The city's proposed budget for the upcoming fiscal year contains a revenue neutral tax rate adjustment that would see that number go to 65.1 cents per $100 of valuation if approved.
That number, City Manager Joseph Scherer told council this evening, will generate an additional $270,000 in revenue.
Because the matter of a tax rate adjustment had not been discussed in previous budget work sessions, Councilman Ernest C. Bobbitt requested that a session be held next week to review the financial plan.
That meeting will be held May 27 at 4 p.m. in the first floor conference room of city hall.
(The next step in the budget process after the work session will be a public hearing at 5:15 p.m. at the Lloyd Andrews City Meeting Hall on Jackson Street on June 2)
“We need to look at it and thoroughly understand it,” Bobbitt said before requesting the work session.
The city's current tax rate is 62.4 cents per $100 of valuation. Scherer also proposes pulling $500,000 from fund balance to fund the proposed budget.
Scherer said one of the reasons he is recommending the revenue neutral tax rate adjustment is to make up for the revenue the city is expected to lose from the end of the privilege license tax mandated by the state.
Mayor Emery Doughtie said the adjustment falls in line with what the county is proposing in light of its revaluation which lowered property values. “We're trying to operate the city with all the costs around us going up and revenues going down.”
Councilman Wayne Smith asked Scherer why the proposed budget wasn't kept at $14 million or lower as was requested in an April work session.
The proposed budget for the city as presented this evening stands at $14,458,957.
Scherer responded, saying holding the financial plan at $14 million or less would result in layoffs or cutting services. “The budget I'm recommending has no layoffs and allows us to provide services as efficiently as we can.”
Doughtie said there is the possibility to use fund balance to maintain services.
Smith said, however, he didn't like taking money from the fund balance at this point. “I know we want to maintain the services we have.”
In his budget message, Scherer said, “We anticipate the economy to continue on a slow and steady path as we did last year. Little change is expected in this scenario over the next 12 months. The housing market will continue to recover, although slowly.”
The city's unemployment rate as of February was 8.5 percent, a decrease of 1.7 percent compared to that time last year.
“The annual budgets produced during the past few years have required a very careful approach to revenues,” he said. “This resulted in continued major deferments of maintenance items and severely reduced capital spending. Available funds are insufficient to address all of the city's capital equipment and improvement needs have been identified.”
The proposed budget will cover a 1 percent raise for employees and provide an employee benefit package. It will fund the city's beautification committee at $1,000; the Roanoke Valley Rescue Squad at $15,000 and the Halifax-Northampton Regional Airport at $25,000.
“We continue to strive to present a recommended annual budget that is balanced, protects the investments made in the past, fosters a work environment that ensures the safety of those who serve the city and provides for services as economically and efficiently as possible,” the city manager said. “Respected citizens, outside agencies and city departments requested substantial new and additional funding for a variety of programs and services. Many of the requests were reasonable, yet the available dollars to help everyone were very limited. As such, most were not included in my recommended budget.”