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Apr 10

City manager's message on the FY 2015 budget

Posted on April 10, 2014 at 10:16 AM by Mary Bunting

All,

city managerYesterday I provided a preview of the budget I will recommend to Council for next fiscal year. The actual budget will be released to Council over the weekend, and required legal ads will begin to run in the paper starting on Sunday.

In keeping with my commitment to share information with you, please find below a summary of the budget. I want to stress that the budget I am recommending is far from what I wish I could have proposed. With more revenue, I would have made bolder investments in employee compensation, operating department needs and our school system. Nevertheless, I am pleased that the budget for next year will avoid drastic cuts to our workforce and service delivery. There are a handful of position eliminations – most of which are vacant – that result from restructuring the Human Services Department and Budget Office. All affected employees have been notified and, as in past years, we will work to find employees another position elsewhere in the organization.

To avoid drastic cuts, we did propose an increase in the personal property tax. Our rate in currently lower than many localities in the region, and the increase proposed would result in only a minor increase in the tax bill for the average car. According to the Commissioner of Revenue, the average bill will increase just $6.46 for the year. Yet, this increase provided enough funds to avoid further cuts to city departments and provide additional funding for the school system which I believe will help avoid teacher furloughs.

As for employee compensation, my clear preference would have been to provide a real salary increase to employees – that is, a raise that increases the overall salary, based on employee merit. I truly believe, and shared with Council and the community yesterday, that our employees are our greatest asset. Without you, we could not be a city that is efficient and lean. I also told Council and the community that our employees have done “more with less” for too many years. Yet, your dedication and commitment to the citizens has been unwavering.

In the current fiscal year, we did provide a real salary increase (of 1% plus up to $1,000 additional base salary adjustment) and it had been my hope that we could build on that increase with another; but the combination of declining revenue and cost pressures made my goal unattainable for FY 2015.

I am pleased, however, that we are able to provide a strong bonus for our employees. Because of strong end-of-year performance by conscientious departments (who save taxpayer dollars instead of spending when possible), we have internally generated funding to support a merit-based bonus of up to $1,000 after taxes. (Employees with a 3 merit rating are eligible for a take-home amount of $500; those with a 4 merit rating will earn a take-home amount of $750; and, those with a 5 merit rating will receive $1,000.) The bonus will be split in two payments, one in July and the other in December. Permanent part-time or WAE employees will be eligible for a $250 payment, assuming they earn a rating of 3 or higher. We will also continue the bonus personal days for employees that was begun two years ago.

I realize that several other regional localities are proposing raises this year. Please note that many of these localities are still converting the VRS requirement to their workforce. When the General Assembly mandated the requirement that employees pick up the 5% VRS employee share, they gave localities the option of doing this conversion – with an offsetting 5% raise – in one year or over five. Here in Hampton, we did the full conversation at one time, believing that was ultimately better for our employees. The earlier conversion allowed employees to have a higher base salary for VRS purposes sooner. Moreover, we did not just offset the 5% employee share with the mandated 5% salary increase – instead, we increased base pay by 6%, slightly more than the 5.75% that was truly needed to make employees whole. Most other localities throughout the region and state have committed only to the 5% for 5% requirement, and even then many are still doing the conversion. Similarly, in earlier years of the recession, other localities had furlough days or pay cuts when Hampton never imposed such cuts. I explain all of this so you understand what you observe in other localities is perhaps more complex than would be immediately apparent. Also, I want you to understand the extra efforts the Council and I have gone to, when our revenues allowed us to do so, to support our employees.

I concluded my remarks to the community with a caution that that if we do not take care of our workforce, we may find an increasing number leaving for other jurisdictions and/or the private sector. I reminded them that a compensation study is under way which will assess our employees’ wages compared to both the public and private sector. I plan to push, and hopefully the community will too, for the appropriate pay increases supported by the study results next fiscal year. In the meantime, it is my hope that the bonus payment coupled with the raises we did provide this year and last, as well as the bonus personal days begun in FY 2013, will convey our serious commitment to the workforce.

As I noted in my last update to you on the budget, I am cautiously optimistic that this will be the last of the bad years. Hampton’s economy and housing market is improving and may be better next year. New housing construction is up, and high value houses are being built. New retail and restaurants are popping up in many locations; and, businesses are announcing expansions and new locations. Hampton is home to small start-up companies like Mango Mango Preserves, featured this year on Shark Tank, and rapidly expanding international businesses like Measurement Specialties, featured in Fortune and Forbes magazines. As more and more businesses like these choose Hampton as their home, our tax base will grow, making future budgets less challenging.

When the budget is released this weekend, I will send you a full copy of my Manager’s Message on the budget for those of you who are interested in learning even more. In the meantime, I hope this update is helpful. As always, please feel free to share any thoughts, questions or concerns you may have regarding the budget with me. My email is confidential and I truly welcome the feedback. I hope everyone has a great rest of the week!

Mary

Comments

sariyah reynolds
April 13, 2014 at 2:14 PM
WOW
sariyah reynolds
April 13, 2014 at 2:15 PM
I hope you have a great rest of the week too

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