City’s draft budget calls for tax reduction, staffing increases
Published 4:10 pm Thursday, April 7, 2022
City Manager Al Moor introduced a $767.6 million fiscal year 2023 budget Wednesday that would cut the real estate tax rate by two cents, reduce the assessment ratio for cars and trucks and add 52 full-time positions.
In her presentation during City Council’s April 6 work session, city Finance Director Tealen Hansen said the budget was driven by several factors — helping residents absorb the impacts of real estate and personal property taxes as a robust economy and building boom in the city have pushed up property values and provided significant increases in the amount of taxes and fees collected.
The proposed budget, a near 10% increase from the current budget, would cut the real estate tax rate from $1.11 per $100 of assessed value to $1.09 — keeping the city’s rate the third-lowest in the region, with only Virginia Beach and Chesapeake having lower tax rates.
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It also would hold the line on some taxes and fees — absorbing an increase in tipping fees at the regional landfill and maintaining the refuse fee at $25.25 monthly, and leaving the stormwater fee at $7.50 per equivalent residential unit.
It would assess cars and trucks under two tons at 75% of their value instead of the current 100%. According to Commissioner of the Revenue Susan Draper, that’s because of the unprecedented increase of more than 40% in the assessed value of cars and light trucks.
But the proposed city budget calls for a 12-cent increase in the water rate — from $10.31 to $10.43 per cubic feet — and a 50-cent increase in the meter service rate, which Moor said would equate to a $1.10 average increase per month, from $100.65 to $101.75. The sewer rate, at $7.27 per cubic foot, would remain unchanged. That does not include any charges from the Hampton Roads Sanitation District.
The $9.3 million in cash funding for water and sewer capital projects, Hansen said, would prevent borrowing, which helps lessen the impact on future water and sewer rates.
There would be no change in the downtown business overlay taxing district (10.5 cents) and the Route 17 taxing district (24 cents), and Moor’s proposed budget includes $8.4 million in money in step increases resulting from the compensation study and fully funds the school division’s budget that the School Board recently approved — though that comes with a string attached squarely on the General Assembly and what it ends up doing with the state budget.
The House of Delegates and the Senate have differing bills that would eliminate the grocery tax; the House bill would eliminate it at the state and local level, while the Senate bill would eliminate only the state grocery tax and keep the 1% local tax. City Finance Director Tealen Hansen said the city could stand to lose up to $3 million, which would go to support the school division.
However, the Senate bill would allow for school divisions to be reimbursed for the lost revenue. If that happens, then Hansen said the city would cut $3 million the school division seeks since it would be getting that money from the state.
Superintendent Dr. John B. Gordon III’s budget asks for $67.3 million from the city, a $2 million increase from what it received in the current fiscal year. The division’s overall $232.5 million budget includes pay increases for staff and adds 28 new positions.
In public safety, the proposed budget would add 18 new positions in the second phase of hiring, on top of the 18 added in phase one, for Suffolk Fire & Rescue for its College Drive fire station, including 12 firefighters, three lieutenants and three captains. It also adds a full-time fire inspector that converts two part-time positions into a single, full-time one. It also adds $1.8 million in additional overtime money for the department.
The current budget provided for 18 new firefighters in the first phase of hiring.
Factoring in the city’s growth, the budget also would add five people to the Planning and Community Development department, as well as five people for Parks and Recreation — eight part-time park attendant positions would be converted to four of the five full-time positions, and the other would be a completely new position. It would also add $281,000 to the Suffolk Police Department for a second overweight-truck crew through part-time positions. Road maintenance and traffic engineering are adding six positions to establish another road-painting crew, and two more for stormwater staffing to address compliance in the city.
The budget also would fully fund the $59.3 million of projects in the first year of the city’s capital improvement program and plan, including $7.5 million in capital funding to replace John F. Kennedy Middle School and $3.575 million in capital funding for major systems repairs and replacements. The city has budgeted $11.2 million for the schools’ debt service.
Among the other items in the CIP’s first year include $4.1 million for the College Drive fire station, around $2.3 million for new and replacement fire apparatus, just over $400,000 for ambulances and $100,000 for a breathing air system. It also includes $9.8 million for the traffic operations center, citywide signal timing and the Freeman Mill Bridge over the Spivey Swamp.
Another $6.5 million in CIP money will go toward renovating the Human Resources building, $3.6 million to work on a new central library, $2.9 million for local urban road construction and nearly $1.8 million to the flyover project on Nansemond Parkway and Wilroy Road.
In that first year, $44 million of the $59.3 million will come from the general government fund, nearly $9.3 million from the public utilities fund, nearly $5.5 million from the stormwater fund and $500,000 from the information technology fund. Another $710,000 would go to Parks and Recreation projects.
The city has proposed issuing $29.9 million in general obligation bonds in the first year, and is expected to issue at least $29.5 million in bonds over the next four years after that as the city looks to preserve its AAA bond rating.
Hansen and Moor both noted the active real estate market, with property assessments up 13.6%, owing to growth in reassessments (10.8%) and new construction (2.8%).
Resulting from the city’s positive economic activity, Moor noted the general fund is projected to increase by $25.2 million in the next fiscal year.
He said the additional money is needed to deal with increased operating and capital project costs due to supply chain disruptions and inflation, along with personnel expenses coming with the staffing of the planned Bennett’s Creek Recreation Center opening and the new College Drive fire station.
Moor said he expects the newly adopted compensation plan to help with hiring issues across the city. He said many, but not all of the 48 approved positions in the current budget had been filled.
Councilman Donald Goldberg said there was no reason not to support the budget, and while other council members who spoke, including Mayor Mike Duman, had generally positive things to say about the budget, they said it would need further scrutiny before they approve it.
A public hearing will be held on the budget at the April 20 council meeting.
To view a copy of the proposed budget, go to https://issuu.com/cityofsuffolk/docs/proposed_fy2022-2023_operating_capital_budget?fr=sYTRmYTM1NzI5NDQ. For a copy of the budget presentation, go to https://issuu.com/cityofsuffolk/docs/fy_23_budgetpresntn_4-6-22?fr=sNWQwOTM1NzI5NDQ.