As the coronavirus outbreak continues to upend the economy and strain city finances, it’s threatening funding for work to address sea level rise and flooding in Hampton Roads.
Cities across the region — and much of the country — are forecasting budget shortfalls due to lost revenue from the COVID-19 pandemic.
Shuttered restaurants and retail stores and empty hotels have meant cities are generating less revenue from taxes on meals, hotels and sales, among other expenses. Event cancellations over the past two months have further limited money flow across local economies.
The result is Virginia Beach is scrambling to cut expenses to make up for an anticipated $67.3 million loss in revenue. Norfolk is projecting a $40 million budget shortfall in its 2020-2021 fiscal year.
Both cities are now considering cuts to resilience funding as they finalize their budgets this month for the next fiscal year.
Virginia Beach plans to delay a flood mitigation project that would raise roads and intersections in rural areas in the southern part of the city. A Norfolk budget proposal recommends diverting resilience funding to its general operating budget for immediate expenses.
"We have tremendous fiscal uncertainty," Norfolk City Manager Larry "Chip" Filer told the City Council during an April presentation of the budget proposal. "I think what we’re all trying to hopefully accomplish is how to protect some of the most core services of the city."
Norfolk and Virginia Beach’s city councils are still reviewing budget proposals for the next fiscal year. Both councils will vote on final budgets later in May.
Norfolk has been generating additional resilience funding since it passed a one cent property tax increase in 2018. Filer is considering using some of that revenue to help pay for basic services like public safety and public works.
Doug Beaver, Norfolk’s Chief Resilience Officer, said the budget cuts will not immediately impact ongoing efforts to combat flooding in the Chesterfield Heights and Grandy Village neighborhoods — part of the Ohio Creek Watershed Project.
But it’s unclear if cuts to resilience funding would impact other efforts to respond to the rising seas.
Due to the ongoing discussion about the city’s budget, a Norfolk spokeswoman declined to specify any potential effect of cuts on resilience planning. She said the use of resilience money "is just one of many strategies that could be used to close the budget gap."
Skip Stiles, executive director of Wetlands Watch — a Norfolk non-profit working to address the rising seas — said he understands the cities’ dilemma.
"There’s not much you can do about it," he said. "I would have a hard time making an argument that diverting money from resilience projects to schools and police and fire wasn’t a necessary step."
Stiles said cities must ensure that funding eventually returns for resilience and sea level rise initiatives once the economy recovers.
"When this is all over, does that money come back? Or does the police department keep all the money it got?" he said.
Funding cuts for resilience work is not the only way cities are looking to close budget gaps. Filer has also recommended delaying the renovation of Chrysler Hall, continuing furloughs for non-essential full-time staff and continuing closures of some libraries and recreation centers.
If Norfolk begins generating more revenue in the next few months, Filer said the city may restore money to services and projects that experience cuts.
"These are challenging times," Filer said. "We hope for a much much brighter, happier conversation when we get into early November in terms of the second part of the fiscal year."
Norfolk will hold a public hearing Wednesday to review Filer's budget proposal for next fiscal year. Virginia Beach's council plans to meet Thursday to discuss the city's budget.
