Critical items were on the table Tuesday night at the Town of Elkin’s first budget workshop of the year, including a potential 6 percent property tax increase, base pay raises for all town employees, and cuts to special appropriations.
Records show Elkin as having the lowest cash on hand in the bank through its undesignated fund balance compared to its last 20 years, with only $1.5 million.
Town manager Lloyd Payne started the public workshop by presenting commissioners with a 2013 - 2014 proposed budget of $4,181,537, a $378,211 decrease from the 2012 general fund budget of $4,559,748.
Payne did not propose a tax increase in this year’s proposal.
Payne recommended increases in recycling, leaf and limb fees, and adjusting fees for certain services in the town’s parks department. The proposal provided all 50 town employees with a 2 percent increase in base compensation across the board, an additional 2 percent for employees identified in a MAPS study, and a 1 percent merit increase, a one-time check provided at the town’s discretion not to be added to the base salary of the employee.
Under Payne’s proposal, recycling will rise $0.16 to $3.40 and leaf/limb service will rise $1 to $3.
Payne’s proposed water fund budget checked in at $1,124,061, a slight increase over the 2012 water budget of $1,089,239.
Payne proposed increasing the minimum water bill by $1 from $14 per month to $15 and would include the first 2,000 gallons of water. Beyond that, the volumetric rate for each additional 1,000 gallons is at $5.50 and would increase 50 cents to $6. Depending on consumption, homeowners would absorb an approximate $30 annual cost.
Not included in Payne’s proposal were selection of capital overlay projects for new expenditures requested by town department heads totaling $345,691, and outside agency special appropriations of $234,368, which is the funding of outside agencies such as the library, the arts council, the rescue squad, a trails association, and others.
“All we have would be $148,870 to divide between everyone,” Payne told commissioners. “Everything is lower. Our sales tax revenue is down. Property revaluations have lowered our tax base. We have uncertainty in the state legislature. We don’t have a pool of money this year.”
“We can’t continue to tap into the general fund to solve our problems,” said Commissioner Dr. Skip Whitman. “I will not vote on any budget that pulls from the general fund. We have to make tough choices.”
“I’m worried about the general fund. How long do we have if we stay at this pace?” asked Commissioner Joe Walker.
“I would say that we would run out of money in five years, if we keep going at this pace,” said Budget Director and Assistant Town Manager John Holcolmb.
“Time to reverse the ship,” said Commissioner Tim Kennedy.
Commissioners began discussions on what they could fund. The general consensus was to try to fund all capital overlay projects, which include a new fire truck for its fire department, a repair to a truck ladder, three replacement vehicles for its police, and new fitness equipment for recreation.
For special appropriations, commissioners discussed cutting all requests for funding by a 10 percent minimum as a starting point, including funding for the Northwestern Regional Library.
Tax increases were then placed on the table.
“I strongly object to raising any property taxes,” Payne told commissioners. “We have to make difficult decisions and sometimes that means saying no.”
“I don’t want to see cuts to the library,” said Mayor Lestine Hutchens.
“I don’t want to see anyone pay tax increases,” said Commissioner J.L. Lowe, Jr. “Now is not the time for that.”
“I could support it. Saving first responders, making cuts elsewhere. I believe I can vote in support of something like that. We’ll see,” said Commissioner Cicely McCulloch.
The current property tax rate for Elkin is $0.50 per $1,000.
“When a penny is added on the tax rate, it raises $40, 413. If the tax rate is raised to $0.53, a penny on the tax rate would be $38,360,” said Payne.
Prior to 2012, Elkin held its taxes at $0.475 for 13 consecutive years, records show.
Reach Anthony Gonzalez at 336-835-1513 or email at email@example.com.