuts were made in Health and Human Resources which depend on substituting Federal medical assistance percentage for general fund balance. She explained that in so many of the programs, the General Assembly made the cuts but they will be restored once Congress passes a 6 month extension in increased federal medical assistance percentage. She said she hopes those cuts will not be permanent. Ms. Bateman said reducing eligibility for family access to medical insurance security plan program from 200% to 175% in the second year in the areas of Mental Health, and Therapeutic Day treatment rates that reduces State Medicaid funding for these services by 3% in the first year and 4% in the second year. She said local Social Services reductions reduce State assistance to local Social Services Departments by $4.6 million each year. Ms. Bateman said the City of Hampton has been recognized as a State and regional leader with the Healthy Family Program. She said the General Assembly reduced this funding by $1.4 million in the first year and $2 million in the second year and the program will receive $3.6 million from the Federal Temporary Assistance for Needy Families (TANF) Block Grant in the first year and $2.9 million in the second year. Ms. Bateman stated the 5% reduction in State funding to Community Service Boards continues and the General Assembly increased the local maximum for local match for Medicaid funded residential services which cost local governments $4 million in Virginia. She said this breaks the longstanding agreement that localities have had with the State regarding the funding of Medicaid services. Ms. Bateman said looking ahead to next week and the next year, in the General Assembly session there is general agreement that Governor McDonnell is going to seek a special session on government reform probably in September 2010. She said it will look further at funding formulas and cost sharing arrangements between the State and local governments. She said she believes this session can also be expected to set the stage for any actions that Governor McDonnell may propose on the issue of transportation which was all but ignored during this past General Assembly session. Ms. Bateman said Delegate BaCote’s solar bill was carried over to the next session. She said she believes there will be more budget cutting and reallocation of resources with the Hampton Langley Joint Land Use Study and the Hampton FADA. She said she believes there are going to be some bad bills that will come back and there are several tax bills City of Hampton, VA Page 5 of 17 Printed on 5/28/2010 City Council Meeting Minutes that are harmful to localities and some pre-trial services bills that would add to jail population and cost to local governments. Ms. Bateman thanked Council again for the opportunity to represent the City of Hampton. Mayor Ward thanked Ms. Bateman for her assistance. 2. 10-0143 Briefing on the Newport News-Williamsburg International Airport (PHF) Mr. Ken Spirito, Executive Director of the Newport News-Williamsburg International Airport, stated that he appreciated the opportunity to brief the Council. He said it has been 6 months since he briefed Council when he first started at the airport and a lot of great things have happened over the past several months. Mr. Spirito noted that Mr. Jim Lockhart and Mr. Jim Mallon, City of Hampton representatives on the Board, had previous commitments and could not attend the meeting. Mr. Spirito said PHF is about to launch a 20 year Master Plan that has not been done since 1997 and they will be looking at every aspect of the airport for 20 year development. He noted that PHF is going to be awarded a pilot program through the Federal Aviation Administration (FAA) that is going to choose PHF as one of seven in the United States to have a sustainable development plan over the next 20 years. He noted that PHF will be joining airports like Chicago, Atlanta and Los Angeles and PHF was the only airport on the East Coast chosen for this pilot program and they are very excited about that. Mr. Spirito said they will be able to set some standards and some sustainable development at airports since they have such an affect on the environment around them. He said they look forward to that and they will involve the City of Hampton’s Planning Department, as he is involved with the Joint Land Use Study project with the City as well. He said Mr. Bruce Sturk, Director of Federal Facilities Support, and his staff have done a great job and they are glad to be a part of it. Mr. Spirito said part of their growth over several years unfortunately came to halt in 2009, but they finished only 2.5% below the previous year. He noted that the national average is 8.5% and they were happy to be only 2.5% when just about every airport was down and on the average of a negative 8.5% it shows a lot of economic stability in the area. He said the Hampton Roads area is pretty stable compared to some of the other communities and the last 4 to 5 months of 2009 they were actually up. He stated PHF’s figures would have been up in January and February 2010 had it not been for the weather holding them back but everything looks good for the future. Mr. Spirito stated one project he first reported to Council was the initiative they took to capture more passengers and to identify and understand where their passengers are coming from. He said they identified their catchment area and found that just about 5,000 people a day purchase tickets in that area and PHF is only capturing 31% of that traffic and Norfolk is taking 53% of that traffic. He said Richmond is still a competitor but not much. He said most of their leakage is happening in the Norfolk area. Mr. Spirito said they have tried to determine where the anomaly is. He said the biggest initiative they had to undertake is capturing more military and government traffic. He said of those 5,000 people that are buying tickets in that area, the military and government account for 42% and they are only capturing less than a quarter. Mr. Spirito stated the City of Hampton, VA Page 6 of 17 Printed on 5/28/2010 City Council Meeting Minutes government and military account for just about 2,000 passengers a day and they are only capturing 400 to 500 of them. Councilman Kearney asked if the military passengers are Navy or Army. In response, Mr. Spirito said it was across the board and all branches of the service. Mr. Spirito stated that unfortunately, through the General Services Administration (GSA) our community was never listed with what is called City Pairs which are Newport News-Los Angeles, Newport News-San Antonio with the proper City Pairs for the airlines to bid that allows the government to travel. He said when someone would submit their orders and it was a city that wasn’t on the list, they were rejected out of Newport News and had to go to Norfolk. Councilman Kearney said it is the same thing with the hotels. Mr. Spirito said it took about 7 months to work with GSA to get them to understand the importance of having our airport, and our low fares with Air Tran, to benefit the government travel. Councilman Wallace asked if a hyphenated name of Newport News-Hampton- Williamsburg would help to capture that particular market area. In response, Mr. Spirito said he believes having the entire Hampton Roads area represented in the name would help a little bit but the GSA have completely overlooked this area for a long time and starting in October 2010 GSA has tripled the amount of cities available for military and government use. He said they have gone from 29 cities to over 90 cities available starting in October 2010 and he believes they will see a significant amount of military and government employees using the airport which will start affecting the consumer. He explained the airlines will have to add more seats, flights and destinations and there will be more availability will be for the consumer and hopefully, lower fares. Councilman Wallace asked what they have to do in order to get the Hampton name inserted. In response, Mr. Spirito said there is a website called kayak.com which is a search engine and when you put in the PHF identifier it comes up as Hampton. He said all the airlines recognize this area as Patrick Henry Field, (PHF) and locally they would have to work together to represent all the cities in Hampton Roads in their name if that is something the City of Hampton is interested in pursuing. Councilman Wallace said there was a time when the airport was the Newport News- Hampton airport and subsequently it was changed to the Newport News-Williamsburg. He said he would like to see Hampton’s name inserted in the airport designation because he gets a lot of reference to that from his friends who travel to the area. Councilman Kearney said he doesn’t travel that often but he enjoys going to the Newport News-Williamsburg International Airport and taking Air Tran to New York. He said the biggest hold back he has heard others say is the traffic situation is so bad going to PHF that they stand a better chance going across the tunnel to the Norfolk Airport. Councilman Kearney said they are closer to Norfolk than they are to PHF. Mr. Spirito said he believes Councilman Kearney is closer to PHF but traveling the highways in Hampton Roads depends on the time of day and if there are accidents. He said there are backups on Jefferson Avenue onto Interstate 64 which is true of almost any interchange in Hampton Roads. Mr. Spirito added that PHF is the closest and by far City of Hampton, VA Page 7 of 17 Printed on 5/28/2010 City Council Meeting Minutes the most affordable airport on record in Hampton Roads and he hopes the passengers will look at PHF first. He said with some of the improvements they are making over the last year and continuing forward they are hopeful passengers will choose PHF more often. Mr. Spirito said he believes that will happen because a report indicated their biggest deficiency was lack of service to the West Coast. He said beginning May 3, 2010, PHF will bring the first new airline in Hampton Roads since 2002. Frontier Airlines will provide non-stop service to Denver, Colorado. Mr. Spirito said invitations are forthcoming to members of Council to attend the celebration of the opening of the new $13.5 million concourse on May 1, 2010. He said construction started in November 2009. He said corporate representatives of Frontier Airlines and Air Tran will be there. Mr. Spirito stated Frontier Airlines will complement the other airlines that have been serving the Hampton Roads area for a long time. Mr. Spirito noted that Frontier Airline’s service pattern is extensive and with non-stop service to Denver a passenger can pretty much get anywhere they want to out of the Denver hub. He said Frontier will have air bus jets that will hold 128 to 136 passengers. He noted that Direct TV is available for all seats. Mr. Spirito said Frontier Airlines is very famous for their branding and they have animals on their tails and they all have different personalities. He said Air Tran has great non-stop service to New York City, Boston, Orlando and Atlanta and passengers can travel for as low as $62 each way which is a great low-fare opportunity for Hampton Roads. Mr. Spirito informed Council that they are finishing up a major runway rehabilitation project for $17 million that will be finished by the end of May 2010. He said they are working daily to bring a tenant into the south corporate area and they are working with one in particular that he believes has some good potential and can bring additional economic development to Hampton Roads. Mr. Spirito noted that some of the improvements that will be seen at the airport are outdoor covered escalators, paving of a gravel parking lot to provide more parking opportunities and 75% of the windows in the entire terminal will be replaced. He further noted that they have doubled the size of the United Service Organizations (USO) and PHF is working with the USO to obtain new furniture to accommodate the troops better. Mr. Spirito said all terminal seating will be replaced next week and seating will have outlets available for recharging electronic devices. He said the Welcome Center will be replaced within the next two weeks. Mr. Spirito said they are very excited about some of the things they are doing internally and externally. He said they are also replacing the majority of the airfield lighting to newer and more efficient Light Emitting Diode (LED) technology and they are working to expand the baggage claim area. Mr. Spirito said they always have competition and challenges in the future. He said there are other airports in the region and PHF is working very hard to acknowledge the fact that no matter which airport you choose it is convenient to do business and live in Hampton Roads and they are very proud to be in the center of those two airports. Mr. Spirito thanked Council for their time. Councilman Wallace asked if the ability to attract Frontier Airlines was partly predicated on the fact that they were able to secure inducement funding from the Port Authority. In response, Mr. Spirito said a part of the initiative of attracting Frontier Airlines is working closely with a regional group of all the communities in Hampton Roads and part of that was the Port Authority and part of the funding that was available in the desolving of the Port that was put into Rays and that enabled them to help attract Frontier Airlines. City of Hampton, VA Page 8 of 17 Printed on 5/28/2010 City Council Meeting Minutes Councilman Wallace said in addition to that there is a per capita contribution on the basis of the individual communities that make up the Peninsula for that particular situation and that is based on the population and Hampton has the 2nd highest population in the region, therefore Hampton is the second highest contributor to that inducement which argues well for Hampton’s name being included in the airport’s name. Mr. Spirito said Councilman Wallace had a valid concern and was correct that Hampton is the 2nd highest contributor and without the contributions of all the municipalities, especially Hampton, the Frontier project would have been more challenging to attract to this area. He said the support that is given regionally to the airport and their economic development initiatives is incredible and during these economic times investing in projects like this are very important to stimulate the economy especially on the tourism side of business. He said Hampton should be commended for its participation and vision for helping. Mr. Spirito said landing an airline is not easy and this region has not done it since 2002 and it is quite an accomplishment. Mayor Ward thanked Mr. Spirito for his leadership and all he has done in that regard. She said it is very exciting and she encouraged everyone to go online and check out the ticket prices because it is amazing where people can go and how little it costs. 3. 10-0148 Budget Process Update Ms. Mary Bunting, City Manager, said the City Manager’s Recommended Budget will be released at the end of the day on April 15, 2010. She said she felt it was appropriate to do a preview of the budget for Council and the community. She said she will not go into all the specifics as it is the City’s tradition to release the budget in the evening to give Council members and the community an opportunity to look at it in advance of the public hearing which will be held on Wednesday, April 28, 2010. The City Manager said the budget was sent to print last night. She said Ms. Chris Snead, Budget Director, will assist in the presentation. The City Manager stated as they have discussed many times in the past the City has faced significant challenges this year and the City faced a $19 million shortfall which is the result of a combination of revenue and expenditure pressures. She explained that although the recommended budget that will be released on April 15, 2010, will show a slight increase on the City operations side, those numbers are somewhat deceiving and do not convey the severity of what the City faces. The City Manager stated the City faces $2.7 million of real cuts from the State budget to the City in areas where they could not take corresponding cost reductions. She explained while the State reduced the jail per diem by 50% the City could not reduce jail expenses by similar amounts. She said they also had decreased real estate tax revenues. She said while State Social Service revenue is down across the State, Hampton actually has some increases in Social Services programming and the revenue that comes to the City from the Federal and State government must be plugged into Social Services direct programming. She said they have $1.2 million of that type of revenue in the budget and it will cause the revenue numbers to look overstated but that money was not available for general public use. She noted that similarly, the City had $1.4 million that used to go directly to the EXCEL fund from cable franchise fees, but the State changed the process and rolled it into the telecommunications sales and use tax. She explained that the money will now being be coming through their general fund and that money is previously obligated and that is $1.4 million. City of Hampton, VA Page 9 of 17 Printed on 5/28/2010 City Council Meeting Minutes The City Manager stated there are various other dedicated charges for services as well as incremental revenues to the Community Development Authority (CDA) in the 2+2 revenue and when you add these dedicated revenues, they total over $4.2 million. She asked Council to remember that $4.2 million of the budget is money on which Council had no flexibility at all in terms of deploying City services. The City Manager said the City also faces several expenditure pressures. She explained that the City has required Virginia Retirement System (VRS) and health insurance impacts as most employers do. She said while the City was entertaining the idea of passing on some of the VRS increase to the employees, the Governor precluded that option. She said while the public pension costs are growing they do not have the ability from the State government to have employees contribute to that. The City Manager said the lease payments were a planned increase and it is an appropriate increase to update the 20 year old public radio safety system for first responders, and minor debt service increases. She also mentioned the increase in social services programming that had accompanying revenue but shows up on the expenditure side. She said they felt it was appropriate to back away from some of the use of fund balance that has been used in the past. She explained they will still use some but as the fund balance in excess of policy is diminishing they thought it was best to scale back. Councilman Kearney asked if the new radio system would be affected. In response, the City Manager said they are building in the lease payment and they had already made the purchase and the first year payment is in this year’s budget. She said they are accounting for the fact it was an expenditure that they had to budget for. The City Manager said they are proceeding with that and it will represent a major enhancement to the police and fire first responders. She stated they also feel it is very prudent to plan for mid-year State budget cuts as they have become the rule rather than the exception over the last several years. She noted that Ms. Bateman referenced in her presentation that the City should plan for continuing expense and revenues pressures the State will pass on to the localities and they have tried to accommodate that in the $19 million shortfall as well. Councilman Wallace asked how much. In response, the City Manager said last year they budgeted $900,000 and that is the same amount they have in the scenario this year although no one knows exactly what the State will do because it is a guessing game. She said the idea is to plan to anticipate making mid-year adjustments in the revenues. The City Manager said between the revenue losses and the dedicated revenues that had expense requirements and the various expenditure pressures, the City faces a $19 million shortfall. She said the City Manager’s Recommended Budget will largely be resolved with expenditure cuts which were painful and difficult. She said it is fair and important to note that the School System also faced challenges and to some degree even greater challenges as their actual revenue loss from State and Federal funds exceeded $23 million. She said while the independently elected School Board made decisions on how to handle that, City Council is required to adopt their budget as part of the City’s released budget as well. She explained combining the school losses and the City of Hampton, VA Page 10 of 17 Printed on 5/28/2010 City Council Meeting Minutes City losses it should be readily apparent to the community that the State’s decision making has very real and deep impacts in the community. The City Manager said this budget was exceptionally difficult to manage and she has never seen a budget situation that was this challenging in the 20 years she has been with the City. She said as she reads the State, National and regional news, Hampton is weathering the recession better than most because many cities and towns are closing community centers, public libraries and other municipal facilities and some are having to cut first responders and they have been able to avoid those cuts. The City Manager said she believes the budget will make required cuts in the least damaging ways although it is not pain free. She said they are proposing the elimination of 78 permanent full time positions. She said not all positions have people in them and they have plans to place as many of those people as possible. She said there are 106 positions that are vacant and open and they will do everything they can to find good matches for he impacted employees. The City Manager said there are also operating budget reductions that will be felt by departments as they struggle to carry on business as usual and there will be a slight impact on service delivery. Councilman Kearney thanked the City Manager for the memo she sent to Council on Friday, April 9, 2010. He said he understands the pain and agony she is experiencing with the elimination of the jobs but he has felt better to know that there was a possibility that all those people could be placed, not necessarily doing what they have been doing, or at the pay, but being able to have a job. The City Manager said they want to try and place as many people as possible but they have to be willing to go to another job and have the skill sets needed. She said she is very encouraged that the City will have opportunities for the employees in transition. Councilman Wallace said he would like to reserve the opportunity to meet with the City Manager and staff to look at what the implications are relative to the staff changes and to the people who are going to be impacted. He explained that he is not trying to micro- manage but he would like to know how this will impact service and the ability to deliver service. Councilman Wallace said he wanted his fellow Council members to be aware of his request. The City Manager said as they actively work on the recommended budget they will fully expect to have those kinds of conversations with Council and the community. She said there was no way to resolve this budget largely on the expenditure side without some reduced or eliminated services and there will be constituents who will bemoan the reduction of an important service to them. She said she has tried to be clear throughout the community conversations, everything the City does is important to some group of people, but they are important services or else this Council and prior Councils would not have been funding them. The City Manager said she doesn’t mean to provide any illusion that this is pain free because there will be reductions in service delivery as a result of this budget and she wishes that wasn’t the case. She said she would rather be in a position where they are maintaining or expanding service delivery but that is not what the economy affords us. The City Manager said she believes they have protected the core services of the City. Councilman Washington said he is in agreement with Councilman Wallace and Councilman Kearney. He said our sensitivities toward the reduction in staff is paramount City of Hampton, VA Page 11 of 17 Printed on 5/28/2010 City Council Meeting Minutes to what they are experiencing at this point in time relative to this budget and he believes to bridge the gap, they will be looking at all of the different revenues they are going to generate in order to cover the gap. He said they will try to save as many of the job opportunities as possible. Councilman Washington said if there is an opportunity for some of those employees to be brought back into the system that will be looked at as well. He said they want to ensure that Council’s main concern is not only people who are being impacted, but the services that are going to be rendered to the citizens as a whole. The City Manager stated the most painful part is knowing there are good, hardworking people who have put their hearts and souls into their jobs every day that are being impacted, not because of who they are or what they do, or how they do it, but because when you have to make $19 million of cuts there is no way to do it without impacting positions. The City Manager said she believes they have protected the core services to include police, fire, emergency management, infrastructure management, garbage collection and the like. She said further in the areas where they cut, they were able to keep a pilot light on which means the service continues for the most part in some fashion although scaled back. She said they hope as the economy recovers reinvestment in some of these areas can occur. The City Manager said she cannot over emphasize the importance of citizen input in this budget process. She said while the recommendations that will come out on April 15, 2010, are the best professional judgment of staff and the City Manager, they nonetheless were impacted by the extensive budget outreach that has occurred over the last several months. She said they undertook this outreach because they understood that as much as possible, the budget should reflect citizen values. She noted that while all the services are important, they understood that cuts needed to be made and that any cuts would offer disappointment to some and as a result they needed to have a clear understanding as to the services residents most wanted preserved. She said there will not be a perfect correlation between input received from citizens and the final recommendations because they have fiduciary responsibilities to ensure certain services are maintained; however, the citizens’ voices and thumbprints are imbedded through the budget. She explained that in addition to largely protecting the services referenced, this budget fully funds the public library system. She said almost all departments took some cuts in the process, they exempted the library because this is a service the citizens spoke in unanimity about when saying they felt funding levels should be maintained. She said another example is youth prevention and early intervention services which have largely been held constant. She noted that while the citizens spoke of the value of these programs they also opted to preserve them largely because of the clear value of data that establishes cuts in these efforts would result in larger long term reactive services. The City Manager said they didn’t want to be penny wise and pound foolish. She said other services, as valued as they were, were identified as “wants” and not “needs” by citizens and thus sustained larger cuts. The City Manager provided Council with the following 14 strategies used in shaping the budget and all played a role in bringing down the $19 million shortfall. 1. Reduction in outside agencies/contracts • Sister Cities, Peninsula Sports Commission, various regional efforts 2. Reduction or deferral of capital projects City of Hampton, VA Page 12 of 17 Printed on 5/28/2010 City Council Meeting Minutes • Blighted property acquisition, strategic property acquisition, neighborhood improvement funding and retail shopping center revitalization 3. Use of fund balance for one-time purchases • Funds that are in excess of the policy required by Council • 10% reserve policy - not using all of those funds 4. Employee pay/benefit changes • No reduction in salary for the general workforce • No furlough days • Minor changes in health insurance co-pays • One time early retirement savings • No general wage merit increases • Department heads agreed to voluntary 2% salary reduction 5. Departmental and service mergers • Position for greater success at a reduced cost • Some immediate pain in accompanying loss of position • Designed to reposition the organization for the future • Includes one City School System consolidation 6. Changing the way we do business • Contracting out some services • Organizational wide changes Mayor Ward asked what the logic was for the 2% and who is included. In response, the City Manager said the Department Heads are included. Mayor Ward asked if it was pursuant to the salaries of the Department Heads. In response, the City Manager stated the executive leadership team felt it was the appropriate thing to do. Vice Mayor Spencer asked how many employees are included in the 2% reduction. In response, the City Manager said it includes the Assistant City Managers, the City Manager, the City Attorney, the Clerk of Council and the various Department Heads. She said it is something they were willing to show the workforce they were willing to do. Mayor Ward said she would like to understand because she knows there are people who aren’t department heads who make more than department heads and whether or not it is actually fair. Councilman Wallace asked if that included Council member salaries. Mayor Ward said that is the next thing and she agrees. In response, the City Manager said that was not in the recommendation. Councilman Wallace said he thought they volunteered to do that. The City Manager said it was a last minute thing the Department Heads came together to offer to the workforce and she believes it is an appropriate gesture on their part, and her part, to do something for the larger community and the organization. She stated that obviously if Council doesn’t believe it is appropriate they will be glad to continue to be City of Hampton, VA Page 13 of 17 Printed on 5/28/2010 City Council Meeting Minutes paid at their salary. She said in reality it is more symbolic than the amount of money generated which is the thought process behind it. The City Manager continued with the next strategy 7. Organization wide changes • Changes and transfers to other funds • Reducing general fund support for various funds • Need to suspend the $1 million contribution to Hampton University 8. Reducing the number of administrative overhead and management positions 9. Reducing the number of administrative support positions 10. Elimination of vacant positions • Some positions are absolutely critical to the City’s operations • State or Federal funding tied to them 11. Reductions in operating costs • Travel, office and operating supplies • Available hours for part-time staff 12. Total benefit savings from position elimination 13. Service eliminations/reductions 14. Increases in user fees and boat tax • Budget will reintroduce the personal property tax on boats and Recreational Vehicles (RVs) • Value of existing boats in the community and their impact has been carefully evaluated to find a rate that would recover some of the cost associated with servicing the boater community The City Manager said these strategies have generated about $19 million to close the budgetary gap and have enabled the City to give the community a balanced budget without a real estate or other major tax increase. The City Manager said they have struggled to make the tough choices in a responsible manner and in a manner that was consistent with community input. She publicly acknowledged in advance of the release of the budget, the wonderful group of Department Heads, Assistant City Managers and Budget Team for ensuring that this budget recommendation accomplishes the goals. She also acknowledged a larger group of employees who have helped her shepherd a new level of civic engagement specifically the “I Value” Campaign has been incredibly uplifting and insightful. She said she was pleased to say the budget will introduce a new element to specifically demonstrate the impact citizen comments had on this budget. She said that Council will find that the budget document features the names, voices and comments of our citizens. She said they have helped them to better illustrate that this budget is more than a budget of numbers and it is a reflection of values and things that are important to the community. She said she believes the citizens’ voices and faces will reflect that the services are all about people. The City Manager explained that for each service a citizen came forward and spoke about the service. She said after each comment an “I Value” statement was included. The City Manager said the next steps will be to release the budget on April 15, 2010 to Council and to the community. She said the budget will be available in the libraries starting on April 16, 2010, and on line no later than April 20, 2010. She stated the budget City of Hampton, VA Page 14 of 17 Printed on 5/28/2010 City Council Meeting Minutes public hearings will be held on Wednesday, April 28, 2010, Wednesday, May 5, 2010, and Wednesday, May 12, 2010. Councilman Kearney said Council has been going through the details involved in the budget during the work sessions and looking at what they should try to keep and what shouldn’t be kept and there have been tough decisions. He stated that as Council members they have been kept informed of the entire process from the beginning and that was the reason for the work sessions and many were open to the press. He said two areas the City Manager highlighted which were very important were the acquisition of blighted property and repairs to shopping centers. He said the fact that the money was in the account but wasn’t spent tells him they were not doing what they should be doing. He said there was a time there wasn’t enough money in that account because of aggressiveness of the offices involved and somewhere that aggressiveness has become very placid. He asked the City Manager to look at that in the upcoming year. He said they have the money to do the operation and he doesn’t want them to spend the money just to spend it but he would like them to be coming before Council providing some of the options because there are shopping centers that need help and that would help the community. Councilman Kearney said if the City is going to put a certain amount of money into an account to be used, he would like to see some options being used during the year and not just holding it back. Councilman Kearney said part of the process they need to take on advisement as Council members and overseers is to see how many applications have been actually processed and how many have been denied. He said he is under the impression that a significant number have been denied and they want to ensure that they are risk takers in this process because they are not a banking institution. Regional Issues 4. 10-0142 Information on the First Vision Hampton Roads Regional Day Event Ms. Mary Bunting, City Manager, said this item was added to allow Council members Gilliland and Wallace to talk about the First Vision Hampton Roads Regional Day Event. Councilman Gilliland said on May 6, 2010, the First Vision Hampton Roads Regional Day Event will be held. He noted that over the last few years there has been an organization called The Convocation of Regional Stewards and they have met on a regular basis convened by the Hampton Roads Partnership to talk about how they can do things better across localities. He said the theme that resulted is to work together on cross-jurisdictional issues. He explained there are things that know no political boundary, but are issues that cross all jurisdictional lines. He said the phrase “cross- jurisdictional issues” was chosen because they know sometimes the phrase ”regionalism” raises the hairs on the necks of some folks. Councilman Gilliland said this is not about regional government or regional governance it is about cooperation on cross-jurisdictional issues. He said the declaration states that they are inter-dependent and Hampton does not stand as an island on its own impacting or not impacting others adjacent to Hampton or others in the Hampton Roads region. He said it is laid out very clearly and it talks about some of the cross-jurisdictional issues with a preamble like that of the Declaration of Independence and the articles include legislative unity. Councilman City of Hampton, VA Page 15 of 17 Printed on 5/28/2010 City Council Meeting Minutes Gilliland said it is important that, as a region, they work across those jurisdictional lines for State and Federal legislative initiatives that would benefit each of the localities in the region. He noted that article number two is education and clearly the quality of the school system in Hampton versus Poquoson or Virginia Beach versus Portsmouth. He said they should not be in competition with each other but should be lifting each other up because the families that live in one community and have children educated in that community work in an adjacent community in Hampton Roads and the educational system, regardless of whether it is Hampton or Newport News, or Virginia Beach, matters to all of us. He said Article 3 is transportation and clearly transportation is a regional issue that they are striving to do better at. Councilman Gilliland noted another article is Public Safety and one thing that is certain, criminals couldn’t care less about where the city line is. He said the criminals are looking for opportunity to commit crime and public safety is a key cross-jurisdictional issue. He said Public Communication boundaries don’t run along political jurisdiction lines. Councilman Gilliland said he e-mailed Mr. Dana Dickens, Executive Director of the Hampton Roads Partnership, about this and what is missing from this is “Green” because it is a cross-jurisdictional issue. The environment and what happens in the waterways and on the land and in the air of Hampton impacts everyone else and what everybody else does as well. He said he doesn’t know why that was dropped but he has challenged it and he hopes that is fixed before they meet on May 6, 2010. Councilman Wallace said they are talking about enhancement and embellishment of the citizen engagement process in terms of creating a regional-wide awareness of the need for the acceptance and the cognitive recognition of regionalism. He said an instance where there is a limitation of enhancement on any particular jurisdiction impacts the other. When the Air Naval Reworks Facility moved from Norfolk to Florida, it had a major impact on the region. He said if an aircraft carrier leaves Norfolk and goes to Mayport, Florida, that has a major impact on the region. He said if a military base closes in Hampton, in terms of Fort Monroe, that is a major impact on the region. He said if they are going to become a region of modeling and simulation there needs to be a regional awareness of that particular capacity and opportunity. Councilman Wallace said these kinds of mechanisms lead this kind of stimulus program and events to create an opportunity for creating citizen awareness of the need and acceptance of regionalism. Mayor Ward said a briefing of the National League of Cities will be done during the evening meeting. 5. 10-0144 Briefing on National League of Cities - Congressional City Conference 2010 NO ACTION TAKEN - Councilwoman Leary was not able to be present to give this report and it may be added to the evening agenda. City of Hampton, VA Page 16 of 17 Printed on 5/28/2010 City Council Meeting Minutes Adjournment _____________________ Molly Joseph Ward Mayor ___________________________ Katherine K. Glass, CMC Clerk of Council Date approved by Council __________________ City of Hampton, VA Page 17 of 17 Printed on 5/28/2010