MINUTES OF BUDGET PUBLIC HEARING

OF THE NEWPORT NEWS CITY COUNCIL

HELD IN THE MARY PASSAGE MIDDLE SCHOOL AUDITORIUM

400 Atkinson Way

April 26, 2007

PRESENT:       Sharon P. Scott; Joseph C. Whitaker; Charles C. Allen; Herbert H. Bateman, Jr.; Joe S. Frank; William Haskins; and Madeline McMillan---------------------------- 7

ABSENT:         None ---------------------------------------------------------------------------------------- 0

                        Mayor Frank advised this was the second of two public hearings that City Council was conducting on the City Manager’s Fiscal Year 2008 Recommended Operating Budget.  He advised public hearings were a process in which citizens were asked to provide comments on the proposed budget and share concerns with regard to government spending.

                        Mayor Frank asked City Manager Randy Hildebrandt to provide a brief overview of the FY 2008 Recommended Operating Budget.

                        City Manager Hildebrandt stated the total budget being recommended for Fiscal Year 2008 represented an effort to achieve a balance between the need to provide property relief to Newport News’ property owners already overburdened by double-digit real estate assessment increases and the need to continue the City’s efforts to meet its core operating requirements that supported services historically provided to citizens.  Most specifically, the budget achieved a $0.06 reduction in the real estate tax rate, while at the same time supported a responsible and sustainable spending plan. 

                        City Manager Hildebrandt stated General Fund expenditures for FY 2008 increased by $28 million, which was a 7% increase over the FY 2007 budget, and included a 7% increase in local funding for Newport News Public Schools.  While the City had retained and reduced costs where possible, the City had resisted the temptation to defer known reoccurring costs to future years or put off maintaining replacing its capital assets. 

                        City Manager Hildebrandt highlighted several major items that accounted for most of the increase in the City’s budget: (1) the City’s contribution to Schools to cover employee raises and other modest operating costs; (2) a 4% wage increase for City employees; (3) funding to reach a composite contribution rate of 6% by FY 2009 for the employee pension fund; (4) funding for increased fuel, utilities and other supplies; (5) funding for replacement of City vehicles and Information Technology assets; and (6) funding for certain recurring items in the Capital Improvement Program with cash instead of issuing debt.

                        City Manager Hildebrandt stated increases in stormwater fees, sewer user fees and water rates could not be avoided in FY 2008.  He explained, while water rates would increase 5% for most customers, the implementation of a new Waterworks billing system and the life-line water rate structure allowed customers using a minimum amount of water to experience no rate increase.  The cumulative effect of the fee increases would be an added expense of $38 per year for the average homeowner.

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                        City Manager Hildebrandt stated that all citizens had a stake in the FY 2008 budget, both as taxpayers and as recipients of City services.  He and his staff worked very hard to develop a financial plan that stroked an appropriate balance between tax relief and the maintenance of core services.  Because of the constraints placed on the City by State law it must rely heavily on real estate taxes to finance a significant portion of school and municipal operations.  As such, the City had little or no flexibility to raise revenues from other sources, especially those tied to the ability to pay, i.e. income tax.  He stated many positive changes were occurring in Newport News as a result of public investments by City government.  Newport News citizens currently received a wide array of quality public services.  His FY 2008 Recommended Operating Budget assured that both City government and the School division could continue providing these services efficiently.

                        Mayor Frank advised on May 1, 2007 City Council would hold a Work Session at 3:00 p.m. to discuss the comments, suggestions and recommendations from the public and communicate its desires and concerns to the City Manager.  He advised on May 8, 2007 City Council planned to adopt the Newport News Public Schools (NNPS) Operating Budget, and, hopefully, the City’s Operating Budget.  The last legal adoption for the NNPS budget would be May 15, 2007 and June 15, 2007, for the City’s Operating budget.

                        Mr. John D. Buckley, 905 Lake Forrest Drive, Newport News, stated citizens were suffering because of real estate taxes and increased property assessments.  He asked City Council to come up with alternatives for senior citizens on fixed incomes to keep their homes, and balance the budget for citizens to survive.  He commented unfavorably about the adoption of the resolution establishing the Hampton Roads Transportation Authority at the April 10, 2007 Regular Meeting of City Council.  He inquired why a Public Hearing was not held prior to Council’s vote to adopt the Authority.

                        Mr. John McMillan, 43 Ridgewood Parkway, Newport News, former member and Chairman of the Newport News School Board and current member of the Newport News Educational Foundation, spoke in favor of the portion of the City’s FY 2008 Recommended Operating Budget for the school system.  He explained the Educational Foundation was a diverse group of citizens, business, military and community leaders who supported NNPS’s efforts to prepare students for the world of work.  Members of the Foundation brought expertise in business, education and industry, as well as skills in community and military leadership.  The Foundation worked with the school division to improve the educational opportunities for students.  He stated NNPS’s effort to maintain competitive salaries, relative to neighboring school divisions was commendable and their approach to accomplishing this, within a constrained budget environment, demonstrated fiscal responsibility and accountability.  NNPS reduced positions based on decreases in student population, cut 10% across the board of non-personnel related items and deferred vehicle and technology upgrades.

                        Mr. David Irby, 18 Davis Avenue, Newport News, urged City Council to reduce the real estate property tax rate.

Mr. L.T. Vaughan, 595 Snug Harbor Lane, Newport News, member of RETRO,

urged City Council to cut spending and reduce the real estate property tax rate.  He stated ordin-

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ary working citizens needed relief on property taxes.  Many citizens were struggling with the City’s tax burden to keep their homes, as well as young people trying to buy starter homes.  Tax increases were not just hitting wealthy homeowners, but were hitting the working class, retired citizens on fixed incomes, and renters.  Money spent on taxes meant less money for discretionary spending which hurt local business.  He suggested that the City Manager cut City department budgets by 4%, use City staff to study projects rather than hire expensive consultants, stop promoting City Center, cut City travel and printing costs, limit City private enterprise partnerships, reduce the real estate tax rate to $1.00, and slow down on spending.

                        Mr. William E. (Bill) Bradley, 263 Shoe Lane, Newport News, born and raised in Newport News, expressed his disappointment in City Council adopting the legislation for the Hampton Roads Transportation Authority, without seeking public comment. He stated transportation should be financed by people who use it.  He urged City Council to make the General Assembly finance transportation with fees and tolls on gasoline and diesel fuel rather than on the backs of homeowners.  He reported his assessment went up $100,000 in the past three years, which amounted to a 67% increase.  He asked City Council to reduce the real estate property tax rate.

                        Ms. Mary Raney, 119 Selden Road, Newport News, spoke in favor of restricting government authority to take private property via eminent domain for private development.  She stated the reason for increased taxes was due to development in Cities imposed by eminent domain legislation.

                        Mr. James Harry Howard, 629 Haystack Landing Road, Newport News, commented on the NNPS’s budget, and felt throwing more money to a problem was not always the solution to the problem.  He noted his objection to the City’s unfunded liabilities regarding defined benefits versus defined contributions.  He urged City Council to move fast forward in changing the City’s defined benefits for City employees.  He felt the healthcare issue needed immediate attention.  Mr. Howard felt the North District Community Center should be put on hold, as well as further development in City Center.  He asked City Council to consider the needs of the citizens and their ability to pay for debt.

                        Ms. Arva Davidson, 13 Howard Court, Newport News, NNPS employee, and Vice Chair of the Hampton-Newport News Community Services Board (CSB), commented on the services provided by the CSB and asked City Council for their continued support.  She reported the CSB created the first comprehensive outpatient licensed psychiatric crisis stabilization unit in the Commonwealth, in partnership with Riverside Behavioral Health Center.  She reported the CSB was awarded additional funding from the General Assembly for the creation of the first psychiatric long-term care pilot program targeted to the aging population currently underserved by regional nursing homes.  Ms. Davidson stated the CSB must have sufficient local tax support to maintain the level and array of services the citizens of Newport News had come to rely upon.  She asked City Council to approve the CSB’s requested funding increase for FY 2008, and reminded that each local tax dollar went to support citizens of Newport News who did not have adequate healthcare or other resources.

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                        Mr. Bland Burcher, 6 Walters Road, Newport News, 72 year old, born and raised in Newport News, noted his concern regarding extremely high property assessments that increased in the past eight years.  He shared his purchase of two lots on March 28, 1985 for $36,000, and indicated the assessments were normal until 2002.  He reported his real estates taxes were $3,476 in 1998 and $8,105 in 2006 which amounted to an increase of 141%.  In 2007 his lots went up 71%.  Mr. Burcher stated that he purchased his lots, to live on through his retirement years, not as investments.  He suggested that the City do away with street cleaning, reduce trash pick-up and recycling from every week to every two weeks, have departments cut their budgets, require employees to pay a percentage towards their retirement or extend the retirement age, etc.  It was time to do decrease the City’s budget obligations in order to reduce the real estate property tax rate to a reasonable figure. 

                        Mrs. Pat Burcher, 6 Walters Road, Newport News, reminded of how fortunate citizens were to live in a democracy where they could voice their opinions and elect their leaders.  She was a 32-year veteran of real estate and a life-time member of the Virginia Association of Realtors.  She stated that in her work to help families find homes, a first consideration was whether they could afford a home and pay the taxes.  She was irritated that many families had preconceived notions that the only places to live in the Hampton Roads region were York County, Poquoson, and Williamsburg.  She lived in Newport News all her adult life where she raised and educated three children.  She and her husband worked very hard, over the years, to keep their properties in good shape.  She stated it was unfortunate that many senior citizens would have to look at other places to live because of taxes.  She believed City Council represented the entire community and wanted the best for the citizens.  She appreciated anything City Council could do to reduce the tax burden on homeowners in Newport News. 

                        Mr. Terry Savage, 101 Cherry Creek Drive, Newport News, noted his respect for the work of City Council, but indicated he could not afford to pay the increased taxes imposed upon his home.  He refused to put his family further into debt by taking out a loan or charging a credit card to pay for increased taxes, only to see it wasted in overspending and handouts.  The proposed tax rate was too high and tax relief was not simply lowering the amount of the increase, but eliminating it altogether.  Citizens could not continue to support the aggressive spending habits of the City.  He asked that the aggressive growth be slowed to an affordable level.  He found in four pages of the proposed FY 2008 budget $1.4 million in savings, which did not cut funding for organizations that assisted or otherwise helped to save the lives of the less fortunate.  He did support the funding that reduced ticket prices, i.e. $200,000 for the FY 2007 – 2008 season requested to offset the differences between the costs of presenting internationally recognized artistic performance in affordable priced ticket sales. He suggested taking such savings to offset the rise in teacher homes so that the raises they received truly were raises and not just a shift in City funds from one account to another.  Mr. Savage stated that Newport News taxpayers would no longer afford nor were they willing to finance unnecessary big ticket items, pet projects, special funding and handouts.  Citizens would no longer be intimidated by threats to cut services, i.e. the school budget each time taxpayers made a noise about cutting spending.  It was the government’s responsibility to provide these services to the citizens, not use them as leverage to maintain its spending habits.   He noted his disappointment in City Council’s vote for the Regional Transportation Authority, and asked the City Attorney to look into the legality the vote.  Mr. Savage urged City Council to rescind the vote to allow the voters the

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opportunity to vote on the regional transportation plan. 

Mr. Jimmy Piver, 37 Twig Lane, Newport News, stated that he no longer considered Newport News a family-friendly City.  He stated middle income people could not afford to live in Newport News.  The wages from employers in the area were not keeping up with the City’s tax increases.  He lived in the Stoneybrook area and noted residents were moving to Smithfield, Franklin, etc. because of real estate taxes.  Mr. Piver stated Newport News had become a socialist republic.

                        Ms. Jamie Starkey, 42 S. Madison Lane, Newport News, resident of Merry Point Estates, complained about the overwhelming reassessment of her home.  She stated resident’s incomes were not keeping pace with rising real estate property taxes.  She stated City Center was a great idea, but average residents could not afford to eat or shop there. Ms. Starkey felt the best way to promote Newport News was by having residents who were proud to live in Newport News.  Once residents were proud of their homes, schools and government, City Council could promote Newport News as a great City to live in, which would be heard throughout the region. 

Mrs. Carole Carkhuff, 197 Revelle Drive, Newport News, expressed disappointment with the Beechmont traffic calming project. She felt the completed project should have a visual calming affect; however, she did not believe it to have such.  She invited City Council to review the construction along the roadway.  She noted $7 million in the FY 2008 budget for traffic calming measures in the Beechmont area was too expensive and unnecessary.  Ms. Carkhuff felt stops signs could have cost the City a lot less.  She asked that City Council be more vigilant in the future about traffic calming initiatives.  She was proud to live in the North District and noted that the population in the North District generated very high tax revenue for the City, to include the airport and the many shopping areas between Oyster Point and Fort Eustis Boulevard.  She felt the North District needed a Community Center as other districts had.  She asked City Council to spend taxpayer money appropriately and lower taxes. 

                        Mr. James W. Rickard, 111 Tazewell Road, Newport News, disabled Vietnam veteran, shared he purchased his home for $17,500 37 years ago, which now had a property assessment of $202,000.  He stated he raised six children, who graduated from Denbigh High and had worked as a Scout leader and Scout Master for 18 years.  Mr. Rickard stated that each of his children had left the City of Newport News because the cost-of-living was too high.  He understood it took money to operate a City of this size, but felt there were many ways the City could save money.   Mr. Richard shared his assessment history: 

                                    Year                             Property Assessment

2002                                                                                  $84,700

2003                                                                                  112,000

2004                                                                                  119,400

2005                                                                                  143,700

2006                                                                                  165,100

2007                                                                                  202,000

Mr. Richard asked City Council to look into what could be done to adjust the budget in order to give citizens relief on their taxes.  He expressed a willingness to assist in the process. Mr. Richard

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further asked that City Council not cut the budgets for the Schools, and the Police and Fire Departments.

                        Mr. Jim Diego, President of Newport News Professional Firefighters, stated his main concern was the retirement fund.  He stated the Firefighters Association was concerned that budget cuts and changes in compensation and retirement benefits would affect all citizens, including the Fire and Police Departments.  Historically, Newport News was one of the lowest paid Fire Departments in the region, which the retirement package made up for.  The Newport News Fire Department trained people to the highest level in the region, but no one could compare to Newport News’ benefits package.  Mr. Diego stated he may agree with everything done by City Council, but noted they had always supported public safety.  He asked citizens to realize they received the best possible service in the region and that the men and women that he represented put their lives on the line; yet citizens were asking that their retirement packages be changed.   He felt that was not fair to firefighters.  He understood the high tax rate and agreed the rate could be lowered, as, too, was a taxpayer.  Mr. Diego stated the services provided to citizens by Fire and Police Departments were top-notch and indicated citizens should be proud of both departments.  He warned that Newport News could loose many qualified people if the retirement package was reduced.  He and his command staff had come up with ideas and made suggestions for the benefits and retirement program, and felt it unfortunate that the City Manager could not meet with him to discuss these suggestions.  Mr. Diego felt the benefits package was fair to the citizens, as well as the Fire and Police personnel. 

                        Ms. Ann Francis, 295 Curtis Tignor Road, Newport News, Board Member for the Newport News Educational Association and Newport News homeowner, stressed the importance of an excellent school system in Newport News.  She shared the following discouraging facts learned at the Virginia Educational Association Convention held in Virginia Beach:  (1) Virginia was the seventh wealthiest State in the nation, but ranked 38 in State support for schools; (2) teacher salaries in Virginia were $2,000 below the national average; (3) The State of Virginia hired over 7,000 new teachers each year; and half were from other States who came to Virginia to get experience, only to return to their home States to earn significantly higher salaries that would factor into a better retirement; (4)  Fifty percent of teachers in the United States planned to  retire within the next five years; and (5) Fifty percent of new teachers hired leave the teaching profession within the first five years.  Ms. Francis hoped that City Council would provide the money requested by the School Board for teacher raises.  She urged City Council and the citizens of Newport News to continue lobbying Virginia legislators to ensure they made decisions for the benefit of all families.  Ms. Francis urged City Council curtail the spending of local taxpayer monies.  Newport News needed to continue attracting educators to the City in an effort to continue educational growth.  She reminded that affordable housing, good schools, and community services attracted new families to Newport News. She noted the following quote: “Teachers have not chosen the wrong profession; they simply want to be treated as professionals.  Schools create our future leaders and citizens.  Society, unfortunately, has chosen the wrong heroes.”

                        Ms. Rhonda Rhodes, 8 Creekpoint Cove, Newport News, presented City Council with information about her financial status and how she struggled to pay her real estate property taxes.  She offered the following personal information: (1) worked as a teacher for twelve years;

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(2) drove a ten year old vehicle; (3) average salary totaled $45,000; (4) take home pay totaled $2,400; (5) no children or dependents; (6)  purchased home in February 2003 for $114,900, which amounted to a monthly payment of $720; (7) home was assessed at $194,000 in 2007, which amounted to a monthly payment of $997; (8) FY 2007 assessment increased by $30,000;  (9) one electrical outlet was the only improvement made to her home; (10) had no credit cards; (11)  average monthly savings amounted to $5.38; and (12) $600 was her average amount of monthly discretionary income.  Ms. Rhodes indicated if she exceeded her budget, she went without. She questioned why the City could not go without in order to decrease the operating budget.

                        Mr. Pat Murchy, 160 Edsyl Street, Newport News, felt it was disgraceful of City Council to approve for the Regional Transportation Authority. He reminded that the City Manager worked for the citizens, and inquired why he could not cut his budget if citizens had to cut their budgets.  Mr. Murchy stated that $1.14 per one hundred was too high and asked that the City Council reduce the rate.  He shared that his assessment had increased by $91,000 in the past three years.  He indicated he might have to sell his home; and if so, he would devote every penny to removing each member of City Council from office.

                        Dr. Guy Levy, 463 Cheshire Court, Newport News, stated he did not envy City Council’s position, and noted he served on the Newport News Educational Foundation and the Framework for the Future Committee.  He asked City Council for their continued support of NNPS.  He suggested that the citizens lobby the Legislature of the Commonwealth urging the equitable distribution of funds so that urban areas could meet the needs necessary to have a good quality of life.  Dr. Levy spoke favorably about the high bond rating for the City, which decreased the City’s cost to finance necessary expenditures.  He hoped for a time when City assessments were lowered and the City could still provide all the services it enjoyed.

                        Mr. Ken Hodge, 1813 Ebb Cove Court, Newport News, addressed the issue of real estate property assessments.  He stated the problem was not with the assessments, but with the real estate property tax rate associated with the assessment.  He referenced a requirement by the Code of Virginia, that all municipalities, whenever there was an assessment increase, make the assessment revenue neutral to the tax rate, e.g. when there was $1.20 per hundred tax rate, and if the new assessed valued raised the rate of tax revenue to the City by an increase of 1% over the previous year, an automatic readjustment must occur, which should amount to $1.04 per hundred.  He expressed concern regarding the City Manager’s Budget message, which stated where there was a reduction in the tax rate from $1.20 to $1.14 per hundred, when the automatic readjustment should be $1.04 per hundred, and must be voted on.  He further expressed confusion by the statement that the overall revenue from real estate tax due to reassessment would be less than 8% of the budget.  The proposed $1.14 was an 8% revenue increase over the FY 2007 budget, yet it was clearly stated that the total budget would increase to 6.5%.  Mr. Hodge understood this to mean that the City Manager asked for more money from real estate tax increases than the entire increase in the City budget.  Mr. Hodge did not feel that the citizens had been honestly informed, being given a tax increase of approximately $0.09 when considering the mandate from the State of Virginia that it be revenue neutral to the extent it exceeded 1%.  He quoted his father who said “numbers don’t lie, but liars use numbers.”

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                        Ms. Romonia Lynch, parent, taxpayer, and teacher/librarian of NNPS, 404 Maureen Drive, Newport News, stated the City of Newport News needed to employ quality teachers in an effort to maintain and exceed State and National student standards.  She stated that teachers had a choice about where they want to work because of the competition around surrounding school districts; and in order to keep quality teachers, a competitive pay scale was necessary.  There seemed to be a mass exodus of qualified teachers leaving NNPS because they were not being compensated for their commitment and dedication.  Ms. Lynch indicated this may lead to the system hiring inexperienced and unqualified teachers.  She urged Council’s consideration and support for the NNPS budget.

                        Ms. Donna Grubbs, President of the Executive Board, Newport News Council of PTAs, 26 Claiborne Place, Newport News, thanked teachers in the NNPS, and City Council for creating a proposed City budget which provided necessary funds to keep NNPS moving forward to strive for excellence.  Ms. Grubbs, on behalf of the Newport News Council of PTAs, expressed support for full funding of the proposed FY 2008 NNPS Operating budget.

                        Ms. Laura J. Irby, 18 Davis Avenue, Newport News, referenced a referendum in 2002 where the citizens voted against a regional transportation authority with taxing ability.  She stated the increase in taxes had eaten up the Mayor’s political capital.  Ms. Irby reminded that Newport News was built on the backs of blue collar workers.  She urged City Council to cut things not needed, i.e. a transportation authority.

Ms. Carla Ashby, 135 Stage Road, Newport News, stated she did not mind paying her share of taxes, but was upset in the increases over the past few years.  She questioned how the City was planning to fund the City budget before anyone had a notion of how property assessments and corresponding property taxes would skyrocket.  When taxes rise too quickly for residents to afford, the City will notice that homes and neighborhoods would be less cared for.  She further stated that some residents, particularly those on fixed incomes, would be taxed out of their homes.  Ms. Ashby stated for the 2000 assessments to be calculated based on home sales which occurred prior to June 1, 2006, to mean the assessments were based on home sales between July 2005 and June 2006, when the market was hot, which was a disservice to the residents because the housing market had since leveled off.  An offset in the tax rate would be greatly appreciated.

Mr. Rick Donaldson, NNPS Board Chairman, 111 James River Drive, Newport News, thanked City Manager Hildebrandt for his support of the School Board Budget, as well as participation on the School Board Budget Committee, and the healthy dialogue between City Council and NNPS throughout the process.  Mr. Donaldson stated the NNPS Board Budget represented a 3% increase above the FY 2007 budget, and eliminated 45 teaching and staff positions, representing a savings of $2.3 million.  Each central office department was directed to cut 10% from its non-personnel budget.  He further advised that the budget deferred major items such as fleet vehicle replacement and technology upgrades.  Mr. Donaldson pointed out that the budget included non-negotiable increases of $3.5 million to cover additional state and local retirement fund charges, $1.2 million in additional utility rate increases, $600,000 in additional debt service, and $300,000 to support special education students at New Horizons.  Priority #1 in the budget was to support competitive teaching salaries. The FY 2008 Recommended NNPS

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budget would give teachers a 5% salary increase, and would provide a 3% salary increase for other employees.  He encouraged City Council’s support for the full funding of the NNPS budget.  Mr. Donaldson expressed disappointment in the acrimony that some of the citizens used as he was aware of the commitment and dedication by members of City Council.

Mr. Neville Pearson, 44 East Governor Drive, Newport News, twenty year retiree, inquired about responsibility for the City’s large deficit.  Mr. Pearson shared that his taxes

had increased 20%.  He stated that the citizens had been given no relief and felt that he had not received better service.  Mr. Pearson thought money would be better served to hire more police officers and fire personnel as opposed to paying someone to start a business in the City that was of no benefit to the citizens.  He expressed opposition to the regional transportation plan; particularly since citizens were not given an opportunity to provide input on the matter.

(RECESS:  9:30 p.m. – 9:40 p.m.)

Ms. Cary Nunnally, representing RETRO, 9 Hilton Terrace, Newport News, stated that the assessments must be adjusted, and did not reflect reality.  She advised that members of RETRO loved Newport News, wanted to stay in Newport News, and desired affordable homes.  She urged City Council to lower the real estate property tax rate to $1.00 per hundred.  Ms. Nunnally noted that no citizen had voiced support of the regional transportation plan.

Ms. Tricia Stall, candidate for Senate of Virginia, 804 Riverside Drive, Newport News, expressed opposition to the unelected taxing authority disguised as a transportation plan.  She reminded that the citizens voted this scheme down in November 2002 and stated it was not wanted now.  Ms. Stall advised that State spending had increased 52% in seven years, and local spending had increased over 70% from 1999 to the present.  She stated that City Council should work just as hard to reduce the appetite for more revenue as it had to dispense earnings and taxes. She further stated that higher taxes had a way of rewarding government’s mismanagement.  She requested that City Council lower the real estate property tax rate to $1.00 per hundred.

Ms. Becky Tuzzolo, 307 Riverside Drive, Newport News, urged the citizens to share their voices with City Council, and stated the Daily Press did not publish enough information to educate the citizens of the City.  She stated that citizens were suffering by the City’s overspending, and urged the City to cut back on new projects, in an effort to get the situation under control.  Ms. Tuzzolo expressed support for the NNPS, additional pay for police and fire, and requested that City Council lower the real estate property tax rate.

Mr. Anthony Starkey, 42 Madison Lane, South, Newport News, shared that his property assessment increased 82% during the past three years, with the tax rate only declining by approximately 3% per year.  It was his belief that a serious error was made in the value assessments, and discussed the tax rate. He urged City Council re-evaluate the FY 2008 City Manager’s Recommended Operating Budget, which reflected an expectation to collect nearly $220 million in property taxes, and double the amount collected three years prior.  Mr. Starkey offered his assistance to recalculate the tax rate and trim the budget.

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Mr. Jim Cumming , 719 Kensington Drive, Newport News, stated the City budget and tax rate issue was about sacrifice and responsibility and Council expected the citizens to make sacrifices and take responsibility for the City’s overspending and poor financial management, to pay for a $212 million pension shortfall, a $530 million debt caused by overspending and support to private developers.  He advised that the citizens did not create these problems.  He further advised the way to fix the problems were to stop spending, reduce expenses, reduce the generous benefit packages, make cuts in City personnel or tax the citizens.  Mr. Cumming stated that City Council’s proposed plan of action was to continue to tax the citizens unmercifully.  Upon review of the budget, he saw very little sacrifice by the City.  Mr. Cumming stated that the attitude of City Council should be to find ways to cut taxes each year rather than increase them, to make the necessary sacrifices and take responsibility for the budget issues created by them and their predecessors.  He urged City Council to cut the tax rate.

Mr. Stephen Ross, retired resident of Newport News and owner of two houses, 204 Captains Lane, Newport News, shared that his real estate property tax assessments had increased by $60,000.  He agreed and understood it took money to operate a City.  Mr. Ross felt the real estate property tax would need to be reduced to nearly $1.00 per hundred to neutralize the assessments, which did not reflect the value of properties.

Mr. John Gergely, 449 Winterhaven Drive, Newport News, reviewed the Expenditures, for cuts, in the FY 2008 City Manager’s Recommended Operating Budget, in community support, which totaled nearly $8 million.  He referenced the requests which included: (1) $200,000 for the Ferguson Center; (2) $353,000 for Jamestown 2007 events; (3)  $278,000 for Newport News Art Commission’s support for the performing arts; (4) $55,000 for the Newport New Public Arts Foundation; (5) $105,000 for the Peninsula Fine Arts Center; (6) $59,000 for Sister Cities; (7) $62,500 for the Virginia Air and Space Center’s Capital Improvements; (8) $600,000 for the Virginia Living Museum; (9) Hampton Roads Film Office; (10) $25,000 for James City County Transit service from Newport News to Williamsburg; (11) $23,000 for Newport News Crime Watch; (12) Peninsula Stadium Authority; (13) $2,700 for Real Estate Tax Reimbursement Program;  (14) Hampton Roads Economic Development Alliance; (15) Hampton Roads Partnership; (16) Hampton Roads Planning District Commission; (17) Hampton Roads Economic Development Alliance; (18) Hampton Roads Planning District Commission; (19); Hampton Roads Municipal Construction Standards; (20) $400,000 for Hampton Roads Transit.

Dr. Ashby Kilgore, Interim Superintendent, NNPS, echoed remarks by Chairman Rick Donaldson, stating that the FY 2008 budget requested only 3% more than the FY 2007 budget.  In an effort to limit the amount of increases, 45 positions were cut, non-personnel budgets were cut, as well as the deferral of various needs.  She reiterated these cuts were made to maintain the emphasis on competitive teacher salaries. Dr. Kilgore shared a few of the successes as evidence of the work performed by teachers in the past few years, i.e. increase in reading scores; closure in the gaps of achievement between various groups; 650 seniors earned dual-enrollment credit; 2007 College Board Inspiration Award by Denbigh High School, and naming of Saunders Elementary School as 2007 Title I Distinguished School by the Virginia Department of Education.  She urged City Council’s support for the full funding of the FY2008 NNPS Budget.

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Dr. Angela Herring, 11 Digges Drive, Newport News, stated that the real estate property taxes were making living in Newport News prohibitive.  She was told that residential real estate tax was the largest source of revenue for the City’s budget and therefore expected core services.  She indicated that property assessments had skyrocketed as the cost of housing had risen, but the tax rate had not been adjusted down to create a moderate increase in revenue.  She further stated that the City took in more revenue, spent more, and put the City in more debt, by asking citizens to pay the bill generated for wants, such as the City Center, Ferguson Center, which did not benefit Newport News monetarily. Dr. Herring suggested that no more money be spent on City Center, or legal expenses to push for the King William Reservoir, or $200,000 for the Ferguson Center.  She urged that City Council stick to core services, and a reduction in the real estate property tax rate to $1.06 per hundred or less.

Ms. Ruthann M. Williams, 121 Saint Stephens Drive, Newport News, addressed the Council decision to approve a condominium project, Windy Knolls, to be constructed in the community adjacent to her Warwick Lawn neighborhood.  She stated that at least 264 vehicles would empty out on Bland Boulevard and Campbell Road.  She offered her house for $100,000.  Ms. Williams, had filed freedom of information requests, and stated from July 2003 to June 2004, the City spent $679,945.08 for local government members and city employees to travel.  She felt this was an area that could be cut.  She inquired about citizens taking tax money and putting it in escrow until tax rates were reduced.

Mr. Timothy Widlaki, a small paint contractor, 301 Wendwood Drive, Newport News, shared the various fees and taxes required to operate a business.  He indicated that the City needed independent workers like him and urged City Council to reduce the real estate property tax rate.

Mr. Richard D. Greene, retiree of the Newport News Shipyard, 300 Wendwood Drive, Newport News, stated he could not afford to stay in Newport News due to the high tax rate and the increased cost of living. He urged City Council to reduce the real estate property tax rate.

Mr. Shawn Posey, active duty Naval Officer, 120 Maxwell Lane, Newport News, stated people could not afford to live in Newport News.  He indicated that every City around the area had a lower tax rate.  Mr. Posey saw City Center as the City’s way to rake in what they could on the Jamestown 2007 celebration.  He pointed out that Newport News did not have the transportation and the roads to support the development of new residences and condominiums.  Mr. Posey stated that City Council was allowing more development in the area of City Center, but that citizens could not afford to live or shop at City Center, hence, it was a waste of money.

Ms. Sarah Russell, 114 Highlands Parkway, Newport News, expressed support for the NNPS FY 2008 Recommended Budget.  She urged City Council to thank the hard work and commitment of the NNPS teachers by supporting the full funding of the NNPS Budget.

Ms. Janet Hirshman Rash, life-long resident and retired NNPS teacher, 59 Raleigh Road, Newport News, stated she was not torn between her need for a significant reduction in real estate taxes and her desire to protect the vital services of the City.  Her conflict was the fact that she was a beneficiary of Council’s desire to improve cultural and commercial

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offerings in the City.  She disagreed with many decisions and actions, but felt many of the changes brought about could be regarded as positive changes since they enriched her life. She hoped the number of citizens would grow who could take advantage of these opportunities.  Ms.  Rash shared her belief in City Council’s commitment to the City of Newport News and expressed appreciation for their work.  She stated the time had come to address the needs of a significant portion of the citizenry.  She felt the City should do what the NNPS had done, and not cut back, but make real sacrifices.  She suggested that everything be put on hold and on the table to take care of Newport News residents in a tax bind.  She urged City Council to do without.

                        Mr. Gerald Chiappazi, 135 Linda Drive, stated that taxes were out of hand and must be reduced.  He further expressed opposition to the Hampton Roads Transportation Authority.  Mr. Chiappazi thanked Council member Scott for her representation in the North District.

                        Ms. Merrill Hemmert, native Newport News resident, current York County resident, expressed concern for the increased real estate property tax rate.  She was disturbed by the fact that many citizens would be forced from their homes because of taxes.  She urged City Council to make its best effort to cut the FY 2008 Recommended Operating Budget so that citizens would not be forced to face the dilemma to move out of the City.

                        Mr. James Stancil, 113 Phillips Lane, Newport News, stated that something must change in the way the value of homes were assessed as it was unfair that his property assessment increased and was based on improvements made by his neighbor. Mr. Stancil stated that term limits should be set in the City on the length of time an official could serve.  It was his belief that no politician should be allowed to remain in office more than two terms.  Mr. Stancil stated that City healthcare should not continue to try to keep up with the price of healthcare, which increased 50-60% each year, yet Council and City officials wanted to guarantee retirees benefits, that would continue to tax the citizens in an effort to pay for the ever increasing costs in healthcare.  Mr. Stancil indicated he would research whether a referendum could be put forth to vote Council members out of office.  He stated it was time for a change in the City.  He questioned the role of the Economic Development Authority and voiced opposition to the fact that companies were being paid to come to the City.  He felt that the same funds should be used to create an entrepreneurial fund and seek ideas among the citizenry.

Councilman Haskins moved closure of the public hearing; seconded by Councilwoman Scott.

Vote on Roll Call:

Ayes:    Scott, Whitaker, Allen, Bateman, Frank, Haskins, McMillan

Nays:    None

Mayor Frank announced that City Council would review and work on the suggestions and ideas presented in an effort to address the concerns and needs of the citizens.  He advised that on Tuesday, May 8, 2007 it was the plan of City Council to adopt the Newport News Public Schools (NNPS) Operating Budget and hopefully, adopt the City’s FY 2008 Recommended Operating Budget.

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THERE BEING NO FURTHER BUSINESS,

ON MOTION, COUNCIL ADJOURNED AT 10:55 P.M.

Mabel V. Washington, CMC                                          Joe S. Frank

            City Clerk                                                              Mayor

                                                                                  Presiding Officer

     A true copy, teste:

          City Clerk