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Martinsville, Virginia 24115
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City hikes proposed
Friday, April 27, 2012
By MICKEY POWELL - Bulletin Staff Writer
Water and sewer rate hikes and a meals tax increase are being proposed to help the city of Martinsville cover mounting expenses amid flat revenues in the fiscal year that will start July 1.
The fiscal 2013 budget proposal presented to Martinsville City Council at a special meeting on Thursday does not raise electric rates or other tax rates.
The city schools are to receive level funding at a little more than $5.8 million.
A $3.50 increase is proposed in base rates for water and sewer services.
That means city customers using 4,000 gallons of water for either service each month would see their water bills rise from $19.81 to $23.31. Their sewer bills would jump from $18.14 to $21.64.
Incremental increases to bills reflecting the use of more than 4,000 gallons would stay the same.
Despite the hikes, Interim City Manager Leon Towarnicki said the combined rate for water and sewer still would be lower than rates in nearby localities.
The meals tax charged at Martinsville businesses that sell prepared foods would rise from 6 cents to 7 cents per dollar. That means an increase of 10 cents on a $10 restaurant meal, Towarnicki noted.
The tax is charged in addition to state sales taxes.
The proposed increases are expected to generate about $750,000 a year, Towarnicki said. That money would go toward capital expenses, specifically efforts to maintain the city’s aging infrastructure, such as its water/sewer system, he said.
Martinsville has about $2 million worth of capital equipment needs, including vehicles such as police cars and garbage trucks needed to replace ones that are wearing out, Towarnicki said.
Purchases of some of that equipment have been postponed for up to a few years because of budget constraints, but the city cannot afford to put them off any longer, he said. If they are postponed further, repair costs could end up being more expensive than replacing the equipment, he added.
The city owes $1.67 million toward developing the Commonwealth Crossing Business Centre, a joint project with Henry County. That money will be due in fiscal 2014, Towarnicki said.
That brings the city’s total capital expenses to about $3.67 million. To help pay that cost, the budget proposal recommends a five-year bond issue.
Towarnicki did not detail the bond issue. He said, though, the city’s process to set it into motion would start in October and close next March.
Money from meals tax and utility payments would be put toward the debt service, he said.
Under the proposed budget, the real estate tax rate is to stay at $1.01816 per $100 of assessed value. The owner of a house with an assessed value of $100,000 would get a tax bill for $1,018.16.
The machinery and tools tax rate for businesses is to remain at $185 per $100 of assessed value, and the personal property (vehicle) tax rate is to continue at $2.30 per $100 of assessed value.
The city schools would get $5,826,394 in local funds for the third straight year. That is how much they requested for fiscal 2013, recognizing that the city has financial constraints.
No general pay increases are proposed for city employees. They have not had a raise since fiscal 2008 and due to rising expenses, such as insurance costs, they are taking home less pay than they did at that time, Towarnicki said.
Total expenses could not be ascertained from budget documents Thursday night and that figure was not mentioned during the council meeting.
The budget proposal is to be balanced with $738,750 in reserve funds, said Towarnicki.
“The cost to provide the core level of services currently ... expected by our citizens has continued to rise without a corresponding increase in revenues” and therefore the city must dip into its fund balance, he said.
He emphasized, though, that cannot keep happening every year for the city’s finances to stay healthy.
The same factors that have influenced annual budgets in recent years are influencing this one, Towarnicki said. They include high unemploment rates, “relatively flat” revenues and increasing costs for fuel, insurance, materials, supplies and increasing numbers of unfunded mandates by the state.
Blame lawmakers for the latter.
“When state legislators and officials brag that they did not raise taxes, local officials will need to point out that local taxes will have to be raised, or local services reduced, as a result of actions taken in the General Assembly,” said Towarnicki, quoting from a Virginia Municipal League document.
Councilman Danny Turner asked if the budget proposal could be balanced without any rate or tax increases. Towarnicki said he will present options to that effect during upcoming budget work sessions, but he indicated those options would have severe effects on services.
Councilman Gene Teague asked for detailed information on matters such as the city’s vehicle fleet and insurance costs.
Except for Turner’s and Teague’s requests, council members made few comments about the spending plan.
“We’ve got a lot to digest” in the next few days, said Mayor Kim Adkins.
Budget work sessions are scheduled for 4 p.m. Tuesday and Thursday in the council chambers at the municipal building in uptown Martinsville.
A public hearing on the budget proposal is set for the council’s regular meeting at 7:30 p.m. May 22.
At that time, the council will consider adopting the budget on first reading.