PILOT MOUNTAIN —During a special budget meeting on Friday afternoon, Pilot Mountain Town Manager Homer Dearmin proposed a water and tax rate increase for town residents and businesses.

Dearmin said because of the debt service on a project from 1997-98 when the town spent $1.4 million on water and sewer lines to the Ararat River, rates need to go up just to keep the budget on track. He proposed a $1.52 increase to the bill base of low-end water users and $3.67 per month to mid-range utility customers. His proposal amounts to a 5 percent increase.

“By implementing this proposed increase, the board will affirm its commitments to repaying the general fund, fulfilling our promises to the state treasure made in October of 2011 and to managing our utilities responsibly by adequately funding them and not keeping rates artificially low,” said Dearmin.

The town raised water rates 5 percent in 2011 and 10 percent in 2010.

He said with the costs of fuel, supplies and personnel, the town cannot afford to not raise its rates to meet those rising costs.

Dearmin also proposed that the town raise it’s tax rate 1 cent because of the recent tax re-valuation by the county. The town’s rate is now at 56 cents for $100 in valuation.

“As in years past, this remains the largest single source of revenue for the Town of Pilot Mountain general fund at over 52 percent of general fund revenues. A revenue neutral tax rate would be 58 cents for $100 in valuation, or a 2 cent tax rate increase. In preparing this budget I have struggled with whether to increase this tax rate to the revenue neutral rate, but in a tough economy when many are struggling to get by, I do not want to pressure this board to increase our tax rate and impose higher taxes on citizens,” said Dearmin.

He said the proposed rate combined with property revaluation will actually mean a tax reduction for most taxpayers.

“It is prudent to note that a 1 cent increase in our tax rate results in just over $12,000 of revenue for the town and would only impact taxpayers by a few dollars a year,” said Dearmin.

“Several factors have converged to make this proposed budget equally challenging as the previous budget, and we must continue to make sacrifices and difficult decisions,” said Dearmin.

Dearmin said that he significantly reduced budgeted expenditures “in light of present economic conditions.”

His proposed budget does not include merit pay increase, however, employees who have taken furlough days in the fall and spring will be reimbursed for those days. A Christmas bonus remains in his budget proposal. He said health care costs are going to increase $100 per month, however, he does not want to pass that increase on to employees.

Dearmin also proposed that the town spend $12,000 to purchase five narrow-band radios for the police department following an unfunded mandate for emergency communications from the Federal Communications Commission that police switch to the narrow-band radios completely by 2014.

He also suggested that the town lease a 2012 Dodge Charger to replace an aging patrol car. He said the town now has five patrol cars, none of which is newer than 2006. He said the town can make three annual installments of $8,153 and the town would own the car after three years.

“We need to rotate out old vehicles, spend less in maintenance costs, and get a better sale price on the vehicles when they are sold,” said Dearmin.

He also informed the board that after negotiations with Waste Management Inc., the town’s solid waste pick-up provider, the town will be able to add recycling.

“Waste Management has proposed a rate rollback that will allow us to implement bi-weekly curbside recycling as an additional service to citizens for a very small increase in our services fees. The service will allow citizens to easily and conveniently recycle plastics, glass, cardboard and other materials on a bi-weekly basis in one roll-cart provided by the vendor. The seldom-used recycling container of Lynchburg Road will be removed. I believe this service will add value to our community at a very small cost and will help our community to contribute to the sustainability of our natural resources,” said Dearmin.

Following Dearmin’s presentation, Pilot resident Renee Davis expressed concern over the proposed increases.

Commissioner Carolyn Boyles pointed out that the town has a water/sewer hardship fund for those who can prove a financial hardship. Commissioner Andrew French said the town would never turn water off on someone who couldn’t afford to pay.

Mayor Earl Sheppard said that the town had been spending money from the general fund for years to support the water sewer fund and that is not allowed by the state.

French said he fears that if the town is not proactive in raising its rates to an appropriate level to take care of the aging infrastructure, the state can come in and take over the town’s water and sewer operations.

“I’d rather have the four of us up here deciding how to run this than someone in Raleigh,” said French.

Dearmin said the budget he proposed does not allow the town to hold back any money for emergencies.

“This is a shoestring budget,” said Dearmin.

The board has scheduled a budget workshop on June 15 at 3 p.m. in the lower level of town hall. The town’s regular monthly meeting is on Monday night at 7 p.m. in the lower level of town hall. There is a public forum at that meeting.

Reach Mondee Tilley at mtilley@heartlandpublications.com or at 719-1930.