Tax hike proposed

Published 10:28 pm Wednesday, April 1, 2015

The city budget proposal includes a 4-cent increase in the real estate tax rate and includes $2.7 million extra for the school system to implement part of the first phase of a compensation study and start building new schools.

“This budget supports the requests from our citizens by keeping education and public safety a priority,” said Lenora Reid, the city’s finance director.

It also delays “well needed by non-critical capital projects,” she added.

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Suffolk Public Schools Finance Director Wendy Forsman said after the meeting that the $2 million proposed for the schools to implement part of a compensation study is about $1.9 million less than is needed for the first phase.

The planned first phase would boost eight positions that are currently paid more than 20 percent below market value, as well as the teacher scale that is currently 12 to 19 percent below the market, Forsman said.

Doing the teacher scale halfway won’t work because some teachers would wind up making less than prior years after they move up the scale, Forsman said. The School Board would consider what to do with the proposal during its Thursday meeting this week, she added.

About $715,000 will be provided to the schools to fund initial costs for a new elementary school, a new middle school and replacements of heating, ventilation and air-conditioning systems.

City Manager Selena Cuffee-Glenn said the budget proposal “is about courage and sustainability” — the courage to make hard decisions and ensuring they are sustainable.

Reid said the 4-cent increase in the real estate tax rate is “required” to supplement limited revenue.

“The city’s real estate tax rate would still remain one of the lowest in the region,” Reid said. Currently $1.03 per $100 of assessed value, it would rise to $1.07 under the proposal.

Taxpayers on a house assessed at $200,000 would pay about $80 more annually for their real estate tax bill.

Other areas increasing include $2.7 million extra for public safety, which includes $1.8 million in increased costs for the Western Tidewater Regional Jail and $900,000 for system support in the new E-911 center.

Costs for water and sewer are rising, too. The water rate will go up to $8.86 per 100 cubic feet, a hike of 57 cents, if the budget is approved. The sewer rate would go up 27 cents, to $6.74.

City financial adviser David Rose said he hopes to be able to stabilize the utility rate increases in future years by refinancing debt.

“We have a growing system,” he said, noting that the “overwhelming majority” of the system’s capital projects have been mandated.

“It’s all about growth,” he said, adding the city’s large land area is “sort of a blessing an a curse.”

Councilman Mike Duman said the council has “a lot of work to do.”

“I’m somewhat disappointed where we ended up as far as assessments are concerned,” Duman said.

He added that he hopes more money will be available for the school system’s compensation plan in future years.

In efforts to cut costs, the budget reduces funding to the risk reserve and freezes eight positions.

The total budget, including 17 operating, capital and enterprise funds, is $547 million. The general fund equals $187 million, a 3.9-percent rise from last year.

The full budget document is available on the city website, as well as at local libraries and recreation centers. A public hearing is set for April 15.