After much debate during a nearly four-hour meeting Tuesday on whether to cut property taxes and by how much, Mount Airy officials approved a city budget that kept a proposed 4-cent reduction intact.
However, that outcome during a budget work session at City Hall did not come easily, as evidenced by the 3-2 vote reflecting differing opinions on the matter.
In supporting the decrease, commissioners Shirley Brinkley, Dean Brown and Jon Cawley said they viewed it as a matter of keeping a promise made in 2011 to slash taxes by 10 cents over five years.
Meanwhile, the board’s Steve Yokeley favored not lowering the rate at all this year. He voiced concerns over how a 4-cent reduction would impact the municipality’s fund balance, or savings, and the need to address major building- and equipment-related projects that are being delayed.
Jim Armbrister, the remaining commissioner, also voted against the package with the 4-cent tax cut while also lobbying unsuccessfully Tuesday for a 3 percent cost-of-living pay raise for municipal employees, They were recommended for a 2 percent hike in the preliminary budget presented on May 15, which was approved with Tuesday’s budget vote.
Brown also had offered to support a 2-cent tax cut rather than 4 cents, as a compromise, but in the end sided with Brinkley and Cawley on 4 cents.
“I really don’t like it, but I’m going to do it,” Brown said of the larger reduction that will drop the rate from 52 to 48 cents per $100 of assessed valuation effective July 1 when the 2014-2015 budget goes into effect. “I was torn between the 4 percent (cut) or not.”
Yet in the final analysis, Brown said the 2011 pledge was the deciding factor. “I did want to keep my promise that I made several years ago to the public.”
“I don’t see any reason not to do it,” Cawley of the larger tax decrease. He pointed out that the city is in good financial shape — being able to increase its savings by $1 million or more in recent years while also regularly cutting taxes. Cawley credited City Manager Barbara Jones for those results which also have been accompanied by no elimination of services to the public.
“Every year she has come in under budget,” Cawley said. “There’s not grass growing up through sidewalks — the jobs are still getting done.”
On the issue of the 4-cent tax reduction, Cawley said he thought “we ought to do what we said we’d do.”
Brinkley also campaigned heavily for the maximum decrease. “I’m in favor of the 4-cent tax cut that we said.”
Mayor Deborah Cochran said Tuesday the 48-cent rate will look good to prospective companies and aid economic development.
The general fund budget totals just over $13 million, an increase of less than 1 percent compared to the package passed for the present fiscal year, $12,973,817. The separate water-sewer budget of $5,754,296 is slightly less that this year’s $5,768,826.
Voice Of Caution
Yokeley mentioned several factors in campaigning to keep the taxation level at 52 cents.
One involved the fact that the 2014-2015 spending plan calls for $2.5 million being taken from the city’s fund balance, or savings, to supplement the regular budget, and another $309,596 for water-sewer operations.
Yokeley referred to commissioners’ willingness to dip into that fund, which stood at $11.9 million at last report, and reduce it to about $9 million and still be within state-recommended levels for “savings.”
He said it troubled him that this limit could be reached in only one year. “And I’m just concerned for the future,” he said.
“After seeing the (budget) figures, I don’t think a 4-cent tax decrease would be justified.”
However, Cawley reminded during Tuesday’s discussion that $2.03 million also had been earmarked from the fund balance for this year’s (2013-2014) budget for the same purpose and barely been touched. The city manager said that as of May 31, only about $60,000 of that had actually been used, with just one month left in the fiscal year.
Another factor troubling Yokeley involves long-term capital outlay projections, for major building- and equipment-related needs such as new vehicles, roof replacements and similar projects.
Those needs are put at more than $16 million over the next five years, including regular city departments as well as its water-sewer division.
For 2014-2015, Jones recommends that only $729,939 be spent in the capital outlay category, which she says will allow the city government to stay on target with the replacement of police vehicles along with various equipment needs for most departments.
That will cover HVAC upgrades, storm-drainage replacement, street paving and the purchase of a knuckle boom grapple truck for the sanitation department, with the latter a projected $140,000 expense. Money also is earmarked to begin an upgrade of the city’s water-sewer infrastructure.
Though there was debate Tuesday on the question of actual “needs” submitted by police, fire and other department heads vs. “wants” — which some might call a wish list, which can be delayed — Yokeley said he feared the municipality reaching a tipping point. It then might have no choice but to make costly capital expenditures all at once which have been put off too long.
“It’s important to plan ahead for expenses you know will be needed in the future,” Yokeley said in arguing for not cutting taxes.
In suggesting the 3 percent pay raise for municipal personnel, numbering 172 full-time employees, Armbrister, a former city police officer, said they had faced major increases in insurance costs in recent years which lessened their take-home pay.
City employees also got a 2 percent raise for the present fiscal year, which cost about $231,000, according to previous reports.
And it has been learned in recent days that both full- and part-time workers received a Christmas bonus last year — of $250 and $75 each, respectively — which totaled $42,900.
Armbrister’s motion for another 1 percent hike next year, costing about $76,000, died Tuesday for lack of a second.
In discussing what implications Tuesday’s budget decision and 4-cent tax reduction might have on city finances in the future, a cross-that-bridge-when-we-come-to-it sentiment prevailed.
Cawley said there seems to be an assumption that if taxes are cut, they may not be increased again. The city government could realize later that reductions can’t be sustained and taxes might need to be hiked, but at least citizens have realized savings in the interim, he reasoned.
“What we’re doing here is a gamble — we gamble every year,” Brinkley said of the budgeting process. “You have to be realistic — you do what you can when you can.”
Yokeley was philosophical about Tuesday’s budget vote not going his way, although Brinkley said he might be able to say “I told you so” at this time in 2015.
“I got outvoted today,” Yokeley said. “That’s the way things work — and we’ll see what happens next year.”
Tom Joyce may be reached at 336-719-1924 or on Twitter @Me_Reporter.