Virginia Beach City Council Votes to Adopt Revised FY2023-24 Budget

On May 9, by a vote of 8 to 3, the Virginia Beach City Council adopted the revised FY2023-24 Budget and Capital Improvement Program (CIP).

The approved Operating Budget maintains all baseline services despite recent inflation and does so without any rate increases in major revenue sources such as Real Estate or Personal Property taxes.

In response to input from residents, the City Council recommended several changes to the budget originally proposed by City Manager Patrick Duhaney on March 21. These include:

• Reducing the real estate tax rate for surviving spouses of military service members who died in the line of duty be reduced to $0.000001(one millionth of one cent) per $100 of assessed value. This reduction in revenue will be fully absorbed by the General Fund and will not be shared with Virginia Beach City Public Schools.
• Reducing the Sandbridge Real Estate tax rate by 1¢ (making the new rate $1.00 per $100 of assessed value – the 99¢ citywide base tax rate and the 1¢ SSD tax rate). The lost revenue will be offset through an equivalent reduction in the Sandbridge SSD's reserve for contingencies. This reduction in tax revenue is not anticipated to negatively impact the sand replenishment cycle.
• A re-evaluation of the actual revenue collections for Business, Professional, and Occupational License (BPOL) tax compared to the budgeted estimates for both FY 2022-23 and FY 2023-24 with the intent of identifying options for amending the threshold for businesses beginning in January 2024 if updated projections reflect higher than budgeted estimates. If capacity exists, the options should be budget neutral and not necessitate a need for a reduction in expenditures.
• The City Manager shall provide a report to the City Council regarding the real estate surcharge within the Town Center Special Service District (SSD), providing options on amending the existing tax rate within the district to ensure residential and commercial properties are equitably charged for the level of enhanced services they receive through the SSD.

Other than these reductions, there will be no change in the City's real estate or personal property tax rates, which both remain the lowest rates in the region.

Supporting the Local Community

Additional amendments to the proposed budget include one-time regional grants to a variety of local community partners in order to enhance the quality of life throughout the City from the Hospice House of Hampton Roads, to the Parks & Recreation Foundation for improvements in Seatack and Bay Colony, to the Up Center's Cohen Military Family Clinic and more. City Council also increased the budgeted line item for the Community Organization Grants (COG) program and the Arts and Humanities Commission grant program. These increased contributions will l allow the committees to award additional grants to non-profit organizations that apply next year. View the full list of grant recipients and total awards here.

Several additional items were also amended during the reconciliation process to better align resources with community needs. These changes are within Human Services, the Department of Housing and Neighborhood Preservation and Virginia Beach City Public Schools.

• Ten part-time positions in Human Services' Developmental Services Division were converted to five full-time positions to improve efficiencies and ensure critical services are being provided. This change won't impact the operating budget but will improve service delivery to vulnerable populations. The recently reported vacancy rate is approximately 26%, which significantly impacts workloads, service quality and the overall ability to provide care.
• The Department of Housing and Neighborhood Preservation has been notified of their award from the federal Department of Housing. This amount is $434,843 greater than the amount estimated within the City Manager's Proposed Budget and will be used for increased contracted manpower and overall programmatic support.
• At their March 7, 2023, meeting, the School Board approved an additional $4,017,393 in estimated state revenue to the School Operating Budget. Due to the timing of this addition, it was not incorporated within the City Manager's Proposed Operating Budget. Though the Commonwealth has not yet adopted a budget for the upcoming fiscal year, this amount is closely in line with the budget as proposed by the House of Delegates. This estimate was approved by the City Council, and once the Commonwealth adopts a budget, additional changes to state revenue may be necessary.

Additional Allocations

Other proposed budget additions include a $75,000 contribution to Emergency Medical Services' earmarked for the Volunteer Rescue Squads to help with recruitment, retention and operations, $1.1 million for more body cameras for Sheriff's deputies within the CIP, $20,000 for portable restrooms (one of which is ADA compliant) on the western portion of the bayfront and $380,000 for park enhancements in Birchwood Malibu, Oak Springs and Pine Meadows Parks, among other items.

Modifications to the Capital Improvement Program

One major change to the CIP will involve updating the Shore Drive Corridor Plan. The previous plan has not been updated in more than 20 years (since 2000) and the update will involve community input on future redevelopment within the corridor. The project will be funded by existing appropriations within Project 100399 "Strategic Development Projects."

For a detailed list of all recommended changes outlined in the 2023-2024 Resource Management Reconciliation Letter as well as specifics concerning funding sources and appropriation adjustments.

Review the original proposed FY 2023-34 Operating Budget and Capital Improvement Program.