PILOT MOUNTAIN — Pilot Mountain residents could face a 4-cent tax increase, increased water/sewer rates, increased garbage collection fees, with the town still needing to use more than $30,000 in fund balance to balance its budget for the 2015-16 fiscal year under the spending plan proposed by the town manager last week.
The budget includes a 1.5-percent cost-of-living increase for the nine full-time employees who are making less than $15 an hour — that is five police staff and four public works employees. None of the staff at the town have had pay rate increases in six years, and Town Manager Amanda Reid hopes to look at how the town does at the end of the 2015-16 fiscal year to see if bonuses are available for the remainder of the employees.
While most of the town’s board of commissioners seem determined to find ways to reduce expenses for the upcoming fiscal year, it was apparent during a budget workshop Wednesday night that elected officials aren’t on the same page as to what needs to be cut and what the priorities should be.
The town already has approached the county commissioners about separating the contribution to the Pilot Knob Volunteer Fire Department into a separate fire district tax for town residents, a decision the county commissioners tabled at their Monday night meeting.
Whether that 4-cent fire district tax is created separate or not, town officials are looking at a tax increase for residents to make the budget balance, according to information discussed during the budget workshop.
Elected officials had hoped to build a budget without needing a tax increase, which would have put town residents paying 54 cents per $100 valuation for property tax, 4 cents for fire tax and then the county’s 58.2 cents. But Reid’s budget message made it clear Wednesday night that keeping the tax rate flat could be impossible.
Reid is tasked with bringing the commissioners a budget that meets the town’s needs and providing how funding those should be handled, thus the tax increase, rate and fee increases and fund balance allocation.
Then it is the commissioners’ job to instruct Reid on how to adjust expenses and revenues to what they want to actually approve as the final budget, in hopes of keeping tax rates and fees to a minimum while still covering operational expenditures for the year.
Water rates could increase
The workshop began Wednesday with a presentation by Marty Wilson of the North Carolina Rural Water Association, a nonprofit group which aids small communities across the state in keeping up with changing regulations, trends and other water-related issues.
Wilson explained the need for the proposed water/sewer rate increases, noting that unless the rates are increased the town still is not covering the cost for producing the water and treating the sewage.
“We are still not hitting our water/sewer usage rates and are about $200,000 from hitting our revenue mark on the water and sewer fund,” noted Reid as she introduced Wilson to the board. Last year, the town went through a rate restructure, which increased water users’ costs, in hopes of covering the operating costs of the water and wastewater treatment processes.
Wilson explained the UNC Environmental Finance Center’s water dashboard to the group, and then showed them with existing rates of $63.60, Pilot Mountain is below the state median of $70.40 monthly rates for municipalities with similar number of accounts.
The dashboard also shows whether a system’s rate is affordable to its users. Wilson said it is based on the percentage of local household income and that the bill should be about 2.6 percent of one’s average income. Pilot Mountain’s is 2.25 percent.
The dashboard showed that the town is not covering operating costs once the debt service is added to the overall figures, Wilson said. And using depreciation information provided by the auditors to the Local Government Commission, the dashboard showed the town’s water system’s physical assets are in condition that the town should be planning for their replacement, Wilson noted.
Based on the expected expenditures to operate the water and sewer systems, Reid and Wilson are recommending increasing the base water rate from $10 per month to $14, and then increasing the per-thousand gallon rate from $5.45 to $5.95 for users inside town limits. Users outside town limits would see rates of $28 base and $11.90 per-thousand if the approved rates are approved.
Wilson said with those rates, the town would be covering “all operating, debt service and proposed capital outlay costs, but it does not cover depreciation cost to plan for the future needs.”
He also said those proposed rates would put Pilot Mountain at $87.77, and still in the affordability range per the dashboard information.
Reid and Wilson said if grant money is available for needs to the utilities system, the town would not qualify for them now because the rate remains too low.
Wendy Byerly Wood is editor of The Pilot, The Elkin Tribune, and The Yadkin Ripple. She can be reached at [email protected]