GARNER — After Monday’s public hearing, town council and finance staff spent all day Wednesday poring through the proposed 2014-15 budget seeking – unsuccessfully – enough expenditure savings and new revenue to offset a proposed 1-cent tax increase.
No decisions were made, and there will be another budget discussion at 5:30 p.m. before the May council meeting, with more to follow after the regular meeting.
At the request of Councilman Buck Kennedy Monday, the staff has prepared an alternative budget that eliminates the tax increase. Among other maneuvers to make up the $297,000 the tax would provide, it moves $90,000 in police equipment purchases to the fund balance, reduces $15,000 for a gateway sign on U.S. 401, cut a police radar purchase in half and cut a mower purchase from public works.
“We don’t recommend this. Our recommended budget is in the 398-page notebook we handed to the council,” town manager Hardin Watkins said. “We vetted the requests; that’s the job of the budget team. We believe there’s merit in the things that our departments have asked for.”
In that recommended budget, property tax revenue decreased slightly as the town waits for under-construction assets to get onto the books. With other losses to state-level changes in tax law, overall revenues were limited to 1.7 percent growth. Finance staff included a property tax amounting to $17 extra for the average Garner home, which is valued, for tax purposes at $170,000 to help cover an overall 3.36 percent growth in the overall budget.
Other methods to cover the gap, finance director Emily Lucas said, would either violate policy by dipping into the fund balance for ongoing expenses, significantly hamper operations, rely on uncertain revenue, or fail to significantly dent the $297,000 provided by the tax increase.
Despite a property tax high for Wake County, Garner would remain near the bottom with solid waste and other taxes and fees included, Lucas said.
One councilman has fought the hike particularly strongly.
A frustrating exercise
“The tax rate has not been approved, and we will vet that more than one way, I can assure you,” Kennedy said at Monday’s council meeting.
On Wednesday, a frustrated Kennedy reeled off a number of small fixes that could make headway, some that that were shot down in discussion.
“Perhaps my hope is waning, but I hope there’s still a way, We could easily balance this year’s budget without a tax rate increase, the question is the impact for next year,” Kennedy said during a break. Later he said he could fix his budget but not “your budget,” and when town manager Hardin Watkins chimed in to call it “Our budget,” Kennedy quipped with a laugh “It’s about to be your budget; I’m not sure I’m going to vote for it.”
Despite general resistance to raising the tax rate one year in advance of a planned 2.75 cent increase for 2015-16 to help fund the $35.7 million bond passed in March 2013, the council members as a whole failed to agree on any substantial changes Wednesday. Most discussion tinkered around the edges of the budget and provided clarification on changes.
Two residents spoke at Monday’s public hearing, one of them on the tax increase. Dan Bruffey said that while the $17 was something he could live with, he also said it comes along with a nearly $64 increase next year to bring his tax bill to more than $890 in 2015-16, $1,800 when Wake County taxes are figured in.
He called the 1-cent increase something “I believe we can live with” but asked that, considering expected new revenues from current development, the town hold off on the one-cent increase another year.
“We know the 2.75 is going to be there, we supported that,” Bruffey said. “If we add one cent now, you won’t take it out a year from now. Let’s don’t fund the one cent, let’s find a place to do the cutting…I admit I’m not sharp enough to go through those details and tell you where, but I think you are sharp enough.”
Councilman Gra Singleton pointed out that Garner’s property tax would become one of the higher in Wake County, Lucas noted that total taxation remained low. Her calculations showed that Garner had the third lowest rate just behind Raleigh and Fuquay-Varina when she incorporated property taxes on an average Wake County home, solid waste fees (which Garner does not charge), and average water and sewer usage and costs.
Where the money goes
The bulk of the tax increase would fund fire operations in future years after a portion goes to police the first year. Garner Volunteer Fire and Rescue would add three new positions starting in January. Chief Matt Poole, calls them needed to fully staff each station without hemorrhaging overtime expenses with every vacation or illness. That increase will cost $137,000 for the half-year and almost $230,000 in future years.
Employees will receive a 3 percent merit-based increase in salary, which will cost a total of about $396,000, or a roughly 2.6 percent increase of total salary and benefits. Town staff maintains the increases, comparable to other towns, are important for retention since employees can carry retirement benefits to other towns in the state.
Kennedy said Wednesday residents could argue the tax increase was going to fund raises for town employees, contrasting with staff linking the tax to fire service. He pointed out the low turnover rate coupled with municipal salaries compare favorably to county norms.
“Nobody wants to leave Garner. When you don’t have the revenues coming in, how can you say ‘Well, I’m going to fund (raises) to the max,” Kennedy said.
He also hoped to put off some vehicle purchases to later years as the town attempts to implement a program to reduce backlog vehicle replacement requests built up over the recession.
The department with the largest budget increase, public works, would have its budget grow from just under $5.9 million to more than $6.6 million, a 12.6 percent increase. Much of that comes from town growth including an increase in the mileage of roads and town-maintained facilities and a few months of operations in a new police station.
“They’re seeing additional work every day. Likely you are going to continue to receive personnel requests from this department, and their requests have merit based on what they could be working on,” budget and special projects manager Jamie Ludovic said.
In addition to the property tax increase, another $45,000 would be raised by a new $50 fire inspection fee, which Kennedy argued to make higher for bigger buildings, to no avail. The service had been free in the past, while most towns charge a fee. Another $10,000 would be generated from new parks and recreation event sponsorships.
Jahner: 919-829-4822; Twitter: @garnercleveland