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Suffolk, VA – Suffolk City Manager Al Moor presented his proposed fiscal year 2025-2026 operating and capital budget to the Suffolk City Council during their April 2, 2025, work session. The proposed budget totals approximately $942.6 million, marking an 8% increase over the current fiscal year 2025 budget. According to Moor, this increase is primarily driven by capital project fund growth.

The next steps in the budget process include a joint meeting between the city council and SPS board on April 9, public hearings, and the anticipated adoption date of May 7. The budget is available on the city’s website.

Director of Finance Charles Meek outlined the guiding principles used in developing the budget:

• Maintain service levels in the growing community with no tax rate increase.
• Maintain competitive compensation and address staffing needs.
• Enhance community services, health, and public safety.
• Invest in public education.
• Strengthen infrastructure and improve quality of life.
• Preserve the city’s strong financial position.

Highlighting key figures, Meek stated, “As the manager mentioned, the proposed budget totals across all funds $942,652,843 that’s an 8% increase over the fiscal year 25 budget”. He further elaborated on specific fund changes:

• The general fund, which houses most city services and programs, sees an increase of about 6% to $339.3 million.
• The capital projects fund experiences a significant 47% increase, largely due to anticipated state and federal funds for road and parks and recreation projects, as recalled from the CIP adoption.
• The transit system fund is projected to have a reduction due to an anticipated decline in state and federal funds.
• The fleet management fund shows a 6% reduction attributed to the projection of fuel rates compared to the previous year.

Meek detailed the general fund revenue picture, noting a projected $15.8 million increase in general property taxes, encompassing real estate, personal property, and public service corporation taxes, as well as penalties and interest. Other local taxes, more consumer-based, are projected to increase by almost $3.6 million. Fees, charges, and miscellaneous revenue are expected to remain relatively flat, while state and federal funds are projected to increase by almost $2.5 million, although Meek cautioned that this needs to be monitored due to potential federal cuts. Fund balance and transfers show a reduction of almost $3.5 million, primarily due to budgeting less from the capital reserve fund for capital projects.

Providing a breakdown of property tax revenue, Meek cited the Assessor’s recent update, indicating an average 6.54% increase in assessed value, with 4.71% from reassessment values and 1.83% from new construction. This, along with the collection rate and consideration for tax relief programs, accounts for approximately a $12.3 million increase for the next year. Personal property tax revenue continues to increase, albeit at a moderating pace, with a projected $3 million increase.

Regarding other local taxes, Meek noted the strength of business license and meals tax revenues, increasing by $1.5 million and $1.3 million respectively, reflecting the city’s growth. Sales tax revenue is also trending upward but moderating, with a projected $500,000 increase. Tobacco tax revenue, however, is projected to decrease by about $200,000, continuing a downward trend. Revenue from the use of money and property remains strong, with an anticipated $900,000 increase due to interest on investments and bond proceeds.

Meek also addressed challenges in developing the budget, including staffing and maintaining new facilities like the downtown library and new fire stations.

He highlighted Suffolk Public Schools’ request for an additional $7 million in local operating support and 11 additional school resource officers (SROs). Meek said SPS has exhausted some pandemic funding and is looking to keep some programs and services funded through those grants operating. Meeks said the city is proposing a phased approach to reach the 11 requested SRO’s, starting with four next fiscal year. SPS will not be required to reimburse the city for the SRO’s, the funding will now come out of the police department budget.

The proposed budget accounts for a reduction in state and federal funding for transit operations, necessitating an increased general fund contribution. Increased debt service in the general and stormwater funds, rising technology maintenance costs, increasing solid waste disposal costs, and the need to replace refuge trucks were also mentioned as financial pressures.

A key aspect of the proposed budget is maintaining service levels without a citywide real estate tax increase. Meek confirmed, “The proposed budget does not adjust the citywide real estate tax. [It] remains at $1.07 per $100 of assessed value, 10.5 cents in the downtown business district, [and] 24 cents in the Route 17 taxing district. This would keep Suffolk at its current rating at the third lowest real estate tax rate in the region.” He also noted the city’s reduction of the real estate tax rate by 4 cents over the past three fiscal years.

During the meeting that followed, city council unanimously voted to set a public hearing for May 7, 2025, to receive public comment on a proposed fiscal year 2025-2026 citywide effective real estate tax increase due to reassessment.

To address staffing needs and maintain competitiveness, the budget proposes a 3% pay increase for all city employees, step plan adjustments, and potential regrades or reclassifications for certain positions.

“We have some positions that have been identified below market averages or that have changes in job duties, and so, it’s been determined regrades or re-classifications are warranted,” Meek said.

Additionally, 46 new full-time positions are proposed to address workload and service demand, with over 50% in public safety. An annual leave buyback program is also being considered.

The proposed new positions include:

• Fire Department: 10 positions for the Station 4 medic unit.
• Police Department: 9 positions, including four SROs.
• Social Services: 6 positions to enhance family services.
• Library: 4 positions for the new downtown library.
• Capital Programs: 4 positions for building maintenance and custodial services.
• Police Emergency Communications: 2 positions for call taking and communications.
• Sheriff’s Office: 2 deputies.
• Parks and Recreation: 2 positions.
• Planning and Community Development: 1 land use planning manager.
• Clerk of the Circuit Court: 1 deputy clerk.
• Commonwealth Attorney’s Office: 1 office assistant.
• Budget and Strategic Planning: 1 position for reorganization of financial operations.
• Other Funds: Public safety IT manager, account representative (Public Utilities), and development surety manager.

The budget also includes increased funding for community health and wellness partners, the operation of the homeless shelter, and a 30% increase in library funding to support expanded hours and programs.

For public education, the proposed budget includes $81.2 million in local funding, a $5.8 million increase. The capital budget aligns with the adopted CIP, featuring $13.1 million for the Northern Shores Elementary School addition and the school administration office. Meek also noted that over the last five years, there’s been a significant increase of local funding support for schools.

Meek emphasized the city’s strong financial position, meeting or exceeding all major financial policies. He also provided a breakdown of the tax dollar allocation for city services.

Further fund highlights include a proposed $4.75 increase in the monthly refuge fee to support a refuge truck replacement program and increased disposal costs. The stormwater fund sees an 11% increase overall, with no change to the monthly fee but an anticipated rate adjustment in FY27. The road maintenance fund is budgeted at $38.5 million, a 5% increase, allowing for street and bridge improvements and equipment replacements. The transit fund faces a 14% reduction due to decreased state and federal funding, requiring increased general fund support. The public utilities fund requires a rate adjustment averaging 3.7% per month for customers due to increasing costs from partners and supplies. The IT and risk management funds also see increases to address technology replacements and rising health insurance claim costs.