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OPENPUBLICA · PUBLIC MEETING RECORD

Record of Proceedings

Hampton City Council Work Session on FY2026 Budget Development – March 20, 2025

City Council — Thursday, March 20, 2025

BodyHampton, Virginia

SessionCity Council

DateThursday, March 20, 2025

StatusFILED

Video Record

0:00 / 5:17:27

Transcript — VerbatimClick a timed line to jump · ⧉ to share it

0:04

Time nine o'clock.

0:16

QR code is how you're going to connect here to follow.

0:23

You ready for me to say something?

0:24

Are you going to say something first?

0:27

Okay.

0:29

That's how you're going to get morning, everybody, and uh welcome to uh uh campus city council work session.

0:37

Um we uh have a busy day ahead of us with uh budget uh development and ratings and so forth.

0:44

So uh a lot of work is going into preparing us for this day.

0:47

So uh I do want to remind everybody that you have uh microphones around, they all have red lights on them, those mics, uh hot mics.

0:56

So uh just just be mad for the fact that you have uh a microphone in front of you and it's on at all times.

1:04

So that I'm gonna ask the uh clerk to call a roll.

1:07

Councilman Bowman Councilman Bowman.

1:17

President Councilman Barley present Harper present.

1:26

President and so with that I'm gonna ask the city manager to uh introduce the uh program and the first presentation this morning.

1:33

Thank you for the mayor.

1:35

And thank you for everyone who's here, both staff and uh public members and council.

1:40

Um this is our annual council budget work session for the benefit of those who may not know.

1:47

We have been uh getting council members information really basically since January about various budget related issues ranging from what the assessments were looking like, uh what the General Assembly budgets uh were doing, how the federal uh conversations that have been going on relating to various issues might impact our budget and what certain departments were requesting and the way of operating increases and capital budget increases so that they could be prepared for today.

2:21

Today is really going to be a culmination of getting their input before we do two more things that will lead ultimately to a manager's recommended budget.

2:30

Well, one of those is uh getting the the council members' input and the next one starting next week is getting the public um input before I make a recommendation to the public and the council on a budget for a fiscal 2026.

2:45

Um I try to take the council input and the public input as well as what I believe and the staff believes from a fiduciary responsibility needs to be considered for the city's uh legal and um and fiduciary responsibilities and presenting that recommendation to council.

3:04

So today we're gonna cover several topics.

3:06

We're gonna cover some revenue topics and ask council for their initial feelings about those revenue topics, and then we're gonna cover some expenditure topics and roughly the morning will be spent on the revenue topics um and the afternoon on the expenditure topics.

3:22

We're gonna kick off uh Brian DeProprio is gonna be the first presenter with basically a budget 101 foundational, um, just to give the council and those in attendance and those who may watch the meeting subsequently um a comparison of where we stand historically and with um uh comparison to our peer localities, and then also um a reminder of where we get the bulk of our revenue and what um the trends are with those revenues so that we can think about this afternoon and the latter part of the morning how we want to approach topics like compensation, operating budget, and capital budget expenses.

4:02

So, with that as an introduction, I'm pleased to introduce our deputy city manager Brian DeProfio, who will focus as I said, on the introductory um background topics.

4:12

Good morning.

4:13

Um hopefully everybody can hear me.

4:16

Um we we don't have a microphone today.

4:20

So um what I'm gonna do is as Mary had said, I'm gonna go through some background information, but also before we get started, wanted to walk you through the um the the what you have in the binder in front of you.

4:31

So you have your agenda for today, and Mary Mary just went through um the items that we'll be covering, but also in your binder, each tab uh corresponds to one of the items that we're gonna be covering this morning.

4:44

So my item for background and overview is under tab one, the next presenter will be under tab two, and so on and so forth.

4:51

So the agenda corresponds with your tabs.

4:53

Um and that will take you through in terms of the presentations we're going over today through tab one through twelve.

5:00

Tab 13 and 14 is the rankings of the projects that Mary had just mentioned.

5:05

And so all the information that you'll need is in that tab.

5:11

It includes the slides.

5:15

We're not going to go over the slides today unless you have questions about them.

5:19

But we uh it also includes the various um ways we're going to be ranking.

5:24

There's there's the uh there's long sort of eight eight and a half by uh or eleven by seventeen paper in there that has each of the projects listed out, and we have the grants sheet listed out separately, we have new requests listed out separately, we have it combined, and then we have the capital.

5:40

So be behind those tabs.

5:44

So with that, um I'm just going to uh start going through the the background information unless anybody has any questions about the materials that you have.

5:53

Okay.

5:54

Um Mary's already gone through the the uh what we're gonna be covering today, so I'll kind of jump right in.

6:00

Um one of the things about the budget is it's really the most important policy document that council adopts each year because you know we have various plans like the strategic plan, like the master plans and other various initiatives that we have uh during uh throughout um city government that we're trying to you know provide those services to our our community.

6:22

But the budget is really where we put money to those things, really where we express our priorities and fund the things that we're going to be doing over the next next year.

6:30

Um how we spend our money is uh is on this slide.

6:36

I'm not gonna go through it in in great detail, but the biggest thing that we spend money on is education.

6:41

That's money that we that we give to our school system in order to run our school system.

6:46

And we're very proud of the work that the school system has done over the years.

6:50

They're 100% fully accredited without conditions, and so they really do a good job with the money that we give them.

6:56

The second highest um area that we spend money on is public safety.

7:01

That's our police, our fire, our 911 um emergency management, um, and so that's at 10.3 percent.

7:09

And so that's our next visit biggest expenditure.

7:11

You might say, well, what about retirement and benefits?

7:13

Well, that is retirement benefits for all city workers.

7:16

So if we were to allocate that out to uh the various areas, operational areas of the city, you know, that public safety number would be just that much higher.

7:24

So uh you can see everything else that we spend money on is less than six percent uh of our budget in those various areas.

7:32

Um in terms of the funding for our schools, that is um determined by a funding formula that we've had in place since 1988 is when we came to the uh the the agreement with the schools on that.

7:44

And we give 61.83% of the residential tax base in the city that includes our real estate, our personal property, you know, our utility taxes.

7:55

We share that with the schools at 61.83 percent, and that has worked really well over the years and and adequately funded our schools and adequately funded our our local government.

Discussion Breakdown — Share of Meeting

Budget Equity Analysis███████████████████████23%

Tax Policy█████████████13%

Employee Benefits████████8%

Taxation███████7%

Water And Wastewater Management███████7%

Procedural██████6%

Public Engagement██████6%

Public Safety█████5%

Fiscal Sustainability█████5%

Summary of Proceedings

Hampton City Council Work Session on FY2026 Budget Development – March 20, 2025

The City Council held a work session on March 20, 2025, from 9:00 AM to 3:43 PM to discuss the Fiscal Year 2026 budget. The session focused on revenue and expenditure topics, including compensation, tax relief, public works fees, and capital priorities. Council members provided initial preference polling (not formal votes) to guide staff in developing the manager’s recommended budget. Key themes included managing slower revenue growth, addressing state-mandated costs, and balancing employee compensation with tax relief.

Discussion Items

Budget Overview and Background – Brian DeProfio, Deputy City Manager, presented an overview of the city’s budget, highlighting that 86% of local revenues come from the “big five” taxes (real estate, personal property, meals, sales, business license). Real estate is the largest source at 47%. The city’s efficiency is high, with 63.2 residents per employee citywide. The budget is expected to be tighter this year, with limited ability to add new initiatives. Key challenges include federal policy changes, state unfunded mandates (e.g., disabled veteran tax relief costing $10.3 million, equivalent to 6.5 cents on the real estate tax rate), and inflationary pressures.
Speed Safety Cameras – Patricia Melochick and Jason Mitchell presented pending state legislation that would expand speed camera use but restrict revenue to traffic infrastructure. The legislation would require two signs within 1,000 feet of each camera zone, including a speed display sign, at an estimated cost of $227,500 for 13 school zones. Council questioned calibration and notification procedures. The legislation is pending governor’s signature.
Blight and Derelict Property Tax – Staff presented a state option to impose a higher real estate tax rate on blighted (up to 5% above general rate) and derelict (up to 10%) properties. Council unanimously (7-0) expressed interest in pursuing this, but staff recommended taking a year to develop a robust process, starting with blighted only in FY27 if needed. A formal ordinance and public hearing would be required.
Tax Relief Programs – Karen Bever, Interim Commissioner of Revenue, reviewed the elderly/disabled tax relief (freeze and deferral programs) and the disabled veteran tax exemption. The disabled veteran program is an unfunded state mandate costing $10.3 million in FY26, up $2.1 million from FY25. The number of participants is growing by 20–25 applications per week. Council discussed the impact on other taxpayers and the difficulty of capping benefits due to state law.
Personal Property Tax Assessment – Karen Bever reported that personal property tax (mostly on vehicles) is expected to be flat in FY26, with used car values declining. The city uses JD Power values with a 75% assessment ratio after COVID adjustments. Tariffs could affect future values.
Real Estate Tax Rate Stabilization – Karl Daughtrey explained the city’s guideline (since 2006) to limit real estate revenue growth to the greater of CPI or resident income growth. The equalized rate for FY26 is $1.14 per $100 of assessed value, compared to the current $1.15. Each penny generates about $1.6 million. At $1.10, the city would collect roughly the same real estate revenue as FY25. Council’s initial preference polling showed a range: $1.11 (2 votes), $1.13 (1), $1.14 (3), $1.15 (1). After seeing compensation costs, a final poll was conducted; results will inform the manager’s recommendation.
Courthouse Security Fee – Carl Daughtrey presented an option to increase the fee from $10 to $15 or $20 per court case. At $20, it would generate $214,620 (net increase of $107,310) for dedicated courthouse security. Council did not indicate a preference during the session.
Public Works Fees – Jason Mitchell presented proposed increases for wastewater and stormwater, with no increase for solid waste.
- Wastewater: A proposed increase of $0.07 for operations and maintenance (to $2.45 per 100 cubic feet) and $2.67 for the rehabilitation surcharge (to $4.79), reflecting a combined monthly increase of $18.31 for the average customer. The increases are needed to meet DEQ requirements and replace aging infrastructure (65% of pipes are over 65 years old). Three new positions (construction inspector, civil engineer technician, senior inspector) are requested.
- Stormwater: A proposed $1.00 per ERU increase (to $12.83 per month for residential) to fund Resilient Hampton projects and maintain EPA compliance. The increase is consistent with the prior multi-year plan.
- Solid Waste: No fee increase for FY26, but staff noted future increases may be needed for steam plant crane replacements ($6.2 million) and boiler rehabilitation ($8.8 million). Council was polled on reducing curbside recycling or bulk trash collection to save money; results will be shared with the public.
Compensation – Nicole Clark presented options for civilian wage increases (3%, 3.5%, or 4%) and market adjustments (0.5% to 2%). Council’s preference polling indicated a majority favored a 3.5% general wage increase (cost: $3.5 million) and a 1.75% market adjustment. For public safety, the step plan advancement (2.5% for eligible) is required, with potential range adjustment of 2% if needed. Health insurance: Staff recommended the city absorb the full 4.5% premium increase ($1.14 million), which council supported in polling.
Priority Ranking Exercises – Council ranked federal grants, new operating requests, and capital projects using software. Top-ranked new operating requests (e.g., Violence Interrupter Program, Hopeful Hampton Divergent Program, VA 250) total about $1.52 million. Top capital projects include Fire Station Alerting ($351,000), HRCC UPS backup, and City Hall renovations. Staff will use rankings and public input to shape the manager’s budget.

Key Outcomes

Blight Tax: Council unanimously directed staff to pursue a differential tax rate for blighted and derelict properties, with staff recommending implementation in FY27 after developing a standardized process. (Preference poll: 7-0)
Compensation Package: Council’s preference polling indicated support for a 3.5% general wage increase for civilians, a 1.75% market adjustment, and the city absorbing the full health insurance premium increase. Public safety step plan advancement is fixed. Total estimated cost: nearly $6 million.
Real Estate Tax Rate: Council’s initial polling showed a preference for $1.14, but a final poll after seeing all costs was conducted; results will be presented with the manager’s budget.
Public Works Fees: Council will consider the proposed wastewater, stormwater, and solid waste increases as part of the budget process. Preference polling on fee increases and potential service changes (curbside recycling, bulk trash) was conducted.
Next Steps: City Manager Bunting will incorporate council’s preferences, public input (starting March 20 evening), and ongoing revenue assessments into a recommended budget to be presented in April. All polling results will be printed and attached to the minutes.

Meeting Transcript

Time nine o'clock. QR code is how you're going to connect here to follow. You ready for me to say something? Are you going to say something first? Okay. That's how you're going to get morning, everybody, and uh welcome to uh uh campus city council work session. Um we uh have a busy day ahead of us with uh budget uh development and ratings and so forth. So uh a lot of work is going into preparing us for this day. So uh I do want to remind everybody that you have uh microphones around, they all have red lights on them, those mics, uh hot mics. So uh just just be mad for the fact that you have uh a microphone in front of you and it's on at all times. So that I'm gonna ask the uh clerk to call a roll. Councilman Bowman Councilman Bowman. President Councilman Barley present Harper present. President and so with that I'm gonna ask the city manager to uh introduce the uh program and the first presentation this morning. Thank you for the mayor. And thank you for everyone who's here, both staff and uh public members and council. Um this is our annual council budget work session for the benefit of those who may not know. We have been uh getting council members information really basically since January about various budget related issues ranging from what the assessments were looking like, uh what the General Assembly budgets uh were doing, how the federal uh conversations that have been going on relating to various issues might impact our budget and what certain departments were requesting and the way of operating increases and capital budget increases so that they could be prepared for today. Today is really going to be a culmination of getting their input before we do two more things that will lead ultimately to a manager's recommended budget. Well, one of those is uh getting the the council members' input and the next one starting next week is getting the public um input before I make a recommendation to the public and the council on a budget for a fiscal 2026. Um I try to take the council input and the public input as well as what I believe and the staff believes from a fiduciary responsibility needs to be considered for the city's uh legal and um and fiduciary responsibilities and presenting that recommendation to council. So today we're gonna cover several topics. We're gonna cover some revenue topics and ask council for their initial feelings about those revenue topics, and then we're gonna cover some expenditure topics and roughly the morning will be spent on the revenue topics um and the afternoon on the expenditure topics. We're gonna kick off uh Brian DeProprio is gonna be the first presenter with basically a budget 101 foundational, um, just to give the council and those in attendance and those who may watch the meeting subsequently um a comparison of where we stand historically and with um uh comparison to our peer localities, and then also um a reminder of where we get the bulk of our revenue and what um the trends are with those revenues so that we can think about this afternoon and the latter part of the morning how we want to approach topics like compensation, operating budget, and capital budget expenses. So, with that as an introduction, I'm pleased to introduce our deputy city manager Brian DeProfio, who will focus as I said, on the introductory um background topics. Good morning. Um hopefully everybody can hear me. Um we we don't have a microphone today. So um what I'm gonna do is as Mary had said, I'm gonna go through some background information, but also before we get started, wanted to walk you through the um the the what you have in the binder in front of you. So you have your agenda for today, and Mary Mary just went through um the items that we'll be covering, but also in your binder, each tab uh corresponds to one of the items that we're gonna be covering this morning. So my item for background and overview is under tab one, the next presenter will be under tab two, and so on and so forth. So the agenda corresponds with your tabs. Um and that will take you through in terms of the presentations we're going over today through tab one through twelve. Tab 13 and 14 is the rankings of the projects that Mary had just mentioned. And so all the information that you'll need is in that tab. It includes the slides. We're not going to go over the slides today unless you have questions about them. But we uh it also includes the various um ways we're going to be ranking. There's there's the uh there's long sort of eight eight and a half by uh or eleven by seventeen paper in there that has each of the projects listed out, and we have the grants sheet listed out separately, we have new requests listed out separately, we have it combined, and then we have the capital. So be behind those tabs. So with that, um I'm just going to uh start going through the the background information unless anybody has any questions about the materials that you have. Okay. Um Mary's already gone through the the uh what we're gonna be covering today, so I'll kind of jump right in. Um one of the things about the budget is it's really the most important policy document that council adopts each year because you know we have various plans like the strategic plan, like the master plans and other various initiatives that we have uh during uh throughout um city government that we're trying to you know provide those services to our our community. But the budget is really where we put money to those things, really where we express our priorities and fund the things that we're going to be doing over the next next year. Um how we spend our money is uh is on this slide. I'm not gonna go through it in in great detail, but the biggest thing that we spend money on is education. That's money that we that we give to our school system in order to run our school system. And we're very proud of the work that the school system has done over the years. They're 100% fully accredited without conditions, and so they really do a good job with the money that we give them.

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