VIRGINIA BEACH, Va. (WAVY) – Virginia Beach’s proposed fiscal year 2024 budget includes significant investments in public safety, the city’s workforce and other initiatives, but residents could see a notable impact on their wallets if current tax rates stay the same.

City Council heard a presentation of the proposed budget during Tuesday’s work session, the first big public step in a process that goes through May 9, when council is set to officially vote on the budget.

Before the presentation, City Manager Patrick Duhaney said that this year’s budgetary process was more difficult than past years, including the previous two, due to no more federal stimulus funding and other factors.

An overview of Virginia Beach’s overall proposed operating budget for FY 2023-24 (Courtesy of City of Virginia Beach)

“Our revenues are flatlining and the cost of inflation and cost for services are increasing dramatically,” Duhaney said, adding that “it was very difficult to come to a sense of how best to balance it, and some tough choices had to be made.”

Virginia Beach’s revenue sources by category (Courtesy of City of Virginia Beach)

Proposed cuts include nine roadway projects that are now slated to be deferred. Meanwhile, the city is hoping to expand funding for some council priorities, including recruitment and retention of the city’s workforce and services for the homeless.

Here’s a breakdown of some of the bigger budgetary items and topics discussed Tuesday:

EMS gets big boost

A key talking point was the 40.6 new full-time positions for emergency medical services personnel as the city struggles with staffing and related burnout.

Thirty-eight of those new full-time EMS positions will help aid volunteer rescue squads, who have struggled with cost increases and decreased revenue and staffing related to the pandemic. Last year’s budget included 20 new full-time EMS positions.

The proposed public safety budgetary highlights from Virginia Beach (Courtesy of City of Virginia Beach)

“EMS believes that with these additional resources they’ll be able to ensure that two ambulances and one [nontransporting EMS vehicle] remains in rotation on a daily basis,” said Kevin Chatellier, director of budget and management services, during the budget presentation on Tuesday.

A $700,000 grant will also go to the Virginia Beach Volunteer Rescue Squad Council, which requested $2.5 million, to help their ongoing needs.

Other items Chatellier highlighted include more positions for the Virginia Beach Commonwealth’s Attorney’s Office to review more body camera footage from new body cameras slated to go to the Virginia Beach Sheriff’s Office. Virginia Beach Council approved expedited funding for 220 initial cameras Tuesday night.

The sheriff’s office is overall getting a $6 million increase from the general fund related to “compensation adjustments needed to be annualized, keeping the sheriff on pay period with the police department” and inflationary impacts on contract increases in the sheriff’s office and revenue loss from a lower inmate population at the jail, Chatellier said.

5% raise recommended to city employees

Virginia Beach is looking at 5% compensation increases for city employees, including those on both the step and non-step plans. That includes no increases in employee contributions to health insurance premiums, with the city picking up the 3% expected increase.

Meanwhile, Virginia Beach City Public Schools, in its proposed budget, is looking at increasing the average employee’s pay by about 8%, based on the findings of a market salary survey. That comes after the school division saw a $28.5 million revenue growth from the local revenue sharing formula with the city and a bump of $27 million in state revenue. Chatellier said the school division will present to City Council in April.

Some infrastructure projects up more than 40% with inflation, 9 deferred due to lack of funding

Some capital projects in the queue are now expected to cost more than 40% of what they were originally budgeted for due to inflation, meaning several projects approved in the city’s CIP will now have to wait, Chatellier shared during Tuesday’s presentation.

“As is the case in previous years, there’s never enough resources to meet all the needs, but it was particularly the instance this year,” Chatellier said.

Projects that will now be deferred are (read more about them on page 51 of Virginia Beach’s budget proposal):

  • 100383 – “Shore Drive Corridor Improvements Phase IV”
  • 100235 – “Landstown Road Improvements Phase I”
  • 100123 – “Cleveland Street Improvements IV”
  • 100160 – “Elbow Road Extended Phase II‐D”
  • 100171 – “Ferrell Parkway”
  • 100524 – “Pleasure House Road Street Improvements Phase I”
  • 100306 – “Pleasure House Road Street Improvements Phase II”
  • 100379 – “Shipps Corner Road Improvements”
  • 100056 – “Centerville Recreation Center”

Chatellier said deferring these projects allows funding to go toward projects closer to completion and to meet federal and state requirements for fund matching. Maintenance of current roads was also a top priority.

Projects that will get funding to remain on timeline include Centerville Turnpike and Rosemont Road.

Transportation funding impacts for FY24 budget process (Courtesy of City of Virginia Beach)

In total, inflation bumped up the city’s roadway project costs by $250 million, the city’s budget executive summary reads (page 53).

Other notable new budget items in the city’s CIP include:

  • $10 million in year 6 for recreation center modernization (council is still discussing prioritization and other planning for this, Chatellier said)
  • $1.2 million in year 1 for emergency maintenance needs at the Little Island Fishing Pier in Sandbridge, which received a “poor” rating in recent assessment
  • $3.3 million in year 1 for a buildout for 30 new shelter beds at the Virginia Beach Housing Resource Center for those experiencing homelessness
  • $3.7 million in year 6 for the Virginia Aquarium, which is set to undergo a roughly $250 million expansion

Tax/fee increases and proposed relief

Non-renting families in the city (based on estimated median real estate value and their assessments) could pay more than $360 (or around $30 per month more) with next year’s budget, compared to fiscal years 2022-2023.

That’s mostly due to increases in home assessments (up 8% on average in Virginia Beach and even higher in other local cities amid inflation and other housing market factors). There will also be increased mostly costs for waste management, water and sewer.

Virginia Beach’s tax rate for real estate is still 99 cents for $100 in assessed value, the lowest among the sevel local cities, but some on council have proposed relief (possibly in the form of a tax rate change).

“I hope that we can sharpen our pencils and find out where we can make some cuts and knock some holes in this budget without creating too much of a problem,” said Councilman Rocky Holcomb. “But certainly giving our citizens a break somehow.”

A comparison of tax rates with area cities (Courtesy of City of Virginia Beach)

Vice Mayor Rosemary Wilson says there has to be a “balance between wants and needs.”

“I know we’ve all been hearing … from our taxpayers because they’re feeling the crunch of this inflation as well,” Wilson said. “A lot of them are on fixed income, they have no place else to go for their funding and their revenue streams.”

Wilson suggested having models of what potential tax rate changes – from about 1 cent to 4 cents lower – would have on the overall budget and to have that information before public hearing times.

Councilman Joash Schulman also suggested help for renters as well.

“As we look ahead for opportunities to provide relief,” Schulman said, “I would to just like to humbly suggest we look for opportunities to make sure we have impacts on people who need it the most, whether that’s through a combination of different initiatives.”

In the meantime, the council will hold several workshops on the budget, along with two public hearings April 19 and April 25.

You can watch Tuesday’s full presentation here and read all about the proposed budget here on the city’s website.