Portsmouth City Council Work Session and Regular Meeting - April 22, 2025

The Portsmouth City Council held a work session at 9:45 AM followed by a regular meeting at 7:20 PM on April 22, 2025. The work session focused on presentations from the Hampton Roads Alliance, the FY2026 budget, and key decisions on the business boat tax, civic organization funding, and retiree supplements. The regular meeting included public hearings on the budget, capital improvement plan, and tax rates, as well as council discussions on school funding and other community matters.

Public Comments & Testimony

• A citizen expressed frustration with the lack of amenities like restaurants, urgent care, and a bookstore in Portsmouth, questioning the value of the casino and urging improvements in housing and infrastructure. She called for a more vibrant city.
• A citizen shared concerns about city truck debris falling on roads due to untarped loads, citing state code violations and urging the city to equip trucks with proper covers.
• A citizen described issues with her apartment complex's inadequate maintenance and broken appliances, asking for better enforcement of landlord obligations.
• A citizen reported delays in demolition of a burned house on Camden Street, noting that the city's six-month deadline resets when work is started and stopped, leading to continued dumping and blight.
• A speaker representing the Portsmouth Alumni Chapter of Delta Sigma Theta Sorority outlined legislative priorities including voting rights, economic justice, public safety, educational equity, and maternal health, asking for updates on affordable housing, safe drinking water, and birthing facilities.
• A school board member urged full funding of the school budget, stating many educators are leaving due to low pay and that inadequate staffing impacts student achievement.
• Several retirees spoke in favor of a permanent cost-of-living adjustment to the legacy pension system, arguing that the proposed $1,500 stipend is insufficient given inflation and that the city's actuarial projections are overstated.

Discussion Items

• Hampton Roads Alliance Presentation: Executive Director Doug Smith presented the alliance's work on regional economic development, emphasizing defense, maritime, and the AUKUS submarine program. He noted that Portsmouth is critical as a world-class maritime center and that the region is well positioned for growth. Council members asked about participation by small businesses and the role of the Eastern Virginia Regional Industrial Facility Authority (EVRIFA), which the alliance manages.
• Proposed Business Boat Tax Change: Budget Director Tre Burke presented a proposal to create a new business boat tax category for boats under 5,000 pounds at $1.50 per $100 assessed value (down from the current $5.00 per $100 for all business boats). The change addresses a specific business's request and is intended to better align with regional rates. Council discussed whether the weight threshold (5,000 lbs) captures smaller pleasure craft used by businesses and debated the intent to incentivize or disincentivize certain uses. The city attorney confirmed legal parameters. Council reached consensus to move forward with the ordinance.
• Civic Organization Funding: The city manager presented a list of existing and proposed funding for nonprofit organizations that provide services to the city. Council discussed adding two new organizations: Complete the Puzzle (autism and disability services, $100,000 request) and the Police Athletic League (PAL, $65,000). Concerns were raised about conflict of interest since PAL is police-affiliated. Council also requested impact statements and historical context for all funded organizations. Consensus was reached to include both new organizations in the budget.
• Retiree Supplement: Council considered two options for legacy pension retirees: a permanent 5% cost-of-living adjustment (adding $12.8 million annually to the actuarial required contribution) or increasing the one-time stipend from $1,250 to $1,500 per retiree (cost $1.4 million). The city manager cautioned that the 5% COLA would significantly increase unfunded liabilities given the plan's 2037 funding target. After debate, council reached consensus (5 votes in favor) to fund the $1,500 stipend as a one-time supplement in the FY2026 budget, committing to revisit the issue annually.
• Budget Overview: Tre Burke presented the FY2026 operating budget and capital improvement plan. Total budget is $338 million (3.4% increase), supported by $244.5 million in local revenues. Key initiatives include a unified billing system, a new pay classification plan, $81.4 million for schools (a $6 million, 7.6% increase), and a 5% water/sewer rate increase. Council discussed the machinery and tools tax rate (lowest in the region) and requested additional revenue projections for tax rate analyses.
• School Funding: Council members debated whether to provide an additional $3 million to fully fund the school division's request. The city manager noted ongoing negotiations with the superintendent and that the state's budget (due by May 2) could increase SOQ funding. Council agreed to request fiscal scenarios from staff showing the impact of adding $3 million, to be presented before the May 12 work session.

Key Outcomes

• Business Boat Tax Ordinance: Council gave consensus to draft an ordinance establishing a $1.50 per $100 tax for business-owned boats under 5,000 pounds. (Decision)
• Civic Organization Funding: Council reached consensus to include $100,000 for Complete the Puzzle and $65,000 for the Police Athletic League in the FY2026 budget. Staff will provide impact statements for all funded groups. (Decision)
• Retiree Supplement: Council voted (5-2) to include $1.4 million for a $1,500 one-time stipend per legacy retiree in the FY2026 budget, rejecting the 5% cost-of-living adjustment. (Decision with tally)
• School Budget Scenarios: Council directed staff to prepare options for providing an additional $3 million to Portsmouth Public Schools, including revenue sources and trade-offs, to be discussed at the May 12 work session. (Directive)
• Public Hearing on Budget: The regular meeting held three public hearings on the CDBG action plan, the annual operating budget, the CIP, and tax rates; no formal votes were taken. (Procedural)
• Debris Covered Trucks: The city manager will follow up on a citizen's complaint about untarped city trucks. (Referral)
• Demolition Enforcement: Council asked the city attorney to review the six-month demolition timeline reset policy and provide a report. (Referral)