Work 01/14/14 Session pt. 2 – Norfolk City Council

Work 01/14/14 Session pt. 2 – Norfolk City Council


>>OKAY.
WE’LL COME BACK IN ORDER.>>MAYOR, MEMBERS OF COUNCIL, IF
YOU RECALL –>>OKAY.
ALL RIGHT, GUYS.>>MAYOR, MEMBERS OF COUNCIL, IF
YOU RECALLESS SUMMER, WE WERE — LAST SUMMER, WE WERE APPROACHED
BY SIMON, LLC, FOR THE OPPORTUNITY FOR A RETAIL
DEVELOPMENT FOR PREMIUM OUTLETS —
>>PULL THE MIC A LITTLE CLOSER.>>FOR PREMIUM OUTLET MALL AT
LAKE WRIGHT, AT THE INTERSECTION OF I-64 AND NORTH HAMPTON
BOULEVARD. AT THAT TIME, NRHA WAS THE TITLE
HOLDER FOR THE PROPER OF THE GOLF COURSE AND — PROPERTY OF
THE GOLF COURSE AND THE TRANSFER WAS MADE TO THE NORFOLK ECONOMIC
DEVELOPMENT AUTHORITY FOR THE OPPORTUNITY FOR US TO CONSIDER
WHETHER A SALES AGREEMENT COULD BE REACHED FOR THAT DEVELOPMENT.
THE REASON WE’RE BRINGING THESE CONCEPTUAL PLANS TO YOU THIS
EVENING IS BECAUSE AS THEY CONTINUE TO DO DUE DILIGENCE ON
THE OPPORTUNITY FOR THAT SALES AGREEMENT, THERE ARE A NUMBER OF
ITEMS OF APPROVAL THAT WOULD NEED TO BE MADE IN ORDER TO
REACH A SALES AGREEMENT, WHICH COULD POTENTIALLY BE MET IN MAY.
AS A REMINDER, THIS IS THE OPPORTUNITY THAT SIMON HAS
PRESENTED, AND THE CONCEPT THAT WE’RE PRESENTING TO YOU THIS
EVENING IS SIMON PREMIUM OUTLET PARK.
THIS WOULD BE A $75 MILLION INVESTMENT WITH APPROXIMATELY
350 GROSS LEASABLE SQUARE FEET FOR THE OUTSET MALL THAT WOULD
GENERATE — OUTLET MALL THAT WOULD GENERATE 450 PER SQUARE
FOOT IN SALES. THAT’S AN ANNUAL $130 MILLION IN
SALES. DIRECT BENEFIT IS APPROXIMATELY
3.3 MILLION ON AN ANNUAL BASIS AND SALES TAX TO THE STATE IS
7.2 MILLION. THERE’S AN ESTIMATED 800
PERMANENT JOBS THAT WOULD BE GENERATED BY WHAT IS
APPROXIMATED TO BE 90 STORE FRONTS.
300 JOBS WOULD BE DEVELOPED DURING CONSTRUCTION, WHICH IS
CONTEMPLATED TO BE BETWEEN 12 AND 18 MONTHS FOR THE
CONSTRUCTION. THAT WOULD — DIRECT LABOR
INCOME COULD GENERATE OVER $18.5 MILLION.
AS THE CONCEPT AND NEGOTIATIONS HAVE EVOLVED, IT WAS ALSO BECOME
EVIDENT THAT SIMON IS A WILLING AND ABLE PARTNER TO DEVELOP THE
CONCEPT OF SIMON PREMIUM OUTLET PARK TO INTEGRATE AN
ESSENCE-BASED PLAN NOT ONLY WITH THE PREMIUM OUTLET, BUT ALSO FOR
THE BURTON STATION STRATEGIC ROADS AREA.
THAT WOULD PROVIDE PUBLIC RECREATIONAL ACCESS THAT WE DO
NOT CURRENTLY HAVE, RIPARIAN BENEFITS TO THE WATER RESERVOIR
AND PRESERVATION OF A LARGER OPEN SPACE IN THE BURTON STATION
AREA. AS YOU RECALL, THAT AS IT STANDS
TODAY, THAT THE GOLF COURSE IS NOT PUBLICLY ACCESSIBLE WITHOUT
FEES AND THE AESTHETIC OR ECOLOGICAL BENEFITS PALE IN
COMPARES SON TO WHAT WE CONCEPTUALIZED TODAY.
90 POTENTIAL STORE FRONTS ON THE NORTHERN END OF THE LAKE WITH —
ADJACENT TO MILLER STORE ROAD. IT WOULD NEED AN EXTENSION OF
ACCESS FROM NORTH HAMPTON BOULEVARD UP TO THE DEVELOPMENT
AND THAT THE DEVELOPERS ALSO ACQUIRED PROPERTY FOR A BACK
ACCESS OFF OF WEST STORE ROAD. WHAT YOU SEE HERE, IT GIVES YOU
SOME SENSE OF — THAT WILL EVOLVE SWOT NEXT SLIDE OF WHERE
THE DEVELOPER AND SIMON ARE CONTEMPLATING THAT THIS
INTEGRATED EXPERIENCE BETWEEN THE SHOPPING AND ALSO THE
RECREATIONAL/OPEN SPACE OPPORTUNITIES.
THIS CONCEPTUAL SITE PLAN PROVIDES STORE FRONTS ON THE
OUTER RING AS WELL AS THE INNER RING AND A FOOD COURT IN THIS.
IT ALSO, BECAUSE LAKE WRIGHT IS A WATER RESERVOIR, CANNOT SERVE
AS A STORM WATER RUNOFF OR RETENTION POND, SO TWO PONDS
WOULD BE DEVELOPED THAT WOLS BE INTEGRATED INTO — WOULD ALSO BE
INTEGRATED INTO THE OPEN SPACE PLAN.
THE OPEN SPACE PLAN WE’VE WORKED ON WITH SIMON CREATES THE
OPPORTUNITY FOR MULTI USE TRAILS, FOR PEDESTRIAN BRIDGE
ACROSS THE LAKE, FOR FOUNTAIN AND EVEN AMPHITHEATER THAT COULD
BE BUILT ON THE LAKE WITH BOAT RENTALS, WITH PASSIVE PARK
OPPORTUNITIES AND TO ENHANCE THE RIPARIAN BENEFITS OF THE VERY
LONG TAGE ALONG THE LAKE — VEGETATION ALONG THE LAKE.
WHAT WE HAVE HERE, CONCEPTUALIZED FOR THE LOOP
HERE, WOULD PROVIDE A ONE-MILE RADIUS AROUND THE SOUTHWESTERN
AND JUST UNDER A MILE ON THE NORTHEASTERN LOOP AROUND THE
LAKE. YOU CAN SEE A TRANSITION HERE
FROM A LITTLE MORE HARDSCAPE BOARDWALK ATMOSPHERE TO THE
MULTIPURPOSE TYPE OF PATH. BECAUSE THE GOLF COURSE IS
CURRENTLY MANICURED WITH VERY LOW-CUT GRASS, WE WOULD BUILD IN
MEADOWS WHERE WE’LL NATURALLY LET THE GRASS GROW AND THEN
MANICURE LAWN OPPORTUNITIES FOR PICNICS AND EVEN POTENTIAL OPEN
AIR TYPE OF MUSIC EVENTS THAT COULD BE PLAYING.
WE HAVE PARKING ACCESS HERE THAT’S AT THE BACK SIDE OF THE
HOTEL THAT’S THERE. WE DIDN’T DO THIS IN A VACUUM.
WE DID ALL THESE CONCEPTUAL PLANS ALSO WORKING WITH THE CITY
OF VIRGINIA BEACH, REALIZING THAT THIS DEVELOPMENT
OPPORTUNITY DOES BRING RETAIL DEVELOPMENT OPPORTUNITIES THAT
WEREN’T PREVIOUSLY CONTEMPLATED IN THE BURTON STATION STRATEGIC
ROADS AREA PLAN THAT’S EMBEDDED IN THE CITY OF VIRGINIA BEACH’S
COMPREHENSIVE PLAN. SO THERE ARE TWO PRIMARY ASPECTS
OF CONCEPTUAL PLANS THAT HAVE BEEN DEVELOPED IN CONJUNCTION
WITH THE CITY OF VIRGINIA BEACH. I APOLOGIZE, THIS GIVES YOU SOME
IDEA OF THE RIPARIAN PLANTINGS THAT WOULD OCCUR, ENHANCEMENT
AROUND THE LAKE IN THE OPEN SPACE PLAN TO MAKE SURE WE HAVE
GOOD FILTRATION INTO THE WATER SYSTEM THAT WE DON’T CURRENTLY
HAVE AT THE GOLF COURSE. NUMBER ONE WOULD BE AN AREA PLAN
THAT STARTS TO BUILD ON A ROAD NETWORK.
THERE WAS A ROAD NETWORK THAT WAS PREVIOUSLY CONTEMPLATED BUT
WASN’T DONE WITH THE TRAFFIC ANALYSIS.
WE HAVE DONE THE TRAFFIC ANALYSIS AND UNDERSTAND THAT WE
HAVE SOME CHALLENGES WITH THE POTENTIAL EXTENSION OF WESLEYAN
DRIVE AND THE ANALYSIS IDENTIFIED THAT A BETTER
CONNECTION WOULD BE AN EASTWARD MOVEMENT OF A CONNECTION INTO
THE CENTER OF THIS AREA, UNDERSTANDING THAT THE PROXIMITY
TO INTERSTATE 64 AND THE WEAVING PATTERNS AND ALSO CONGESTION AT
THE WESLEYAN INTERSECTION ARE OF CONCERN AND IT WOULD BE BEST TO
MOVE THAT AND PROVIDE A BETTER INTERSECTION EASTWARD.
THIS WOULD BE PHASE ONE THAT COULD BE DONE POTENTIALLY —
WELL, WOULD BE DONE SIMULTANEOUS TO THE DEVELOPMENT OF THE OPEN
SPACE AND THE PREMIUM OUTLET MALL.
WHERE THIS FILLS IN IS INTO A GREATER NETWORK OF POTENTIAL
FUTURE ALIGNMENTS AND DEVELOPMENT OPPORTUNITIES IN THE
CITY OF VIRGINIA BEACH’S STRATEGIC ROADS AREA.
THE PRIMARY GOAL FOR THE STRATEGIC ROADS AREA, ONE GOAL
IS TO PRESERVE THE RESIDENTIAL VILLAGE AT BURTON STATION AND TO
SEVER BURTON STATION ROAD SO THAT THE TRAFFIC IS NOT
ENCOURAGED TO GO THROUGH THAT RESIDENTIAL DEVELOPMENT.
THIS CONCEPT CONTINUES TO PRESERVE THAT OPPORTUNITY, BUT
MORE IMPORTANTLY, HOW IT DOES THAT IS IT BUILDS IN
APPROXIMATELY 130 ACRES OF OPEN SPACE THAT CAN BE MASTER PLANNED
ALONG WITH THE CITY OF VIRGINIA BEACH LIKE WE’RE WORKING ON WITH
THE LAKE WRIGHT MASTER PLAN. SECONDLY, IT PRESERVES THE
OPPORTUNITY FOR DEVELOPMENT IN WORKING WITH — WHERE THEY ARE
IN THEIR CAPITAL IMPROVEMENT PLAN WITH THEIR DEVELOPMENT OF
TOLIVER ROAD AND THEN HOW WOULD THE INTERCONNECTIVITY OF THIS
NEW ACCESS TO THE PREMIUM OUTLETS WORK INTO THAT.
SO THE NEXT STEPS ARE THAT SIMON HAS ALREADY MADE APPLICATION TO
THE CITY OF VIRGINIA BEACH FOR REZONING FOR THE AREA OF
PARKING, THE PARCELS THAT ARE BEING CONTEMPLATED FOR SALE FROM
THE EDA TO SIMON, THAT ARE UP NEAR MILLER STORE ROAD.
SIMON ALSO NEEDS TO MAKE APPLICATION TO THE CITY OF
NORFOLK. BOTH THOSE WOULD GET
CONSIDERATION BY EACH CITY COUNCIL IN THE APRIL/MAY TIME
FRAME. WE ALSO NEED TO COORDINATE WITH
THE CITY OF VIRGINIA BEACH TO ENGAGE THE COMMUNITY OF BURTON
STATION VILLAGE FOR DISCUSSIONS ABOUT THIS EVOLUTION IN THE
AREA, WHEREAS BEFORE MUCH OF THE DEVELOPMENT OPPORTUNITY WAS
FOCUSED AROUND COMMERCIAL OFFICE SPACE, WE’RE NOW INTRODUCING A
DIFFERENT AND ADDITIONAL JOBS AND RETAIL OPPORTUNITIES THAT
WEREN’T CONTEMPLATED BEFORE AND SO WE WANT TO TAKE THAT AND
RECEIVE SOME FEEDBACK ON THESE CONCEPTUAL PLANS.
>>RON, WHY DO WE NEED TO GET INVOLVED WITH VIRGINIA BEACH’S
ISSUES WITH THE RESIDENTS? WOULD WE HELP ON WHICH SIDE?
>>THEY ASKED BECAUSE WE’RE WORKING COOPERATIVELY, TO MASTER
PLAN THE WHOLE AREA AND NOT LOOK AT ONE SINGLE PARCEL AND
UNDERSTAND THAT ANY DEVELOPMENT CAN HAVE RAMIFICATIONS FOR THE
WHOLE AREA, THEY ASKED THAT WE PARTICIPATE IN THAT WITH THEM.
>>AND I ASKED YOU A FEW MINUTES AGO, AND I’LL BRING THIS UP,
THERE ARE ABOUT 12 HOMES BETWEEN THE GOLF COURSE AND BURTON
STATION ROAD HAVE BEEN IN LIMBO FOR OVER TEN YEARS.
WHAT HAPPENS WITH THAT? IS THAT A PART OF THIS
CONVERSATION?>>IT WOULD BE A PART OF IT.
OF COURSE, THEY’RE IN THE CITY OF VIRGINIA BEACH.
>>RIGHT.>>WE DON’T HAVE ANY OWNERSHIP
OF THOSE PARCELS AT ALL, BUT THAT WOULD OBVIOUSLY BE PART OF
THE DISCUSSION THAT WE WOULD TAKE INPUT ON.
>>RIGHT, THANK YOU.>>THERE ARE TWO COOPERATION
AGREEMENTS THAT WE WOULD LIKE TO DEVELOP AND BRING TO BOTH CITY
COUNCIL — TO EACH CITY COUNCIL. ONE WOULD BE A COOPERATION
AGREEMENT FOR A CONTRIBUTION TO THE ROADWAY IMPROVEMENTS IN THE
AREA WITH THE CITY OF VIRGINIA BEACH AND THEN BETWEEN THE CITY
OF NORFOLK AND NORFOLK EDA FOR THE WATER AND STORM WATER
IMPROVEMENTS THAT NEED TO BE MADE.
WE NEED TO WORK THROUGH FINAL DESIGNS FOR THE OUTLET MALL AND
OPEN SPACE AND AS PART OF THAT, WE’RE ALSO LOOKING TO
POTENTIALLY, WE’RE CONSULTING WITH THE VIRGINIA LAND
CONSERVATION FOUNDATION ABOUT THE OPPORTUNITY TO LAND
CONSERVATION EASEMENT THAT WOULD ALSO BRING OFFICIAL FUND, BUT
MOST IMPORTANTLY, PRESERVE THE OPEN SPACE IN PERPETUITY AROUND
THE LAKE. SO AS WE WORK THROUGH THE NEXT
STEPS, WE’LL CONTINUE TO KEEP YOU UPDATED, BUT WE WANTED TO
BRING THE CONCEPTS THAT WERE THERE TO THE PUBLIC AND TO THE
COUNCIL BECAUSE WE WILL START TO SEE APPLICATION DECISIONS THAT
NEED TO BE MADE OVER THE NEXT SEVERAL WEEKS AND COUPLE MONTHS.
>>LET ME ASK YOU A QUESTION IF I COULD.
GETTING BACK TO THE CONVERSATION WITH VIRGINIA BEACH AND THE
RESIDENTS AND WHAT’S DESCRIBED AS BURTON STATION VILLAGE, IN
THE EVENT — IF WE DON’T OWN ANY OF THE PROPERTY THERE, BUT
VIRGINIA BEACH WOULD BE THE PERSONS WHO WOULD BE THE GROUP
THAT WOULD DEAL WITH THOSE RESIDENTS SHOULD THEY TRY TO —
NEED TO ACQUIRE THAT PROPERTY.>>RIGHT.
YES, SIR, OR THE MARKET.>>OR THE MARKET WOULD, OKAY.
BECAUSE BURTON STATION, WHAT’S DESCRIBED WITH BURTON STATION
VILLAGE, ME BEE VERY FAMILIAR WITH IT OVER THE YEARS, IT’S
BEEN SOMETHING THAT VIRGINIA BEACH HAS BEEN DODGING BACK AND
FORTH WITH FOR YEARS AND I CAN’T IMAGINE THE LIMBO PROPERTY
OWNERS THAT LIVE — NOBODY’S LIVING THERE RIGHT NOW, SO I
HAVE ALWAYS BELIEVED THAT VIRGINIA BEACH NEEDED TO STAND
THIS ALONE. TEN YEARS AGO THEY WERE TALKING
ABOUT THE NORTH HAMPTON BOULEVARD PROJECT AND I THINK
IT’S SOMETHING THAT VIRGINIA BEACH NEEDS TO OPEN UP TO AND WE
DON’T NEED TO GET — WELL, IF WE’RE GOING TO GET INVOLVED,
ASKED TO BE INVOLVED WITH IT, BUT I DON’T BELIEVE WE NEED TO
HAVE EGG ON OUR FACE BECAUSE VIRGINIA BEACH HAS NOT HANDLED
THIS ISSUE THE WAY THEY SHOULD HAVE OVER THE YEARS.
>>OKAY. RON, THANK YOU FOR AN EXCELLENT
PRESENTATION. IF NO OTHER QUESTIONS, THEN
WE’LL BREAK FOR DINNER.>>OKAY.
I THINK WE’RE READY TO BEGIN AGAIN.
>>BEFORE YOU, YOU HAVE THIS NICE PRETTY BOOK THAT’S A
COMPREHENSIVE ANNUAL FINANCIAL REPORT, AND IN THAT REPORT, WE
HAVE OUR ANNUAL ASSESSMENT THAT’S DONE BY THE AUDITORS.
THEY COME BEFORE THIS FINE GOVERNMENT BODY TWICE A YEAR,
THEY COME AT THE BEGINNING OF THE AUDIT AS PART OF THE
PLANNING STAGE, AND TODAY, OR RATHER THIS EVENING, THEY’RE
GOING TO COME TO PRESENT THEIR AUDITOR REPORT AND WE’LL LISTEN
TO THEM AS THEY COME AND SHARE THIS.
THIS IS THE PARTNER FOR KPMG, WHO IS OUR AUDIT FIRM COMING AT
THIS TIME.>>THANK YOU.
GOOD TO SEE YOU AGAIN, THANK YOU.
>>THANK YOU. WELL, FIRST OF ALL, I’D LIKE TO
THANK YOU FOR LETTING US COME AND — WELL, FIRST OF ALL, TO
SERVE AS THE AUDITORS FOR THE CITY AND WE’RE HERE, AS JOHN
INDICATED, TO PRESENT THE RESULTS OF THE AUDIT.
OUR AGENDA FOR TONIGHT IS, FIRST OF ALL, GIVE YOU A FEW
HIGHLIGHTS ABOUT THE AUDIT ITSELF AND THEN WE’RE GOING TO
GO THROUGH — THERE’S A SET OF REQUIRED COMMUNICATIONS THAT I
NEED TO MAKE TO YOU AS THE GOVERNING BODY THAT HAS
OVERSIGHT OVER THE FINANCIAL REPORTING ROLE, WHICH ARE ALSO
SUMMARIZED IN A LETTER AND WE’LL GO THROUGH THOSE AND THEN TALK
FOR A FEW MINUTES ABOUT THE INTERNAL CONTROL PROCEDURES WE
PERFORMED UNDER GOVERNMENT AUDITING STANDARDS AND THE A-133
AUDIT, WHICH IS THE AUDIT OF THE CITY’S FEDERAL GRANTS.
OKAY, SO WE’LL START WITH THE HIGHLIGHTS.
JUNE 30, 2013, AUDIT IS COMPLETE.
AS AN AUDITOR, WE ALWAYS LIVE IN THE PA, BUT I KNOW — PAST, BUT
I KNOW YOU ALL HAVE A COPY OF THE FINAL ISSUED REPORT THAT WAS
HANDED OUT TONIGHT. SO CONGRATULATIONS TO ALICE AND
HER STAFF ON A JOB WELL DONE WITH THE REPORT.
WE DID ISSUE A CLEAN OR AN UNQUALIFIED OR UNMODIFIED
OPINION ON THE FINANCIALS, WHICH MEANS THAT THE NUMBERS AS
PREPARED BY THE CITY’S STAFF, YOU KNOW, WERE FAIRLY STATED.
WE ALSO ISSUED, WHICH IS AT THE BACK OF THE REPORT, A COUPLE OF
REQUIRED REPORTS UNDER GOVERNMENT AUDITING STANDARDS.
THOSE REPORTS PROVIDE YOU WITH SOME NEGATIVE ASSURANCE ON THE
OPERATIONAL CONTROLS. LIKE WE DON’T ACTUALLY AUDIT
CONTROLS LIKE A PUBLIC COMPANY WORK BUT WE DO PERFORM SOME
PROCEDURES AND ALSO PROVIDE YOU WITH SOME NEGATIVE ASSURANCE
THAT NOTHING CAME TO OUR ATTENTION ON CERTAIN COMPLIANCE
MATTERS. THE AUDIT IS ALSO PERFORMED IN
ACCORDANCE WITH A SET OF SPECIFICATIONS THAT THE AUDITOR
OF PUBLIC ACCOUNTS OF THE COMMONWEALTH OF VIRGINIA ISSUES,
AND WE PERFORM CERTAIN PROCEDURES ON THEIR BEHALF AND
HAVE COMPLETED THOSE AS WELL. WE ALSO COMPLETED, AS I STATED
BEFORE, AN A-133 AUDIT OF THE FEDERAL PROGRAMS OF THE CITY AND
WE’LL TALK ABOUT THAT A LITTLE BIT FURTHER IN A MINUTE.
SO NOW WE GET TO THE REQUIRED COMMUNICATIONS AND I THINK AT
LEAST IN YOUR DROPBOXES, YOU GOT A WRITTEN COPY OF THOSE
COMMUNICATIONS, SO I’M GOING TO TRY TO BE BRIEF AND JUST GO OVER
THE HIGHLIGHTS, AND OBVIOUSLY AT ANY TIME, WE’RE HAPPY TO ANSWER
QUESTIONS IF YOU HAVEN’T HAD A CHANCE TO LOOK AT THE LETTER IN
DETAIL. THE FIRST STEP IN THE LETTER IS
JUST TO LAY OUT FOR YOU, LIKE WHAT AN AUDIT IS AND WHAT IT
ISN’T. THE OBJECTIVE OF AN AUDIT IS TO
LOOK FOR MATERIAL ERRORS. THE OBJECTIVE OF AN AUDIT IS NOT
TO IDENTIFY FRAUD, ALTHOUGH WE DO PERFORM SOME PROCEDURES TO DO
RISK ASSESSMENTS THAT WE TALKED TO YOU ABOUT WHEN WE CAME A FEW
MONTHS AGO THROUGH THE PROCESS. AND THEN IN TERMS OF OTHER
REQUIRED COMMUNICATIONS, THE BOOK IS VERY THICK AND OUR
OPINION ONLY COVERS CERTAIN OF THOSE PANELS IN THE MIDDLE —
PAGES IN THE MIDDLE, BUT WE DO READ THE ENTIRE DOCUMENT TO MAKE
SURE WHAT’S PRESENTED IN THE DOCUMENT IS CONSISTENT WITH, YOU
KNOW, WHAT WE’VE LEARNED IN OUR ROLE AS THE AUDITORS OF THE
CITY. IN TERMS OF ACCOUNTING POLICIES
AND ALTERNATIVE TREATMENTS, THE SIGNIFICANT ACCOUNTING POLICIES
FOR THE CITY ARE IN THE FIRST FOOTNOTE TO THE FINANCIAL
STATEMENTS AND THERE WERE REALLY NO SIGNIFICANT CHANGES THIS
YEAR. THERE WERE A FEW SEMANTICS, AND
FOR THOSE OF YOU THAT WERE HERE EARLIER, THERE ARE SOME MORE
SIGNIFICANT CHANGES THAT ARE COMING DOWN THE ROAD NEXT YEAR
THAT, YOU KNOW, WE’LL TALK TO YOU ABOUT WHEN WE COME BACK AS
WE’RE HEADING INTO THE NEXT AUDIT.
WE ALSO ARE REQUIRED UNDER PROFESSIONAL STANDARDS TO
DISCUSS WITH YOU THE QUALITATIVE ASPECTS OF YOUR ACCOUNTING
PRINCIPLES AND WHAT THAT REALLY MEANS IS, YOU KNOW, DO WE AS THE
AUDITORS OR THE ACCOUNTING EXPERTS HAVE ANY CONCERNS ABOUT
THE CHOICES THAT THE CITY IS MAKING IN TERMS OF ACCOUNTING
PRINCIPLES AND PRACTICES, AND WE DON’T.
I MEAN, THE CITY IS CHOOSING CONSERVATIVE AND APPROPRIATE
POLICIES AND ACCOUNTING STANDARDS AS THEY PREPARE THEIR
FINANCIAL STATEMENTS. MANAGEMENT JUDGMENTS AND
ACCOUNTING ESTIMATES, WE TALKED TO YOU ABOUT OUR PLANS RELATED
TO THESE WHEN WE CAME A FEW MONTHS AGO, AND WE’VE COMPLETED
THE AUDIT WORK OVER THESE THREE AREAS, THE POST-EMPLOYMENT
BENEFITS, THE ACCRUAL FOR SELF-INSURANCE, AND THE TAX AND
UTILITY ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS.
ESTIMATES OBVIOUSLY ARE SENSITIVE BECAUSE THEY’RE
SUBJECT TO MANAGEMENT JUDGMENT, BUT WE DIDN’T HAVE ANY
SIGNIFICANT FINDINGS AND DIDN’T PROPOSE ANY ADJUSTMENTS IN THESE
AREAS THAT WERE OF ANY SIGNIFICANCE AS WE WORKED
THROUGH THE PROCESS. IF YOU LOOK RIGHT BEHIND THE
LETTER, WHEN YOU HAVE A CHANCE, YOU WILL SEE SOME ADJUSTMENTS
THAT WE DIDN’T MAKE THAT WE CONSIDERED TO BE IMMATERIAL AND
WE ARE REQUIRED UNDER PROFESSIONAL STANDARDS TO REPORT
THOSE TO YOU. THEY ARE — I MEAN, SOMETIMES
FOR A VARIETY OF REASONS, WHETHER IT’S CONVENIENCE OR THE
WAY THE ACCOUNTING SYSTEM WORKS, THERE WILL BE CERTAIN ITEMS THAT
WILL COME UP THAT WE’LL PASS ON BECAUSE THEY’RE NOT MATERIAL TO
THE FINANCIALS AND THOSE ARE INCLUDED RIGHT BEHIND THE LETTER
DATED DECEMBER 23rd AND I WON’T GO THROUGH THOSE IN DETAIL
BECAUSE IT GETS TO BE VERY COMPLICATED.
THERE WERE NO DISAGREEMENTS WITH MANAGEMENT ON FINANCIAL
ACCOUNTING AND REPORTING MATTERS, NO CONSULTATIONS WITH
OTHER ACCOUNTANTS THAT WE WOULD WANT TO BRING TO YOUR ATTENTION.
WE ARE A LITTLE BIT LATER IN TERMS OF GETTING FINISHED WITH
THE AUDIT FROM OUR PREVIOUSLY ESTABLISHED SCHEDULE, BUT
EARLIER THAN LAST YEAR, SO THAT’S GOOD.
ALWAYS GOOD TO MAKE PROGRESS. AND WE DO CONFIRM TO YOU IN
WRITING IN THAT LETTER, YOU KNOW, OUR INDEPENDENCE WITH
RESPECT TO THE CITY IN ACCORDANCE WITH THOSE STANDARDS
ESTABLISHED BY THE AICPA AS WELL AS GOVERNMENT AUDITING
STANDARDS. OKAY, SO A BRIEF DISCUSSION
ABOUT INTERNAL CONTROL AND THE A-133 AUDIT.
THERE WERE NO MATERIAL WEAKNESSES OR SIGNIFICANT
DEFICIENCIES AT THE FINANCIAL STATEMENT LEVEL, WHICH IS
ACTUALLY SUMMARIZED IN ONE OF THOSE OPINIONS THAT I TALKED
WITH YOU ABOUT THAT ARE AT THE BACK OF THE DOCUMENT UNDER
GOVERNMENT AUDITING STANDARDS, SO THAT’S GOOD NEWS.
WE ALWAYS IDENTIFY OPPORTUNITIES FOR IMPROVEMENT AND OTHER MORE
MINOR MATTERS THAT WE GO THROUGH WITH MANAGEMENT OF THE CITY, AND
THAT HAS BEEN DONE. WE DID COMPLETE THE A-133 AUDIT.
THERE WAS 108 MILLION IN FEDERAL ASSISTANCE THAT THE CITY
RECEIVED IN FISCAL 13, OF WHICH APPROXIMATELY 5 MILLION WAS ARRA
FUNDING. FOR THOSE OF YOU WHO HAVE BEEN
AROUND FOR A WHILE, THAT’S STIMULUS MONEY AND USED TO BE A
MUCH HIGHER PERCENTAGE, YOU KNOW, OF THE FUNDS THAT WE’RE
RUNNING THROUGH THIS DOCUMENT, AND THE OVERALL NUMBER HAS COME
DOWN A LITTLE BIT AS WELL IN THE ABSENCE OF THOSE STIMULUS FUNDS
FROM WHERE IT WAS A COUPLE OF YEARS AGO.
THERE WERE 11 PROGRAMS AUDITED, TWO AT NORFOLK PUBLIC SCHOOLS
AND THEN NINE FOR THE CITY. ALL PROGRAMS THAT RECEIVED
FEDERAL ASSISTANCE IN EXCESS OF $3 MILLION ARE SUBJECT TO AUDIT
AT LEAST ONCE EVERY THREE YEARS, AND THEN BEYOND THAT, WE SELECT
A NUMBER OF SMALLER PROGRAMS THAT ARE RISK — THESE ARE RISK
ASSESSMENT TYPE PROCESS THAT FILL THE COT IN THE OFF YEARS IN
TERMS OF SATISFYING THE REQUIREMENTS FOR THE NUMBER OF
PROGRAMS. THIS YEAR, IT WAS STILL DRIVING
TO SOME DEGREE OUR SELECTIONS BY THE ARRA, AND THERE WERE A
COUPLE FAIRLY SMALL PROGRAMS TESTED BECAUSE THEY WERE 100%
ARRA AND I THINK THAT WILL CHANGE NEXT YEAR AND WE’LL BE
BACK TO BEING ABLE TO DO A MORE TRUE RISK ASSESSMENT AND IN THAT
CASE, WE’LL FOCUS MORE ON HIGHER-DOLLAR, WHAT THEY CALL B
PROGRAMS, WHICH ARE THE ONES UNDER $3 MILLION, RATHER THAN
SOME OF THE SMALLER ONES THAT WE’VE BEEN FORCED TO DO THE LAST
FEW YEARS WITH THE STIMULUS FUNDING.
A PIECE OF GOOD NEWS. THE LAST COUPLE OF YEARS, THE
CITY HAS BEEN A HIGH-RISK AUDITEE UNDER A-133 BECAUSE OF A
FINDING WE HAD TWO OR THREE YEARS AGO IN ONE OF THE MAJOR
PROGRAMS, AND THIS YEAR, WE DID NOT HAVE ANY MATERIAL WEAKNESSES
IN ANY OF THE A PROGRAMS, THE ONES OVER $3 MILLION, SO WE’VE
CLEARED OUR TWO-YEAR, YOU KNOW, TOUR OF DUTY AS A HIGH-RISK
AUDITEE AND NEXT YEAR WE’LL BE ABLE TO GO BACK TO LOW RISK.
WHAT THAT — WHAT SHOULD HAPPEN AS A RESULT OF THAT IS THAT 11
OUGHT TO COME DOWN A LITTLE BIT IN TERMS OF THE NUMBER OF
PROGRAMS BECAUSE WE’RE REQUIRED TO COVER 50% OF THE DOLLARS AS A
HIGH-RISK AUDITEE AND ONLY 25 AS A LOW.
SO HOPEFULLY THAT WILL BE A POSITIVE THING GOING FORWARD.
>>SO AGAIN, THE IMPACT OF BEING HIGH-RISK IS WHAT?
>>WE HAVE TO COVER 50% OF THE DOLLARS THAT YOU RECEIVE IN THE
AUDIT.>>OKAY.
>>VERSUS 25% FOR A LOW-RISK. RIGHT.
I MEAN, THERE ARE CERTAIN PROGRAMS LIKE TITLE ONE AT THE
SCHOOLS THAT ALMOST GET AUDITED EVERY YEAR BECAUSE THEY’RE SO
SIGNIFICANT, BUT WE’LL HAVE A LITTLE BIT MORE FLEXIBILITY
WITHOUT ARRA AND AS A LOW-RISK AUDITEE TO, YOU KNOW, MAKE SOME
JUDGMENTS ABOUT WHICH PROGRAMS WE DECIDE TO LOOK AT MOVING
FORWARD. WHERE IT’S BEEN PRETTY FORMULAIC
THE LAST FEW YEARS. THERE WERE A FEW FINDINGS AS A
RESULT OF THE A-133 AUDIT, AND THEY ARE DISCUSSED IN DETAIL
BECAUSE I’M GOING TO BE PRETTY BRIEF HERE, ON PAGES 154 THROUGH
168 OF THE CAFR. SOME OF THESE ARE REPEAT
FINDINGS, SOME OF THEM ARE, YOU KNOW, ODD, ONE-OFF TYPE THINGS
THAT HAPPEN, BUT I’LL JUST KIND OF BRIEFLY WALK THROUGH THOSE.
THE FIRST TWO OR THREE ARE IN THE TANF GRANTS, WHICH IS
ADMINISTERED BY THE HUMAN SERVICES DEPARTMENT.
THE FIRST COUPLE WE SEEM TO HAVE EVERY YEAR.
I MEAN, THEY RELATE TO PAYMENTS THAT THE CITY MAKES ON THE
STATE’S BEHALF, THE TANF RECIPIENTS, AND THEY’RE A VERY
COMPLEX SET OF RULES AROUND EXACTLY WHEN THOSE PAYMENTS
START AND WHEN THEY STOP, YOU KNOW, WHEN THE PARTICIPANT DOES
CERTAIN THINGS. THEY’RE NOT EASY TO ADMINISTER
AND IT’S VERY DIFFICULT TO GET ALL THE WAY THROUGH THAT, YOU
KNOW, WITHOUT HAVING A COUPLE OF ISSUES.
SO THE GOOD NEWS IS THAT’S IMPROVED.
THE NUMBERS HAVE IMPROVED AND THE NUMBERS OF FINDINGS.
THAT ACTUALLY WAS WHERE WE HAD THE MATERIAL WEAKNESS TWO YEARS
AGO THAT CAUSED US TO BE A HIGH-RISK AUDITEE FOR A COUPLE
OF YEARS, SO I THINK THAT’S GOOD NEWS AND PROGRESS.
WE ALSO HAD AN ELIGIBILITY FINDING IN TANF, YOU KNOW, WHICH
WE’VE WORKED THROUGH AND DISCUSSED WITH MANAGEMENT, AND I
THINK THEY’VE GOT PROCESSES IN PLACE TO TRY TO AVOID THAT IN
THE FUTURE. THAT AND COPF ARE TWO PROGRAMS
THAT WERE SMALL PROGRAMS THAT WERE ALL ARRA DOLLARS AND THAT’S
WHY THEY WERE TESTED. THEY WERE LESS THAN A MILLION
DOLLARS EACH, JUST A FEW HUNDRED THOUSAND.
THEY HAD SOME REPORTING DISCREPANCIES IN THOSE TWO
GRANTS THAT, YOU KNOW, CREATED SOME ISSUES WITH THE SPECIAL
ARRA REPORTING THAT YOU’RE REQUIRED TO DO WHERE A COUPLE OF
NUMBERS GOT FLIPPED BETWEEN QUARTERS OR, YOU KNOW, SOMETHING
LIKE THAT, SO THAT — OBVIOUSLY, THAT WON’T BE AN ISSUE MOVING
FORWARD. THE SUBSTANCE ABUSE BLOCK GRANT
AND ALSO TITLE ONE AND SCHOOL IMPROVEMENT HAD A COUPLE OF
ISSUES WITH SUSPENSION AND DEBARMENT.
THAT’S A FEDERAL RULE THAT REQUIRES YOU, BEFORE YOU PROCURE
A VENDOR, WHERE YOU’RE GOING TO BE SPENDING FEDERAL DOLLARS, TO
MAKE SURE THAT THAT VENDOR IS NOT SUSPENDED OR DEBARRED.
IN THE CASE OF THE SCHOOLS, IT’S REALLY HAPPENING BECAUSE THEY’RE
USING A LOT OF PIGGYBACK PROCUREMENTS FOR EFFICIENCY
PURPOSES WHERE THEY’RE, YOU KNOW, JUMPING ON TO ANOTHER
SCHOOL SYSTEM THAT’S BOUGHT THE SAME THING AND GONE THROUGH THE
WHOLE PROCESS, AND A STEP JUST NEEDED TO BE ADDED TO MAKE SURE
THAT THE SUSPENSION AND DEBARMENT HAS BEEN COVERED.
THERE WERE NO QUESTIONED COSTS WITH ANY OF THOSE BECAUSE THE
VENDORS WERE NOT SUSPENDED OR DEBARRED.
I MEAN, WE CAN CHECK ON THEM AFTER THE FACT, SO NO ISSUES
THERE. IN THE HIV GRANT, THERE WAS A
FINDING — AND THAT IS THE GRANT WHERE THE CITY OF NORFOLK
HANDLES THAT FUNDING FOR THE ENTIRE REGION, AND THERE’S A
FAIRLY COMPLEX REQUIREMENT IN THERE WHERE THEY HAVE TO — YOU
HAVE TO MAKE SURE THAT YOU DON’T SPEND LESS THAN LAST YEAR, AND
OBVIOUSLY WITH SO MANY LOCALITIES, YOU KNOW,
CONTRIBUTING TO THE SPENDING, THERE ARE JUST SOME SUGGESTIONS
THAT WE’VE MADE ABOUT, YOU KNOW, MAKING SURE THAT THAT IS — THAT
THAT’S MONITORED CAREFULLY. HIGHWAY, IT WAS ANOTHER PROGRAM
REPORTING FINDING, AND THERE ARE A FEW OTHERS.
PROBABLY THE BIGGEST OF NOTE THAT FOR SOME REASON DIDN’T MAKE
THE LIST RELATES TO THE FEMA GRANT AND JUST GETTING THE
REPORTING CLOSED UP ON HURRICANE IRENE.
I MEAN, I THINK SOME OF THE THINGS THAT IMPACTED THAT WERE
THE FACT THAT FEMA WAS ACTUALLY PERFORMING AN AUDIT OF THE CITY
AT THE SAME TIME, WHICH KEPT THE FOLKS BUSY AND MADE IT A LITTLE
BIT DIFFICULT TO GET ALL THAT DONE.
AND THEN WE ALSO, IN THE APA FINDINGS THAT I DISCUSSED, HAD A
FEW MINOR ITEMS WHICH ARE NOTED ALSO IN THE SCHEDULE OF
FINDINGS. DOES ANYBODY HAVE ANY QUESTIONS
OR –>>I HAVE ONE QUESTION.
>>YES.>>I GUESS THE RYAN WHITE
GRANT –>>THAT’S THE HIV, YES.
>>YES. NOW, IF ISLE OF WIGHT OR SOUTH
HAMPTON COUNTY, SOMEBODY, IF THEY DON’T ACCOUNT FOR THE
DOLLARS THE WAY THEY SHOULD, ARE WE HELD RESPONSIBLE?
OR HOW DO WE MAKE SURE THAT THEY ARE IN COMPLIANCE SO IT WON’T
IMPACT US?>>YOU HAVE A RESPONSIBILITY TO
ENSURE THAT, YOU KNOW, THE DOLLARS THAT ARE SPENT DON’T
DECREASE OF LOCAL FUNDS FROM ONE YEAR TO THE NEXT, AND YOU KNOW,
YOU CAN HOLD THEM ACCOUNTABILITY FOR MAKING SURE THEIR DOLLARS
DON’T INCREASE, BUT ALL THE DATA HAS GOT TO BE GATHERED AND
MONITORED, YOU KNOW, HERE AS THE KEY AGENCY THAT RUNS THE GRANT.
NOW, ISLE OF WIGHT IS NOT ONE OF THE MAJOR ENTITIES.
THERE’S LIKE FIVE OR SIX, I THINK IT’S NEWPORT NEWS AND
VIRGINIA BEACH AND PORTSMOUTH, YOU KNOW, THAT ARE THE ONLY ONES
THAT ARE THE KEY ONES THAT HAVE TO BE MONITORED, SO YOU REALLY
DON’T — I MEAN, IT DOES MAKE IT A LITTLE BIT EASIER BECAUSE YOU
DON’T HAVE TO CHASE EVERY TINY LITTLE ENTITY THAT PARTICIPATES
IN THE AREA. THERE’S FIVE OR SIX THAT ARE
CONSIDERED THE KEY, AND THAT’S THE LEVEL THAT THE COMPLIANCE IS
PERFORMED.>>I NOTICE YOU HAVE SEVERAL
THINGS HERE FROM THE SCHOOL SYSTEM THAT APPEARED ON THIS
AUDIT. WHEN THE SCHOOL SYSTEM, WHEN
THEY DO THEIR AUDIT, DO THOSE SAME ITEMS APPEAR ON THEIR AUDIT
AGAIN?>>NOT FOR A-133.
YOU KNOW, THE SCHOOLS’ FINANCIAL STATEMENTS APPEAR IN THE CITY’S
CAFR WAS A COMPONENT UNIT BECAUSE VIRGINIA HAS DEPENDENT
SCHOOL DISTRICTS AND ULTIMATE THEY RELY ON THE CITY TO BUILD
THE BUILDINGS AND FUND OPERATIONS AND THAT TYPE OF
THING, BUT THE A-133 AUDIT IS DONE AT THE REPORTING ENTITY
LEVEL, SO WHEN I GO AND GIVE MY REPORT TO THE SCHOOL BOARD NEXT
WEEK, I’M GOING TO TELL THEM ABOUT THEIR FINDINGS, BUT THOSE
FINDINGS, BECAUSE THEY OBVIOUSLY CARE ABOUT WHAT THE OUTCOME IS
OF THE GRANTS THAT WE AUDIT ON THEIR SIDE, BUT THE A-133 AUDIT
IS NOT REPEATED IN THEIR REPORT BECAUSE IT’S SUPPOSED TO BE
PERFORMED AT THE LEVEL OF THE ENTIRE REPORTING ENTITY, WHICH
WOULD BE THE CITY. ANY OTHER QUESTIONS?
COMMENTS?>>I’M ALICE KELLY, THE DIRECTOR
OF FINANCE, AND I JUST WANTED TO THANK EVERYBODY, INCLUDING KPMG,
THE AUDITORS, AND ESPECIALLY THE FINANCE DEPARTMENT AND ALL THOSE
FINANCIAL STAFF OF THE CITY IN PREPARING THE COMPREHENSIVE
ANNUAL FINANCIAL REPORT. SOMETIMES PEOPLE FORGET HOW
COMPREHENSIVE IT IS AND EVERY FINANCIAL TRANSACTION THAT GOES
ON IN THE CITY IS IN THAT REPORT, SO IT IS A VERY USEFUL
AND POWERFUL DOCUMENT THAT WE USE FOR A LOT OF DIFFERENT
THINGS AND I JUST WANTED TO MAKE SURE THAT YOU HAD A COPY AND IF
YOU HAD ANY QUESTIONS, PLEASE FEEL FREE TO CONTACT US LATER
ON.>>AND THANK YOU, ALICE, AND
EVERYBODY AT THE CITY FOR THE HOSPITALITY THAT OUR FOLKS GET
WHEN THEY’RE HERE. IT’S NOT ALWAYS FUN TO HAVE
AUDITORS IN THE BUILDING, BUT WE DO OUR BEST.
>>THANK YOU VERY, VERY MUCH. NEXT ITEM?>>SURE.
MAYOR, MEMBERS OF COUNCIL, NEXT IS THE MID YEAR UPDATE AND THE
FIVE-YEAR FORECAST, AND AS I MENTIONED EARLIER, I’M REQUIRED
TO PROVIDE FOR YOU AN UPDATE, AND WE HAVE A COUPLE OF ITEMS, I
THINK. I THINK THAT — I GUESS THE BEST
WAY TO START THIS OFF IS WE HEARD YOU OVER THE LAST BUDGET
DEVELOPMENT PROCESS AND WE’RE TRYING TO GET AS MUCH
INFORMATION TO YOU AS EARLY AS POSSIBLE.
TYPICALLY, IT WOULD BE BETTER TO HAVE THIS PRESENTATION
EARLIER — EXCUSE ME, LATER IN FEBRUARY SO WE COULD MAKE SURE
THAT WE HAVE ALL THE NUMBERS REFINED, SO I APOLOGIZE FOR THE
ENTIRE STAFF WHO WORKED A FEW WEEKENDS TO MAKE SURE THAT THEY
GAVE PEOPLE THE BEST NUMBERS POSSIBLE.
I THINK THERE IS ABOUT AS EARLY AS WE COULD — I THINK THIS IS
ABOUT AS EARLY AS WE COULD GET THIS INFORMATION TO YOU, SO ONE
OF THE ITEMS, AND I THINK SABRINA IS GOING TO COME UP.
ONE OF THE ITEMS THAT YOU HAVE AS BLUE NOTEBOOK WHICH IS A
RESOURCE GUIDE FOR FY 14. TYPICALLY YOU GET THAT IN THE
APRIL TIME FRAME. WE WANTED TO GET THAT TO YOU
TODAY. SO THROUGHOUT THIS DISCUSSION ON
NOT JUST WHERE WE ARE IN TERMS OF FY 14, BUT AS WE GO OUT INTO
15, 16, 17, 18, 19, THIS IS A BUILDING BLOCK AND IF THERE’S
SOME ADDITIONAL INFORMATION THAT COUNCIL WOULD LIKE TO HAVE,
WE’LL MAKE SURE THAT WE CAN BUILD THIS BOOK FOR YOU.
RIGHT NOW, THIS IS THE TYPICAL TYPE OF INFORMATION THAT YOU
WOULD GET AS WE DELIVERED THE BUDGET TO YOU IN THE APRIL TIME
FRAME. WITH THAT SAID, TODAY WE WANT TO
PROVIDE FOR YOU REALLY THREE UPDATES.
ONE IS WHERE DID WE END UP FISCAL YEAR 2013, THE PERIOD
THAT ENDS JUNE 30, 2013. WE WANT TO GIVE YOU AN UPDATE OF
WHERE WE ARE IN THE CURRENT FISCAL YEAR AND THEN WE’LL GIVE
YOU A FIVE-YEAR OUTLOOK AND YOU KNOW AS WELL AS I DO, IT’S VERY
DIFFICULT TO PREDICT TOMORROW. I MEAN, EXTREMELY DIFFICULT TO
PREDICT FIVE YEARS OUT, BUT WE’RE GOING TO PUT A LITTLE BIT
OF A GREATER DEAL OF EMPHASIS ON THAT FIVE-YEAR FORECAST THIS
TIME BECAUSE I THINK IT’S SIGNIFICANT IN TERMS OF WHAT WE
DO IN FY 15 AND FY 16. SO WITH THAT SAID, I’LL START
OFF WITH THE FIRST PIECE OF WHERE WE’VE BEEN, AND THE
ADMINISTRATION IS VERY APPRECIATIVE FOR THE COUNCIL,
THE ACTIONS THAT YOU TOOK BACK IN SEPTEMBER OF 2011 WHEN YOU
PROVIDED US WITH SIX PRIORITIES, SIX PRIORITY AREAS WITH THE
FOUNDATION BEING THE WELL-MANAGED GOVERNMENT, AND I
WILL SAY THAT THAT IS WHAT WE DRIVE THE RESOURCES TOWARDS
THOSE SIX IDENTIFIED AREAS. ONE OF THE THINGS THAT I WOULD
SUGGEST, IF YOU LOOK AT THAT CORNERSTONE, SAFE, HEALTH AND
INCLUSIVE COMMUNITIES, THERE ARE CERTAIN THINGS THAT WE, I GUESS,
HAD TO BRING BACK ONLINE BECAUSE IT WAS IMPORTANT TO THE COUNCIL,
SO IN OTHER WORDS, AS A BUDGET SAVING STRATEGY YEARS AGO, WE
CLOSED LIBRARIES ON MONDAYS AND WE CLOSED REC CENTERS CERTAIN
HOURS DURING THE WEEK AND THAT WAS NOT SOMETHING THAT BODED
WELL FOR THE COMMUNITY, SO WHAT THE COUNCIL DID IS THEY OPENED
BACK UP LIBRARIES AND OPENED UP REC CENTERS.
SO AGAIN, THOSE PRIORITIES AND BASING OUR RESOURCES ON THOSE
PRIORITIES MAKES IT EASIER FOR THE ADMINISTRATION TO BEGIN TO
EXECUTE. THE OTHER THING THAT I’D POINT
OUT IS THAT LIFELONG LEARNING, THE COUNCIL HAD APPROPRIATED A
GREAT DEAL OF MONEY IN TERMS OF EDUCATION.
ONE OF THE AREAS THAT WE TALK ABOUT ANNUALLY IS JUST K-12
EDUCATION. AND I THINK IT’S IMPORTANT TO
NOTE THAT FROM FISCAL YEAR 2012 TO FISCAL YEAR 2014, THE COUNCIL
PROVIDED ADDITIONAL MONEY FOR K-12 EDUCATION TO THE TUNE OF
ABOUT $7.5 MILLION OR MORE FROM THE FY 12 TO FY 14, AND EVEN IF
YOU GO BACK TO 2007, I THINK THE MAYOR HAS SAID THAT IN A COUPLE
OF SETTINGS BEFORE, WHERE THE STATE MONEY DECREASED, THE
COUNCIL ACTUALLY PROVIDED ADDITIONAL MONEY FOR K-12
EDUCATION, AND AGAIN, UNDER THAT PRIORITY OF LIFELONG LEARNING,
SO FROM FY 2007 TO THE CURRENT FISCAL YEAR, COUNCIL ADDED MORE
THAN $14 MILLION IN ADDITIONAL FUNDING FOR K-12 EDUCATION WHILE
THE STATE HAS PULLED AWAY ALMOST $20 MILLION IN FUNDING OVER THAT
SAME TIME PERIOD. SO THAT’S JUST A FEW EXAMPLES OF
WHY IT’S SO IMPORTANT TO HAVE THE PRIORITIES AND WE EARMARK
THAT RESOURCE TOWARDS THOSE PRIORITIES.
I THINK IT ALSO PROVIDES THE GROUNDWORK FOR WHAT WE CALL A
WELL-MANAGED GOVERNMENT. ONE OF THE THINGS I DIDN’T
MENTION, IF YOU LOOK AT THE ORG CHART WE PROVIDED FOR YOU, WHICH
I BELIEVE WE HAVE TO UPDATE FOR THE ORG CHART, WE HAVE START OFF
WITH ALL OF THE PRIORITIES RIGHT AT THE TOP AND WHAT THAT HAS
ALLOWED US TO DO IS HAVE THE STRATEGIC AREAS SUCH AS
NEIGHBORS BUILDING NEIGHBORHOODS, SMART PROCESSING,
HEALTHY NORFOLK, WHERE WE’RE ABLE TO, AGAIN, TAKE THOSE
STRATEGIES AND ALIGN OUR RESOURCES WITH THOSE STRATEGIES,
AND WHAT’S NEAT IS THAT BECAUSE OF YOUR ACTIONS, THE CITY HAS
BEEN RECOGNIZED AS AN ALL-AMERICAN CITY IN 2013 AND
UPGRADE FROM STANDARDS AND POORS IN TERMS OF OUR CREDIT RATING
AND BEING IN THAT FIRST GROUP OF 100 RESILIENT CITIES, SO AGAIN,
I BELIEVE THAT SPEAKS VOLUMES TO WHAT THE COUNCIL HAS DONE IN
TERMS OF HAVING PRIORITIES. SO IF YOU START TO LOOK, CUT
THROUGH THIS, THE PRIORITIES, THE COUNCIL SETS THE VISION AND
THE PRIORITIES AND THEN IT’S UP TO THE ADMINISTRATION TO SET
GOALS, OBJECTIVES AND PERFORMANCE MEASURES AND
EVALUATIONS. AND ONE OF THE THINGS THAT YOU
WILL HEAR FROM SABRINA TONIGHT IS A NEW FOCUS ON THE EVALUATION
OF RESULTS, SO IN OTHER WORDS, THE TOP LEADERSHIP AND THE
ADMINISTRATION IS BEING EVALUATED BY THEIR PERFORMANCE
MEASURES, THEIR OBJECTIVES AND THE GOALS AND HOW THEY REACH
THEM. SO I THINK THAT IT TOOK US A
COUPLE OF YEARS TO WORK THROUGH SOME THINGS, BUT I DO BELIEVE
THAT THAT IS THE WAY TO HAVE WELL-MANAGED GOVERNMENT AND TO
LIVE UP TO THE PRIORITIES THAT THE COUNCIL HAD SET.
SO THE PRELIMINARY FIVE-YEAR OUTLOOK, SPECIFICALLY, THIS IS
THE LAST SLIDE IN THE PRESENTATION.
WE’VE MOVED IT UP TO THE FRONT BECAUSE I THINK THAT THE RED
LINE AND THAT BLUE LINE SPEAKS VOLUMES.
I’LL START BY SAYING THAT BACK IN SEPTEMBER, WE TALKED ABOUT A
$20 MILLION GAP FOR THE NEXT FISCAL YEAR.
SOMEWHERE IN HERE, WE’LL AT THE YOU THIS GAP HAS COME — TELL
YOU THIS GAP HAS COME DOWN DRAMATICALLY, BUT I ALSO WANT TO
PUT IN THE PROPER CONTEXT THAT CHESTERFIELD COUNTY, THE CITY OF
VIRGINIA BEACH, EVERYBODY HAS SIMILAR CHALLENGES.
THEY HAVE SIMILAR CHALLENGES, SO IT’S NOT JUST THE CITY OF
NORFOLK THAT HAS TALKED ABOUT THIS STRUGGLE BETWEEN REVENUE
AND EXPENDITURES. I WILL SAY THAT WHAT’S IMPORTANT
WITH THIS PARTICULAR GRAPH IS THAT WHEN YOU START TO LOOK AT
THE DIFFERENCE BETWEEN THE REVENUE AND THE EXPENDITURES,
THE EXPENDITURES EXCEEDING THE REVENUE, ONE OF THE THINGS THAT
WE FOUND OUT THIS FALL IS WE HAD AN ECONOMIC ROUNDTABLE HERE IN
THE CITY, WE INVITED THE GOVERNOR’S CHIEF FORECASTER, WE
INVITED FORECASTERS FROM THE FEDERAL RESERVE, WE HAD CITY
MANAGERS FROM ACROSS THE REGION, AND WE EVEN HAD THE NAVY AT THE
TABLE. AND A THEME THAT CAME ACROSS
BASICALLY WAS THAT THERE’S ALMOST THIS NEW NORMAL.
IN OTHER WORDS, THE EXPECTATIONS OF GROWTH BEING 6%, 7% IS NOT
GOING TO BE A REALITY FOR US OVER THE NEXT TWO OR THREE
YEARS. SO WITH THAT, IF YOU TAKE THAT
INTO ACCOUNT, I CAN TELL YOU THAT ABOUT 25% OF THE REVENUE
THAT IS GENERATED BY THE CITY COMES FROM REAL ESTATE.
THE GOOD NEWS IS THAT WE’VE TALKED TO THE ASSESSOR AND THERE
IS THE BELIEF THAT REAL ESTATE ASSESSMENTS WILL ACTUALLY BE IN
THE POSITIVE FOR FY 15.>>WHAT DO YOU MEAN BY POSITIVE?
>>ONE PERCENT. POSITIVE FOR, LET’S SAY, THE
CITY. IN OTHER WORDS, SO SYMPATHY
ABOUT REAL ESTATE AS — THINK ABOUT REAL ESTATE AS BEING 125%
OF YOUR PORTFOLIO AND YOU HOPE THAT YOUR PORTFOLIO GROWS EACH
YEAR. SO ONE OF THE SLIDES THAT WE
HAVE IN YOUR RESOURCE BOOK, IF YOU JUST GO TO PAGE 15, EVEN IN
THE RESOURCE BOOK, WE’VE HAD 25% OF OUR PORTFOLIO NOT GROWING 5%
EACH YEAR, 6%, 7% EACH YEAR. WE’VE HAD ACTUALLY 25% IN OUR
PORTFOLIO THAT’S BEEN DECLINING, SO WHEN YOU START TO LOOK AT
RESIDENTIAL ASSESSMENT OR THE POTENTIAL REVENUE ASSOCIATED
WITH THAT, THAT’S FOUR CONSECUTIVE YEARS OF DECLINE.
AND LAST YEAR WAS THAT FIRST YEAR IN FOUR YEARS THAT WE SAW
AN OVERALL GROWTH. THAT GROWTH WAS 0.28%.
SO IN OTHER WORDS, IN THE PAST, IF YOU ASKED ME WHAT WAS THE
GROWTH IN REAL ESTATE OVER THE LAST TEN YEARS, I’D SAY ABOUT
6.5%. OVER THE LAST 20 YEARS, ABOUT
5%. OVER THE LAST 30 YEARS, ABOUT
5.5%. SO FOR US TO HAVE NEGATIVE
GROWTH OR NOT TO HAVE THAT GROWTH FOR A PERIOD OF TIME, AND
NOW TO GET INTO WHATEVER THIS NEW NORMAL IS WITH THE
EXPECTATION AT BEING VERY PLEASED THAT YOU’RE AT LEAST ON
THE POSITIVE SIDE, BUT THIS RETURN TO 5 AND 6% GROWTH, WE
DON’T SEE THAT IN FY 15 OR FY 16.
SO THAT’S WHAT’S THE VALUE OF THAT ROUNDTABLE.
IT’S NOT JUST SOMETHING THAT’S UNIQUE TO NORFOLK.
IT’S WHAT WE WERE SEEING ACROSS THE REGION AND ACROSS THE STATE.
BUT THAT — HOW WE PUT INTO THIS PERSPECTIVE, IF I STARTED OFF IN
ON THE FAR LEFT IN FY 13, I WILL SAY IN A FEW PAGES, IT’S A
POSITIVE STORY, THAT WE ENDED WITH A SURPLUS.
I’LL TELL YOU RIGHT NOW THAT IN FY 14 MID YEAR, WE’RE TRACKING
THE BUDGET. ON AN $800 MILLION BUDGET, MAYBE
ONE OR TWO MILLION IN TERMS OF MENTIONING OF KNOCKING OUT A
FORECAST. I COULD MISS THAT IN ONE DEPOSIT
DAY, BUT WHAT I REALLY WANT TO FOCUS ON AND SABRINA WILL GO
INTO MUCH MORE DETAIL, IS REALLY THAT 16, 17, AND 18, AND 19,
BECAUSE OUR HOPE IS IF WE CAN GET THROUGH 15 AND 16, THAT WE
CAN GET BETTER GROWTH IN ONE OF OUR KEY SOURCES, REAL ESTATE.
MANY OF THE THINGS YOU’VE BEEN HEARING AROUND THE TABLE IN
TERMS OF GROWING THE ECONOMY, WE WOULD HOPE THAT SOME OF THOSE
PROJECTS ALSO HELP AS YOU START TO GO, AS YOU GET THROUGH THIS
ROUGH PATCH. SO WHERE ARE WE WITH FY 13?
WE TALKED A LITTLE BIT ABOUT THIS AT THE RETREAT.
I THINK WE’RE IN THE $3 MILLION RANGE AND NOW WITH THE BOOKS
CLOSED, WE DO HAVE A SURPLUS FOR THE PERIOD ENDED JUNE 30, 2013,
OF ABOUT $5 MILLION. SO I THINK THE — THAT’S GREAT
NEWS. WHAT I’D LIKE TO PUT IN
PERSPECTIVE IS IF YOU GO BACK TO THE LAST TWO FISCAL YEARS, WE’VE
HAD SURPLUSES CLOSER TO $9 MILLION, SO THE SURPLUS, THIS
SURPLUS IS SMALLER THAN THE LAST TWO YEARS AND PART OF IT IS
BECAUSE IT STARTS OFF GETTING A LITTLE EASY AT THE BEGINNING
TRYING TO FINE EVERY NICKEL THAT’S UNDER — FIND EVERY
NICKEL THAT’S UNDER THE CUSHION AND EVERY ACCOUNT THAT COULD BE
SCRUBBED AND NOW IT’S GETTING MUCH MORE DIFFICULT TO HAVE
SURPLUSES AT THAT 8 TO $9 MILLION RANGE, BUT THE GOOD
NEWS IS WE DO HAVE A SURPLUS. NOW, THE COUNCIL APPROVED
FINANCIAL POLICIES ABOUT HOW A SURPLUS SHOULD BE USED.
ONE THING I WOULD LIKE TO SAY IS JUST HOW WE ACCOUNT FOR THE
SURPLUS, AND WE TALKED A LITTLE BIT ABOUT THIS AT THE RETREAT.
I THINK THE BIG THING IS WHEN YOU LOOK AT THE REVENUES, THE
REVENUE CAME IN A LITTLE BIT BETTER THAN EXPECTED.
EXPENDITURES WERE LESS THAN WE HAD PROJECTED, AND SHE HATES IT
WHEN I BRING — WHEN I BRING ATTENTION TO HER, BUT
DR. PATRICIA HARRISON, I MEAN TO HAVE A REVENUE FORECAST THAT IS
.3 OF A PERCENTAGE POINT IS REMARKABLE AND I GUESS THE
BENCHMARK IS IF 2% IS A GOOD FORECAST, SO WE’RE VERY
FORTUNATE TO HAVE DR. HARRISON HERE.
SHE LOOKS AT THE REVENUE ON A DAILY BASIS.
BUT WHEN YOU START TO LOOK AT THAT, IT’S ABOUT $31 MILLION
THAT WE’RE UP, BUT ONE OF THE THINGS THAT OCCURS, AFTER YOU
LOOK AT OTHER SOURCES, WE HAVE THIS CONCEPT CALLED
CARRY-FORWARD, SO A GOOD PORTION OF THAT POSITIVE VARIANCE, WE
ALREADY ROLLED INTO THE CURRENT FISCAL YEAR, ABOUT $19 MILLION.
IF YOU GO DOWN THE LINE, THE SCHOOL SYSTEM DID THE SAME
THING, ABOUT $7.7 MILLION THAT THEY HAD AN APPROVED
CARRY-FORWARD. ONE OF THE THINGS YOU WILL HEAR
FROM ME TONIGHT AND SABRINA TONIGHT AS WELL AS THE SCHOOL
SYSTEM IS WHEN YOU HAVE THAT CARRY-FORWARD, IF YOU MATCH IT
TO A ONE-TIME EXPENDITURE, THAT’S FINE, BUT IF YOU DON’T
MATCH IT TO A ONE-TIME EXPENDITURE, YOU START THE NEXT
YEAR WITH THAT PROBLEM AND THAT’S SOMETHING THAT WE
DISCUSSED A LITTLE BIT IN SEPTEMBER.
[ INAUDIBLE COMMENTS ]>>SO THE DESIGNATION THAT WE
HAVE, A PIECE OF IT IS — AND AT $19.6 MILLION, ONE OF THE THINGS
THAT WE DID IS WE BASICALLY SAID THE SURPLUS FROM 2012, IT WAS
ABOUT 8.6 MILLION, WE ROLLED THAT WHOLE THING INTO THE NEXT
FISCAL YEAR, SO WE DESIGNATED THAT FOR THAT PURPOSE.
THAT’S THE BIGGEST PIECE OF IT. WE HAD SOME DEPARTMENT SAVINGS
THAT WE CAPTURED MID YEAR, THAT WE SAID WE’RE GOING TO HAVE ON
REDUCTION STRATEGY TO ENFORCE THOSE SAVINGS AND ROLL THOSE
OVER ALSO.>>THERE’S A SEPARATE CATEGORY
DESIGNATION?>>RIGHT, THAT IS BASICALLY THE
SCHOOL SURPLUS, ABOUT $2.4 MILLION.
THERE WERE SOME SCHOOL ENCUMBRANCES ALSO, SO THAT’S —
[ INAUDIBLE COMMENTS ]>>YEAH.
SO THEN YOU SAY, OKAY, WHAT DO YOU DO WITH THE $5.2 MILLION.
IF WE GO BACK TO THE FINANCIAL POLICIES, WHICH AGAIN PLAYED A
TREMENDOUS ROLE IN THE UPGRADE FROM S&P, AND ONE OF THE THINGS
THAT THE COUNCIL DECIDED WAS THAT LET’S ACHIEVE STRUCTURAL
BALANCE, AND YOU GAVE US FIVE YEARS TO DO IT.
OKAY? SO THIS IS THE FIRST YEAR OF
THAT FIVE-YEAR PROCESS, BUT IN ORDER TO ACHIEVE IT, WE HAVE TO
WEAN OURSELVES OFF OF TAKING THOSE SURPLUSES THAT ARE
ONE-TIME, ROLLING THEM OVER FOR ONGOING EXPENDITURES.
OKAY? SO ONE WAY TO DO THAT IS TO TAKE
A SURPLUS AND YOU COULD EITHER PUT IT INTO ONE-TIME
EXPENDITURES LIKE A CAPITAL PROJECT OR TECHNOLOGY OR THINGS
OF THAT NATURE, OR WE COULD PROP UP OUR RESERVES.
THE GREAT THING ABOUT THE RESERVES, THE CITY HAS MET
EVERYTHING WITHIN THE RANGE OF ALL RESERVES ESTABLISHED, THE 5%
RESERVE, THE RISK MNGMENT RESERVE AND THE ECONOMIC
DOWNTURN RESERVE, SO WHILE EVERYBODY WOULD LOVE TO GET
RESERVES HIGHER. WE HAVE MET THE MINIMUM LEVEL
FOR EACH ONE OF THOSE RESERVES, BUT THOSE ARE THE KINDS OF
DISCUSSIONS THAT I BELIEVE YOU WILL HAVE OVER THE NEXT COUPLE
OF MONTHS ABOUT HOW TO USE THAT SURPLUS.
AS I MENTIONED EARLIER, PAYROLL CAPITAL IS ONE OF THE BEST WAYS
TO DO THAT BECAUSE WHAT IT’S GOING TO DO IS USE THAT ONE-TIME
RESOURCE FOR A ONE-TIME EXPENDITURE.
I’LL JUST TALK A LITTLE BIT ABOUT RESERVES AND A LITTLE BIT
ABOUT THE STRATEGY BEFORE I TURN IT OVER TO SABRINA.
>>MARCUS, WHEN YOU –>>SURE.
>>FIRST OF ALL, THE ONE PERCENT THAT I’M TALKING ABOUT, I TAKE
IT THAT’S ON — DOES THAT INCLUDE IN THERE THE PROPERTY
THAT WILL BE DEVELOPED IN THE FUTURE?
WE TYPICALLY ADD THAT IN, RIGHT?>>YES, THAT’S EXACTLY RIGHT.
>>SO WE MAY SEE MORE THAN A ONE PERCENT INCREASE.
>>WE HOPE.>>NOW, THE CASH PIECE THAT
YOU’RE TALKING ABOUT HERE, OVER TIME WE’VE HAD A GOAL, ANYWAY,
OF CASHING MAYBE 10% OF OUR CAPITAL PROJECTS.
>>I SAY 12.5.>>BUT A GOAL IS — BEFORE YOU
START THROWING OUT NEW NUMBERS, SOMETHING LIKE 10% HAS TYPICALLY
BEEN A PRETTY HEALTHY CASH PAYMENT.
>>RIGHT, YES. SO WITH RESERVES, AGAIN, THE
GOOD NEWS IS WITH THE POLICY THAT YOU SET EARLY LAST YEAR,
THE GOOD NEWS IS THE 5% RESERVE THAT WE HAVE, WHICH WOULD BE
ABOUT $41 MILLION, YOU HAVE MORE THAN ENOUGH MONEY IN THAT POT.
SO YOU’RE CLOSER TO $42 MILLION. SO YOU HAVE EXCEEDED THAT
MINIMUM LEVEL. THEN WE HAVE THE ECONOMIC
DOWNTURN RESERVE, WHICH YOU PUT AS A FLOOR $3 MILLION.
AND A CAP AT $5 MILLION. WE’RE THERE AT 3.
THE HIGHEST THAT THAT HAS BEEN IS 4 AND THAT WAS BACK IN 2010,
AND THEN YOU HAVE THE RISK MANAGEMENT RESERVE, AND I’M
GOING TO ANTICIPATE THE COUNCIL AND WINN WILL ASK ME WHETHER
THERE ARE MORE POTS OF MONEY VERSUS JUST THAT POT.
YES, WE DO. WE HAVE A CLAIM PAYMENT,
INSURANCE PAYMENT, AND WE HAVE UNEMPLOYMENT COMPENSATION,
WORKERS COMPENSATION, SO THERE’S ANOTHER POT OF MONEY —
>>THAT’S NOT IN THE RISK POOL.>>THAT’S NOT IN THE RISK.
WHAT’S BUDGETED IN 2014 BETWEEN THE CLAIMS PAYMENTS AND
INSURANCE AND THE WORKERS’ COMPENSATION WAS 4.3 MILLION.
>>WHY DON’T WE HAVE A FOURTH POT THAT WE CAN HAVE?
>>FOURTH POT?>>SURE, WE NEED A FOURTH POT OF
RESERVE.>>SURE.
WELL, YOU BUDGET THAT. THAT’S BNLED EVERY YEAR —
BUDGETED EVERY YEAR IN THE OPERATING.
THIS IS OVER AND ABOVE THAT, YOU SET IT ASIDE.
IT’S SITTING THERE FOR CLAIMS.>>WE’VE MET THAT OBLIGATION.
>>YEAH.>>WE PAY CLAIMS OUT OF IT.
>>IT’S YOUR PROJECTED EXPENDITURE AND IT’S A BUDGET
ITEM, NOT A RESERVE. IT’S INTENDED TO BE SPENT,
PROJECTED TO BE SPENT.>>RIGHT, RIGHT.
>>SO EVEN WITH THE RISK MANAGEMENT RESERVE, THE HEIGHT
OF THAT WAS 5.7 MILLION BACK IN 2007, SO AGAIN, YOU’RE IN A
PRETTY COMFORTABLE LEVEL WITH THE RESERVES RIGHT NOW.
THE RECOMMENDATION IS TO USE THE FY 13 SURPLUS IN A MANNER THAT’S
CONSISTENT WITH FINANCIAL POLICY, BUT IN THE EVENT THAT
REVENUE OR EXPENDITURES IS SO FAR OUT OF BOUNDS, IT’S GOING TO
IMPACT A SIGNIFICANT REDUCTION IN PROGRAMS AND SERVICES THAT
IS, I GUESS, THE FIRST LINE OF DEFENSE.
SO WITH THAT SAID –>>THE SCHOOL SYSTEM LAST NIGHT
WAS SAYING THEY HAVE A $20 MILLION SHORTFALL?
>>WELL, I CAN’T SPEAK FOR THE SHORTFALL.
I KNOW THAT THEY HAVE IDENTIFIED A SHORTFALL, THE FIRST PIECE OF
IT IS THAT ROLLOVER FROM THE PREVIOUS YEAR, AND I BELIEVE
THAT THEY HAVE A SURPLUS FROM FY 13 OF ABOUT 2.4 MILLION, WHICH
AND IT PART OF THIS 5.2.>>SO THEY’RE NOT INCLUDING IN
THEIR 20 MILLION FIGURE, THE 2.4 —
>>I’M NOT SURE WHAT THEY –>>THEY WILL SEE SOME INCREASED
REVENUE FROM THE STATE THIS YEAR.
>>HE SAID ABOUT 1.8, I THINK, LAST NIGHT.
>>THAT’S A — THEY’RE DOING IT THE SAME THING, THE WAY MARCUS
IS. I MEAN, TRYING TO FIGURE OUT HOW
TO MANAGE THEIR FUNDS. AT LEAST THIS MORNINGS HE TOLD
ME HE WAS ABLE TO DO IT.>>AND JUST MY LAST COUPLE
SLIDES, WHERE WE ARE RIGHT NOW, I MENTIONED EARLIER THAT WE’RE
TRACKING THE BUDGET, $817 MILLION, 817.5 MILLION,
GENERAL FUND BUDGET, WE ROLL EVERYTHING IN, THE ENTERPRISE
FUNDS, THE CIP, WE GET CLOSE TO A BILLION-TWO, BUT IN TERMS OF
GENERAL FUND, WE’RE TRACKING THE FORECAST OR TRACKING THE BUDGET
YEAR TO DATE, MAYBE A LITTLE BIT BETTER BUT NOT SIGNIFICANTLY
BETTER. A QUICK UPDATE ON WHERE WE ARE
PROJECTED TO BEGIN 2015 AND A LOT OF DISCUSSIONS YOU’LL HAVE
OVER THE NEXT COUPLE MONTHS, I MENTIONED EARLIER THAT WE’RE NOT
ALONE WITH PROJECTING THESE SHORTFALLS, AND THAT’S WHAT
HAPPENS IN THE TIME PERIOD TO TRY TO CLOSE THE SHORTFALL.
WE START OFF WITH THIS $20 MILLION GAP AND AGAIN, YOU
START OFF ON THE RESOURCES SIDE, YOU BACK OUT THE ONE-TIME AND
RE-FINE YOUR REVENUE ESTIMATE. SAME THING ON THE EXPENDITURES,
YOU BACK OUT THE ONE-TIME, BUT YOU ALSO TAKE INTO ACCOUNT, IF
YOU BUILD A NEW BUILDING, YOU HAVE TO STAFF THE BUILDING.
IF YOU BUILD A LIBRARY, YOU HAVE PEOPLE THAT WORK IN THE LIBRARY
AND YOU PUT BOOKS IT IN, SO EACH TIME THAT THERE ARE CAPITAL
PROJECTS, MANY TIMES THERE ARE CAPITAL PROJECTS YEARLY, THERE
WILL BE OPERATING EXPENSES THAT ARE RELATED TO IT.
THE GOOD NEWS IS WHERE WE ARE TODAY, THAT GAP HAS BEEN CUT IN
HALF, SO INSTEAD OF HAVING THIS $20 MILLION GAP, IT’S CLOSER TO
9.5. WE’LL CONTINUE TO HAVE STRATEGY
TO BRING THAT DOWN TO APRIL, BRING IT DOWN TO ZERO BEFORE WE
PRESENT A BUDGET TO YOU IN THE APRIL TIME FRAME.
ONE OF THE WAYS THAT WE’VE BEEN ABLE TO ABLE TO CUT THE GAP —
BEEN ABLE TO CUT THE GAP IN HALF, AND I THINK IT’S VERY
IMPORTANT BECAUSE THIS IS SOME OF THE AREAS THAT SABRINA WILL
TALK ABOUT THAT A LOT OF TIMES WE DON’T TALK ABOUT AROUND THIS
TABLE, IT’S JUST THE CONCEPT OF MANAGING OUR RESOURCES.
WE DID DO ESTIMATES, THAT’S WORTH ABOUT ALMOST $4 MILLION IN
SAVINGS STRATEGIES. SOME ESTIMATES WENT UP, SOME
WENT DOWN, BUT WHEN YOU NET IT OUT, WE HAVE LESS THAN
$4 MILLION OF STRATEGIES THERE. THE NEXT TWO ARE EXTREMELY
IMPORTANT. IT’S REALLY A PHILOSOPHICAL
CHANGE. ONE IS TO LEVEL-FUND DEPARTMENTS
IN 15 WHERE THEY WERE IN 14. SO THAT IS A STRATEGY THAT’S
WORTH ABOUT $3 MILLION, BUT WHAT IT DOES IS THAT INSTEAD OF
COMING INTO A DEPARTMENT AND BASICALLY SAYING I NEED YOU TO
GIVE ME A 5% REDUCTION STRATEGY OR 10% REDUCTION STRATEGY, WE
PUT THE PHILOSOPHY OUT TO EVERYONE, SO IN OTHER WORDS, A
LOT OF STRATEGIES THAT SABRINA WILL TALK ABOUT HAVE REALLY
RELATED TO THE ADMINISTRATIVE DEPARTMENTS, NOT NECESSARILY
CONSTITUTIONAL OFFICERS OR THE COUNCIL APPOINTEES, BUT IF WE
JUST LEVEL-FUND ALL DEPARTMENTS AT THEIR 14 LEVEL, THAT’S WORTH
ABOUT $3 MILLION IN SAVINGS. THE OTHER THING THAT WE DID IS
WE TOOK ONE PERCENT REDUCTION FOR ALL DEPARTMENTS.
NOT JUST THOSE THAT REPORT TO ME, BUT AGAIN, THE CAPITAL
APPOINTEES AND THE CONSTITUTIONAL OFFICERS, AND
THAT REDUCTION, ONCE YOU TAKE AWAY SOME THINGS THAT ARE JUST
MANDATED, WAS WORTH ANOTHER 3.7 MILLION.
>>ARE YOU JUST MODELING DOING THIS OR IS THIS SOMETHING YOU
LOOKING AT AS BEING POLICY?>>THAT IS HOW WE STARTED
BUILDING — CLOSING THIS GAP.>>SO IT’S MORE THAN JUST
MODELING. YOU’RE LOOKING AT IT AS POLICY.
>>WELL, I GUESS YOU CALL IT POLICY.
I GUESS IT’S A TOOL TO BRING THE GAP DOWN.
>>IF IT COMES FROM YOU, IT’S POLICY FROM YOUR OFFICE.
BUT I UNDERSTAND THAT THE TROUBLE YOU RUN INTO IS THERE
WAS — AND I REMEMBER, MARCUS, AND I DON’T MEAN TO BE STICKING
YOU WITH IT, BUT I REMEMBER WHEN YOU CAME ON, YOU WEREN’T GOING
TO GO AND DO ACROSS-THE-BOARD CUTS.
I’M NOT GOING TO STICK YOU WITH WHAT YOU MAY HAVE SAID TWO YEARS
AGO, BUT IT WAS SOMETHING I THOUGHT I REMEMBER YOU WERE NOT
GOING TO USE AS A BUDGET TOOL, TO JUST WALK IN AND SAY
EVERYBODY CUT YOUR BUDGET BY ONE PERCENT, ONE PERCENT, 2%, 3%.
YOU WERE GOING TO DO A CASE BY CASE BASIS AS MUCH AS POSSIBLE
WITH EACH DEPARTMENT. SO PARKS AND REC, YOU LOOKED AT
THEIR BUDGET AND IT WAS 3% AND THAT’S WHAT YOU CAME UP WITH.
AND IF THE POLICE DIDN’T NEED A BUDGET CUT, THEY NEEDED AN
INCREASE, IT WAS ONE PERCENT, THEN IT WAS A CASE BY CASE BASIS
AND I’M JUST AFRAID WE MAY BE BACK SLIDING ON WHAT WE MAY HAVE
SAID. IF THAT’S THE CASE, I THINK WE
HAVE TO EXPLAINS THAT TO THE DEPARTMENT HEADS THAT WORK FOR
YOU, THOSE MANAGERS.>>SURE.
>>AM I WRONG?>>THAT’S NOT WHAT I HEARD HIM
SAY THOUGH.>>THAT WAS MY CONCERN TOO.
>>I HEARD YOU SAY SOMETHING DIFFERENT.
>>MAYBE I MISREAD WHAT YOU SAID.
>>WE START OFF WITH ACCOUNTABILITY, SO WE SAID IN
THE PAST, WHAT WE’VE DONE IS SOMETHING AS SIMPLE AS, AND
AGAIN, THIS IS SIMPLE, BUT TO HIRE SOMEBODY, IT WAS ALMOST
LIKE YOU HAVE TO HAVE 11 SIGNATURES BEFORE YOU COULD EVEN
HIRE SOMEBODY. SO THIS ORGANIZATION HAD BECOME
AN ORGANIZATION THAT TO SOME EXTENT HAD TO BE RUN THROUGH THE
BUDGET OFFICE OR HUMAN RESOURCES.
SO WHAT THE DEPARTMENT HEADS SAID IS JUST MAKE ME
ACCOUNTABLE, YOU KNOW. I WILL MUCH RATHER YOU REDUCE ME
BY ONE PERCENT AND LET ME WORK IT OUT THAN FOR ME TO HAVE TO
HAVE SOMEBODY IN A CENTRAL DEPARTMENT MANDATE OR DICTATE
WHEN I CAN HIRE SOMEBODY. SO IT’S MORE OF ACCOUNTABILITY
THAN IT IS AN ACROSS-THE-BOARD CUT.
>>I GUESS TO CHARACTERIZE IT AS A MATURING PROCESS.
>>YES.>>MARCUS, I’VE HEARD FROM A
COUPLE EMPLOYEES IN TWO DIFFERENT DEPARTMENTS THAT SAID
THAT THEIR DEPARTMENT HEAD HAS COME DOWN AND SAID WE HAVE TO
MAKE ALL THESE BIG CUTS THIS YEAR SO WE CAN BALANCE THE
BUDGET.>>RIGHT, SO —
>>IT’S NOT BIG CUTS. IT WAS A ONE PERCENT.
>>OH, YEAH –>>BUT THAT ONE PERCENT COULD
IMPACT A SECTION OF THAT DEPARTMENT A LITTLE BIT MORE
THAN OTHER SECTIONS BECAUSE THAT ONE PERCENT COULD BE DIVIDED UP
AND MAYBE 50% OF THAT IS WITHIN ONE SECTION OF IT, SO THEY’RE
FEELING A BIGGER PINCH THAN MAYBE ANOTHER SECTION WHICH
MIGHT NOT HAVE GOTTEN CUT AT ALL.
>>RIGHT.>>BUT WE’RE NOT LETTING —
[ ALL SPEAKING AT ONCE ]>>YOU’RE NOT LOOKING AT A ONE
PERCENT LIKE EVERYBODY — NOBODY ORDERS STAPLES BECAUSE WE’VE GOT
A MILLION OF THEM IN OUR SUPPLY CLOSET.
>>NO.>>YOU’RE NOT AT THE TIMING —
TELLING THEM WHAT TO DO.>>NO, NOT AT ALL.
BACK TO ACCOUNTABILITY, AND THAT’S WHY I HIGHLIGHT THE
EVALUATION PIECE. IN 2014, BECAUSE WE’RE HALFWAY
THROUGH THE FISCAL YEAR, THE CONCEPT IS WE’RE NOT GOING TO
LAY OFF A BUNCH OF PEOPLE BECAUSE OF THIS ONE PERCENT CUT,
BUT I’M PRETTY SURE I HEAR THE COUNCIL SAY, SHOW ME WHAT IS
THE — PAINLESS ISN’T THE WORD, BUT SHOW ME YOU’VE MADE THE
TOUGH DECISIONS FIRST. SO SOMEWHERE IN HERE, THOSE ONE
PERCENT REDUCTIONS, ONE PERCENT WILL BE REFLECTED IN THE BUDGET
THAT I PRESENT TO YOU, AND IF YOU SAY WE CAN’T LIVE WITH THIS,
THEN THAT BECOMES A VERY DIFFERENT DISCUSSION AND THAT’S
HOW WE’RE TRYING TO AT LEAST BE AS EFFICIENT AS WE CAN, SHOW YOU
WHAT THE IMPACT WOULD BE ON PROGRAMS AND SERVICES.
SOME PROGRAMS AND SERVICES MAY BE A LOW PRIORITY FOR THIS BODY,
AND SOME PROGRAMS AND SERVICES MAY BE ABSOLUTELY POSITIVELY
NOT, BUT I BELIEVE YOU WANT TO SEE THE IMPACT FIRST.
SO NOT DOING IT IMMEDIATELY, BUT THAT IS WHAT’S GOING TO BE
PROVIDE TO YOU IN THE APRIL TIME FRAME.
>>AND THE FLOAT THAT WE’VE TALKED ABOUT BEFORE, THAT MONEY
THAT SEEMED TO CARRY OVER, AT THIS POINT WE’RE WILLING TO PAY
THAT DOWN, AM I CORRECT? IS THAT WHAT YOUR EXPLANATION,
BEFORE WE MOVED ON, I DIDN’T GET A CHANCE TO ASK YOU, BUT THE
IDEA IS THAT WE’RE PAYING THAT FLOAT DOWN.
IS THAT RIGHT, SABRINA?>>OR AT LEAST MATCHING WHATEVER
THAT IS.>>IT’S THAT CARRYOVER.
>>YEAH, IT’S GOT TO MATCH. SO WE’RE GOING TO HAVE
$19 MILLION IN CARRY-FORWARD, YOU SHOULD HAVE $19 MILLION IN
ONE-TIME EXPENDITURES.>>BUT WE’RE WILLING TO GET RID
OF IT OFF OUR BOOKS? I MEAN, YOU ARE WILLING TO MAKE
THE TIGHT CALL — I KNOW, SAB NA, WE TALKED ABOUT IT BEFORE,
WE WERE WILLING TO MAKE THAT HAPPEN.
[ INAUDIBLE COMMENTS ]>>I THINK WE CUT THAT
DISCUSSION SHORT. WHEN WE WENT TO THAT, WE WERE
LIKE, OKAY, I’VE HEARD ENOUGH, IF I REMEMBER.
>>JUST TO EXPAND ON THIS, YOU’RE SAYING FOR EVERYBODY,
THAT THEY’RE ACCOUNTABLE FOR THEIR DECISIONS ON HOW TO CUT BY
ONE PERCENT. AND THEN WE WILL, AFTER THAT IS
DONE, THEN WE WILL — YOU’LL COME BACK TO US AND WE’LL DECIDE
WHETHER THOSE CUTS ARE APPROPRIATE OR WE’RE COMFORTABLE
WITH THEM.>>EXACTLY.
IT WILL BE IN THE BUDGET PRESENTATION.
>>WHAT ABOUT THE DEPARTMENT, THOUGH, THAT FRANKLY NEEDS TO BE
CUT BY 5%?>>SURE.
>>I MEAN –>>SABRINA IS GOING TO TALK
ABOUT THAT.>>WHERE DOES THAT COME IN HERE?
WE’RE STILL INDIVIDUALIZING OR THE DEPARTMENT THAT NEEDS TO
GROW BY 5? WE’LL DO ALL OF THAT AFTER
YOU’VE DONE THE UNIFORM ONE PERCENT?
>>WE HAVE A $20 MILLION PROBLEM, WE HAVE NOT ADDRESSED
IT YET. THIS IS ONE STRATEGY, IT WAS
WORTH $3 MILLION. THERE’S ANOTHER STRATEGY THAT IS
WORTH ALMOST $4 MILLION, SO WE GET IT DOWN TO 9.4 MILLION.
SABRINA IS GOING TO TALK ABOUT EXACTLY WHAT YOU SAID.
WE’VE ESTABLISHED SWAP TEAMS, AND WE’RE NOT LOOKING AT THIS IN
SILOS. WE’RE LOOKING AT ENTIRE
ORGANIZATIONS, THE CITY ATTORNEY’S OFFICE, THE AUDITOR’S
OFFICE, SO THIS IS THE BEGINNING OF TRYING TO MAKE THE GAP GO
AWAY BUT TO HAVE THE STRUCTURAL BALANCE SO WE’RE NOT USING
ONE-TIME STRATEGIES FOR ONGOING EXPENDITURES.
>>AND THEN JUST A DUMB QUESTION.
I KNOW THIS IS DUMB. LEVEL FUNDING SAVES US
3 MILLION, HOW DOES THAT HAPPEN?>>SURE.
THIS IS A BAD EXAMPLE, BUT LET’S JUST GO FOR IT.
IT’S PRETTY EASY TO — WE BUDGET BY POSITION IN THE CITY.
SO YOU BUDGET A POSITION AT $40,000 AND YOU HIRED SOMEBODY
ON JULY 1st AND YOU PAID THEM $40,000, YOU WOULD BE FINE.
BUT YOU COULD — AND THE WAY THE SYSTEM HAS BEEN, YOU COULD HIRE
SOMEBODY ON JANUARY 1st AND PAY THEM 80, AND YOU WILL STILL BE
FINE BECAUSE YOU HAD $40,000 IN THAT SLOT.
WHAT WE’RE SAYING IS THAT SOME OF THESE SURPLUSES WERE BASED ON
DOLLARS RELATED TO PERSONNEL, SO WHY WOULDN’T YOU RESET THE MODEL
AND BASICALLY SAY, DEPARTMENT HEADS, THIS IS HOW MUCH MONEY
YOU HAVE FOR PERSONNEL AND YOU CAN RESTRUCTURE YOUR
ORGANIZATION AROUND THAT. NOT EVERYBODY HAS A ONE PERCENT
CUT. THERE’S SOME DEPARTMENTS THAT WE
KNOW GOING INTO IT, THAT AS A COUNCIL PRIORITY, WE DIDN’T
PROVIDE A STRATEGY FOR NORFOLK PUBLIC SCHOOLS THAT HAD ANY
REDUCTIONS IN IT BECAUSE WE UNDERSTOOD THAT THAT’S IMPORTANT
TO THE COUNCIL. SO IT’S REALLY ALMOST STEP ONE,
AND THEN YOU’RE GOING TO GET ADDITIONAL STRATEGIES AND
ADDITIONAL EVALUATIONS TO BRING THIS DOWN TO ZERO.
>>BUT THE $3 MILLION SAVINGS IS…
>>IT’S BASICALLY BECAUSE THE EXAMPLE I GAVE YOU —
>>SOME PEOPLE WOULDN’T BE HIRING RIGHT AWAY?
>>RIGHT, AS WE TALKED –>>IN PERSONNEL?
>>NO, THE DEPARTMENT HEADS BASICALLY SAID LET ME MANAGE MY
DEPARTMENT, LET ME BE IN CONTROL OF HIRING.
DON’T HAVE THE MANAGER AND THE BUDGET DIRECTOR AND THE H.R.
DIRECTOR AND AN ACM SIGN OFF ON EVERYTHING THAT WE DO.
THEY SAID, GIVE ME ACCOUNTABILITY, AND SO THAT’S
WHERE WE’RE STARTING.>>SO MARCUS — OKAY, MAYBE I
MISUNDERSTOOD THEN. SO THE ONE PERCENT CUT, THAT’S
ACROSS THE BOARD OR IS THAT JUST FOR COUNCIL APPOINTEES.
>>EVERYBODY.>>THAT’S EVERYBODY, AND THE
LEVEL FUNDING IS FOR –>>EVERYBODY.
>>OKAY. SORRY.
>>IT’S A STRATEGY. WE COULD HAVE HAD A DIFFERENT
STRATEGY THAT SAID GIVE ME A 5% REDUCTION STRATEGY, GIVE ME A
10% REDUCTION STRATEGY. THESE TWO STRATEGIES ARE WORTH
$7 MILLION.>>I HEARD TWO DIFFERENT THINGS.
I HEARD ONE’S FOR ONE AND ONE’S FOR THE ORROCK BUT YOU’RE
SAYING — FOR THE OTHER, BUT YOU’RE SAYING THAT THEY BOTH
APPLY. ALL RIGHT, I GOT YOU.
>>WITH THAT, AS WE MOVE FORWARD, I THINK THAT THE BIG
THING BEFORE I PASS IT OVER TO SABRINA IS WHAT WE’RE TRYING TO
DO TO GET TO YOUR QUESTION EARLIER, IS THAT IF WE LOOK AT
FY 15 AND FY 16 THROUGH THE SAME LENS, THEN YOU KNOW WHATEVER
ACTIONS YOU DO IN FY 15, WHAT IMPACT THEY WILL HAVE ON FY 16,
SO EVEN THOUGH WE WERE FIVE-YEAR FORECAST, WHAT WE WANTED TO MAKE
SURE WE SHOW YOU WHEN WE PRODUCE THE BUDGET OR FOLLOW YOUR
GUIDANCE TO PRODUCE THE BUDGET OVER THE NEXT FEW MONTHS, IS TO
MAKE SURE THAT WE’RE NOT SINGLE-FOCUSED ON FY 15 BECAUSE
SOME OF THE ACTIONS AND STRATEGIES WILL HAVE AN IMPACT
IN FY 15. THAT’S A LITTLE BIT OF A
DIFFERENT PHILOSOPHY. OKAY.
>>AS THE MANAGER SAID, WE’RE LOOKING AT THE BUDGET, THE
DEVELOPMENT OF THE 2015 BUDGET WITH THE FIVE-PRONGED APPROACH,
RAISING REVENUES, REDUCING EXPENDITURES, BECOMING MORE
EFFICIENT, GROWING OUR ECONOMY AND SHARING SERVICES.
WE CAN’T CUT OUR WAY OUT OF THIS AND WE KIND OF HAVE TO GROW OUR
WAY OUT OF THIS AT THIS POINT. BUT BEFORE WE MOVE INTO THE
WHOLE 2015 DEVELOPMENT AND WHERE WE’RE GOING, I WANT TO TAKE A
MOMENT JUST TO LOOK BACK ON THE LAST THREE, FOUR YEARS SINCE THE
GREAT RECESSION HIT US. WHAT WE’VE ACCOMPLISHED SO FAR
IN TERMS OF FOUR YEARS, WE’VE HAD VERY LITTLE TAXES AND FEE
INCREASES. THEY HAVE BEEN VERY MODEST.
WE’VE ALSO DONE A LOT OF COST-CUTTING STRATEGIES AND
CONTAINMENT. LOOKING BACK THROUGH THE RECORDS
QUICKLY, WE FOUND ABOUT $9 MILLION IN CONSULTANT STUFF
THAT WE HAD DONE THAT WE RENEGOTIATED LEASES, LOOKED AT
BEST PRICING, AND GOTTEN NEW CONTRACTS.
WE’VE REDUCED DISCRETIONARY SPENDING ALL ACROSS EXECUTIVE
DEPARTMENTS, AT LEAST BY $2.3 MILLION.
ONE OF THE BIGGEST COST CONTAINMENT STRATEGIES THAT WE
IMPLEMENTED WAS OUR HEALTHCARE, OUR TRANSITION TO A
CITY-ADMINISTERED, A SELF-INSURED MODEL.
THAT ACTUALLY SAVED THE HEALTHCARE CONSORTIUM, WHICH HAS
NORFOLK PUBLIC SCHOOLS, REDEVELOPMENT HOUSING AUTHORITY
AND THE CITY, ABOUT $5 MILLION. WHEN WE WERE RIGHT ON THE CUSP
OF GOING INTO THE AFFORDABLE CARE ACT AND HEALTHCARE COSTS
WERE RISING ABOUT 8%, WE’RE MANAGING, I THINK WE’RE PROBABLY
THE ONLY LOCALITY THAT CAN SAY THAT IN CALENDAR YEAR 2014, OUR
EMPLOYEES WILL NOT SEE A BENEFIT INCREASE, AND BECAUSE WE JUST
TRANSITIONED OVER, WE DON’T HAVE A LOT OF EXPERIENCE DATA, SO
WE’RE — AND WHEN MARCUS SAID THAT THIS WAS EARLY FOR OUR
PROJECTIONS, WE ARE PROJECTING HEALTHCARE FOR THE 2015 BUDGET,
SIX MONTHS OF THAT BUDGET, RATHER EARLY, SO WE’RE STILL
REFINING THOSE NUMBERS, BUT EARLY INDICATIONS INDICATE THAT
WE WILL HAVE A VERY, VERY MINIMAL, IF TO NO INCREASE.
WE’RE STILL WORKING OUT THE NUMBERS THERE, BUT AGAIN, THAT
IS A — THAT’S A BIG EFFORT THAT WE ALL UNDERTOOK AND THAT SAVED
US A LOT OF MONEY. WE ALSO RIGHT-SIZED DEPARTMENTS
OVER THE LAST THREE OR FOUR YEARS.
LOOKING BACK AGAIN, PERSONNEL, WE’VE ELIMINATED A LOT OF
REDUNDANT POSITIONS, VACANT POSITIONS.
OVER $16 MILLION WORTH OF POSITIONS AND PERSONNEL ACTIONS
THAT INCLUDES TRAVEL, TRAINING, SOME PROFESSIONAL DEVELOPMENT,
AND AGAIN, THESE — MOST OF THESE REDUCTIONS APPLY TO THE
EXECUTIVE DEPARTMENTS. THE ONES UNDER THE CITY
MANAGER’S PURVIEW. WE DID NOT INCLUDE JUDICIAL,
CONSTITUTIONAL, COUNCIL APPOINTEES IN THE LAST THREE
YEARS OF BUDGET REDUCTIONS. WHAT WE WOULD DO IS MID YEAR, WE
WOULD COME ALONG, LOOK AT THE FORECAST AND SAY WE’RE GOING TO
HAVE PROBLEMS NEXT YEAR. SO WE NEED TO SAVE SOME MONEY
THIS YEAR AND WE’D IMPLEMENT MID YEAR BUDGET REDUCTIONS.
BEFORE I GOT HERE, THE CITY WOULD IMPLEMENT MID YEAR BUDGET
REDUCTIONS AND THOSE WOULD BE ONE-TIME.
NEXT YEAR, THAT MONEY WOULD BE PUT BACK INTO THE BUDGET.
WHAT WE STARTED DOING WAS WE IMPLEMENTED MID YEAR REDUCTIONS,
BUT THEN WE ALSO CARRIED THOSE SAME REDUCTIONS INTO THE
FOLLOWING FISCAL YEAR, SO YOU PICKED UP THE ONGOING REDUCTIONS
THERE. SO THAT’S BEEN HAPPENING FOR
ABOUT THREE YEARS WITH OUR EXECUTIVE DEPARTMENTS.
>>YOU’RE IN CONVERSATIONS NOW WITH THE JUDICIAL FOLKS AND ARE
THEY WILLING PLAYERS IN HELPING WITH THIS?
>>MOST OF THEM ARE. MOST OF THEM, WE MET WITH THE
CITY CLERK, WE’VE MET WITH EVERYBODY, ACTUALLY, AND THE
CITY CLERK SAID, YOU KNOW, WE’LL DO WHAT WE CAN.
WE’LL HELP WHEREVER WE CAN. WE HAVE SOME FOLKS THAT JUST
SAID NO.>>WHAT ABOUT THE
CONSTITUTIONAL?>>THE CONSTITUTIONALS, THERE
ARE A COUPLE THAT ARE HAVING PROBLEMS AS WELL, SO WHEN IT
GOES BACK TO YOUR QUESTION OF, YOU KNOW, IS IT ONE PERCENT
ACROSS THE BOARD, WE DO HAVE TO LOOK AT WHAT THE IMPACT IS.
SOME FOLKS JUST CAN’T HANDLE IT, WHICH MEANS OTHER DEPARTMENTS
WILL HAVE TO PICK UP THE ADDITIONAL REDUCTION.
>>YOU HAVE TWO NEW ONES THAT ARE JUST FEELING THEIR WAY.
>>RIGHT, RIGHT.>>WITH REGARD TO THEIR
STAFFING, AND SO I WOULD THINK THAT THEY’RE IN POSITIONS THAT
THEY COULD MAKE THEIR CHOICES NOW FAIRLY —
>>WE’VE MADE PROPOSALS TO THEM TOO.
>>ONE OF THEM HAS BEEN THERE FOR A PERIOD OF TIME, BUT STILL
REGARDLESS, HE WAS IN THE OFFICE STILL AND FEELING HIS WAY FOR
WHAT HE HAS TO DO TO MAKE THOSE HARD CALLS, SO, I MEAN, THEY CAN
MAKE THEIR DECISIONS SINCE THEY’RE FRESH AND IF THEY HAVE
TO SHED PERSONNEL, THEY SHED PERSONNEL.
THOSE OFFICES ARE OFTEN — I’M NOT CASTING APERSIANS TO ANYBODY
WHO — ASPERSIONS TO ANYBODY THAT WAS THERE BEFORE, BUT WE
ARE POLITICAL FIEFDOMS AND ALLOW PEOPLE TO PUT POSITIONS AND TO
PAY THEM THAT MAY NOT NECESSARILY BE QUALIFIED OR WORK
THAT HARD. IT’S JUST HOW THAT IS.
THAT’S JUST HOW THOSE OFFICES RUN AND IF THAT BE THE CASE, THE
PEOPLE COMING IN NEW CAN SHED SOME OF THAT AND NEAT THAT ONE
PERCENT FAIRLY WELL.>>THEY HAVE BEEN VERY
ACCOMMODATING, ACTUALLY. BACK TO CONSOLIDATING
DEPARTMENTS, SPEAKING OF EFFICIENCIES AND WHAT WE’RE
LOOKING AT IN TERMS OF HOW WE RUN THE CITY, WE’VE CONSOLIDATED
SOME DEPARTMENTS. THIS YEAR, THE 2014 BUDGET, WE
CONSOLIDATED COMMUNICATIONS AND I.T.
WE LOOKED AT IT AND SAID THEY’RE LIKE SERVICES, COMMUNICATIONS IS
HEADING MORE TOWARDS THE SOCIAL MEDIA TYPE OF ENVIRONMENT, AND
WE BROUGHT THAT UNDER ONE UMBRELLA.
THERE WAS SOME COST EFFICIENCIES THERE.
WE’VE ALSO, TWO YEARS AGO, WE CREATED A DEPARTMENT OF — WE
ESTABLISHED A DEPARTMENT OF GENERAL SERVICES.
WE TOOK FIVE FUNCTIONS THAT WERE SPREAD OUT AND BROUGHT THEM
UNDER ONE UMBRELLA FOR BETTER OVERSIGHT AND ACTUALLY, DGF AS
WE CALL THEM, HAS DONE A PRETTY GOOD JOB IN MANAGING FLEET.
THEY HAVE TURNED FLEET AROUND. THEY HAVE DONE A COMPLETE
INVENTORY OF THE FLEET VEHICLES, THEY’RE REPURPOSING VEHICLES.
WE’VE ACTUALLY OCCUR STALE OUR FUEL COSTS.
— CURTAILED OUR FUEL COSTS. THEY WENT TO A FUTURES MARKET
WHERE THEY LOCK IN THE FUEL PRICES AT THE BEGINNING OF THE
FISCAL YEAR AND THEY’RE LOCKED IN.
I USED TO GRIT MY TEETH AT THE END OF THE YEAR, I DIDN’T KNOW
WHAT THE FUEL FRIES WAS GOING TO BE BECAUSE — FUEL PRICE WAS
GOING TO BE BECAUSE IT FLUCTUATED SO MUCH.
WE’VE ALSO REFINED SERVICE DELIVERY, MADE TECHNOLOGY
CHANGES AND IN THAT, WE PICKED UP SOME CHANGES.
WE GOT RID OF A MAIN FRAME, JUST GENERAL IMPROVEMENTS WITH
TECHNOLOGY. THOSE WERE ABOUT $2.1 MILLION
WORTH.>>CAN I ASK YOU A QUESTION ON
THAT. ONE OF THE ISSUES THAT’S COME UP
AND I KNOW THE CHIEF IS HERE, THERE’S BEEN DISCUSSIONS BETWEEN
NORFOLK P.D., THE NORFOLK COMMONWEALTH ATTORNEY’S OFFICE
AND THE CITY AND THEIR I.T. AND THE WAY THAT THEY DON’T TALK,
THERE’S A PROBLEM WITH REGARD TO THAT.
IS THAT SOMETHING THAT WE CAN LOOK AT TO REC STI PHI AND IF WE
CAN — RECTIFY IF WE CAN PUT IT UNDER ONE UMBRELLA?
I KNOW THE CHIEF IS HERE, I KNOW HE KNOWS ABOUT IT, AND I KNOW
THE COMMONWEALTH ATTORNEYS TALKED ABOUT IT.
I UNDERSTAND THEY’RE ON THREE DIFFERENT SYSTEMS AND IT’S
PROBLEMATIC. THEY’RE NOT — THE SYSTEMS DON’T
TALK WELL, SO IF WE CAN LOOK AT THAT TO TRY TO SAVE MONEY ON
THAT, THAT WOULD BE GREAT. I KNOW WE HAVEN’T DONE THAT YET
AND I DON’T KNOW IF THEY’VE BROUGHT THAT TO YOU YET.
>>THEY BOTH HAVE TWO BUDGET REQUESTS AND WE’RE WORKING
THROUGH THAT.>>SOMEHOW CONSOLIDATE, GET
EVERYBODY ON THE SAME SHEET? ALL RIGHT.
THANKS.>>ENERGY EFFICIENCY, THIS IS
SOMETHING THAT I BELIEVE WE SHOULD ALL BE PROUD OF.
A FEW YEARS AGO, I THINK IT WOULD BE ARRA MONEY AND WE
UPGRADED THE CENTRAL ENERGY PLANT AND PICKED UP QUITE A BIT
OF SAVINGS FROM THAT AND OTHER,S THAT THE DEPARTMENTS HAVE DONE,
OVER $1.3 MILLION IN UTILITY SAVINGS.
WE’RE ALSO IN THE PROCESS OF IMPLEMENTING A CLIMATE CONTROL
POLICY FOR BUILDINGS. SOME BUILDINGS, YOU WALK INTO,
ARE JUST FREEZING WHICH MEANS THEY’RE PAYING A LOT OF IN AIR
CONDITIONING. AGAIN, THAT GOES BACK TO THE
ACCOUNTABILITY OF THE DEPARTMENT HEADS, MAINTAINING THE
FACILITIES. SHARED SERVICES, YOU KNOW, THAT
WAS AN INITIATIVE THAT WE ENTERED WITH VIRGINIA BEACH AND
CHESAPEAKE. WE ACTUALLY HAD QUITE A BIT OF
SUCCESS. THE HEALTHCARE MOVING TO A
SELF-ADMINISTERED MODEL WAS A RECOMMENDATION FROM THEM.
SIGN SHOP, WE ACTUALLY CONSOLIDATED OUR SIGN SHOP WITH
VIRGINIA BEACH. WE HAVE AN MOU WITH VIRGINIA
BEACH AND CHESAPEAKE NOW AND THEY ARE ACTUALLY MAKING ALL OF
OUR TRAFFIC WARNING SIGNAL SIGNS.
WE DO OUR INDIVIDUAL SIGNS, BUT WE WERE ABLE TO PICK UP SOME
SMALL SAVINGS, BUT NEVERTHELESS SAVINGS THERE WITH SIGN SHOP.
MOST RECENTLY, AS OF JANUARY 1st, WE’VE ACTUALLY STARTED
ADMINISTERING THE HEALTHCARE FOR NORFOLK PUBLIC SCHOOL EMPLOYEES.
SO WE’RE TRANSITIONING, WE’RE IN THE MODE OF TRANSITIONING WITH
THAT. MOVING ON, WHERE ARE WE GOING?
BACK TO YOU ONCE ASKED, YOU KNOW, SHOW US THE PAIN.
WE’VE CUT, WE’VE CUT, WE’VE LOOKED UNDER EVERY ROCK, WE’VE
TURNED OVER EVERY STONE, WHICH IS PART OF WHY WE HAVE THIS
$19 MILLION CARRY-FORWARD ISSUE. SO AS WE MOVE FORWARD AND WE
DEVELOP A BUDGET, WE KNOW THAT THERE ARE ONGOING PRIORITIES.
FINANCIAL STABILITY IS ONE. ONE IS TO DECREASE OUR RELIANCE
ON ONE-TIME REVENUE FOR ONGOING EXPENSES.
WE HEARD YOU LOUD AND CLEAR WITH NEIGHBORHOODS.
CIP IS A PRIORITY, NEIGHBOR PLANS IS A PRIORITY.
YOU TOLD US TO LOOK FOR OPPORTUNITIES FOR FUNDING TO
THEM AND WE’VE ACTUALLY GONE THROUGH SOME OF THE PAST
PROJECTS, IDENTIFIED SOME POTENTIAL RESOURCES.
WE’LL BRING THOSE BACK TO YOU AND YOU’LL HAVE TO MAKE SOME
DECISIONS, BUT THERE ARE SOME POTENTIAL RESOURCES YOU MAY WANT
TO REPROGRAM. HEALTHY NEIGHBORHOODS IS ANOTHER
ONE. COMPENSATION.
OUR HUMAN CAPITAL THAT WE BEGAN THE COMPREHENSIVE REVIEW OF
COMPENSATION WITH THE 2014 BUDGET.
>>BEFORE YOU GO ANY FURTHER ON THAT POINT, MARCUS, WHERE DOES
OUR INCREASE IN WAGE ON THE EMPLOYEES THAT ARE BELOW THE
LIVING WAGE FIT INTO THIS?>>THAT’S WHAT SHE’S ABOUT TO
ADDRESS. PART OF THIS STRATEGY.
>>OKAY.>>SO COMPENSATION, WE HAVE COME
UP WITH AN INITIATIVE CALLED ATTRACTION, RETENTION,
MOTIVATION, AND DEVELOPMENT. WE’RE AFFECTIONATELY TERMING IT
ARMD FOR OUR EMPLOYEES. I HAVE SEVERAL MORE SLIDES ON
ALL OF THESE, SO I’LL GO INTO IT IN A LITTLE BIT MORE DETAIL.
LIFELONG LEARNING, AGAIN, MAINTAINING OUR CITY SUPPORT,
THE DIRECTIVE FROM THE CITY MANAGER WAS TO MAINTAIN
CITY-LEVEL FUNDING FROM 14 TO 15, WHICH MEANS ONE OF THOSE —
THE SHARE SERVICES OPPORTUNITIES THAT WE CAME UP WITH IN CLOSING
OUR CENTRAL STORES, WE HAD A $1.7 MILLION SAVINGS IN 2014.
THAT $1.7 MILLION SAVINGS WE PUT TOWARDS SCHOOLS.
THAT AS ONE-TIME REVENUE SOURCE THAT WE GAVE TO SCHOOLS THIS
YEAR. BECAUSE OF THE DIRECTIVE FROM
THE CITY MANAGER TO KEEP CITY FUNDING AT THE SAME LEVEL IN
14 — IN 15 AS IN 14, WE HAVE TO FIND $1.7 MILLION TO REPLACE
THAT FOR THE SCHOOLS GOING FORWARD.
SO NOT ONLY DO THEY HAVE $20 MILLION GAP, THEY ACTUALLY
HAVE A $22 MILLION WITH THIS 1.7 MILLION.
AND ALSO TO WORK — TO DEVELOP A FOCUSED WORKFORCE DEVELOPMENT
STRATEGY. I DON’T THINK WE HAVE VERY
COORDINATED EFFORT. WE’VE BEEN TALKING WITH THE SHIP
REPAIR INDUSTRY, JOHN ANDREWS AND I HAVE BEEN TALKING WITH
THEM TO ESTABLISH SOME SORT OF CONTINUUM OF TRAINING FOR SHIP
REPAIR, SO WE’VE BEEN IN DISCUSSIONS ABOUT TTC AND SOME
OF THEIR PROGRAMS.>>SABRINA, COUNCILMAN SMIGIEL
JUST GAVE ME A LOOK. YOU LEVEL-FUNDED SCHOOLS.
YOU DIDN’T TAKE –>>NO, I DIDN’T TAKE IT.
I HAVE TO FIND THE 1.7.>>SCHOOLS IS LEVEL-FUNDED.
>>SO BACK TO — YOU’VE SEEN THE SLIDES ON STRUCTURAL BALANCE
WITH THE SEE SAW, ONE UP AND ONE DOWN, BUT THE BLUE LINE
REPRESENTS OUR CARRY FORWARDS AND YOU SEE IT GOING HIGHER FROM
11, 12, AND 13, AND INTO 14. AND THE RED BARS GOING DOWN ARE
REAL ESTATE, SO THERE IS A CORRELATION.
ONE OF OUR MAJOR REVENUE SOURCES DROPPED AND WE INCREASED OUR
CARRY-FORWARDS, WHICH MEANT THAT WE SCRUBBED.
WE FOUND ALL OLD ACCOUNTS, WE CONSOLIDATED STUFF.
ALL OF THIS ONE-TIME REVENUE THAT WE’VE BEEN USING TO BALANCE
THE BUDGET, BUT THOSE ONE-TIME REVENUES ARE EXACTLY THAT,
THEY’RE ONE-TIME REVENUES, SO WE DON’T HAVE THEM GOING FORWARD.
SO CARRY-FORWARD, LET ME DEFINE, ALL CARRY-FORWARD IS NOT BAD.
THERE’S CARRY-FORWARD THAT GOES ON FROM YEAR TO YEAR THAT WE
KNOW WE WILL HAVE A CONTINUOUS AMOUNT, SO THAT’S THE
CARRY-FORWARD AND THOSE ARE OKAY BECAUSE THOSE ARE REPETITIVE.
ABOUT HALF OF THAT, ABOUT 10 MILLION OF THAT 19 IS
ONE-TIME AND THAT’S WHAT WE’VE BEEN RUNNING, ABOUT 10 MILLION
EACH YEAR OF ONE-TIME REVENUES WE’VE BEEN USING TO SUPPORT
SALARIES, LIGHTS, ANYTHING THAT’S AN ONGOING REVENUE.
IT’S REALLY THAT 10 MILLION OR SLIGHTLY ABOVE THAT WE HAVE TO
TARGET IN TRYING TO GET DOWN. ANY QUESTIONS ON CARRY-FORWARD
AND ONE-TIME? BECAUSE THE ONE-TIMES ARE MIXED
IN WITH THE CARRY-FORWARD. THAT’S JUST HOW WE CLASSIFY IT.
>>SABRINA, 10% — OR I MEAN 10 MILLION, THAT’S A PERCENTAGE
OF YOUR BUDGET, YOUR OPERATING BUDGET IS, WHAT, ONE PERCENT?
I MEAN, A MILLION IS A LITTLE OVER ONE PERCENT, SO YOU’RE
STRUCTURALLY BALANCED ALMOST 99%, RIGHT?
>>RIGHT. THESE ARE THINGS, WHEN WE LOOK
AT OUR CARRY-FORWARD, WE SAY WHAT CAN WE TIE?
WE GO THROUGH THIS EXERCISE WHEN WE GO TO BOND RATINGS AGENCIES,
LOOKS LIKE EVERY YEAR NOW WHERE WE SAY WHAT IS IN OUR
CARRY-FORWARD THAT WE CAN TIE TO ONE-TIME EXPENSES AND EQUIPMENT
PURCHASES, WE DRAW THE LINE AND BRING THAT AMOUNT DOWN BECAUSE
THE RATING AGENCIES DON’T LIKE AN UNSTRUCTURAL BALANCED BUDGET,
AND THEY DON’T LIKE TO SEE A VERY HIGH LEVEL OF ONE-TIME
MONEY BEING USED FOR ONGOING EXPENDITURES.
WE ACTUALLY TOLD THEM THAT WE WOULD GET IT DOWN IN FIVE YEARS.
THE MANAGER HAS TOLD US GET IT DOWN IN THREE YEARS.
NO PRESSURE, BUT THREE YEARS. SO HOW DO WE ENSURE THE
FINANCIAL STABILITY? AGAIN, IT’S A TWO-YEAR LENS THAT
WE’RE LOOKING AT. I CAME FROM THE STATE BUDGET
OFFICE WHERE WE DID A BIENNIAL BUDGET.
WE’VE ACTUALLY ASKED THE BUDGET OFFICE FOLKS TO START LEARNING
HOW TO DO A BIENNIAL BUDGET. WE WON’T PRESENT IT TO YOU THIS
YEAR, BUT WE’RE IN THE PROCESS OF CONVERTING PERSONALLY TO A
BIENNIAL BUDGET SO WE ALWAYS HAVE A HANDLE ON WHERE WE’RE
GOING. ECONOMIC ROUNDTABLE, THIS IS THE
SECOND ANNUAL ONE WE HAD AND ALSO OUR CITY ECONOMIST PUTS OUT
ECONOMIC INDICATORS YOU HAVE IN FRONT OF YOU.
SHE TRACKS THE MARKET, THE HOUSING MARKET, THE EMPLOYMENT,
ALL OF THAT SHE USES TO DEVELOP THE CITY’S PROJECTION AND AS THE
MANAGER ALLUDED TO EARLIER, MOST RECENTLY HE HAS ESTABLISHED TWO
TEAMS. THE EXECUTIVE STRATEGIC
EVALUATION TEAM AND THE STRATEGIC WORKFORCE ANALYSIS
TEAM. THE ESET AS WE CALL IT IS SORT
OF AN INTERNAL ONE. IT’S ONE WITH BUDGET OFFICE AND
POSSIBLY FINANCE AND H.R. LOOKING AT SPECIFIC ISSUES AND
PROCESSES. THE SWAT TEAM INCLUDES FOLKS
FROM THE CITY ATTORNEY’S OFFICE AND THE AUDITOR, AND THE WORK
PLAN’S SET BY THE CITY MANAGER FOR THE YEAR.
AND AT THE END, THEY WILL PRODUCE A REPORT JUST LIKE JLARC
WITH RECOMMENDATIONS. A FEW THINGS THAT WE’RE LOOKING
AT IS CONSOLIDATING OR CENTRALIZING STAFF FUNCTIONS.
YOU KNOW, THERE ARE CO-LOCATED DEPARTMENTS, CAN THEY USE THE
SAME ADMINISTRATIVE PERSONNEL FOR PAYROLL, SO CAN THEY USE THE
SAME MAINTENANCE FOLKS. WHY DO WE HAVE SO MANY REDUNDANT
POSITIONS IN CLOSE-BY DEPARTMENTS.
WE’RE ALSO LOOKING AT FEES AND CHARGES.
WE DO EVERY YEAR AND EACH YEARS, WE TAKE A LITTLE BIT OF A BITE
OUT OF SOME OF THE FEES AND CHARGES, TO HAVE FULL COST
RECOVERY. WE’VE ALSO STARTED ISSUING
QUARTERLY FINANCIAL REPORTS, BACK TO DEPARTMENTS.
THIS IS SOMETHING NEW THAT THE BUDGET OFFICE IS DOING.
NORMALLY THEY WOULD TRACK PROJECTIONS ON THE YEAR END, BUT
THIS YEAR, THEY STARTED ISSUING QUARTERLY REPORTS BACK TO EACH
DEPARTMENT HEAD TO SAY THIS IS WHERE WE SEE YOU’RE GOING TO END
UN, SO IF THERE’S A SHORTFALL, THE DEPARTMENT HEADS CAN
READJUST. THE EXECUTIVE DEPARTMENTS UNDER
THE CITY MANAGER’S PURVIEW HAVE TO SIGN AND RETURN THE FORMS
BACK TO US. THERE ARE A COUPLE OF
DEPARTMENTS THAT ARE LOOKING AT AN OVERAGE AT THAT POINT.
FIRE IS ONE OF THEM. SO WE ARE WORKING WITH THEM, BUT
THEY ARE PROJECTED TO HAVE A SHORTFALL.
SO AT SOME POINT, WE MAY ALSO WANT TO LOOK AT A POLICY THAT
SUPPORTS THE REAL ESTATE TAX REVENUE SUSTAINABILITY.
WE TALKED ABOUT THIS DURING THE RETREAT, ESTABLISHING SOME
TRIGGERS. THOSE ARE ALL SOME OF THE
ACTIONS THAT WE’RE TAKING TO ENSURE OUR FINANCIAL STABILITY.
SO TAKING CARE OF OUR CAPITAL NEEDS REMAINS ANOTHER FINANCIAL
PRIORITY. MORE ONGOING CASH FUNDING FOR
PROJECTS. AGAIN, WITH THE GREAT RECESSION,
WE HAVE NOT BEEN ABLE TO PUT IN CASH.
IT LOOKS LIKE, WHEN YOU LOOK AT THE CIP TABLES, IT LOOKS LIKE
THERE’S CASH, BUT THAT’S BECAUSE THERE’S CASH COMING IN FOR
SLOVER AND WE HAVE TO CARRY THAT APPROPRIATION.
THAT’S NOT OUR CASH GOING IN. THAT IS SOMETHING WE NEED TO
IMPROVE ON, AND AGAIN, FUNDING FOR NEIGHBORHOODS.
ALSO, WE’RE IN THE PROCESS OF CONDUCTING A FACILITY
ASSESSMENT, THE RFP WAS JUST RELEASED FOR AN INDEPENDENT
EVALUATION OF OUR FACILITIES. WE HAVE ABOUT 159 BUILDINGS,
WITH AN AVERAGE AGE OF 35 YEARS. WE HAVE LEAKY ROOFS, WE HAVE
MAINTENANCE ISSUES AS WELL. WE PUT ABOUT 1.4 MILLION A YEAR
INTO THE MAINTENANCE OF OUR FACILITIES.
THAT’S HALF OF WHAT WE GIVE SCHOOLS.
WE GIVE SCHOOLS ABOUT $3 MILLION, SO WE DO NEED AN
ASSESSMENT. OUR FOLKS DO A GOOD JOB, BUT I
THINK IT’S TIME TO PRIORITIZE ALL OF OUR NEEDS.
SO MOVING ON TO OUR COMPENSATION AND THIS IS A FOCUS OF THE 2015
BUDGET, WE BEGAN THE REVIEW WITH THE MESSAGE WHEN HE SAID WE’RE
GOING TO REVIEW COMPENSATION IN THE 2014 YEAR.
SO WE PRESENTED MOST OF OUR FINDINGS DURING THE RETREAT.
NOT MUCH HAS CHANGED SINCE THEN, BUT THIS IS OUR FIRST ENDEAVOR
INTO OUR COMPENSATION REFORM. WE CONSIDER THIS AS SORT OF A
FIRST DEPOSIT BECAUSE IT TAKE YEARS TO CORRECT SOME OF THE
ISSUES THAT WE HAVE GOING ON, AND IN ADDITION, WE WERE NOT
DOING YEARLY MARKET ANALYSIS OR STUDIES.
THAT’S SOMETHING THAT OUR H.R. DEPARTMENT WILL BE DOING FROM
NOW ON, A YEAR-TO-YEAR ANALYSIS OF MARKET RATE ADJUSTMENTS.
AGAIN, EVEN THOUGH WE PICK IT NOW, WE WILL FALL BEHIND AGAIN
BECAUSE ALL OF THE OTHER LOCALITIES ARE ALSO ADJUSTING
THEIR MARKET, SO THIS IS GOING TO BE A PERIODIC REVIEW AND A
RESTART. SO TO RECAP THE GOALS OF THE
COMPENSATION REVIEW, WE HAD NINE CONVERSATIONS WITH EMPLOYEES,
STAFF, SENIOR STAFF. H.R. AND — THIS IS CAPRICE
STANLEY AND HER STAFF CONDUCT ALL THE CONVERSATIONS.
THEY WERE OFFSITE IN SOME TERMS. EVERYBODY HAD A CHANCE TO
PROVIDE INPUT. ONE OF THE THINGS WE WERE ASKED
TO LOOK AT IS WHETHER OR NOT THE STEP SYSTEM IS APPROPRIATE FOR
US, AND DURING THE CONVERSATION, WHAT WAS REVEALED WAS FOR THE
GENERAL EMPLOYEES, THEY WERE OKAY WITH NOT HAVING STEPS.
THEY WERE OKAY WITH GOING THROUGH AN OPEN RANGE SYSTEM,
MEANING A MINIMUM AND MAXIMUM, WHICH ALLOWS US THE FLEXIBILITY
TO PROVIDE MARKET RATE ADJUSTMENTS WITHOUT HAVING TO
HAVE HAVE BEEN LAND IN A STEP. THE PUBLIC SAFETY OFFICERS DID
NOT WANT TO ELIMINATE THEIR STEPS.
THEY WANTED TO KEEP THEM, SO THE RECOMMENDATION AT SOME POINT
WILL BE TO KEEP THE STEPS FOR PUBLIC SAFETY.
WE WERE ALSO ASKED TO CONSIDER THE ADDITIONAL RETIREMENT
PROGRAMS SUCH AS THE FIVE AND FIVE CONVERSION, THE DROP
PROGRAM AND THE VRIP. I CAN GO INTO THOSE IF YOU —
>>JUST BRIEFLY. WE DON’T NEED TO —
>>THE FIVE AND FIVE VERSION IS ALL THE EMPLOYEES, AFTER OCTOBER
1st, I BELIEVE, 2010, CONTRIBUTE 5% INTO THE RETIREMENT.
ALL THE EMPLOYEES PRIOR TO THAT DO NOT.
DOING A FIVE AND FIVE CONVERSION, MEANING THE CITY IS
NOW PAYING 5% FOR THOSE PRIOR TO 2010.
WE WOULD TAKE THAT 5%, INSTEAD OF THE CITY PAYING ON THE
EMPLOYEES’ BEHALF, GIVE IT TO THE EMPLOYEES, LET THE EMPLOYEES
PAY THE 5%. WHAT THAT IMMEDIATELY DOES IS
BASICALLY RAISES EVERYBODY’S SALARIES ABOUT TWO STEPS RIGHT
THERE. SO IT’S A BASE SALARY CHANGE,
WHICH IS A HIGHER BASE FOR THEIR RETIREMENT YEARS.
BUT WE’RE GIVING THEM THE MONEY TO PAY FOR IT BECAUSE ALL WE’RE
DOING IS TAKING IT FROM HERE AND MOVING TO IT THEM SO THEY CAN
PAY FOR IT. IT ALSO PUTS EVERYBODY ON THE
SAME PLAYING FIELD. EVERYBODY AT THAT POINT BECOMES
EQUAL, EVERYONE IS CONTRIBUTING 5% AND IT CREATES THE EQUITY.
THE DROP PROGRAM IS SOMETHING THAT PUBLIC SAFETY ASKED FOR FOR
ITS SWORN OFFICERS AND THIS REALLY HELPS THE ADMINISTRATION.
THE FOLKS WHO ARE TRYING TO HAVE PERSONNEL AND PLAN THE
SCHEDULES. WHAT THEY HAVE RIGHT NOW IS
FIREMEN OR POLICEMEN THAT WILL RETIRE.
BECAUSE THEY RUN AN ACADEMY, INS DIFFICULT FOR THEM TO FILL THOSE
POSITIONS, IT’S NOT LIKE A REGULAR OFFICE JOB WHERE
SOMEBODY CAN FILL AN ADMINISTRATIVE POSITION.
THEY HAVE TO WAIT FOR THE ACADEMY TO FILL IT.
WITH THE DROP PROGRAM, THE OFFICER SAYS I’M GOING TO RETIRE
IN THREE YEARS. THAT’S MY DATE.
SO AT THAT POINT IN THE THREE YEARS, HE WANTS — THEY WANT TO
ENTER THE DROP PROGRAM, THERE’S A PAYMENT THAT WOULD HAVE GONE
INTO THE RETIREMENT FOR THEM WOULD GO INTO A SEPARATE ACCOUNT
THAT WOULD EARN SOME INTEREST THAT THE ACTUARIES WOULD
DETERMINE. AT THE END OF THREE YEARS, THEY
GET THAT AMOUNT AND THEY WALK AWAY WITH IT.
IT’S A LUMP PAYMENT FOR THEM.>>A SAFETY VALVE?
>>I THINK SOME LOCALITIES DO IT.
I DON’T THINK THE STATE DOES THAT.
THE VRIP IS THE VOLUNTEER RETIREMENT PROGRAM WHICH WE JUST
IMPLEMENTED BACK IN DECEMBER. WE HAD ABOUT 82 PEOPLE
PARTICIPATE IN THAT, AND THAT IS WHERE WE OFFERED $10,000 AS AN
INCENTIVE TO RETIRE. THERE WAS NOT AN EARLY
RETIREMENT PROGRAM. DOES THAT ANSWER?
>>YEAH, AND I TAKE IT YOUR IN FOR ANOTHER RECOMMENDATION OF
ONE OF THOSE?>>YES.
THE OTHER THING –>>IT WILL BE AFTER MEETING WITH
FIRE AND P.D., RIGHT?>>THE MANAGER HAS BEEN MEETING
WITH THEM REGULARLY.>>WE ARE RECOMMENDING A DROP.
>>WILL THERE BE A SEPARATE FOR CITY EMPLOYEES?
>>THE DROP WILL ONLY BE FOR SWORN OFFICERS.
THE OTHER RECOMMENDATION IS TO SIMPLIFY THE FORMAT OF THE
COMPENSATION PLAN. IT’S A LITTLE REDUNDANT THE WAY
IT IS, AND IF WE WANT TO MAKE IT EASIER FOR FOLKS READ, WE’RE
GOING TO COLLAPSE SOME OF THE SECTIONS.
>>OTHER THAN THE FIVE AND FIVE, IS THERE ANY OTHER CATCHING UP
FOR THE OFFICERS?>>YES, I’M GOING TO GET TO
THAT.>>SORRY.
>>NO PROBLEM. THIS IS THE ARMD MODEL.
IT’S NOT JUST ABOUT COMPENSATION, IT’S ABOUT
ATTRACTING EMPLOYEES AND ALSO FOCUS IS ON OUR NORFOLK
RESIDENTS.>>FROM THE SWORN, THE FIVE AND
FIVE, WHILE IT ISN’T ADDITIONAL MONEY IN YOUR POCKET, IT IS THE
EQUIVALENT OF TWO STEPS.>>I UNDERSTAND.
I ACCEPT WHAT SHE SAID, BUT FROM WHAT I HEAR, THAT THERE’S SOME
THAT WANT TO BE CAUGHT UP OTHER THAN THAT.
THEY MAY HAVE MORE THAN THAT THOUGHT.
ARE WE LOOKING AT TRYING TO CATCH —
>>THERE’S AN ADDITION, YES.>>OKAY, THAT’S WHAT I THOUGHT
SHE SAID.>>I THINK WE’RE ON THE SAME
SHEET.>>SO IT’S ALSO ABOUT RETAINING
EMPLOYEES AND COMPENSATION BEING ONE OF THEM, BUT MAYBE
ESTABLISHING ALSO CAREER LADDERS AND A PROFESSIONAL DEVELOPMENT
TRACK. AS I SAID, WE, YOU KNOW, LOOKING
BACK OVER THE FOUR YEARS, WE REDUCED DISCRETIONARY SPENDING,
REDUCED PROFESSIONAL TRAINING, SO THOSE ARE THINGS THAT WE
WOULD LIKE TO BRING BACK AT SOME POINT WHEN OUR REVENUES ARE ABLE
TO SUSTAIN THEM. MOTIVATING EMPLOYEES, SOMETHING
AS LITTLE AS A PICNIC FOR THEM GOES A LONG WAY.
WE HAVE AN EMPLOYEE RELATIONS COMMITTEE AND WE HAVE AN
EMPLOYEE ENGAGEMENT COMMITTEE THAT ARE VERY ACTIVE.
>>TELL US SOME OF THE THINGS YOU’RE DOING TO ATTRACT
EMPLOYEES.>>ATTRACT EMPLOYEES, I CALL UP
THE H.R. DIRECTOR AND I SAY WHAT ARE YOU DOING?
[ LAUGHTER ]>>I WAS JUST WONDERING.
>>THAT’S NOT YOUR BAILIWICK.>>WE ACTUALLY, WE DO — WHEN WE
KNOW THAT THERE’S A QUALIFIED PERSON THAT WE HAVE PERSONALLY
WORKED WITH OR WE KNOW OF THEM, WE CALL THEM AND WE TALK TO
THEM. ONE OF THE ISSUES THAT WE FACE
IS THAT THE VRS CHALLENGE THAT WE HAVE BECAUSE WE’RE NOT ON
VRS, WE’RE AN INDEPENDENT SYSTEM.
A LOT OF FOLKS DON’T WANT TO CHANGE THEIR RETIREMENT SYSTEM.
BUT OUR H.R. DEPARTMENT, THEY DO TARGETED RECRUITMENT FOR
POSITIONS, SO THEY WILL REACH OUT.
SO IF IT’S A DIRECTOR OF ON CERTAIN FIELD, THEY WILL REACH
OUT TO LIKE ORGANIZATIONS AND TALK TO PEOPLE AND DO TARGETED
MARKETING. DID I GET IT RIGHT?
>>UNDER SWORN OFFICERS, DOES THE SHERIFF’S DEPARTMENT FALL
UNDER STEP OR DOES –>>IT DOES NOT INCLUDE
CONSTITUTIONALS. SO JUST AS A QUICK COMPARISON OF
REGIONAL AND MARKET ADJUSTMENTS THAT LOCALITIES HAVE DONE,
EVERYONE HAS DONE SOMETHING IN THE RECENT YEARS OR THEY’RE IN
THE STAGES OF A COMPENSATION STUDY.
PORTSMOUTH IS IN THE STAGES OF A COMPENSATION STUDY AND AS WELL
AS HAMPTON. SINCE WE HAVE SUCH GOOD FOLKS ON
OUR STAFF, WE FOREGO — WE DID NOT DO AN INDEPENDENT
COMPENSATION STUDY. OUR H.R. STAFF IT DID AND THEY
HAVE DONE A DARN GOOD JOB AND ALSO RYAN BERGMAN FROM THE
BUDGET OFFICE HAS ALWAYS BEEN COSTING OUT THE INCENTIVES.
FOR NORFOLK, WHAT WE DID IS IN 2013, WE ACTUALLY PROVIDED 5%
FOR SHERIFF’S DEPUTIES AND BACK INTO 2009, PUBLIC SAFETY’S
COMPENSATION PLAN WAS OVERHAULED AND THERE WAS A RETENTION
PROGRAM THAT WAS ASSOCIATED WITH THAT.
IN 2008, THERE WAS ADDITIONAL MONEY GIVEN TO PUBLIC SAFETY
OFFICERS. I THINK THEIR TOTAL — THEIR
TOTAL WAS ABOUT 5%. IT WAS HALF A PERCENT MORE THAN
OTHERS, AND PLUS ANOTHER THOUSAND DOLLARS THAT THEY GOT.
SO PUBLIC SAFETY HAS HAD SOME ADJUSTMENTS.
IT’S THE GENERAL EMPLOYEES THAT HAVE NOT HAD MARKET ADJUSTMENTS
FOR THE CITY.>>MAYOR, ONLY BECAUSE IT’S A
FEW MINUTES BEFORE 7:00, OUR NEXT — I GUESS THIS IS A
CONCEPT THAT, WHAT COUNCILMAN PROTOGYROU SAID, A LOT OF WHAT
SABRINA HAS PRESENTED, YOU RECEIVED AT RETREAT.
I THINK THE BIG DIFFERENCE, TO ANSWER YOUR QUESTION, IS LIVING
WAGE A PART OF STRATEGY. THE BIG DIFFERENCE IS, THERE’S
ALSO A THREE-YEAR STRATEGY THAT’S IN THIS PRESENTATION THAT
TRIES TO DEAL WITH THE ISSUE OF COMPRESSION AND ADDITIONAL STAFF
IN TRYING TO GET US MORE COMPETITIVE WITH THE SALARIES.
AND BASED ON TIME, WHATEVER YOU’D LIKE FOR US TO DO, GOING
FORWARD — [ INAUDIBLE COMMENTS ]
>>SO THE ISSUE ISN’T THAT WE HAVEN’T PROVIDED INCREASES.
WE’RE THE ONLY LOCALITY IN 13 AND 14 TO PROVIDE GENERAL WAGE
INCREASE OF 12%. NEWPORT NEWS IS CLOSE TO US, BUT
WE’RE THE ONLY ONES THAT HAVE PROVIDED 2%.
>>CAN SHE PICK UP WHERE SHE ENDED OR STOPPED WHEN WE COME
BACK IN TWO WEEKS?>>I’D LIKE TO KNOW HOW MANY
PEOPLE ARE HAVE A STEP PROGRAM.>>WE’RE THE ONLY ONE IN THE
REGION WITH A STEP PROGRAM.>>SO THERE’S SOME —
>>YEAH, WE HAVE THAT.>>AND I’D LIKE TO SEE — I
MEAN, I DIDN’T GET A DIRECT ANSWER TO MY QUESTION.
MAYBE I DIDN’T ASK A DIRECT QUESTIONS.
SO TO ASK A DIRECT QUESTION, WHEN ARE — IT WAS ABOUT 75,
PAUL, PEOPLE THAT WE HAD THAT WERE WORKING FOR US FULL-TIME —
>>NOT MAKING A MINIMUM WAGE.>>NOT MAKING A LIVING WAGE, SO
MY DIRECT QUESTION IS WHEN ARE THEY GOING TO GET — I DON’T
THINK WE NEED A STRATEGY FOR THAT.
I THINK WE JUST NEED TO FIX IT BECAUSE WE’RE DOING — I MEAN,
WE’RE DOING THIS POVERTY COMMISSION AND WE’RE TALKING
ABOUT KEEPING PEOPLE OUT OF POVERTY, AND OUT OF THREE OR
FOUR, FIVE THOUSAND PEOPLE, WE DON’T NEED A STRATEGY TO GET 75
PEOPLE TO A LIVING –>>I THINK THE MAYOR TOOK CARE
OF THAT.>>THE MANAGER HAS DONE A —
>>IT’S IN THE BUDGET YEAR.>>YOU SHOULD DO IT.
>>HE SAID DO IT, BUT I’M ASKING WHEN ARE WE GOING TO DO IT?
>>THERE ARE TWO THINGS. WE CAN DO IT JULY 1, WHICH MAKES
IT VERY EASY. IF YOU DO IT TODAY, YOU CREATE
MORE PROBLEMS WITH COMPREHENSION.
SO OUR RECOMMENDATION IS TO DO IT JULY 1 WITH THE BUDGET.
>>THESE ITEMS THAT ARE OF INTEREST, ARE WE GOING TO GO
THROUGH THEM? ONE-TIME ITEMS?
>>I THINK THE ONLY ONE THAT RELATES TONIGHT IS THE AIRPORT
AND RON COULD DO A 30-SECOND STAND-UP.
>>AREN’T WE VOTING ON SOME OF THESE ISSUES?
>>IN TWO WEEKS, YES.>>SO WE’RE NOT MEETING AGAIN,
RIGHT?>>NOT NEXT WEEK.
>>WE’RE IN THE MEETING BEFORE WE VOTE.
>>NO, BUT –>>SO I WOULD ASK THAT — I
MEAN, WE’VE GOT THESE TIME SENSITIVE ISSUES THAT WE’RE
SUPPOSED TO TALK ABOUT THEM TWO WEEKS BEFORE WE VOTE AND NOW WE
HAVEN’T DONE THIS, THAT WE PRIORITIZE THESE AND DO THEM AT
THE BEGINNING OF OUR –>>I THINK THERE’S PEOPLE HERE.
>>NOW WE’RE TOTALLY LOST WHAT WE HAD HOPED TO DO AND —
ALTHOUGH YOU WANT TO TALK ABOUT THE AIRPORT, I WANTED TO TALK
ABOUT THE PCO AND WE DON’T HAVE TIME TO DO IT AND NEXT TIME WE
DO I, WE’RE VOTING.>>ALSO THIS CHURCH STREET
PROJECT AS WELL.>>YES.
YEAH, DEFINITELY THE CHURCH STREET ONE.
SO NOW WHAT DO WE DO?>>LET’S DO THE AIRPORT THING.
>>BUT NOW WHAT DO WE DO ABOUT THE OTHER TWO?
>>WELLING WE CAN STAY RIGHT HERE, OKAY, UNTIL EVERYBODY IS
SATISFIED AND THEN GO UPSTAIRS, OKAY?
WE’LL JUST START LATE.>>AND THEN CHURCH STREET AND
THEN THE OTHER — THE PAWN SHOPS.
>>WELL, SHORT VERSION, ARE THERE QUESTIONS DIRECTLY THAT
YOU’D LIKE ME TO ANSWER AND I’LL FLIP THE PRESENTATION.
— SKIP THE PRESENTATION.>>CHANGING — THERE’S A ZONING
TEXT AMENDMENT, COULD YOU JUST EXPLAIN WHERE THERE ARE LOOKING
AT DOING THESE PROJECTS. THERE’S OBVIOUSLY THE ZONING
CHANGES BECAUSE THEY WANT TO BE ABLE TO MARKET SOME OF THEIR
PROPERTY A LITTLE BIT MORE — WHERE IS THAT HAPPENING?
IS IT BY THE ENTRANCEWAY? DO THEY WANT TO SHIFT THE
ENTRANCEWAY OFF OF AZALEA GARDEN AND MOVE IT TO MILITARY HIGHWAY
AND MAKE THAT THE ENTRANCE? WHAT ARE WE LOOKING AT HERE?
>>THIS IS THE AREA COVERED BY THE AIRPORT ZONING IN PURPLE,
OKAY? IT DOES NOT INCLUDE THE AREA —
HERE’S THE ENTRANCE, IT DOES NOT INCLUDE THE BOTANICAL GARDENS
WHICH WE TALKED ABOUT LAST TIME. SO IT ONLY INCLUDES THE AIRPORT
PROPERTY ITSELF. THE TWO AREAS THAT ARE REAL MOST
AFFECTED ARE THE AIR CARGO AREA, AND AS YOU KNOW, AIR CARGO IS
SORT OF THE WAY THAT MARKET IS WORKING, KIND OF CHANGING AND
WE’RE NOT AS BIG A PLAYER IN THAT AS WE’D LIKE TO BE,
ALTHOUGH WE GET A PARALLEL — WHEN YOU GET THE PARALLEL
RUNWAY, WE COULD BECOME A BIGGER PLAYER IN THAT.
AND THEN, OF COURSE, RON TOLD YOU EARLIER ABOUT SOME PLANS
DOWN ON THE SOUTH SIDE OF MILLER STORE ROAD.
THIS AREA HERE THAT’S GOT GENERAL AVIATION AND SOME OF THE
OLD MAINTENANCE FACILITIES ALONG MILLER STORE ROAD, IS THAT WOULD
BE THE TWO AREAS THAT WOULD BE THE VOTES.
>>AND THE ADMINISTRATION RECOMMENDS IT?
>>WE RECOMMEND APPROVAL, PLANNING COMMISSION RECOMMENDED
APPROVAL UNANIMOUSLY.>>THAT’S NOT THE PRIVATE
AIRPORT, IS IT?>>YES, IT IS.
>>LANDMARK AREA.>>YOU’RE NOT TALKING ABOUT
REMOVING THAT, ARE WE I DON’T MEAN.
>>NO, SIR. NONE OF THIS IS, YOU KNOW,
NOTHING IS FOR SURE GOING TO HAPPEN.
IT’S JUST PROVIDING ADDITIONAL FLEXIBILITY TO THE AIRPORT
COMMISSION TO GENERATE REVENUE AT THE AIRPORT.
>>OKAY. NEXT?
CHURCH STREET.>>OKAY.
CHURCH STREET, THE REAL QUICK THING, THERE’S THREE
QUESTIONS — THREE THINGS THAT ARE COMING FORWARD.
THE FIRST IS A PLAN AMENDMENT. THE SECOND IS A REZONING, AND
THE AREA IS TWO TRIANGLES LOCATED ALONG CHURCH STREET,
ALONG THE RAILROAD TRACKS, AND ARE ALSO ACCESSED BY O’KEEFFE.
THE PROPOSAL IS TO CHANGE THAT’S AREAS INTO A PLANNED
DEVELOPMENT. THIS IS THE TEXT FOR IT, BUT LET
ME GET TO THE PLAN. THIS IS WHAT THE PLANNING
COMMISSION SAW. TWO TRIANGLES, THE SUPPORTIVE
HOUSING IS HERE. THERE ARE TWO BUILDINGS, EACH
WITH 20 APARTMENTS, SOME OF WHICH ARE MARKET RATE, SOME OF
WHICH WOULD BE SUBSIDIZED, BUT THE KEY IS THAT THAT 65% OF THIS
PROJECT IS INTENDED TO BE MARKET RATE, SO APARTMENTS HERE AND
APARTMENTS HERE. PLANNING COMMISSION AND THE
NEIGHBORHOOD GREATLY CONCERNED ABOUT HOW MUCH WOULD ACCESS ON
TO O’KEEFFE, WHICH IS NOT A VERY GOOD ROAD, AND THE IDEA WAS CAN
WE TRY TO DIRECT AS MUCH STUFF AS POSSIBLE ON TO CHURCH.
WE DIDN’T GET THE RIGHT ONE BACK N I’M SORRY.
WE HAVE A NEW — THERE’S A NEW PLAN WHICH, LET ME GO BACK,
ESSENTIALLY CUTS O’KEEFFE OFF AT THIS POINT RIGHT HERE AND
ALLOWS — AND HAS THE CIRCULATION GO THROUGH HERE.
THERE’S SOME TECHNICAL DIFFICULTIES, A FEW DETAILS TO
BE WORKED OUT, BUT THERE AREN’T ANY SHOW STOPPERS.
NOTHING WITH THAT PLAN THAT CAN’T BE MADE TO WORK.
THERE’S SOME THINGS THAT WE’LL HAVE TO WORK ON TOGETHER, BUT
WE’RE PREPARED TO DO THAT.>>WHAT DID THE PLANNING
COMMISSION VOTE, HOW DID THEY VOTE?
>>PLANNING COMMISSION VOTED AGAINST THIS 6-1.
AND THAT WAS BASED ON THE CONCERN OF THE NEIGHBORS.
>>RIGHT.>>IT WAS BASED ON THE
PERCEPTION OF THE PLANNING COMMISSION THAT THE
TRANSPORTATION WAS NOT APPROPRIATELY DESIGNED, WITH ALL
THE TRAFFIC ENTERING ON TO HOE KEEF, THERE WAS A GREAT FEAR
ABOUT THE POTENTIAL FOR CONCENTRATING POVERTY IN AN
ALREADY CONCENTRATED CENSUS TRACT AND THERE WAS THE
NEIGHBORHOOD CONCERN THAT THIS IS 161 RENTAL UNITS IN A
NEIGHBORHOOD THAT IS ALREADY, IN THEIR OPINION, OVER SATURATED
WITH RENTAL UNITS.>>AND I THINK THAT’S CRITICAL
THAT WE NEED TO CONCENTRATE ON, THE FACT THAT THE POVERTY ISSUE
IS SOMETHING THAT’S A CONCERN AS WELL AS THE NUMBER OF UNITS AND
UNLESS IT GOES BACK TO THE PLANNING COMMISSION, I THINK
THEY’RE — YOU KNOW, I THINK WE NEED TO SUPPORT, YOU KNOW, THEIR
VOTE ON IT.>>BUT DOESN’T THIS ALSO ASSIST
WITH YOUR INITIATIVE ON HOMELESSNESS?
>>LET’S TAKE IT OVER THERE TO EAST BEACH THEN.
IF THAT’S THE CASE, LET’S TAKE IT OVER TO EAST BEACH, LET’S
TAKE THESE 160 UNITS OVER TO EAST BEACH.
>>AND THEY’RE RIGHT ON A RAILROAD TRACK.
THAT DOESN’T SEEM RIGHT.>>LET’S TAKE THEM TO EAST
BEACH.>>THAT’S A HEAVY RAILROAD —
>>THEY ARE RIGHT THERE ON A RAILROAD TRACK, BUT IT’S VERY
DIFFICULT, AS YOU SAW, IF YOU LOOKED AT THE OUTLYING AREA, TO
PUT — YOU CAN’T PUT RESIDENTIAL THERE BECAUSE OF THAT — NOT
LIKE SINGLE-FAMILY THERE.>>I UNDERSTAND.
>>BUT THERE ARE A LOT OF CONCERNS IN THE COMMUNITY ABOUT
THE ENTIRE PROJECT. IN REALITY, YOU ARE BETTER
PUTTING RENTAL THERE THAN YOU ARE PUTTING — THAN YOU ARE
PUTTING SINGLE-FAMILY THERE IF YOU HAD TO MAKE A CHOICE, BUT —
>>CAN WE PUT — WE’RE NOT DEBATING THIS.
THIS IS — I UNDERSTAND THAT THE PLANNING COMMISSION VOTED 6-1
AGAINST IT?>>RIGHT.
>>SO CAN YOU STILL BRING IT FORWARD?
>>BUT DIDN’T THEY VOTE PRIMARILY BECAUSE OF THE —
>>POVERTY IS THE ISSUE.>>WHAT’S THE POTENTIAL FOR THAT
PIECE OF PROPERTY?>>WAREHOUSE.
>>IT’S OFFICE, IT’S WAREHOUSE, IT WOULD BE ANOTHER SCRAP YARD.
>>IT NEXT TO A SCRAP YARD.>>IT IS, RIGHT NEXT TO THE
METAL YARD.>>OKAY.
WE GOT TO MOVE ON.>>WHAT I’M THINKING IS WITH
EVERYTHING THAT WE’RE DOING DOWNTOWN, I’VE ALWAYS IMAGINED
THAT SITE AS BEING AN AREA THAT TRAINS COULD PULL UP, YOU KNOW,
UNLOAD MERCHANDISE, SUPPORT DOWNTOWN.
THE PORT SOMETIMES, YOU KNOW, SOME KIND OF WAY COULD BE — I
THINK THE INDUSTRIAL — THE MIDTOWN INDUSTRIAL AREA, I THINK
WE NEED TO KEEP IT AS A MIDTOWN INDUSTRIAL AREA AND TAKE
ADVANTAGE OF THAT RAILROAD SPUR THAT WE HAVE THERE.
>>OKAY. I THINK WE’VE — THANK YOU FOR
THE BRIEFING. WHAT’S NEXT?
THE PAWN SHOPS.>>PAWN SHOPS.
NORVIEW, THIS IS A REQUEST TO AMEND THE PCO STANDARDS TO ALLOW
PAWN SHOPS, SPECIAL EXCEPTION. IT CAME TO US BY THE NORVIEW
CIVIC LEAGUE TO ASK US TO — THE PLANNING COMMISSION TO SPONSOR
THE APPLICATION. IT’S PRIMARILY, OF COURSE, TO
ALLOW THE RELOCATION OF THE EXIST PAWN SHOPS TO THE FORMER
BB&T BUILDING, AND IT WENT TO THE PLANNING COMMISSION AND AT
THE PLANNING COMMISSION, THERE WAS AN AWFUL LOT OF COMMUNITY
CONCERN EXPRESSED FOR THE FIRST TIME THAT HAD EVEN BEEN HEARD,
SO PLANNING COMMISSION RECOMMENDED AGAINST IT.
AFTER THE PLANNING COMMISSION MEETING, SUBSEQUENT TO THAT,
WE’VE HAD A NUMBER OF MEETINGS WITH THE COMMUNITY.
THE COMMUNITY SAID, CAN WE JUST HOLD OFF ON THIS AND LET US TALK
ABOUT IT, AND SO THERE’S BEEN A LOT OF COMMUNITY MEETINGS.
THE COMMUNITY IS QUITE SPLIT ON WHAT THEY BELIEVE THE FUTURE OF
THE PCO OUGHT TO BE, BUT AT THIS POINT, THEY ARE — THEY HAVE
ACHIEVED CONSENSUS THAT THEY WILL LIKE THE PAWN SHOP TO GO
FORWARD, SO WE’RE RECOMMENDING APPROVAL OF THE APPLICATION.
WE WILL PROBABLY SEE ANOTHER APPLICATION IN THE FUTURE TO
TALK ABOUT THE PCO AS A WHOLE, BUT THIS IS JUST PAWN SHOPS.
>>IF YOU MOVED THE PAWN SHOP TO BB&T FROM THE LOCATION IT IS
NOW, THAT’S ALREADY APPROVED, THAT MEANS YOU’LL HAVE TWO PAWN
SHOPS OVER THERE BECAUSE ONE IS ALREADY APPROVED AS A PAWN SHOP,
SO IF WE MFD OUT, THE NEXT PERSON — MOVED OUT, THE NEXT
PERSON WOULD NOT HAVE, UNLESS I MISS MY GUESS, WOULD NOT HAVE TO
SO TO SPEAK APPROVAL BECAUSE IT’S ALREADY ZONED FOR A PAWN
SHOP.>>IF I COULD YIELD TO
MR. PISHKO, YES, THAT’S TRUE FROM A ZONING STANDPOINT.
>>THAT’S RIGHT, BUT THERE’S ANOTHER — WE HAVE AN AMEND ON
THE NUMBER OF PAWN SHOPS, SAY IT’S 20, AND WE’RE AT THAT
LIMIT, SO YOU WON’T SEE A NEW PAWN SHOP BECAUSE THE REDUCTION,
SO YOU’RE CORRECT. IF SOMEBODY SURRENDERED THEIR
PAWN LICENSE AND THAT LOCATION WAS EMPTY FOR LESS THAN TWO
YEARS, THEN IF THERE WAS ONE OF THE 20 THAT WANTED TO GO THERE,
IT COULD. BUT IT WOULD — IT WOULD HAVE TO
BE WITHIN THE 20 THAT ARE PERMITTED.
>>BUT A NEW BUSINESS WOULD NOT SAY THIS PLACE IS OPEN NOW, IT’S
BEEN A PAWN SHOP, LET ME GO IN THERE AND BE A PAWN SHOP.
>>ONLY AN EXISTING PAWN WOULD GO IN THERE.
WE’VE ONLY GOT 20 PERMITTED.>>AREN’T WE ALL ABOUT —
>>WHEN WE ESTABLISHED IT, WE SAID WE WOULDN’T FORCE ANYBODY
OUT OF BUSINESS AND UNTIL WE GOT TO THE 20, WE WOULD NEVER DO A
NEW ONE. WE’VE NEVER GOTTEN FROM THE 21
TO 20, SO THERE WON’T BE A NEW ONE UNLESS YOU INCREASE THE
LIMIT.>>SO TECHALLY WE COULDN’T HAVE
A NEW ONE UNLESS TWO OF THEM WENT OUT OF BUSINESS.
>>OR UNLESS YOU CHANGED LIMITS. THAT’S RIGHT.
>>AND SO THEN HENCE FORWARD IN THIS PARTICULAR PCO, IF THE
LIMIT WAS LOWER, THEN SOMEBODY BY SPECIAL EXCEPTION NOW COULD
COME IN WITH A PAWN SHOP, IS THAT CORRECT?
>>NO, BECAUSE –>>LET’S SAY SIX PAWN SHOPS GAVE
UP BUSINESS. NOW THIS IS GOING TO CHANGE THIS
PCO SO THAT NOW YOU CAN HAVE A PAWN SHOP WITH A SPECIAL
EXCEPTION, WHEREAS BEFORE WE’VE NOT PERMITTED IT, CORRECT?
>>CORRECT. IF YOU’VE GOT BELOW THE 20, SIX
WENT OUT OF BUSINESS, THAT WOULD BE A SITE.
>>IT WOULD BE GRANDFATHERED.>>IS LIPMANS GOING OUT OF
BUSINESS, SURRENDERING? YOU KNOW, THAT’S WHAT WE HEAR
EVERY WEEK, THAT HE’S GOING OUT OF BUSINESS.
SO IF LIPMAN GOES OUT OF BUSINESS, WHAT DOES THAT GIVE
US?>>20.
>>IT GIVES US 20.>>WELL, WE LOST THE ONE
DOWNTOWN.>>THAT’S LIPMANS.
>>I NEVER CALLED IT THAT, THAT’S WHY.
>>THAT WOULD STILL BE 20, SO WE STILL COULDN’T GET ANOTHER ONE
UNLESS SOMEBODY ELSE WENT OUT OF BUSINESS BECAUSE THAT WOULD BE
19.>>BUT THIS IS IN PERPETUITY,
RIGHT? I’M NOT TALKING ABOUT THAT, I’M
TALKING ABOUT THE WHOLE PCO IS NOW PERMITTED, THAT IF YOU’RE
DOWN BELOW THE LEVEL, ANYBODY COULD COME IN FOR ANY OF THOSE
PROPERTIES AND BY SPECIAL EXCEPTION AND CHOOSE TO HAVE A
PAWN SHOP.>>THAT’S CORRECT, AND THE
REASON THAT –>>AND THERE’S NOTHING ELSE FOR
ANY OTHER PCO IN THE AREA, CORRECT.
>>EXCEPT THIS ONE.>>ANYBODY KNOW THE LAST TIME
ANYBODY TURNED IN A PAWN SHOP?>>THEY TURN OVER VERY LITTLE.
[ ALL SPEAKING AT ONCE ]>>THEY HAVE A MARKET VALUE AND
THE BUSINESS –>>FIGURE OUT A WAY TO
EVENTUALLY DO THAT PIECE.>>WE GOT TO MOVE QUICKLY THEN.
THANK YOU.>>COULD WE IN FUTURE, THOUGH,
DO THIS EARLIER?>>WE CAME IN AT 4:00 AND WE
COULDN’T GET EVERYBODY HERE.

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