Proposed City of Statesville budget calls for property tax hike, water & sewer rate increases
FROM STAFF REPORTS
Property owners in the City of Statesville would see a tax hike and city water and sewer customers would also pay higher rates in 2019-2020 if the city manager’s budget is approved by the City Council.
City Manager Ron Smith unveiled a proposed $111.1 million spending plan during Monday night’s council meeting.
The budget calls for:
► Raising the property tax rate by 6.39 cents to 54.5 cents per $100 property valuation;
► Increasing the water rate by 3 percent;
► Boosting sewer rate by 3.5 percent;
► Maintaining the current rate for electric utility customers; and
► No standard pay raises for city employees
In his budget message, Smith said the underlying goal of the team that produced the spending plan was to craft a budget that avoided raising the property tax rate.
That goal, he told the council, was rendered virtually unattainable by massive projected increases in the costs of employee insurance ($800,000) and retirement benefits ($350,000.)
The majority of $7 million in requested capital expenses were delayed in an effort to minimize the tax increase, Smith added. However, there is funding for the addition of two new positions in the Sanitation Department, nine new vehicles for the Statesville Police Department and four new sanitation vehicles.
“This was a pretty brutal budget process,” he explained.
The proposed operating and capital budget contains six operating funds:
► General Fund -- $36.7 million
► Electric Fund -- $54.16 million
► Water & Sewer Fund -- $14.27 million
► Civic Center Fund -- $1.11 million
► Airport Operating Fund -- $2.9 million
► Stormwater Fund -- $1.95 million
The Stormwater Utility Fund will be used to begin hiring staff and purchase equipment – including a min-excavator, midsize SUV, one-ton pickup truck, and a dump truck – needed to begin making improvements to the city’s stormwater infrastructure. It will be underwritten by a new monthly fee assessed on all property owners.
Major Revenue Sources
Major funding for the city’s operations comes from:
► Electricity Sales -- $45.38 million (a decrease of 4.58 percent)
► Property Taxes -- $17.74 million (an increase of 19.58 percent
► Local Option Sales Tax -- $7.06 million (a decrease of 2.61 percent)
► Sewer Fees -- $6.96 million (an increase of 4.85 percent)
► Water Sales -- $4.63 million (an increase of 3.07 percent)
An increase in property values following the county’s reappraisal of all real property is expected to generate an additional $843,129 in revenue for the city coffers.
Smith cautioned the council that this year’s difficulties were a sign of things to come, especially if they decide to fund the capital requests that have been deferred.
“What this shows is that the city needs to make decisions this year, and next, to help prepare for the future, and to expect a similar discussion this time next year,” the city manager said. “Improvements to our local economy take time and investment, but the needs of the community and the functions of our operations will come before we see a significant increase in revenues.”
The council will hold a public hearing on the budget during its May 20 meeting.