2400 Washington Avenue

PRESENT:       Joe S. Frank; Madeline McMillan; Sharon P. Scott (arrived at 2:55 p.m.); Joseph C. Whitaker; Charles C. Allen; and Herbert Bateman, Jr. -- 6

ABSENT:        Haskins -- 1

OTHERS PRESENT: Randy W. Hildebrandt; Stuart E. Katz; Mabel V. Washington; William Mitchell; Alan Archer; Butch Blanks; Allen Jackson; Sheila McAllister; Al Riutort; Lisa Cipriano; Rhonda Sturgis; Lynn Sugg; Rich Caplan; Eileen Leininger;  Christopher S. Garrett; Alan Krumm; Cathy Matthews; Collie Owens; Robert L. Freeman; Laurel Freeman, Jr.; Laurel Tsirimokos; John Hightower; Jeff Stodghill; Beverly Diamonstein; Walter Wildman; Glenn Butler; Lori Carlson; Nora Lambiotte; Sabine Hirschauer; Lottie Vincent; Cleder Jones; Kim Lee; and Jennifer D. Walker

            I.          Hilton Village Architectural Review Board Appeal

(Special Meeting: 2:00 p.m. – 3:10 p.m.)

            II.         Presentation: Newport News Public Arts Foundation

                        City Manager Hildebrandt introduced Mr. Robert Freeman, Chairman, Newport News Public Arts Foundation (NNPAF), to outline NNPAF’s mission, accomplishments to date and pending public arts projects.

                        Mr. Freeman stated the NNPAF was a public nonprofit 501(c)(3) organization whose purpose was to transform the visual appearance of the City of Newport News through the selection and location of major pieces of sculpture throughout the City. The Foundation’s mission was to promote interest in public art, support new projects that integrated art, architecture, and urban planning, and preserve and protect existing works of public art for future generations.

                        Mr. Freeman noted the history of the NNPAF and explained through that process and installation of public art in Port Warwick it raised two questions: 1) Who would own the art and how would it be maintained; and 2) How the art could be installed Citywide. The answer to both questions ended up being the creation of the NNPAF. He stated the NNPAF owned the sculptures in Port Warwick and would own all the sculptures that it brought to the City, with the exception of private art. He explained sculptures were a liability and had to insured and maintained. Mr. Freeman stated it would to one’s advantage to donate their sculptures to the NNPAF so that they could be maintained and protected into perpetuity.

                        Mr. Freeman stated in addition to the five public art sculptures in Port Warwick the NNPAF had done two monumental sculptures at: 1) Oyster Point at Thimble Shoals and Canon Boulevards; and 2) Riverside Hospital. 

                        Mr. Freeman noted that funding for public art was unique in its own special way and noted it came about through monies from different organizations.  He highlighted current and proposed public arts projects for the City of Newport News.   (A copy of his presentation, “Public Art…our history,” and a list of “Current & Proposed Projects,” are attached and made a part of these minutes.)

                        Mr. Freeman noted a proposed public art project for Hilton Village. He introduced Mr. Jeff Stodghill to explain the project. (A copy of the project is included in the above attachment, “Public Art…our history.”) 

                        Mr. Stodghill stated the proposal was introduced to residents of the Hilton area at a community event. He explained that the sculpture could be a part of the community if the community helped to raise the funds.  He stated the residents of the Hilton area had worked over the past year, through a private fundraising campaign, and had raised $62,500, pledged and collected funds, in support of the project. At this point they were very close to their goal in order to get to a threshold to take the campaign public. He stated if the project came to fruition, it would be a catalyst and model for projects to come.  

                        Mr. Freeman stated the Hilton sculpture proposal was the first time the NNPAF reached out in a public way to do a public campaign. The Hilton project was very important and he felt it was the NNPAF’s coming out party. NNPAF anticipated starting the artwork in the late fall of 2007 with installation in the summer of 2008.

                        Mr. Freeman shared that the NNPAF owned $.5 million worth of sculptures, and had $20,000 in its maintenance fund. He stated NNPAF expected to receive private donations of $325,000 this year. He thanked City Council for its operating support from the City of $55,000 and noted it allowed NNPAF to receive another $25,000 from the State. Mr. Freeman stated the NNPAF had one full-time employee and a host of dedicated volunteers. He was very please with the work they had done. NNPAF’s vision was that once the projects were installed throughout the City in the next 12 to 18 months it would have a major monumental impact upon the City. He felt this would be the springboard for their organization to go into other parts of the City.

                        Councilwoman McMillan inquired whether traffic concerns would be considered when installing the proposed piece of sculpture at Jefferson Avenue and

Bland Boulevard. Mr. Freeman replied traffic concerns were always considered. The NNPAF met with traffic engineers and the engineering staff of the City before installing any piece of art.

                        Mayor Frank inquired whether the NNPAF had taken a look at the Huntington statue in Huntington Park to see whether it could be restored. Mr. Freeman replied he received two opinions on the Huntington statue which noted it really needed help. He stated he would revisit the matter and report back to City Council. He wondered whether it would be more suitable to relocate the sculpture to another part of the City so more citizens could admire it. He felt the statue needed cosmetic upgrading.

                        Vice Mayor Allen stated he was opposed to moving the Huntington statue from Huntington Park.

            III.       Presentation: Status of Enterprise Resource Planning (ERP) Software                            System

                        City Manager Hildebrandt introduced Mr. Alan Krumm, Project Manager, Enterprise Resource Planning, to present information about what the City was trying to accomplish, why, and the benefits of the Enterprise Resource Planning (ERP) Software System.  

                        Mr. Krumm reminded the City began the process of planning for the replacement of its core business software in 2003. He stated a committee was formed to assess the City’s needs and to identify potential solutions and associated costs. The committee was headed by the Information Technology Department and consisted of representatives of four departments that were principal users of business software (Budget and Evaluation, Finance, Human Resources, and Purchasing) along with selected major operating departments. (A copy of the presentation, “ERP – Enterprise Resource Planning,” is attached and made a part of these minutes.)

                        Mr. Krumm reported in 2005, the group recommended that the City hire a consultant to assist in performing a formal study to determine the best course of action. The study found no municipalities that were building their own major business applications because of time, costs, and risks were too great. The recommendation was to purchase an Enterprise Resource Planning (ERP) package from a vendor.

                          Mr. Krumm stated in FY 2007 the committee, now known as the ERP Steering Committee (ERPSC), reviewed the RFP responses and heard presentations from three companies. The ERPSC narrowed the evaluation to one product and was in the process of negotiating a contract with the vendor.

                        The project would significantly change the City’s business practices for the next 10 – 15 years. Over 1,400 employees would have to be trained on the new software. These were major changes for these individuals, many of whom had used the

existing systems their entire career. Clearly, this process would be very challenging. However, the significant improvements in data availability, reporting, query, functionality and reliability would be well worth the effort.

                        Mr. Krumm stated the goal of implementation of the financial systems was July 1, 2008 and the payroll/personnel systems by January 31, 2009. Although, this was a very aggressive and ambitious schedule, he was confident it could be met. 

                        The total funding requested was $4,626,955 and was comprised of four components: The first and largest element was the actual purchase of the system which included the software license, custom modifications, verification assistance, and the system servers. The cost for this element was $3,873,692. The second component was the operating expenses for the project team. These costs included laptop computers, printers, training area furnishings, and wireless connections, in the amount of $102,458. The third component was the temporary staffing or over-hires for the core departments (Finance, Purchasing, and Human Resources), to backfill the normal department functions, while the experienced employees were dedicated to the implementation. In addition, temporary contractual system programmers would be used to assist in the conversion process. The total temporary personnel costs were $568,655. The final element was the first year maintenance contract totaling $82,150.

                        Councilwoman McMillan inquired whether there was an additional cost for training the current employees. Mr. Krumm replied training was included in the purchase price of the software. The vendor would provide a certain number of training days.

                        Mr. Krumm stated the next step was to get the approval of City Council, sign the contract and begin the project. He noted the planned schedule for implementation of all systems to be January 2009.

                        Miscellaneous Item: Walkers Dam Stabilization Project

                        City Manager Hildebrandt introduced Ms. Eileen Leininger, Assistant Director of Waterworks, to give City Council an overview of the bids the City received for construction and engineering construction services for the Walkers Dam Stabilization Project.

                        Ms. Leininger reminded City Council that the breach in the dam was discovered by Waterworks’ operators the morning of April 23, 2007. Engineers from the Department of Waterworks met with its Dam Engineering and Inspection Services Consultant (URS Corporation) on April 24 to assess the situation and recommended immediate action. A team of divers, working under the direction of the City’s consultant,

initiated an underwater inspection starting April 26. The result of the inspection concluded that a large breach had occurred in the vicinity of the boat lock structure, which compromised its foundation support system. 

                        Ms. Leininger reported upon receiving the result of the underwater inspection, the City’s consultant immediately prepared a design to temporarily block the breach in the dam to prevent further damage and to quickly restore the elevation of the lake to normal levels. The solicitation for bids was advertised and opened. Prior to the contract being awarded, the boat lock structure suffered a complete collapse into the river due to high river flows and strong tidal effects. This collapse caused intense hydraulic conditions in the river that increased erosion of the foundations soil, which ultimately began causing failure of the dam structure itself.

                        On May 31, URS sent out another dive team to assess the new conditions and extent of damage to the structure. The discoveries made during this inspection prompted an immediate temporary stabilization effort to try to save as much of the dam structure as possible. As a result of the increased damage to the dam structure and changed condition of the river bottom, the design concept of the construction project as initially bid could not be used. Therefore, Waterworks requested that the solicitation be canceled on June 7. URS modified the contract drawings and specifications to a design that would stabilize the structure in its current state and be incorporated into the permanent rehabilitation of the dam. The new solicitation for this project was advertised on June 11 with bids due by the morning of June 26, 2007. 

                        Ms. Leininger informed the Purchasing Department received two bids for the project. Only one bid was considered responsible. She asked for City Council’s approval for an appropriation of funding in the amount of $4,445,200 for construction and engineering construction services for the Walkers Dam Stabilization Project which included the bid award for construction contract to Seaward Marine Corporation of Norfolk, Virginia, in the amount of $3,819,234. (A copy of memo from the City Manager explaining the project is attached and made a part of these minutes.)

                        Councilman Bateman inquired whether the Seaward Marine Corporation was adequately bonded and insured. Ms. Leininger replied yes, and noted they would get performance and payment bonds once submitted. Waterworks checked references and were sure that the company could do the work.

                        Mayor Frank understood the City had a regular dam inspection program, where inspections were covered over time on a regular basis, and inquired whether there was an explanation to why the problem at the Walkers Dam was not discovered prior to its collapse. Ms. Leininger replied this was a sudden event that happened over the course

of a weekend. She stated they would do a regular job in the future of inspecting the underwater structures.

                        Mayor Frank inquired whether the City had looked to see if there was some legal responsibility with the firm that was hired to inspect the dam for not advising the City in a way that could have prevented the problem at the Walkers Dam from occurring. Ms. Leininger replied this was an underwater problem and they tasked the firm to inspect the dam above the surface. She stated they did not have under water inspections.

                        Mayor Frank did not understand what sense it made to inspect the dam, which was mostly underwater, above the surface. Ms. Leininger replied some failures could be seen above the surface at low tide and structural failures seen on the surface. She stated Waterworks was looking at the matter in order to start doing regular underwater inspections.

                        Mayor Frank felt if the City was spending money from the Engineering fund to inspect the City’s dams, it seemed to him that the City needed to make sure the inspections were thoroughly and professionally done. He felt the purpose of an inspection was to alert the City of problems before they became major disasters. Mayor Frank inquired why the City was not alerted to the problem before it became a disaster. Ms. Leininger stated part of the problem was underwater inspections of the dam were not requested.

                        Mayor Frank inquired whether this improvement to the Walkers Dam would be part of the permanent solution in that it would not have to be replicated when the City did the permanent to fix the dam. Ms. Leininger replied this was part of the permanent fix to the dam. 

                        City Manager Hildebrandt introduced Dr. Rhonda Sturgis, Legislative Relations Coordinator, to explain the legislative proposal to provide local government flexibility in administering the Real Estate Tax Program.

                        Dr. Sturgis stated as an alternative to some form of State mandated provisions that would restrict the growth in real estate tax revenue, the City Manager  suggested that City Council endorse a multi-faceted legislative strategy that provided local governments greater discretion and flexibility in managing real estate tax revenue within their jurisdictions. First, he suggested that the City of Newport News support SJ 354, as introduced by Senator Nick Rerras in the 2007 General Assembly Session. This

bill authorized the General Assembly to enact legislation that would allow localities, by ordinance, to exempt from real property taxes, or defer real property taxes on, up to 20% of the value of residential property that was the occupant’s primary dwelling and lived in continuously. This bill, which had the support of Governor Kaine, was one important tool for granting relief to homeowners who had experienced a dramatic increase in real estate assessments over the past few years. (A copy of memo, “Legislative Proposal to Provide Local Government Flexibility in Administering Real Estate Tax Revenue Program’” is attached and made a part of these minutes.)

                        Dr. Sturgis stated, in addition, the City’s 2008 legislative package included a legislative proposal to allow for a reclassification of the tax rate structure, such as setting different tax rates for residential homes, apartment complexes and non-residential properties. This proposal would give localities a mechanism to manage dramatic shifts in the tax burden because the market was driving up the value of one or more classes of property and allowed for a more evenly distributed tax base. For example in FY 2003, single-family residential property represented 59.38% of the total tax levy, but by FY 2008 it had increased to 65.86%. This was another illustration of how the housing market price increases had resulted in a redistribution of the local tax burden. This was a circumstance that did not escape the attention of the General Assembly and was why authority to impose up to a ten-cent tax on commercial property was included as a component of the funding plan initially proposed for Hampton Roads and the Northern Virginia Regional Transportation Authorities.

                        Another tool that would be administered by State Government was providing tax credits for low to moderate income households based upon a “circuit breaker” approach. This approach was utilized by the majority of states, and provided tax relief for homeowners when a property tax bill exceeded a certain percentage of income. This type of proposal would target those homeowners most impacted by substantial rises in property assessments and not just those over the age of 65. Because income taxpayers usually did not use itemized deductions on their federal income tax returns, this form of federal tax relief was not available to everyone. This type of program allowed credits based upon income, introducing an “ability to pay” philosophy, which was currently lacking in the reliance on real estate tax collections as a fundamental source of revenue for local government. The program would allow citizens to receive relief from rising assessments without placing a burden on local government budgets and make the Commonwealth a meaningful partner in offering tax relief.

                        Mayor Frank inquired whether the legislation required constitutional amendments. 

                        Councilman Bateman understood the City needed additional tools to assist with real estate taxes, but he was not sure how such legislation would benefit the City. He stated when you looked at commercial properties and how they were assessed versus how residential properties were assessed, the procedures were different. He was not sure that you could apply the same type science to residential assessments that was applied to commercial. It seemed to him that commercial lagged behind. 

                        Mayor Frank felt it would be useful for the City Manager to get some modeling of how the legislation impacted various price ranges, price points on residential and the impact on commercial so City Council could better visualize the impact of the legislative proposals. 

                        Councilwoman McMillan recalled at the 2006 Virginia Municipal League Conference there was a workshop on this particular legislation. She recalled that the issue was not warmly received, although she could not remember the exact specifics. She wanted to review a copy of SJ 354. She was not comfortable in supporting the bill before she understood its specifics. She also wanted more information of the tax credit proposal. 

                        Councilwoman McMillan inquired whether there was anyway to use a model to see how this would be implemented and how it would affect the City’s revenue stream. She felt the City had to be careful in talking about a program that might not be beneficial to the City and the citizens who really needed tax relief.

                        Councilwoman Scott stated she served on the Finance Committee for VML and indicated the committee had been discussing parts of the legislation proposed by the City Manager for the past three years. She indicated the committee planned a meeting on July 9, 2007 and offered to bring the matter back to the table for discussion. The problem the committee found when they discussed it was that every jurisdiction’s needs were different, i.e. small Counties did not want what big Cities wanted. Nothing materialized out of all the work done. She asked Dr. Sturgis to help the committee to follow up on its hard work.

                        After much discussion regarding this item it was the consensus among City Council to carry this matter forward for further discussion at a future Work Session to allot more time for discussion of this critical matter.

                        City Manager Hildebrandt stated he would get more information regarding this matter and schedule it for the July 10, 2007 Work Session of City Council.

            V.        “Friends of the Homeless” Financial Review

                        City Manager Hildebrandt introduced Mr. Alan Archer, Assistant City Manager, to report on the findings of the Friends of the Homeless Financial Review.

                        Assistant City Manager Archer reminded that at the March 13, 2007 Work Session of City Council, the Friends of Homeless (FOTH) presented a two-month emergency funding request in the amount of $60,804 to pay for operating expenses related to shelter operations. The discussion resulted in City Council approval of a resolution appropriating $30,000 at its March 13, 2007 Regular Meeting.

                        Assistant City Manager Archer stated City Council asked the City Manager to assess the capacity of the organization and recommend the extent of any additional funding that the City should consider providing to the organization. 

                        Since the March 13 Work Session the City Manager authorized $28,915 for emergency expenses related to ongoing shelter operations for FOTH.  The City Manager and the Director of Human Services convened a special meeting with human services and housing providers to develop a shelter management plan that would ensure the continued provision of emergency shelter care services. 

                        Assistant City Manager stated in response to Council’s request, the Director of Internal Audit had completed a management and financial review of FOTH. 

                        As noted from the City Manager’s June 22, 2007 memorandum the City administration did not recommend the appropriation of additional funds to assist the Friends of the Homeless until such time that the FOTH’s financial and management issues had been resolved by its board of directors. Assistant City Manager Archer introduced Ms. Cathy Matthews, Director of Internal Audit, to brief City Council on the  summary of management and financial findings of FOTH and Mr. Glenn Butler, Director of Human Services, to review the Shelter Management Plan. (A copy of the June 22, 2007 memo is attached and made a part of these minutes.)

                        Ms. Matthews noted the specifics of the Summary of Review Findings on housing and management issues of FOTH.  (A copy of the Summary of Review Findings are attached and made a part of these minutes.)

                        Mr. Butler stated the City Manager authorized the Department of Human Services to apply for a $140,000 grant from the Commonwealth of Virginia Department of Housing and Community Development. He explained this was the same grant program that funded 50 emergency shelter beds for FOTH. It was the City’s understanding the FOTH was ineligible to receive the grant award for FY 2008. 

Therefore, the Department of Human Services and the Greater Peninsula Continuum of Care Council met to develop a strategy to preserve state funding for emergency shelter beds on the Peninsula. Human Services is the fiscal agent for the grant application and a number of Continuum of Care members, specifically, the Salvation Army, would provide ongoing case management services to move homeless families into permanent living arrangements as quickly as possible. 

                        Mr. Butler stated Human Services applied for the grant May 11, 2007, and noted once the grant allocation was approved the Salvation Army would provide initial intake and assessment and ongoing case management, and Human Services would be the fiscal agent to report back to the State. Human Services would utilize hotel/motel vouchers to acquire emergency shelter beds to house the homeless wherever possible, including FOTH, the Salvation Army, the Avalon shelter, ACCESS and LINK.   This would ensure that all the beds on the Peninsula were being used when it came to emergency shelter.

                        Mr. Butler reported the grant application included the following components: 1) ongoing case management to move homeless families as quickly as possible to permanent living arrangements; 2) a request for a Child Services Coordinator to address the needs of homeless school-aged children; and 3) a request to fund child day care for homeless families. (A copy of memo, “Status Report #3 – Friends of the Homeless,” explaining the Shelter Management Plan is attached and made a part of these minutes.)

                        Ms. Nora Lambiotte, member of FOTH Board of Directors, expressed concern that the landscape of homeless care was changing. She felt the FOTH might not be included in providing shelter for the homeless if an agreement was authorized with the Salvation Army to provide case management services for the homeless. She requested that City Council have Mr. Butler and/or Assistant City Manager Archer set up a meeting with FOTH so they could have the same opportunities to utilize the funds as any other organization. She indicated FOTH had the facility, the staff and the Children’s Coordinator, and could continue to provide the services that they had done originally; but they needed funds to help keep the FOTH shelter open. FOTH was in the process of establishing a new board and received applications for an Executive Director. She noted a qualified candidate had applied for the position.

                        Mayor Frank was concerned that even when the FOTH Board of Directors got through all the pressing matters, they still would have a substantial amount of debt to address. It was not clear to him where the Board would get sufficient funding to sustain the shelter, to provide services and deal with current and future debt. He inquired whether the Board had a plan on how they were going to address such issues. Ms. Lambiotte replied the Board planned a meeting on June 28, 2007 with the new board to

address each particular situation. She stated the board needed time to come up with a solution.

                        Mr. Butler explained that the whole idea behind the hotel/motel voucher program was to open it up to the entire Peninsula. That was the reason in working with the Virginia Peninsula Continuum of Care Council.

                        Councilwoman Scott inquired whether there were homeless clients that worked and whether they had to pay a percentage of their earned income for shelter. Mr. Butler replied 85% of homeless individual had jobs and they were required to pay a percentage of their income towards shelter.

                        City Manager Hildebrandt stated a number of non-profit organizations had the capacity to provide homeless shelter beds and the City would use that capacity wherever it could to ensure the availability of year-round beds for homeless families. He anticipated the State releasing the grant award by June 20, 2007 in the total grant request of $228,000.

                        Mayor Frank felt that Human Services should have a plan that would ensure that FOTH was included as a shelter provider in the proposed shelter management plan, especially in light of the fact that it may be cheaper and case management services were provided in house. Mr. Butler replied case management services would be provided to homeless individuals at hotels and motels as well. 

THERE BEING NO FURTHER BUSINESS,

ON MOTION, COUNCIL ADJOURNED AT 5:47 P.M.