Norfolk budget calls for cutbacks, no layoffs

NORFOLK

The city will avoid tax increases and layoffs under the $1.17 billion budget City Manager Regina V.K. Williams proposed Tuesday, even though Norfolk's general operating revenue has shrunk for the first time in 16 years.

Williams' proposed budget calls for little new spending and cutbacks in many areas.

In return, the average homeowner would for the first time in decades see a slight decrease in real estate taxes. Residential real estate assessments will decline 1.35 percent and Williams has proposed keeping the real estate tax rate steady at $1.11 per $100 of assessed value.

Under her budget plan, which the City Council will finalize on May 19, property owners will be faced with long-scheduled increases in water and sewer rates. Homeowners also could see a monthly increase of about $11 for garbage collection, because of rate changes expected to be approved next week by the regional trash agency.

Norfolk's revenue forecast includes a $6 million increase in real estate tax proceeds, with all of the gain coming from commercial real estate and newly constructed homes. State aid and other revenues, such as sales tax proceeds, are projected to decline over the next year.

With revenues decreasing, Williams has included few new projects or funding increases in her budget, which takes effect July 1. Her proposal allocates $350,000 in additional money for Festevents to provide programming to revive Waterside, the ailing waterfront entertainment complex.

Williams also has put aside $375,000 from this year's budget to make physical improvements to Waterside.

Williams said 64 positions, nearly all vacant, would be eliminated to cut costs. Several employees would be reassigned, she said. Nearly half of those jobs are in recreation, neighborhood preservation, cultural facilities and libraries.

In addition, all employees would receive three unpaid furlough days, amounting to a 1 percent pay cut that will reduce the average employee's pay $442 per year. Salaried administrators will be "strongly encouraged" to work on their furlough days, Williams said.

In exchange, the city will pick up health insurance cost increases for employees, saving an employee with a family $1,531 per year.

Mayor Paul Fraim acknowledged the pay reductions will be painful but said declines in state funding and local tax revenues give the city no choice.

"We're doing the very best that we can," he said. "Under the circumstances, everyone is going to be expected to share in the pain equally.

"Schoolteachers ought to be paid more. So should our firemen and policemen. But there's a balancing act we do annually with the city's ability to pay."

Aid to the school system was reduced by $3.5 million to $101 million, but Williams said the school budget likely will increase slightly, thanks in large part to $12.1 million in federal stimulus funds.

Williams also cut in half the amount Norfolk planned to borrow for the proposed $100 million courthouse project, slashing this year's capital spending plan on the courts from $40 million to $20 million. Fraim said that will not delay the project, which will provide the Circuit, General District and Juvenile and Domestic Relations courts with new quarters in two buildings.

"It's not a breach of faith or a loss of commitment," Fraim said. "With the financial situation the way it is, I would hope everyone would understand why we have to do that."

Construction on the first phase of the courthouse project is scheduled to begin in July of 2010, Assistant City Manager Stanley A. Stein said.

Harry Minium, (757) 446-2371, harry.minium@pilotonline.com