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City of Norfolk Approved FY 2015 Budget In Brief Item

Page

Guiding Principles

2

FY 2015 Budget Highlights

3

Real Estate Picture

6

Budget Overview

8

Structural Balance

10

Looking Ahead

11

Major Budget Balancing Strategies

12

Well-Managed Government

14

Operating Budget at a Glance

18

Capital Budget at a Glance

20

Lifelong Learning

24

Safe, Healthy and Inclusive Communities

30

Accessibility, Mobility and Connectivity

32

Economic Vitality and Workforce Development

33

Environmental Sustainability

34

Message from the City Manager The Approved FY 2015 Budget is the culmination of initiatives, strategies, and tough decisions that we made over the past few years. In 2011, we came together and identified six priorities to move the city forward. Focusing on priorities will lead Norfolk into the future as America's heritage port city where people are transforming their neighborhoods, economy, and culture into the most fun and livable waterfront community in the world. The foundation of this vision is building a WellManaged Government. The Approved FY 2015 Budget continues the focus of building a datadriven organization that provides effective and efficient services that are responsive, accountable, inclusive, and customer-focused.

In addition to focusing on Well-Managed Government, this budget also highlights the Safe, Healthy, and Inclusive Communities and Lifelong Learning priorities. We look forward to working with City Council and the community as we all continue to move the city forward and to improve the quality of life for all residents in this great city. Marcus D. Jones City Manager


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City of Norfolk

Guiding Principles This budget continues our focus on building a data-driven organization that provides effective and efficient programs and services. To that end, we used the following principles to guide the FY 2015 budget development process.

 Establish a sustainable long-term financial plan  Eliminate structural imbalance  Centralize internal functions to strengthen core operations and provide enhanced services

 Eliminate redundancies to create efficiency  Consolidate funding streams to maximize impacts  Maintain or enhance service levels City’s Six Priorities The city’s six priorities define what success looks like and ensure we are effective (doing the right things) and efficient (doing them well). The six priorities are:

Established 2011 Guiding Principles


City of Norfolk

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Approved FY 2015 Budget Highlights  Focuses on three priorities: Well-Managed Government; Safe, Healthy, and Inclusive Communities; and Lifelong Learning.

 Initiates best practices to evaluate programs, services, and department structures to create efficiencies that enhance services

 Brings together existing city resources under one umbrella in the new Department of Neighborhood Development

 Transitions Waste Management to a self-sustaining operation  Begins the implementation of Attraction, Retention, Motivation and Development (ARMD) initiative to further the Employer of Choice initiative

 Increases support for homeless programs and housing assistance

 Enhances service levels with the opening of Slover Memorial Library and the Consolidated Courthouse in FY 2015

 Achieves a structurally balanced budget four years ahead of schedule in accordance with City Council’s approved city financial policies

FY 2015 Budget Highlights


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City of Norfolk

A Better Norfolk Groundwork for a Well-Managed Government

FY 2015 Budget Highlights


City of Norfolk

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A Better Norfolk ...and a Resilient City Norfolk was named one of the first 33 cities across the world to join the Rockefeller Foundation’s 100 Resilient Cities Network. Selected cities receive technical support and resources for developing and implementing plans for urban resilience West Freemason was named one of the top ten neighborhoods in the country by the American Planning Association Standard & Poor’s (S&P), upgraded Norfolk’s bond rating to “AA+,” which is one notch below the highest grade possible, the first upgrade for the city in 50 years Norfolk became the first city in Virginia to receive a Virginia Values Veterans certification for our commitment to veteran employment and support programs The City of Norfolk’s work was recognized as an All-America City by the National Civic League. The award recognizes exemplary efforts of community problem solving The American Public Works Association gave the city a worldwide management excellence award for waste management FY 2015 Budget Highlights


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City of Norfolk

Real Estate Picture Real Estate Tax Real estate tax revenue is our largest source of locally generated revenue and supports at least 25 percent of our operating budget. Without consistent and substantial growth in real estate assessments, revenues are not able to keep up with the growth in expenditures. Norfolk Overall Real Estate Assessments and Tax

Sustainable revenue growth is essential to maintaining or enhancing our service levels. In order to maintain or enhance service levels, we will need to establish a policy to ensure there is sufficient revenue. Stabilizing our revenue growth should be a focus.

Real Estate Picture


City City of of Norfolk Norfolk

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Real Estate Picture Unprecedented Decline in Residential Assessments Residential real estate assessments are projected to decline in FY 2015 for an unprecedented fifth consecutive year. Homeowners will on average see a decrease in their assessments and tax bills from last year. Moreover, on average, homeowners will pay about $260 less than in FY 2010 when residential assessments were at their peak. Impact of Decline in Assessments on Average Residential Tax FY 2014: Average homeowner’s tax bill

$2,321

FY 2015: Average homeowner’s tax bill (estimated) Average savings from decline in residential assessments

$2,312 -$9

Difference from average homeowners tax bill five years ago

-$260

Historical Decline in Residential Assessments

Real Estate Picture


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City of Norfolk

Budget Overview Doing More with Less  Approved FY 2015 General Fund budget is $817.8 million  Approved FY 2015 General Fund Budget is $330,339 more than the Approved FY 2014 Budget.  The majority of the increase is due to Norfolk Public Schools.  Most of the city departments are doing more with less.

Budget Overview


City of Norfolk

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Budget Overview General Fund Expenditures—How Each Dollar is Use

FY 2015 Approved Budget Overview—All Funds Fund General Fund

Approved Budget $817,831,138

Enterprise Funds Special Revenue Funds

$131,354,377 $59,104,682

Internal Service Funds

$99,792,406

Total Operating Funds Capital Improvement Plan Total Operating and Capital Funds Annual Plan for HUD Block Grants

$1,108,082,603 $104,353,800 $1,212,136,403 $5,421,897

Total Financial Plan

$1,217,558,300 Budget Overview


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City of Norfolk

Structural Balance A Structurally Balanced Budget The Approved FY 2015 Budget builds upon City Council approved financial policies. Our commitment to these policies further strengthens the city’s long-term financial sustainability. The first tenet of the financial policies was to achieve a structurally balanced budget within five years. The Approved FY 2015 Budget is structurally balanced four years ahead of schedule.

We have been able to achieve a structurally balanced budget with minimal tax and fee increases while maintaining or enhancing services.

Structural Balance


City of Norfolk

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Looking Ahead Two Year Lens窶認iscal Year 2015 and 2016 In developing the Approved FY 2015 Budget we analyzed each budget action through a two year lens. In order for the city to maintain or enhance services, we must not only look at how programs and services impact the city in one fiscal year, but also in the following years. In the past, we added new initiatives, restored programs, provided compensation increases, or increased support for Norfolk Public Schools using one-time revenues. These practices led to future financial instability.

Although our approved budget is structurally balanced this year, it is not sustainable in FY 2016. We are projecting a preliminary gap of approximately $9.0 million to maintain the same level of service next year. We need to focus on a policy to stabilize our revenue to ensure we can continue to provide the services our residents and businesses receive today.

Looking Ahead


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City of Norfolk

Major Budget Balancing Strategies Our Approach to Funding Results

We fund strategies focused on outcomes

We aligned outcomes with priorities

We are holding departments accountable to achieve outcomes within existing budgets

Major Budget Balancing Strategies Several cost containment strategies were employed to achieve a structural balance. Strategies used were:  Step 1: Level funded budgets in FY 2015 (savings of $3.7 million)  Step 2: Reduced most department budgets by one percent (savings of $3.2 million)  Step 3: Captured retirement savings and restructured debt services payments (savings of $7.5 million) Major Budget Balancing Strategies


City of Norfolk

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Major Budget Balancing Strategies Police, Fire-Rescue, and the Sheriff are partially exempted from step one and two of the major budget balancing strategies.

Norfolk Public Schools Held Harmless No cuts are approved for Norfolk Public Schools (NPS.) NPS will receive the same amount of city funding as last year.

Even as local revenues decrease city support for NPS remains constant. In comparison to some of our surrounding localities, who decrease support for schools as local revenue decreases, we are maintaining support.

Major Budget Balancing Strategies


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City of Norfolk

Well-Managed Government We planned year round, achieved a structural balance, analyzed budgets through a two year lens, and created in-house analysis teams for the city to focus on its priorities. The priority of Well-Managed Government is the foundation from which we developed the efficiency and accountability initiatives that will allow us to maintain or enhance service levels despite a reduction in local revenue. Norfolk Healthcare Consortium The city transitioned to a self-administered healthcare model in January 2014. As a result, in calendar year 2014 the Healthcare Consortium which includes Norfolk Public Schools and Norfolk Redevelopment and Housing Authority avoided $6.0 million in cost from this change. Aligned Fees and Charges to Fully Recover Costs A modest fee increase in FY 2015 will allow Waste Management services to become self-sustaining and transition out of the General Fund. This transition will allow Waste Management to establish a reliable vehicle replacement plan and increase capacity in the General Fund for the purchase of other city vehicles and technology. Well-Managed Government


City of Norfolk

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Well-Managed Government In-House Analysis Teams: ESET and SWAT Rather than use external consultants to provide recommendations for efficiency strategies, the city formed two in-house analysis teams, the Executive Strategic Evaluation Team (ESET) and Strategic Workforce Analysis Team (SWAT.) These two teams evaluate selected programs, services, and the organizational structure of departments. The teams identified opportunities to create efficiency improvements, enhance services, and initiate industry best practices through:  Centralizing Maintenance Operations  Expanding Privatization of Custodial Services  Centralizing Financial Operations

 Streamlining Public Safety Financial Management  Streamlining Human Services Administrative Services  Enhancing Employee Recruitment  Transitioning Waste Management to Self-Supporting  Transitioning Norfolk Community Services Board to General Fund Well-Managed Government


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City of Norfolk

Well-Managed Government Employer of Choice High quality employees deliver high quality services efficiently and effectively. To ensure Norfolk attracts and retains high quality employees we will begin implementation of our three year Attraction, Retention, Motivation, and Development (ARMD) Initiative in FY 2015.

Well-Managed Government


City of Norfolk

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Well-Managed Government Attraction, Retention, Motivation, and Development In FY 2015, we will take a number of first steps in our three year ARMD Initiative. The FY 2015 ARMD Initiative includes:

A living wage for all permanent employees.

Market rate adjustments for employees earning significantly less than their regional counterparts by January 2015.

At least a two percent General Wage Increase (GWI) for all general and Constitutional Officer employees by January 2015.

A step increase for all Sworn Police, Fire, and Sheriff employees by January 2015.

A Deferred Retirement Option Program (DROP) for eligible sworn Police and Firefighters in January 2015. This program will provide a significant lump sum payment for eligible retirees who delay retirement for four years.

A five percent salary increase and a five percent employee contribution to the Norfolk Employee’s Retirement System (NERS) for employees who do not currently contribute to NERS. By doing this, we will increase future retirement benefits for nearly 2,900 current city employees.

A one-time $300 supplement for City of Norfolk retirees who meet specific service time and income requirements. Well-Managed Government


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City of Norfolk

Operating Budget at a Glance FY 2015 General Fund Revenues by Source

Operating Budget at a Glance


City of Norfolk

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Operating Budget at a Glance FY 2015 General Fund Expenditures by Area

Over 1/3 of the city’s Approved Budget is dedicated to Norfolk Public Schools

Operating Budget at a Glance


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City of Norfolk

Capital Budget at a Glance The Capital Improvement Plan (CIP) is a multi-year plan for the construction, renovation or replacement of the city’s buildings, parks, infrastructure and other physical assets. The CIP functions like a credit card. We can buy things today with the promise to repay the lender in the future. While the initial payment may be low, as borrowing increases, the payments continue to grow. The city’s General Fund CIP is guided by two measures of affordability; one measure is tied to the value of revenue producing real property with the second measure being a proportionate share of the General Fund budget. These measures, or self-imposed debt limits, are as follows:

 

Debt Service as a percent of the General Fund budget (not-to-exceed 10 percent)

Net debt as a percent of taxable real estate (not-to-exceed 3.5 percent)

The city meets both these measures in FY 2015

Capital Budget at a Glance


City of Norfolk

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Capital Budget at a Glance The Approved FY 2015 CIP is about Neighborhoods and Schools

About 79 percent of CIP funding is dedicated to the construction or maintenance of schools and neighborhood development reflecting the city’s commitment to our residents and our children.

Capital Budget at a Glance


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City of Norfolk

Capital Budget at a Glance FY 2015 Neighborhood Projects CIP Projects Implement Broad Creek Neighborhood Plan Implement Southside Neighborhood Plan Implement Wards Corner Neighborhood Plan Implement Fairmount Park/Lafayette Blvd Neighborhood Plan Revitalize, Redevelop, and Conserve Neighborhoods Support Citywide Public Art Address Street Flooding Citywide Control Beach Erosion Improve Citywide Dreding and Waterways Improve Community and Neighborhood Parks Develop Bicycle, Pedestrian Greenways, and Sharrows Enhance Signals and Intersections Repair and Maintain Bridges—Minor Repair and Maintain Bridges—Major Repair Terminal Blvd—Concrete Pavement Improve Neighborhood Streets-Major Improve Street Lights Repair Neighborhood Streets/Sidewalks/ Walkways Support Norfolk Studios Program Improve Downtown Corridor Streetscaping Improve Infrastructure and Improve Property Total Capital Budget at a Glance

Amount $1,000,000 $1,000,000 $1,000,000 $750,000 $2,500,000 $250,000 $1,500,000 $500,000 $150,000 $250,000 $250,000 $200,000 $250,000 $1,000,000 $1,750,000 $300,000 $100,000 $250,000 $500,000 $100,000 $1,000,000 $14,600,000


City of Norfolk

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Capital Budget at a Glance Norfolk Public Schools The single biggest driver of our Capital Improvement Plan (CIP) moving forward is school construction, renovation, and maintenance funding. The city is spending more than $10.0 million on debt service for school construction in FY 2015. The amount is expected to increase to nearly $20.0 million by FY 2019. The city is committed to building schools that will enhance the educational experience of Norfolk’s students. The Five-Year CIP contains funds to build five schools, Campostella, a school in the Broad Creek Area, Ocean View, Larchmont, and Camp Allen.

The Approved FY 2015 CIP includes $101 million for school construction and maintenance

Capital Budget at a Glance


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City of Norfolk

Lifelong Learning The priority of Lifelong Learning is a commitment to support a culture of learning and development for residents of all ages.

The Colonel Samuel L. Slover Memorial Library (Slover) is scheduled to open in January 2015 The Approved FY 2015 budget continues our commitment to make Slover the most technologically advanced municipal library. To ensure the library has the most recent technological advances, $1.5 million is provided Colonel Samuel L. Slover Memorial Library within the FY 2015 CIP. The Approved FY 2015 CIP also includes funding to design, construct, and furnish the Broad Creek Anchor Branch Library.

Lifelong Learning


City of Norfolk

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Lifelong Learning Lifelong Learning Early Childhood Education

Lifelong Learning


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City of Norfolk

Lifelong Learning Creating Best Practices with our Partners The city is a member of Collective Impact, United for Children: Young Terrace. The city partners with Norfolk Public Schools, local universities, businesses, non-profits, and community-based organizations to assist children living in Young Terrace by focusing on education, character-building, and healthy living. Norfolk Ready By Five works with the Virginia Star Quality Initiative to rate and improve the quality of the early education system. The initiative encourages early education providers to be rated for quality. Providers are then eligible to receive resources to improve the quality of education they are providing our children. Norfolk will be home to New School, to be opened and operated by Elevated Early Education (E3) initiative. The New School will be a data-driven, mixed income, early education facility. The school will provide a pre-k model for the Commonwealth.

Lifelong Learning


of Norfolk City City of Norfolk

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Lifelong Learning Norfolk Public Schools City’s Commitment to Norfolk Public Schools in FY 2015

Lifelong Learning


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City of Norfolk

Operating Budget at Glance Lifelong Learning Norfolk Public Schools Average Daily Membership Continues to Decline Average Daily Membership (ADM) is the student enrollment count that determines the level of state funding NPS receives. In FY 2015 Norfolk Public Schools projects ADM to decline by 390 students from 29,805 to 29,415. As schools lose students, the state decreases financial support, however the city does not. The city will provide more local resources per student in FY 2015.

Average Daily Membership Continues to Decline

Lifelong Learning


City of Norfolk

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Operating Budget at Glance Lifelong Learning Norfolk Public Schools

Norfolk Spends the Most per Student in the Region Per Pupil Expenditure (PPE) is the statistic that measures the amount of money put toward general education for each student. Each spring the Virginia Department of Education Superintendent’s Annual Report for Virginia provides a yearly PPE comparison for each school division in the Commonwealth. The most recent report indicates that Norfolk spends the most per student in the Hampton Roads region.

FY 2013 Per Pupil Expenditure

Lifelong Learning


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City of Norfolk

Safe, Healthy, and Inclusive Communities Neighborhoods are the fabric of our community. We are looking at Neighborhoods with a different lens. In FY 2015 the city will implement a new service delivery model focused on neighborhood collaboration and community problem solving. Focusing on Neighborhoods The Approved FY 2015 Budget creates the Department of Neighborhood Development. We will unify all neighborhood programs under one umbrella. We will change what was a fragmented approach to neighborhoods into a focused, responsive, and collaborative effort that will maximize our resources and act as an advocate for our residents.

Safe, Healthy, and Inclusive Communities


City of Norfolk

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Safe, Healthy, and Inclusive Communities Investment in Our Neighborhoods In FY 2015 the city, with our community partners, will provide more than $26 million in support for our communities. There is support for:  Four neighborhood plans;  NRHA’s Revitalize, Redevelop, and Conserve neighborhoods project;  Repairing of neighborhood streets, sidewalks, and walkways;  Improving street lighting and neighborhood amenities;  Improving community and neighborhood parks;  Implementing of the Recreation, Parks, and Open Space Master Plan; and  Designing a boxing facility in Barraud Park.

Safe, Healthy, and Inclusive Communities


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City of Norfolk

Accessibility, Mobility, and Connectivity The way we work, travel, commute, access data and connect with one another is transforming rapidly. The priority of Accessibility, Mobility and Connectivity guides our efforts to communicate with residents and provide access to jobs, shopping, recreational activities, medical facilities, and other community locations. There are several initiatives planned or ongoing that will improve programs and services for our residents. These actions include:  The continued development of the one-stop Development Services Center online permitting process to create a more friendly environment and experience for residential and commercial permit requests.  Expanding use of social media sites such as Facebook and Twitter to disseminate public information to a growing “wired” community.  “We Roll Together”—a campaign to make Norfolk more bike friendly. The program will education motorists and bicyclists to ‘slow their roll’, ‘know their role’ and ‘share the road.’ Accessibility, Mobility, and Connectivity


City of Norfolk

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Economic Vitality and Workforce Development The priority of Economic Vitality and Workforce Development focuses attention and resources on a growing and diversified economy that enhances the quality of life for our citizens through a wide range of housing, shopping, educational, cultural, business, and employment opportunities. The Approved FY 2015 Budget includes a five-cent increase in the cigarette tax with all proceeds supporting development related activities. The five-cent increase will be used, in part, to promote Small, Women-owned and Minorityowned businesses (SWaM). Norfolk’s cigarette tax will increase from $.075 per pack of 20 cigarettes to $0.80 per pack of 20 cigarettes. In addition, we continue to pursue creative and innovative projects like Better Block Norfolk which provides a temporary glimpse at the development potential of some of our historically vibrant commercial corridors.

Economic Vitality and Workforce Development


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City of Norfolk

Environmental Sustainability When discussions began on the our priority of Environmental Sustainability in 2011, solutions to our environmental challenges seemed daunting. Limited funding was available to address our resiliency in instances of flooding, hurricanes, and other natural disasters. Over the last three years, through a holistic lens, we have seen that our environmental challenges are connected. We have made steady progress in the development of a flooding strategy and adopted plaNorfolk2030, bringing us closer to creating long-term viable solutions to our environmental challenges. We are One of 33 Cities Around the World Our efforts to promote an economically and environmentally sustainable community have not gone unnoticed. Articles in major publications including the New York Times and Wall Street Journal on the city’s flooding challenges helped secure our selection as one of the Rockefeller Foundations 100 Resilient Cities. As one of the first 33 cities in the world to be awarded this distinction we will receive support to, create a resilience strategy, and receive access to tools, technical support, and resources for implementing a comprehensive resilience plan. Environmental Sustainability


City of Norfolk

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Norfolk is America’s heritage port city where people are transforming their neighborhoods, economy, and culture into the most fun and livable waterfront community in the world

Well-Managed Government


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Life. Celebrated Daily.

City Council

FY 2015 Budget Calendar

Paul D. Fraim Mayor

Date

Event

Angelia M. Williams Vice Mayor Ward 7

April 22, 2014

City Manager Presentation of Proposed Budget to Council

Andrew A. Protogyrou Ward 1

April 29, 2014

Public Notice of the Operating, Capital Improvement Plan and HUD Entitlement Grant Budgets

Dr. Theresa W. Whibley Ward 2

April 29, 2014

First City Council Work Session

Alveta V. Green Ward 3

May 7, 2014

Public Hearings on the Operating, Capital Improvement Plan, and HUD Entitlement Grant Budgets

Paul R. Riddick Ward 4

May 13, 2014

Second City Council Work Session

May 20, 2014

Third City Council Work Session and Budget Adoption

Thomas R. Smigiel Ward 5 Barclay C. Winn Ward 6

Marcus D. Jones City Manager

This Budget in Brief includes highlights of the Approved FY 2015 Budget. For additional details, please visit the city’s website www.norfolk.gov to view information about the budget or read the Approved Budget Document. A Approved Budget Document is also available in each library branch.

Fy 2015 approved budget in brief  
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