Historically, Mount Airy’s commissioners have sometimes been reluctant to take money from city savings to balance the budget, but a majority of those presently serving advocates doing that to ensure a property tax reduction.
“Our citizens out there are hurting,” Commissioner Jon Cawley said Thursday afternoon during the last day of a city government planning retreat when goals, including lowering taxes, were set. City Manager Barbara Jones subsequently was directed to initiate a cut of 2 to 4 cents per $100 of assessed valuation when preparing the 2013-2014 budget.
Cawley said people are still suffering from a bad economy that doesn’t seem to be on the mend. “If it gets much worse, maybe Jesus will come back.”
In addition to wanting to give a financial break to municipal taxpayers, Cawley and others said there is a moral issue involved to continue a promise made in 2011 to reduce the tax rate by 10 cents over a five-year period. That was halted last year, when the commissioners opted not to cut amid a tight budget outlook — but the city still ended up adding to its general fund savings, which now amount to $11.8 million.
“I think we need to stand by what we said we were going to do,” Commissioner Shirley Brinkley said Thursday. Even though she wasn’t on the board when the 2011 pledge was made to cut taxes by 2 cents per year, “I expected it as a citizen.” The tax rate is now 56 cents per $100 of assessed valuation. A $60 savings would result for a $150,000 house from a 4-cent decrease.
The 4-cent figure Brinkley and Cawley pressed for Thursday would get the board back on track with its pledge.
“If we had done that last year, we could have continued to do what we said,” Cawley said of the promise. As it turned out, more than $200,000 was added in savings, while still meeting several budget challenges including purchasing an aerial fire truck.
“It sounds unanimous that all the commissioners want some kind of tax break — and I agree with that as well,” Mayor Deborah Cochran said.
Much of Thursday’s budget discussion included verbal jousting between Cawley and the city manager on the question of if the savings should be dipped into, and by how much, although Cawley said he was in no way criticizing Jones.
On Wednesday during the first day of the retreat, board members had been presented with $2.8 million in capital outlay requests from various departments, $3.8 million when the water and sewer unit — which has a separate budget — is included.
Those requests reflect various vehicle and equipment needs, including addressing failing HVAC systems at some municipal facilities, although Jones acknowledged Thursday that she wouldn’t recommended funding all the requests.
Commissioners also were told Wednesday that Mount Airy will be losing about a half-million dollars in revenues next year from multiple sources, compared to what was received from them for the present fiscal year.
A “Need” To Spend
On Thursday, board members said using money from savings is a way to both fund needed capital expenses as well as cut taxes.
Commissioner Scott Graham, referring to the delaying of such expenditures in recent years due to the high cost of some, said it is unfair to put those urgent needs on the backs of future boards. He believes the present commissioners shouldn’t be afraid to make such hard decisions.
“If we’re not willing to do that, we need another job — we need to be doing something else,” Graham said. “We need to start spending money (for capital needs), because it’s going to bite somebody on the (butt).”
“I don’t think we can keep putting things off,” Commissioner Steve Yokeley agreed. “We need to have a plan to replace some of the problem areas.”
The People’s Money
There was debate Thursday on how much could be taken from savings and still have a healthy fund balance. Jones said one rule of thumb is that 85 percent of the general fund for the present year’s budget should be maintained, which would be in the $10 million range given this year’s $11.7 million budget. That gives the board around $2 million to “play with,” the discussion indicated.
“A lot of municipalities have less than 40 percent in savings” in comparison to their operating budgets, Cawley said.
But the city manager urged a conservative approach on this. “Although we do have a healthy fund balance, I just want to caution us from using (it),” Jones said. It was mentioned Thursday that unexpected expenses could arise, such as costs from the new health-care reform program.
Cawley then reminded of his desire to help citizens in a back economy, pointing out that they don’t have what the city does in savings. And he pointed out that this money came from the people in the first place and does not belong to city officials.
The commissioner added, “It seems to me that the city of Mount Airy should be in similar financial shape as its citizens” and speculated that most local residents don’t have a year’s worth of savings at their disposal.
“Every year you’ve been manager, you’ve put money in there,” Cawley told Jones regarding the account in question. “We have put money in savings every year in a horrible economy.”
While also allocating the use of city savings, Graham did say that he would prefer to try to identify the most-pressing needs rather than simply spending the extra money from the fund. “I hate to see us decide on what we need on the basis of what we’ve got.”
Graham also said he would support the 2-cent tax cut for next year rather than the 4-cent one, just to be on the safe side with citizens. “When you promise somebody something and take it back, it’s a whole lot worse.”
The city manager, meanwhile, said she would embrace the commissioners’ directive when preparing the 2013-2014 budget during the spring.
“I will make every effort to do everything we talked about,” Jones said. “I will make every effort to reach the (tax-cut) goal of two to four cents.”
Reach Tom Joyce at 719-1924 or email@example.com.