Published: Mar 13, 2012 07:00 PM
Modified: Mar 13, 2012 07:03 PM
HILLSBOROUGH - Town of Hillsborough leaders discussed slightly raising a recommended property tax rate increase of 5.5 cents for the next fiscal year during a budgetary planning retreat last month.
Town Manager Eric Peterson has recommended a 5.5-cent increase for fiscal year 2013. It would be the town’s first property tax rate increase since fiscal 2009 and would equate to a $110 property tax increase for a $200,000 home. Under the proposal, Hillsborough’s tax rate would change to 67.5 cents per $100 of assessed valuation.
Under the town manager’s proposed budget, the town’s operating expenses would total $14.3 million, with $7 million in expenses in the General Fund and $7.38 million in expenses in the Water/Sewer Fund. General Fund expenses would decrease 2.4 percent from fiscal 2012 and Water/Sewer Fund expenses would increase by 5 percent.
A 5 percent increase in water rates is proposed as well as an 8.8 percent increase in sewer rates to pay for rebuilding the town’s aging water and sewer system. From the proposed sewer rate increase, $399,000 would be placed in reserve for use in fiscal years 2015 and 2016 when the town makes its first debt payments on a necessary $19.2 million upgrade to the Wastewater Treatment Plant.
The proposed water rate increase would cost an extra 39 cents per 1,000 gallons for in-town customers and an extra 76 cents for out-of-town customers. The proposed sewer rate increase would mean an additional 76 cents per 1,000 gallons for in-town customers and an extra $1.48 for out-of-town customers. Hillsborough charges for a minimum of 3,000 gallons.
In the General Fund, the proposed 8.9 percent increase in property taxes primarily would address about $2 million in street maintenance and repaving needs over the next four years. It also would minimize reliance on town savings to balance the budget and would fund Phase 2 of Riverwalk, extending the greenway trail so that it runs from downtown through Gold Park and to Allison Street near Occoneechee Mountain State Natural Area.
The positions recommended for elimination are: Public Works equipment operator; police narcotics investigator; and a full-time police administrative position. The administrative position would be reduced to 18 hours per week. The equipment operator position would return to the FY15 budget when Riverwalk is scheduled to be completed and when additional homes are expected to be occupied.
During the retreat, town leaders discussed the possibility of increasing the proposed 5.5-cent rate increase to 6 cents to allow additional revenue to be placed in the town’s contingency fund.
“We’re right at our target for our fund balance,” Commissioner Mike Gering noted. “To me, that puts us on the edge.”
Commissioner Eric Hallman added, “This is not done just to raise the coffers, but this is essential.”
The town manager pointed out that the maximum amount of contingency that a municipality may budget for a fund is 5 percent.
“We’re running on a razor-thin contingency,” Peterson said. “It’s only about 1.4 percent.”
The commissioners noted their intention would be to have some funding to work with if needed and to not raise rates again for several years.
“It’s a tough pill to swallow, but I’m in agreement with that,” Commissioner Frances Dancy said. “I’ve been looking at our fund balance and at our employees. We need them. We can’t operate without them.”
Town staff also are looking into other health insurance and wellness program options than currently proposed in the budget. The draft budget proposes charging employees an increasing percentage to stay on the current health plan and offering a high-deductible health plan and health savings account as an option. The current on-site Wellness Program, including a part-time nurse and a doctor/physicians assistant contract for two hours a week, would be eliminated.
Employees have been encouraged to come up with “better budget proposals,” including providing information on how to pay for the proposals without raising taxes or water/sewer rates or cutting funding to nonprofits.
Town staff and residents are encouraged to make suggestions. Better Budget Proposal forms are available on the town’s website and in the town clerk’s office on the Town Hall campus, 101 E. Orange St. The town would need to receive completed forms by 5 p.m. April 5. Citizens who would like to present their ideas to the Board of Commissioners on April 23 may sign up for a 10-minute period by contacting Town Clerk Donna Armbrister by phone at 919-732-1270 Ext. 71 or by e-mail.
“This workbook is not the final word on Hillsborough’s budget/financial plan. Rather, it’s intended to serve as a starting point in a four-month-long process,” the town manager wrote in his budget message.
The draft budget and budget message are available on the right side of the Town Budget page on the town’s website,http://www.ci.hillsborough.nc.us/
. The Better Budget Proposal form — in a downloadable form and in a webform — also is available there. Click on Town Government to reach the page.
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