Tax hike proposed in Waynesville
It's budget time for the town of Waynesville, and any way the pie is sliced, it probably means more money out of residents' pockets.
"I certainly didn't want to recommend a tax increase of 3 cents on the hundred," said Town Manager Marcy Onieal after Friday's first budget workshop. "But you can see from the budget book that the revenues just aren't there. We're already doing more with less. The board has made it clear they do not want to cut services. So I presented the tax increase as a viable option."
As Alderman Julia Freeman was leaving, she said emphatically, "It'll be an absolute last resort before I'll vote for a tax increase."
Mayor Gavin Brown was more matter-of-fact. "It'll put the tax rate back to where it was four or five years ago, and we just can't continue to absorb these increases."
The present tax rate is $0.4082, with a proposed rate of $0.4382 per $100 evaluation. Each penny on the tax rate raises $102,000.
The public had an opportunity to weigh in on the budget at the regular 7 p.m. governing board meeting Tuesday. The next budget workshop is scheduled at 5:30 p.m. June 17, at the old board room in the Municipal Building. The mayor and board of aldermen are scheduled to adopt a budget on June 24 at the regular meeting.
Water and sewer rates may go up, too. The proposed budget suggests a 5 percent water increase which would bring in an additional $120,300, and a 5 percent sewer rate increase totaling $94,300.
Waynesville electric customers are seeing a $1/month increase (to $11.50 per month) on its residential base rate which, according to the proposed budget, began in April and will extend through Aug, 1, 2014, to reach parity with Duke/Progress residential rates.
Expenses will be discussed in depth at the June 17 workshop, but the board and staff didn't ignore the elephant in the room: health insurance.
Health insurance goes up
Estimates from the town's current provider came in 27 percent higher than last year. In the last three years the town has absorbed successive increases of 18, 13 and 15 percent. That amounts to $2.2 million annually on an $8 million payroll. The proposed budget includes a 15-percent increase.
Onieal does not attribute major cost increases to the Affordable Care Act, and says the town is aggressively negotiating with other carriers to bring costs back to a manageable $1.8 million without sacrificing employee coverage and benefits. The town pays 100 percent of employee premiums and 80 percent of dependent premiums. For most employees, it is the most important benefit, Brown said.
A one percent cost of living adjustment is proposed for employees, with money available for a new salary schedule and employee training.
Although Waynesville is seeing a small sales tax increase in some areas, the change in state statutes is hurting towns.
"Sales taxes are down all over the state, and Waynesville is no exception," Brown said.
Powell Bill funds collected from gasoline tax that's disbursed by the state, will remain flat. The distribution formula is tied to population and street mileage, neither of which grew in Waynesville last year and is not expected to increase in the 2014-15 fiscal year.
The town has learned to do more with less, said Onieal. It has left vacancies unfilled and increased the transfer of money from its enterprise funds such as electricity. The finance director warned that such transfer, legal now, may not always be a way out to balance the general fund.
Onieal told the board that the margin for absorbing additional costs without money coming in to pay the bill has all but disappeared. She and finance director Eddie Caldwell estimate that unrecovered revenues since the beginning of the economic decline in 2008 are equivalent to nearly 10 cents on the property tax rate today.
"We've done about all we can do with absorbing costs," said Onieal. "How do we want to come up with the money, or what do we want to do without?"
The 2014-15 proposed overall budget of $29.7 million is 1.2 percent lower than last year's budget. This level includes the proposed tax hike.
The town staff implemented a new bookkeeping formula that captures functions shared by all departments in all funds and more accurately establishes cost allocation back to departmental budgets through transfer of interdepartmental revenues, based on true costs rather than an arbitrary formula previously based on square footage.
One source of potential revenue which was discussed in Maggie Valley's budget hearings would be if Santek, the operator of the county's landfill switched from paying Maggie Valley to paying Waynesville to treat leachate. Waynesville Water Department's Fred Baker and Onieal said after Friday's meeting that no one from Santek or the county had approached them about the issue.
To laughter, Caldwell said investment income was down $175,000 and bank fees ate up any dividends. Brown asked Onieal and Caldwell about refinancing some debt. Both replied that much of the town's debt carries "no refinancing" clauses but they were exploring that possibility.
The proposed budget includes a $75,000 increase in contributions, anticipating $25,000 each to HART for its new theatre, Folkmoot's renovation of the old Hazelwood School into a community center, and the renovation of the old Hazelwood prison into a multi-use homeless shelter. Alderman Gary Caldwell requested that those place-marks in the proposed budget be revisited.
"There may be other deserving nonprofits that need that money worse," he said.
Onieal sees light at the end of the tunnel:
• Merger of Lake Junaluska and Waynesville will create economies of scale.
• Indicators of economic recovery and growth are beginning to arise in urban areas and will spill over to rural areas in the nut too distant future.
• Haywood County will have its next property revaluation in 2017. Waynesville assesses its taxes based on the county's revaluation.
• Waynesville will have general fund debt rolling off beginning in 2018.
The next budget workshop is June 17 at 5:30 p.m. in the old board room in the Municipal Building.