Hendersonians face increases in property taxes, water rates and sewer rates under the budget proposal City Manager Eric Williams delivered Thursday to the City Council.
“The budget that I gave you tonight, with the exception of the fact that it has no layoffs of city employees, which I would oppose, there’s not a single part of it that I present to you with a great deal of glee or pleasure,” Williams said at the end of a meeting of the council’s Finance and Intergovernmental Relations Committee.
The FAIR Committee was supposed to have a formal presentation of the budget but ran out of time after discussions about health and insurance and the 2004 city audit, so council members simply received their budget books and the promise that they can ask questions Tuesday at 6 p.m. at the next FAIR meeting.
“I have tried to address virtually every concern from building fund balance to public safety to whatever it may be,” the city manager said.
The only comment from the City Council was made by John Wester before he looked at the budget: “Very often this information gets out as being a done deal. I want to make sure everybody understands that this is a work in progress.”
“I guarantee you it’s a work in progress,” Finance Director Traig Neal said.
The Henderson budget is four separate budgets in one: the general fund, the sewer fund, the water fund and the regional water fund. Altogether, Williams proposes spending $25,028,816, a 2 percent decrease from the $25,174,563 budget the City Council approved last June.
The general fund would increase 1 percent to $13,662,856. Debt service accounts for much of that increase, rising 13 percent, or $143,000, to $1,280,920. The water fund would fall 3 percent to $4,003,300. The sewer fund would drop 5 percent to $3,773,850. And the regional water fund would be down 9 percent to $2,662,810.
The city work force would remain at 258 people.
Williams anticipates pushing the city’s general fund balance above 8 percent by the end of 2005-06 by taking advantage of the way the Local Government Commission calculates the fund balance, or accumulated savings. Rather than only count unrestricted funds — the method that shows Henderson with a fund balance below 3.5 percent at the end of the last fiscal year — the LGC includes restricted money that falls under the general fund. So Powell Bill money, which the state supplies for road maintenance, and drug seizure money, which is limited to law enforcement uses, can count toward the fund balance.
Williams estimates that the fund balance will gain $75,000 in unrestricted money (funds departments were given but didn’t spend, often because of personnel vacancies), $75,000 from the Powell Bill and $100,000 from drug seizures by the end of this fiscal year, June 20. Those additions would lift the fund balance from 5.36 percent on June 30, 2004, to 7.42 percent of annual spending. In actual dollars, the total is $1,038,417.
By the end of 2005-06, Williams projects, the fund balance will grow to 8.39 percent. The budget calls for $88,949 in unrestricted money to go into the fund balance in the coming fiscal year.
On the revenue side, Williams proposes to add 5 cents to the property tax rate, making it 69 cents per $100 of valuation; to raise city water rates by 10 percent; and to increase sewer rates by 15 percent.
Each penny of the property tax is expected to bring in $68,355, for a total of $4,716,495. That’s an increase of 8.3 percent from the current year’s levies of $4,354,000. The total would be higher, except that the city’s tax base declined from almost $743 million to $735 million. The tax collection rate is budgeted at 93.4 percent.
Williams’ proposed increases for water and sewer rates would bring in a total of $2.2 million from Henderson water customers, $3.2 million from sewer customers and $1.4 million from Franklin County for water.
The budget would cut $1 off the monthly sanitation fee, to $24, but the city would end curbside recycling. The city would lose about $66,000 in revenue while removing a $145,000 expense.
Williams cited the decline to 44 percent monthly participation in curbside recycling “despite reasonable efforts to both publicize and promote” the biweekly collections. He wrote that the city can promote recycling by encouraging city residents to use any of the county’s seven manned convenience sites, three of which are close to the city; urging the county to open a convenience site within the city; or establishing an unmanned recycling dropoff site at the city’s Operations & Service Center.
The recycling proposal is one of several examples in which Williams’ proposal invites a negative reaction from the council, based on the extensive work sessions the FAIR Committee has held on departmental budgets and outside agencies’ requests the past three months. Among the others:
* Williams backs Public Works Director James Morgan’s suggestion to switch from twice-weekly backdoor garbage pickup to weekly curbside collection using rolling 90-gallon containers the city would obtain through a lease purchase.
* Williams would increase the budget for the H. Leslie Perry Memorial Library by only $3,208 to $253,208, even though the library asked for $348,000 as part of its move to a building more than three times the size of the current library.
* The only outside agencies that would receive funding are the airport, $23,180, an increase of $60; the Human Relations Commission, $500, no change; and the Appearance Commission, $2,400, no change. Williams would cut total contributions to such agencies by $16,090 by zeroing out the Vance County Rescue Squad, Crimestoppers, Life Line, the Vance County Arts Council, the Vance County Historical Society, ACTS and Gateway.
The council will start revising Williams’ proposal Tuesday night. The public hearing on the budget will be held during the council’s meeting Monday, June 6, at 7:30 p.m. The council plans to adopt the budget June 27.