“We have to have additional revenue from somewhere,” Joe Walker, Elkin town commissioner said. “We either have to change our water rates or raise taxes.”
Town manager Lloyd Payne recommended moving to the new policy after discussing the continued deficit the water fund has carried for several years.
The final decision whether to adjust residential water customer rates will be made when Elkin adopts its 2010/12 budget prior to the start of its new fiscal year on July 1. There will be a public hearing before the budget is formally finalized.
Elkin Finance Director John Holcomb presented the commissioners with data showing that most municipalities across the state with similar or like population rates have minimum bill policies. Holcomb also provided information on Elkin’s rates for water usage and the fees associated with usage for the past several years with no increase in rates.
Payne and Holcomb explained to the board how the projected $263,062 deficit for the water fund would just continue to increase yearly if rates were not changed to help alleviate some of that burden.
“We’re (the town) operating at a continual deficit with the water fund while maintenance still has to be performed, water lines installed and replaced, meters read, and then there’s always the potential for lines breaking or major repairs needed to the water plant,” Payne said. “If we continue to have to borrow from the fund balance to operate our water system, it’s bad management.
“Although moving to a minimum bill for water service will not bring the water fund to a positive balance in the first year, it will work toward decreasing the deficit. The cost of doing business is going up,” he said.
The board of commissioners spoke of their concerns over the amount to charge for the minimum bill with passion.
“I’m worried about the cost to the residents,” J. L. Lowe, commissioner said. “With the addition of the Yadkin Valley Sewer Authority and the separate bill that residents will be receiving, adding an additional cost for water at this time could be very bad for some residents.
“People are looking for jobs, they want to work and there are no jobs,” he said. “I think we need to spend every available dollar toward economic development to bring employers into the area to help put people back to work.”
“I think if we’re going with the $10 minimum bill, we need to also let the residents know that we will be revisiting the volumetric amount yearly,” Walker said. “An annual increase in the volumetric amount won’t be as much as a financial impact to the tax payers as going with a higher minimum bill amount and/or a higher volumetric rate to start with.”
Commissioner Cicely McCulloch, first term commissioner, agreed with the other commissioners.
“I think when the taxpayers realize that the increase to their water bill (for the average 2,000 gallons a month customer) will only be a $2 impact, they will understand,” McCullogh said. “Although no one wants an increase in any kind of bill right now, we all want the services that are provided and to continue those services, we have to pay for them.”
Commissioner Gil Ripley agreed that although charging $12 for the minimum bill was a fair and equitable amount, he felt that charging $10 would be all he would be comfortable with.
“With the new sewer bill residents will be receiving and with the economy the way it is, we need to be sensitive to the taxpayers,” Ripley said. “I’d not want to go higher than the $10 option for the minimum bill.”
Terry Kennedy, also a first term commissioner, gave his opinion to the board as well.
“We didn’t get to this amount in a deficit in one year and we won’t be able to come out of it in one year, so I’d agree with the $10 minimum, especially with the sewer bill,” Kennedy said. “The two bills are going to make a double impact.”
Walker continued his thoughts to the board.
“The board, as elected officials, will be looking at these rates on an annual basis and be responsive to what our bills are showing us,” Walker said. “It won’t be done in one year, but we can also work on our economic development and bringing in business which will help the town’s economy also.”
Elkin charges $3.30 per 1000 gallons with a $1.40 administration fee for water service at present. The proposed water bill will be a minimum $10 with a $3.30 volumetric charge. The volumetric charge will increase with every 2,000 gallons of water used. Elkin has approximately 490 residents who use less than the 2,000 gallons per month. These customers will see the biggest impact, with their water bill going from $4.70 per month to $13.30 per month. Residents who use 2,000 - 3,999 gallons per month will pay $13.30 and for each 2,000 gallons used after that, an additional $3.30 will be added to the bill.
At $10 per bill, minimum, the increase in water revenue would generate an additional $58 to $59,000 per year for the town.
Changes in budget proposals
The new proposed budget for Elkin’s fiscal year 2011 now stands at a deficit of $1,048,250 after the second budget workshop meeting on Monday night.
The first budget proposal projected a deficit of over $1.2 million.
Removal of the $75,000 slated for architect fees to design a new fire station were removed from the budget, as well as funds slated for Project 5 of sidewalk replacement along North Bridge Street, turning east onto Market Street at a cost of $120,000.
Other changes to the first proposed budget included a revenue of $130,000 in the water tank project when the final grants are received, an additional cost of $24,300 for the increase in charges of the change in contractors for the Elkin Center, an award of $4,000 to the Jaycees, a state sales tax disbursement of $40,000, utilities franchise tax of $5,000, $2,000 in fees for recycling, an additional funding of $2,5000 (GET RIGHT FIGURE) from the TDA for the economic development position, and the latest Surry County tax scroll of ($14,343).
Questions on the cost of the AirCare helicopter being stationed at the Elkin airport were left unanswered while Elkin awaits AirCare and Surry County’s commitment to funding.
Roofing repairs and maintenance for the town owned properties were left in the budget.
“This is a legitimate expense,” Payne said. “We own these buildings and we need to maintain them with regular maintenance.”
Payne explained to the commissioners that the Surry County water maintenance agreement could offset some of the capital cost included in the proposed budget, but as the agreement has yet to be finalized, the impact amount is unsure at present.
Other increases for Elkin residents
Holcomb also presented the board with a listing of current and proposed fees for services provided by the individual departments of the town.
An increases in the fee for the use of the town’s bulk item truck is proposed for $20.00 bringing the cost of use to $70.00 per load.
An increase in the cost of commercial out of town tap fees for the water system are: 3/4” tap, $1,000; 1” tap, $1,200; and a 2” tap, $2,700. A residential out of town tap fee will increase to $750.00
“Although it will cost an out of town resident more to tap on to the water system, there will also be fire hydrants placed along the lines,” Walker said. “This will provide the homeowners a break on their homeowners insurance.”
Other fee increases surround services with the Elkin Parks and Recreation Department.
The cost of a two-week session of summer day camp will increase to $110.00 per resident and $190.00 for a non-resident. The cost of youth basketball for 5 - 15 year olds will increase to $25.00 per resident and $45.00 for non-resident.
The cost for the use of the Chatham shelter, for the first 3 hours, will remain the same at $15.00 for residents and $30 for non-residents, but there will be an increase of $5.00 per hour for each additional hour the shelter is used.
The cost of renting the band-shell, with a three-hour-minimum, will be $50.00 for residents, and $100.00 for non-residents, with an additional cost of $5.00 for each additional hour.
The parks and recreation department now requires that “A security deposit of $100 will be required for renting the entire gymnasium at time of reservation.”
The town operates its budget with a cushion of $3,875,211, referred to as it fund balance.
Those are monies set aside in case of extraordinary expenses a town might incur, like the complete loss of the water plant because of a natural disaster.
However, the state’s Local Government Commission, which oversees all state municipality budgets, requires that a certain percentage of a town’s budget be maintained at all times.
Currently, said Payne, the town has “unreserved” in its fund balance $2,726,563. This money can be used to offset current fiscal year deficits.
“Although we can use this money, we have to be fiscally responsible and only use what is absolutely necessary,” said Payne, which led into the discussions of capital projects that are on the drawing board for the upcoming fiscal year.
The third and final budget workshop is scheduled for 5:30 p.m., Monday, May 24 at the town hall. The final budget will be available for public inspection on June 2, with the adoption of the budget planned for the Elkin town board meeting on June 14.
Projected capital projects include in this year’s budget were unchanged. They are:
• equipment for the water plant in the amount of $98,000;
• roof repairs at the Elkin airport, a T-hanger, and safety lighting and fencing in the amount of $66,296, (after a $300,000 grant from the Department of Transportation)
• a projected $300,000 for the tennis court project, $225,000 of which the town hopes to collect from the county, Elkin City Schools, the United States Tennis Association, and private donations;
• $45,000 for the Parks and Recreation Department for the purchase of a back-hoe and new fitness equipment;
• $36,000 for the fire department, that will be used for the purchase of equipment
• Street capital outlay includes $20,000 for the purchase of a used pickup truck;
• approximately $832,000 for the Elkin Center, or workforce training center, as it has previously been called, which, which will be paid back by 2014 using grants, county funds and Surry Community College, netting Elkin $221,000. The building will be completed this year and classes will begin in September of this year.
• public building repairs for roofing at the library, fire department, parks and recreation building, and the town hall will cost $71,954.
• a program designed to allow the town to scan and index all of the town ordinances and post to the Internet, as well as check the validity of the ordinances, will be a net cost of $11,000.
Payne continued to say that while there are a lot of projects proposed that would be good for the town, there’s a point where the board must decide which one’s are most important and beneficial.
Payne also broke down the town debt service for previous years’ capital improvement. They are:
• The town’s general fund debt service payments for fiscal year 2011 is a projected $132,790;
• Payment on the town hall building is $31,06
• Phase I of the Corporate Park, $64,844;
• Public Works facility, $36,880;
• The remaining principal on the town hall is $460,865;
• The corporate park, $89,741;
• And the public works facility, $275,000.
The projected cost for economic development includes an additional $33,000 to make Leslie Schlender, Elkin’s economic development director, full-time. The proposed economic development expenditures is $144,047.
The general fund expense summaries are as follows; Governing body, $97,174; administration, $155,222; finance, $261,703; legal, $17,480, which includes the cost of adding town attorney, Ray Parker, as an employee of the town and the cost of his FICA.
Those expenses will a projected increase from the previous fiscal year of 1.9 percent.
Other expenditures include planning and zoning, $78,096; Main Street for $57,812; Economic Development, $144,047; Public buildings, $1,048,157, which includes the entire expense for the Elkin Center at a cost of $925,000, that will be funded with grants, leaving an actual net cost to Elkin of $221,000; police, $1,059,571; fire department, $364,869, garage, $58,043; streets, $397,017; Powell Bill, $207,980; sanitation, $213,969; recreation, $942,170; Elkin Public Library, $86,939; cemetery, $23,250; airport, $388,796, which does not include the cost to Elkin for the new medical helicopter base; debt service, $133,600; and non-departmental, $271,403.
The cost of providing health insurance to town employees has increased by 20 percent and the town saw an increase of 40 percent to its workman’s compensation policy, due to the injury of an employee in the recreation department.
Town employees will also receive 2 percent across the board pay increase and will be eligible for additional merit pay in January 2011.
Elkin’s current tax rate is 47.5 cents per $100 of property valuation. Each cent on Elkin’s tax rate equals $42,925 in revenue to the town.
Post a Comment
