CHESAPEAKE
When City Manager William Harrell looked to trim the budget this year, he and his staff zoomed in on about $12 million in reserves tucked away across city departments.
Social services had about $4.3 million; the Chesapeake Community Services Board nearly $5 million; t he Chesapeake Interagency Consortium, which serves at-risk children, $2.7 million.
These reserves, called "fund balances," are stashes of money city departments keep for one-time expenses or in case of unexpected catastrophes.
Harrell, working with a predicted $7 million revenue shortfall out of a $963.2 million budget, wants some of those departments to use their stashes to help pay for daily operations. He's recommending reduced funding to social services and the Community Services Board, but also is asking those groups to use about $750,000 each of the fund balances to help pay bills.
The idea has not pleased everyone. The chairman of the Community Services Board, which serves those with mental disabilities or mental health or substance abuse problems, worries that raiding the fund balance will make paying for big future expenses more difficult.
"It's like drawing money out of your bank account," said the chairman, Richard Losea. "What happens when the city's portion of that fund balance runs dry?"
But Harrell said saving money this way allows for other expenses, such as a proposed salary plan, which would deliver raises to Community Services Board workers and other city employees.
"The overriding issue is the general objectives of the government are more critical than the interests of individual departments," said Harrell.
Of the fund balances, Harrell said: "These are city dollars that have been placed there. Now is the time to begin drawing down on those funds."
Assisted by a financial adviser, city officials will be reviewing the fund balance policy. Harrell said the prior philosophy was that "departments should fend for themselves in the budget process." In the future, the city might opt to centralize reserve funds, allowing the council to choose where excess money goes, he said.
"There is no need to have these little pockets of reserves all over the city," said Councilman C.E. "Cliff" Hayes Jr. He said that before this year, he was unaware that the fund balances had grown so large.
Harrell said departments that are supported by the general fund rarely have such large fund balances.
Chesapeake's human services department, which oversees social services, Chesapeake Juvenile Services, and the Chesapeake Interagency Consortium, has healthy fund balances that drew Harrell's attention.
Doris "Cookie" Palacios, director of the department, said that the fund balances have grown in part because her groups have had to work within a no-growth budget. That has forced her to hold positions open, which has resulted in salary savings that end up in the reserves.
The fund balance is almost like a lock box with money that the department can't touch, she said.
"It's just growing," Palacios said of the fund balance. "We have all these needs here. Everything that results in a savings flows into an account that we can't access. That's a dilemma for us."
Losea, of the Community Services Board, said the agency's fund balance includes both city and state money. He said it has been accumulating for at least the past 11 years that he has been involved.
He said the agency took $1.3 million from the reserve to use as a down payment to construct the group's main building, which was completed several years ago.
When Losea initially heard that overall funding could be reduced, he thought it would have a "grave impact on Chesapeake's most vulnerable citizens," he wrote in a letter to Harrell.
He said that funding cuts would force the agency to reduce outpatient services to adults and children, to eliminate two clinical therapists and would result in longer waits for residents.
The proposed cuts to social services were also large. Harrell has helped Palacios avoid shortfalls by proposing that social services use more than $750,000 from the undesignated reserves.
Palacios said she is fine with that, as long as the department doesn't have to take money from there each year.
"We're hoping we don't use it for that kind of stopgapping in the future," she said.
Mike Saewitz, (757) 222-5207, mike.saewitz@pilotonline.com
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Dr. Tabor....recheck your numbers
There are 28 elementary schools.......which have the least amount of faculty and staff. There are 10 middle schools, which have more faculty/staff than the elemntary schools, but less than the high schools. There are 7 high schools which employ more faculty/staff than the lower schools. Western Branch High has the more faculty/staff than any other school in Chesapeake at 160. Where did you get 29K teachers?
I don't know where Dr. Tabor
got his numbers, but he'd better check them again. 29,000 teachers??? On what planet does the City of Chesapeake employ 29,000 teachers? More like 2900 I'd bet. That's a 14-1 ratio, but that is a skewed number at face value. It does not account for classes which must be kept small like special education rooms and kindergartens, or specialty teachers in the elementary schools like those in the music, art, PE, technology and media center programs who teach the whole school! I'm a teacher in Chesapeake and I've rarely had fewer than 28-30 kids in a class. I hate when people dump on the public schools when they have no clue about it. Spend a week there. If that doesn't dissipate your contempt, nothing will.
Norfolk should pay attention
to the benefits of having a city manager with a brain and no axe to grind. They save money rather than concoct funds to pay parents when their kids do well on school tests or pay his convicted felon friend a 6 figure salary for a made-up job. The city is only as good as its leader.
School and city staffing
Angel- Chesapeake is by no means the most overstaffed of the area's public school systems, but, for 40K students, there are 29K teachers, plus about 400 other instructional staff, plus non-instructional staff whose numbers I cannot find, but based on the budget percentages, have to be at least 600 (bus drivers, mainenance, etc) That is an employee to student ratio of about 1 to 10, comparable to the elite private school, Norfolk Academy.
Other, less costly, private schools provide equal education to Chesapeake schools with about half the cost and staff.
Chesapeake could easily cut its spending by up to 20% simply by offering vouchers good for $4500 to parents who take their children out of the system and put them in private schools.
Any city in which almost 1 in ten wage earners works for the city is in deep trouble on many fronts.
Let me get this straight
Chesapeake has 12 million dollar surplus in various departments within the city, yet wants to raise lunch prices in the schools.
Hint to school board members:
Elections are coming
If my household funds are short of the budget
In our households if we are short of funds to make the bills, then we cut back on spending. The luxury items are the first to go. Things like subsidize for developers to build "up scale" projects that the areas average incomes cannot buy or rent. Oh and then there is the multitude of unused parks. And here's a good one, $15 million plan for a bicycle path. Hey I know, how about cutting some of the Assistant City Managers jobs, or at least cut their six figure pay by about 20%. I hear all the citizens that are complaining about the high taxes and the artificial increase in property assessments. All these disgruntled people will be voting the same old out of touch politicians back in office the next election cycle. Wake up people! It's time to vote these out of touch has beens out, they are the ones that got us where we are now. Do you really want more of the same?
Surplus?..Right!!
A surplus? In that amount? And you are force feeding students high tech curriculam like "Nail Technolgy"? As an educator you have my absolute "disgust"! To many "fat cats" Chesapeake! Spend it wisely! Spend it on your children!
Thank you William Harrell! What I'd like to know is
who was in charge of the budget process in the years that these departments were accruing these surpluses? These unused funds belong to the people of Chesapeake, not to those department heads. Unused funds should be turned back into the general fund, not saved by some well-intentioned department head. And before any of them get the notion that they should "spend it they lose it", they need to be audited. They must demonstrate a need in order to get the funds and their missions must be well defined. Thank you William!
I know what to do.
Let's build more houses, then tax those houses. :)
Confused
I'm confused. How can a city department have a surplus at the end of the fiscal year? And if there is a surplus at the end of the fiscal year, shouldn't the next year's budget be adjusted accordingly?
Mr. Tabor--as per the teachers...
I am interested in the comment you made regarding the overstaffing of schools. It has been my experience that they do not have enough funding. For example; elementary schools only have art and music one day a week for 45 minutes. PE is only twice a week. The teachers told me that the school does not have enough funding to keep those classes in the curriculum full time like they used to.
That has been my experience, so what do you base your opinion on? I am not disagreeing with you, just wondering what the truth is.
William Harrell is the Boss!
His job is to run the city, and run the city as efficiently as possible. If the various departments have been squirrelling away tax money and the Boss needs it to pay the bills; then he should have it! I'll bet there is not a single department head telling Mr. Harrell that he can't have their stash; and he needs to go to another department to get the money.
U.S. Department of Justice.
U.S. Department of Justice. They are nowhere near national standards.
The City of Chesapeake has overtaxed the citizens long enough. It is ridiculous that the assessed value of our homes has increased 39% in the last three years. This has caused people to move away from the area because Chesapeake is no longer affordable. How many people do you know that have received a 13% raise each year? This excess money has accumulated primarily because we are overtaxed. It should be refunded to the citizens.
I do not think the people of Chesapeake are going to appreciate giving the city workers a raise when they are fully aware they have been overtaxed for years and they are not working to capacity. Wake up Chesapeake.
Spending Money That's Set Aside Seen as Unwise Some Critics
Mr. Harrell is not the best thing that hit Chesapeake. If he was a great manger he would take bolder strides to save our hard earned tax dollars. In the last six months Mr. Harrell has hired 6 people for the outside Chesapeake. He should be promoting within the departments and eliminating jobs in each department. Also, are our tax dollars paying for the move of each of these new employees? Each time I have visited the City of Chesapeake the employees seem to have more time on their hands then they should. I would like to see them be more diverse in their jobs. In the private sector we are responsible to perform at all levels. In our business you can be the accountant, programmer, project manger, program tester, sales and marketing. If one person is too busy, pull another person for the day from another department. You can also cross train people. This will save the city money. Isn’t what the new Budget Director position was created for?
Mr. Harrell does not seem to have a strong grip the diversity ratios. If the figures were accurate in The Virginian-Pilot article “Hires Help Diversify City Leadership” dated April 5, 2008, someone should be reporting Mr. Harrell to the U.S
TIme to return the taxes to the people
The largest employer in Chesapeake is the city. City government, especially the school system, has become overstaffed and bloated during the "good times" of automatic tax revenue growth.
The budget has grown to use every dime the recent run-up in assessments provided, now, with the housing market declining and tax revenues likely to remain static or even decline, it is time for the city to tighten the belt and trim the budget, just like every family in the City must do in lean times.
They knew the automatic increases in tax revenue would not last forever, now it is time to set priorities and cut taxes and spending to fit the times.
Overtaxed Citizens not needed to operate our city. cont'd
Mrs. Willis, voted NO to the Wal- Mart roadway in Edinburgh. My correction.
Overtaxed Citizens not needed to operate our City
The problem in City Hall has been that they are too flush with money. Citizens have been overtaxed on their real estate for about 6 years now. This surplus in funds proves that. If we establish a COLA (cost of living adjustment) real estate tax policy, it will add just enough of an increase to the general fund for council to focus on the core essential needs of operating our city. When there's too much cash in City Hall, you have the tax and spend crowd Hayes, Parker, Willis and Adams who want to subsidize these private developer pet projects with our money like Bell Harbor and the Wal-Mart roadway in Edinburgh. Mr. Harell is doing a fine job, now we have to surround him with five new council members that he will not have to follow behind and clean up their poor financial decisions. VOTE FOR CHANGE. The tax & spend crowd have been in City Hall for too long; let's get Chesapeake back to true fiscal conservative principles.
Makes you wonder....
where all the revenue from all that development went. When we as citizens opposed all the new development we were told by counsel that it would bring in much needed money to the city coffers and we would all live happily ever after. Based on the budget shortfall it seems that the only people that prospered were the developers that took the money and ran! Our city is in far worse shape now then it ever was prior to all this development. Many of those that voted yes to any and every thing the developers wanted are up for reelection, please keep that in mind when you go to the polls! As for the actions of the new City Manager I say bravo but please don't forget where that money came from.
Why does Pilot reporter Saewitz always ask Hayes for comments?
Cliff Hayes is one of the tax and spend democrats on council that has helped create part of Chesapeake's financial problems. There are 8 other members on the council. Perhaps Saewitz should do a little homework and start interviewing fiscally responsible members of council, such as Alan Krasnoff. The record speaks for itself....go look! There should not be "surplus" funds in any department. I agree with Harrell. The money should be used to help offset the bills.
I agree!
With Mr. Harrell. His job is to manage this City. I see Mr. Harrell is doing a good job. The City has all of this surplus in different departments. It is time for this City to start spending our money wisely. With the housing market down our assessments should have gone down? It seems like all Hampton Roads uses our Property tax assessments to bail them out each year to balance the budget. This should be a wake up call for Chesapeake. All of this tax and spend has caught up with them, and Mr. Harrell is fixing the problem. He is trying to spend our money wisely. Lets give him a chance. He is the best thing to hit Chesapeake in years!! Good job Mr. Harrell and thank you!!
Its not their money
Taxes belong to those that paid them - stashing tax funds that are not required to fund annual operations isn't a "right" of city departments - it is not "their money", it is money taken from citizens and that the elected City Council is supposed to oversee.
End slush funds.
Spend less.
Spend less.
Great Idea!
I think the City Manager is on target. Revenue is revenue and for those demanding it be returned/refunded to the taxpayer, it would cost more to print and mail the checks than it is worth. That would be a waste of tax dollars and this way, the taxpayers get services for their money.
The City of Va. Beach would be wise to follow the Chesapeake Manager's process.
Real Estate
Thats why our our real estate taxes increased in a time when people are having prolems just getting the tax value from a sale.
too much money taken in taxes
give it back to the people who paid taxes.