VIRGINIA BEACH -- The City Manager's Office believes sequestration will not have an immediate impact on the City.
That said, during a presentation to City Council Tuesday, Director of Management Services Catheryn Whitesell laid out a plan both to monitor and mitigate effects that the massive federal budget cuts could have if the sequester stands for any length of time.
'We don't have a clear understanding of direct impacts,' said Whitesell. 'Right now, we're adopting a watch-and-wait strategy.'
Whitesell explained the strategy includes 3 dates through the end of the year which would signify bad, worse, and worst cases.
Mitigation steps could begin July 1 and could include moving money from Virginia Beach's Fund Balance into a 'Sequestration Reserve.' That would be about $9.8 million that could be used to fill funding gaps. Other measures that could go into effect on that date include putting a freeze on hiring people to fill new positions in the city and cutting non-mandated travel.
'We would delay -- if we give any -- any planned pay increase for 6 months until we see if our revenue streams are gonna end,' Whitesell told City Council. 'Right now, we're not sure where we're gonna end up with pay raises in next year's budget other than the 1% required VRS (Virginia Retirement System) pay raise that we have to do legally.'
If services still are threatened when September 30 comes, Virginia Beach could put a hiring freeze on non-sworn positions, cut discretionary spending in its departments by 5%, and notify the school division of potential revenue problems, asking Virginia Beach City Public Schools to help in addressing shortfalls.
December 31, if sequestration remains an issue, the City could consider furloughing employees (a 3-day furlough for employees would save about $3.9 million) and laying off non-essential personnel. Whitesell pointed out, even during the recession, Virginia Beach did not have to resort to those measures.