The Henderson City Council’s Finance and Intergovernmental Relations Committee concluded a 3 1/2-hour budget session Tuesday night by making plans to meet again tonight but making no decisions on spending and how high to raise taxes.
The meeting began with City Manager Eric Williams presenting an amended budget based on previous committee discussions. The revised budget restores the city’s curbside recycling contract with Waste Industries and twice-weekly backdoor garbage pickup, and it now includes a 3 percent raise for all city employees in the form of a cost-of-living adjustment.
The extra spending hinges on a $27-a-month sanitation fee, a $2 increase from the current level and a $3 increase from Williams‘ May 26 budget proposal, and a property tax rate of 69 cents per $100 value, the same 5-cent increase that Williams presented May 26.
Under the latest plan, the city’s general fund balance would pass the 8 percent minimum urged by the state’s Local Government Commission by June 30, 2006. But restricted funds — Powell Bill money for road maintenance and drug seizure money for law enforcement — would account for roughly half the money in that savings account, which Williams projects to total 8.55 percent of annual spending by the end of the fiscal year.
Taking into account concerns raised by council members at previous meetings, the new budget proposal also calls for matching the county’s contributions to the Vance County Historical Society for its Garnett Street museum and to the Vance County Arts Council. The Historical Society would receive $3,500 from the city; the Arts Council would receive $1,000. Williams had zeroed out those groups, among other outside agencies.
Williams also discussed what he thought would be equitable for the city to appropriate for the library. Planning to be in its new building for four months, the library had requested $348,417 from both the city and county for a total local request of $696,834. The county’s budget, approved Tuesday night, allots $300,000, assuming only two months in the new library; Williams’ May 26 proposed budget included $253,208, a gap of $46,792.
With equity in funding always an issue between the city and county, Williams pointed out that the city spent $23,000 more than the county on the H. Leslie Perry Memorial Library in fiscal 2002 and 2003. If political pressure were applied for the city to match the county’s funding, Williams said, the city could make the case that an additional appropriation of $23,792, for a total of $277,000, would even out the contributions of the two governments over recent years.
Council members spent the rest of the meeting critiquing Williams’ latest proposal.
On the revenue side, council members worked through different permutations of sanitation rates and property taxes to meet the city’s general fund needs. FAIR Chairman
Bernard Alston said Henderson must have some combination of taxes and sanitation fees equivalent to a 7-cent increase in the property tax rate.
Four main proposals emerged from the discussions.
Mary Emma Evans and Mike Rainey supported a plan that would raise the sanitation fee to $30 a month and keep the tax rate at 64 cents per $100 value. Ranger Wilkerson indicated he would support a similar plan but had to leave the meeting early.
Harriette Butler, John Wester and Lonnie Davis supported Williams’ plan for a $27 sanitation fee and a 5-cent tax increase.
Elissa Yount proposed a $27 sanitation fee, a 3-cent tax increase and a requirement that the city find $130,000 in savings, equal to 2 cents on the tax rate. Inspired by the $130,000 the city saved by bidding out and switching insurance plans, Yount said she is convinced that more money can be squeezed out of the budget by eliminating waste, bidding out other contracts and being firmer in negotiations in areas such as the soon-to-expire Time Warner cable franchise (the last has the potential to boost revenue). She argued that while the city puts more of a burden on residents for funding, it also must take steps to save money and be more efficient.
Alston supported a plan similar in spirit to Yount’s. He proposed that Henderson increase the sanitation fee to $28, raise taxes by 3 cents and meet additional funding needs through greater efficiency. He argued that no increase in taxes would a mistake and that tax rates have been kept artificially low over the years, causing much of the city’s fiscal problem.
Mayor Clem Seifert, who has no vote on the budget unless the eight council members split 4-4, was unclear on his exact position on any of the proposals. While he at times supported the idea of not raising taxes and making the city government work with what it gets, he was not firm on that point. He cited the need to ascertain the true priorities of the community and raise taxes accordingly, instead of charging too little in taxes to meet the city’s needs.
Seifert argued that any increase in taxes will be unpopular, so if the city is going to raise the tax rate, it must make a change significant enough to better meet the needs of citizens.
On the expenditure side of the equation, there was a consensus about how to distribute the 3 percent raise. Instead of an across-the-board raise, council members and the mayor supported using the money for merit raises based on employee performance. Police Chief Glen Allen offered support for that idea.
Council members also discussed freezing positions and allowing open jobs to go unfilled or be combined with other positions to save money. Allen supported the idea of savings through attrition, promoting from within and postponing hiring low-level employees to replace those who are promoted.
The council discussed other personnel savings without going into much detail.
The FAIR Committee is set to resume its discussions at 6 p.m. today at the Municipal Building.
— Written by Brad Breece