HAMTPON — The city’s proposed $643 million budget for the upcoming fiscal year reduces the real estate tax rate and increases employee salaries, giving civilian workers a pay boost between 3% and 13% depending on amount of time employed.
The planned budget is a 5.2% increase from last year’s $611 million. The additional costs are covered through a $31.8 million increase in revenues — driven by the growth in real estate assessments, consumer-driven local taxes, state revenues, fines and investment earnings.
City Manager Mary Bunting said the city is trying to grow its economy so it won’t have to rely much on residential real estate for revenue growth.
“Our tourism has rebounded from the pandemic, and we expect strong growth in the number of people to visit our community,” Bunting said. “So we’re not going to rest on our laurels. We’re going to do all we can to boost our local economy.”
About 45% of the general fund budget goes toward the school division. The school budget includes $5.7 million to provide a 3% raise for employees and adds more than 200 employees to the payroll.
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Employee compensation
Assistant City Manager Brian DeProfio said the city plans to spend an additional $7.5 million in the upcoming fiscal year on employee compensation. Some will be used to provide a 3% general wage increase for civilian employees. But salary increases to address pay compression are also included in the spending plan. The budget includes a 0.5% increase for each year of service (up to a 10% maximum additional) for a maximum increase of 13%. DeProfio said the median increase for employees would be about 5%.
“Our most tenured employees, those with 20 years or more service with the city, will receive a 13% increase,” Bunting said. “The combination of general wage increase plus the 0.5% per year of service tenure adjustment will significantly address the compression that has long impacted our civilian workforce.”
The budget also continues the city’s step plan (first implemented in the current fiscal year) for all sworn public safety officers, providing a 2.5% pay differential for each year of service for the first 10 years of service and then every two years afterward.
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New expenditures
One of the new proposed costs in the budget is $3.4 million to implement speed cameras at the city’s schools. The money would cover a pilot program and the possible expansion of the speed cameras in all 34 school zones. However, the program is expected to pay for itself because money collected from violations would offset the cost of the cameras.
The city’s capital improvement plan — a 5-year spending proposal — is adopted separately from the city budget. The first year of the CIP is incorporated into the city manager’s recommended budget. The CIP calls for $71 million to be spent in 2024-25.
Some projects include Hampton City Schools maintenance and technology investments ($7.5 million), Virginia Peninsula Community College site improvements ($182,849) and nearly $2 million worth of renovations to the Hampton Roads Convention Center (paid for through a special fund, not tax dollars).
The city also plans to spend almost $8.5 million on wastewater infrastructure rehabilitation and $8.2 million on citywide street and traffic maintenance.
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Tax rates
To help offset some of the impact of real estate tax assessment increases, Bunting proposed lowering the tax rate from $1.16 per $100 of assessed value to $1.15 per $100 of assessed value. This is the third consecutive year the city has lowered the rate. Karl Daughtrey, Hampton’s director of finance, previously said each penny of the tax rate generates about $1.5 million in revenue for the city.
Bunting noted that three years ago, the city’s rate was $1.24, and said the city made “substantial progress” in making its rate competitive compared with other nearby cities. She said the city “strives to provide tax relief wherever we can.”
However, the city plans to increase its wastewater fee by about $10.96 a month and its solid waste fee by $1.53 a week. The solid waste fee increases are to cover increased costs of recycling, increased costs to hire drivers and steam plant equipment upgrades. The wastewater fee increases are due to the need to cover state-mandated maintenance of aging pipes and pump stations and pollution reduction.
“This is the one that sort of pains us the most, we really didn’t want to have to do this,” Bunting said of the wastewater rate increase. “But we will not meet the state mandates if we do not do it.”
The full budget will be online Monday. Printed copies will soon be available in city libraries.
City Council will hold a public hearing and vote April 24 on the Capital Improvement Plan. It will hold public hearings on the budget that day and May 1, with a final vote scheduled for May 8. The CIP hearing is separate from the regular budget hearing April 24.
Josh Janney, joshua.janney@virginiamedia.com.