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Apr 12

City Manager's Message, 4-12-17: FY 18 Budget Preview

Posted on April 12, 2017 at 1:41 PM by Mary Bunting

This afternoon, I will be giving City Council highlights of the Fiscal Year 2018 Manager’s Recommended Budget, and I wanted to make sure each of you also got a similar preview. If you wish to see the entire preview, you can watch a replay of the afternoon session on the City’s internet. 

Although real estate property values increased for the third straight year, our economic recovery remains slow. The Hampton Roads region's recovery from the recession is ranked one of the nation’s slowest, according to the Hampton Roads Planning District Commission.  Given this reality, I am pleased to recommend a budget that provides for employee raises, investments in public safety, and other initiatives that support the strategic priorities identified by City Council without an increase in the real estate tax or any budget related layoffs of permanent full-time staff.


Employee compensation continues to be a top budget priority, and I am proposing a 2% raise for all permanent full-time employees. Also, I am proposing to address an issue many of you raised during the compensation and classification study —the limited flexibility with the City’s promotional policy. The budget would fund a change to the policy that will minimize compression.  Historically, the City provided an 8% (10% if going from non-exempt to exempt) increase for internal promotions but allowed managers to hire people from outside the organization at 10%.  This often put managers in a position where they could pay people coming from outside the organization more than people who were promoted from within.  The proposed policy increases the promotion raise to 10% (12% if going from non-exempt to exempt).  Making this change will certainly cost more money to the City, but is the right thing to do - especially to ensure we retain our talented and dedicated workforce.


For the past two years, we have covered the employee contribution for health insurance premium increases to allow employees to take home as much of the pay raises as possible. In my prior recommendations, I acknowledged that at some point that future premium increases would once again be shared between the City and employees. This budget covers the City portion (70% ) of the increase in health insurance premiums and the full (100%) employer/employee share of life insurance premiums. Employees participating in our health insurance plan will have a slight increase in their premiums this year. However, the premium increases are relatively modest and will be less than full-time employees’ 2% pay increase, ensuring that employees should see an increase in take-home pay. 


We will continue with the quarterly bonus personal days started several years ago as a non-monetary incentive for employees when raises were not consistently provided. Although we have returned to consistent raises, this personal day benefit is another way to recognize the efforts of your hard work to make Hampton a great place to live, work and play.


Finally, the budget once again funds a mid-year citizen satisfaction bonus of up to $250 for full-time employees and $125 for eligible part-time employees. The actual bonus is based upon the percentage of residents who express satisfaction with the way employees perform their jobs, as reflected in the Citizen Satisfaction Survey.


Other budget highlights include the funding of 7 new officers to supplement 5 COPS grant-funded positions added midyear to expand our Police presence on the street, the continuation and expansion of youth violence efforts, expansion of our Coastal Resiliency efforts, and a continued focus on the “Love Your City” grant program to promote and highlight the unique events that promote fun in our community.


Looking forward, several economic development projects are on the verge of getting up and running.  We continue to see development momentum with new investments in the City, including ongoing projects such as the expansion of the Peninsula Town Center; the redevelopment of Riverdale into Riverpointe anchored by Kroger and At Home; Lidl; Aldi; aggressive development at the H2O; the Armory reuse; new Hyatt Place Hotel; and other investments such as the Peninsula Town Center’s recently announced Macy’s redevelopment plans. The value of construction permits more than doubled from FY14 to FY16. We are optimistic that these trends will continue, as we continue to seek development proposals for city-owned properties and work with private landowners, particularly in our Master Plan areas, to seek expansions and redevelopment.

With a shift in federal government priorities stemming from the new Presidential administration, we also face a number of questions, which could impact our City and region in varying ways with some potentially positive and others potentially negative.  However, I am confident that as a City, we will remain resilient and steadfast in our commitment to provide the best services to the citizens of Hampton regardless of what comes our way. Together Team Hampton has always done so, and I am proud of all that our workforce does each and every day to make Hampton better today than it was yesterday.  

I am thankful that you “Choose Hampton” and that you continue to build a bright future for our City.



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