SALISBURY – The mayor’s proposed budget for the upcoming year calls for an increase in the tax rate to the constant yield but to minimize the impact on taxpayers it also calls for a decrease in water and sewer utility fee.
Mayor Jim Ireton presented the Mayor’s Fiscal Year 2014 (FY14) Proposed Budget to the City Council last week.
Ireton began by acknowledging the impact of assessable base losses over the past four years. Since FY 2011 there has been a decrease of $551 million in the assessable base. The City of Salisbury’s assessable base has dropped 22.1 percent in four years, equating to $4.8 million in lost property tax revenue.
“In order to make up that difference, the departments have cut $1.7 million out of their operating budgets for fiscal years FY10 through 14, and through General Fund budget cuts, furlough days and frozen and unfunded positions they have put $5.3 million back into the city,” the mayor said. “Notice how we have weathered that storm.”
Ireton reviewed a number of new expenses the city agreed to take on in FY13, including almost $702,000 in increased health insurance costs, about $650,000 in increased pension and retirement costs, almost $756,000 in increased police salaries and almost $293,000 in increased general employees’ salaries.
“Like the rest of the nation, Salisbury is slowly emerging from the economic downturn,” the mayor said. “My priorities continue in the most critical areas of importance to our citizens- law enforcement, emergency medical services, infrastructure, neighborhood integrity, downtown revitalization. In the area of taxes and fees, we are proposing to do what the county has done for several years now, and that is going to the constant yield.”
Ireton is proposing to fund the government at the same level next year as this year, which means rising to the constant yield tax rate that will close the budget gap of $1.1 million. About half of all property taxpayers will see an increase in tax bills, while the other half will see a decrease in water and sewer rates for FY14.
“The goal of a balanced approach where we offset increased taxes with reductions in fees was achieved in this budget,” Ireton submitted.
The mayor’s proposed budget includes $234,000 for five police vehicles with equipment and almost $756,000 in police raises; $47,000 for portable radio replacement for Salisbury Fire Department volunteers, which is a replacement of half of the departments radios; and $15,000 for a Fire Station #2 engineering plan update. Also included is $30,000 for Johnson’s Lake Dam improvement engineering, $50,000 for Naylor Mill Road Bridge repair engineering, $42,000 for a trash truck, almost $769,000 for street paving, $854,000 for street lighting, $9,600 for city-wide playground maintenance, $15,000 grant match for Popular Hill storm windows and $85,000 for a downtown redevelopment office.
“The City of Salisbury maintains, on behalf of its taxpayers, a budget surplus in both its General Fund and in the water and sewer utility,” Ireton said. “Since 2007, the city has put an average of $835,000 in General Fund surplus each year, and that’s after they [departments] made the budget cuts … they still managed to put money back in.”
The City of Salisbury has over $9.7 million of unassigned surplus in the General Fund and over $26.4 million of total unrestricted and restricted funds in the water and sewer fund.
The mayor is proposing to use $1.6 million of the surplus in FY14 to invest in capital expenditures, meet the approved police raises from last year, fund other employee raises and to kick-start downtown revitalization.
“The city remains in good financial health,” Director of Internal Services Keith Cordrey said. “The city has been able to weather the recession and remains strong due to conservative financial policies. But there are some concerns moving forward. We have had some cost increases moving forward without revenue increases and it has forced the budgets to be balanced without many desirable capital investments.”
He added, “The Wastewater Treatment Project will require a significant amount of debt and previous budgets have been strong resulting in the use of the surplus budgeted to often be reduced or avoided. Tighter budgets may influence this trend, so we will need to monitor actual financial results."
The council voted 3-2 with Council members Terry Cohen and Tim Spies in opposition to approve the budget on first reading.
“I am uncomfortable with responses and some of the numbers that are in here,” Cohen said of her opposition, acknowledging a few already identified mistakes that were planned to be worked out during budget sessions. “I know this is the traditional process but because of those types of things it has taken me an inordinate amount of time to go through this. We found a lot of things last year that were understated that made a very big difference to the taxpayers this year.”
The council also voted 3-2 with Cohen and Spies in opposition to amend water and sewer rates to decrease sewer rates by 6.5 percent to be effective for all bills starting October 1, 2013 and thereafter.