Understanding Operating Budget VS Capital Improvement Budget
It is important to understand that both the City of Chesapeake and Chesapeake Public Schools have both an operating budget and a capital improvement budget.
The operating budget plans for costs such as staff to provide city services, supplies, facility maintenance, and day to day operating expenses. The capital improvement budget funds new construction or major improvements to city facilities and infrastructure including roads and buildings.
This one minute video may help explain it better, however the time line he mentions is not accurate for Chesapeake as we review the budget annually and making adjustments to project for the next five years.
Recent Proposed Changes Show Decreases in Public School and Public Safety
In my years as a property manager for government subsidized properties, I was responsible for both the operating and capital improvement budgets. I had to make difficult choices on how to allot funding, where we could save money and hiring the best vendors to ensure quality of work. I learned quickly how small numbers often added up when factoring in volume, such as selecting something as simple as a vendor to supply the volumes paper needed.
The recent proposed changes to the Chesapeake’s capital improvement plan shows our tax dollars being shifted around in a manner that I am personally concerned about.
DECREASED Budget to Public Schools from 29% to 23%
DECREASED Budget to Public Safety from 8% to 4%
DECREASED Budget for Economic Development from 8% to 1%
INCREASED Budget to Parks & Recreation from 7% to 11%
INCREASED Budget for Transportation from 10% to 25%
This prioritizes our five year budget in the following manner:
$114.68 Million Transportation
$111.41 Million Education
$42.12 Million Parks & Recreation
$20.94 Million Public Safety
$4.82 Million Economic Development
Our $42 Million Parks & Recreation Budget – City Council To Determine How Half Should Be Spent
While there are definitely many valuable projects being addressed, I was curious as to why we needed over $42 million for Parks and Recreation, yet Public Safety was not even budgeted half that amount. I was concerned about the cuts to the public school budget and was under the impression that we were trying to foster economic development in Chesapeake, although it is certainly is not reflected that way in our budget. I asked this question at the Town Mall meeting held at Hugo A. Owens middle school on February 6, 2018.
I received an email from the city with the following answer:
“You also mentioned that a disproportionate portion of the Capital Improvement Plan CIP was allocated to Parks, Recreation, and Tourism (PRT). The CIP includes $42.1 million for parks (8.5% of the total) over the next five years as follow:
· Nearly half ($23.6 million) is for park expansions and major improvements. COUNCIL WILL DETERMINE HOW THESE FUNDS ARE SPENT; there is strong demand for expansion of Oak Grove Park, athletic fields at Centerville Park, and enlarged community centers.
· $4.3 million is available for park improvements to meet increased recreational demands related to new developments. This project is entirely financed from developer fees paid to the city when amenities are not included in residential developments.
· $5.0 million of debt financing for improvements to Northwest River Park. Northwest was developed in the 1970s and there have been few improvements to the original structures and facilities. Most of the buildings and structures need to be replaced; the city plans to spend $1.0 million annually over the next six years.
· $1.5 million for renovations to the Chesapeake Conference Center. This facility is over twenty (20) years old and improvements are required to replacing aging mechanical systems and to ensure the facility is appealing to users. Funding is provided from taxes that Council dedicated to economic development and visitor facilities.
· $1.0 million for Chesapeake Arboretum
· $800,000 for renovation of the Dismal Swamp Canal Trail – this heavily used bicycle trail requires periodic paving; none has been done since before the former roadway was converted to a recreational facility. Paving is necessary to prevent the trail from further degradation.
· $5.9 million is planned to address deferred maintenance at parks and community centers. These funds are used to refresh community centers, replace athletic field lights, improve parks and athletic fields, and improve accessibility to disabled residents. “
Personally I am concerned about why $23 million has been pulled from our schools, public safety and economic development budget with just a vague answer that city “Council will determine how these funds are spent.”
Is this the best use of our tax dollars? I don’t think so.
Stormwater Money Going Down the Drain
Also of note is the fact that our Stormwater budget is considered an enterprise fund meaning that it generates it’s own revenue. There is over $25 million in the five year Stormwater budget and as Jennifer Barnes, who is running for city council, so eloquently put it “Our drainage ditches should be made out of GOLD!”
Jennifer Barnes also had a recent conversation with our city manager regarding our city’s flooding issues. She discovered that the city has a brand new ditch digger that we have owned for two years, yet it has never been used. She was informed that we do not have a driver for it ?!?
Your Vote on May 1, 2018 Matters
It is an unusual year for city elections this spring because 7 out of the 9 city council seats are available including the Mayor. With the majority of seats available, it is a rare opportunity to change the direction the city is heading in. The Mayor and one of the City Council Seats are considered a special election on the ballot and are actually only 2 years terms. This is because they backfilling the vacancy created when Mayor Krasnoff moved to Clerk of Court position in November and Dwight Parker was temporarily appointed as a city council member.
I encourage you to research your candidates and vote for city council members and a Mayor who share your values and views on what the city’s priorities should be. I believe my experience in analyzing both operating and capital improvement budgets is extremely valuable in ensuring that our money is spent wisely. My industry knowledge as an appraiser has demonstrated the damaged caused by new development will be helpful in preventing similar problems in the future. If you agree, we need your help by sharing this information and encouraging friends, family, neighbors and co-workers to vote on May 1, 2018.