After a spirited discussion about whether it is possible, the majority of Mount Airy’s commissioners instructed City Manager Barbara Jones Friday to incorporate a 4-cent property tax cut into her 2014-2015 municipal budget preparations.
There were concerns about being able to make such a reduction and still fund several key projects the commissioners want to accomplish, in addition to addressing costly needs of various city departments.
“It is a balancing act,” City Manager Barbara Jones said during the discussion Friday afternoon as officials wrapped up a two-day annual retreat held in a conference room at Bank of America.
“Will it be difficult to balance? Yes,” Jones added later.
However, most of the board members in the room said they believed the 4-cent tax decrease for the next fiscal year that begins on July 1 should be done to keep Mount Airy on track to fulfill a promise made to citizens three years ago.
During another retreat in the winter of 2011, the board of commissioners agreed to slash property taxes by 10 cents within five years, and on Friday there was strong sentiment that the city not “retreat” from this.
“Just remember what we’re doing,” Commissioner Jon Cawley reminded his counterparts when there was some wavering on making such a hefty reduction — one representing more than $400,000 in revenues.
Not keeping the five-year tax-cut pledge “makes us look like every politician,” Cawley said. “We promise to do something, then make excuses for why we can’t.”
Mayor Deborah Cochran also told council members, “I think you need to ask yourself the question, ‘what do the taxpayers need?’ They need some relief.”
Commissioners Shirley Brinkley and Dean Brown also backed the 4-cent reduction from the present rate of 52 cents per $100 of assessed valuation.
The board’s Steve Yokeley favored a more conservative approach, however, in which a “range” of cuts from 1 to 4 cents be considered to provide more flexibility in making sure revenues meet expenditures.
“I think it would be wonderful to have a 48-cent tax rate,” Yokeley said. “But I don’t think it’s realistic.”
Jim Armbrister, who recently was picked by the board to replace Commissioner Scott Graham, attended the retreat, but will not be sworn in to office until next Thursday.
The overall goal of the two-day planning retreat of city government leaders was to establish priorities for the remainder of the year, including the budget.
“Continued tax cuts to encourage continued growth for businesses coming in and new residents” had been picked as the No. 1 objective by board members on Thursday afternoon during the first day of the retreat.
Fund Balance Debated
A sub-plot to Friday’s budget discussion involved the looming presence of a fund balance — or savings — the city government has accumulated, which translates to $11.9 million available to spend. The fund balance totals $13.2 million, but a portion of that is restricted from use.
This fund has been built as a result of factors including tight budgeting in recent years and delayed the funding of major capital, or building- and equipment-related, needs among municipal departments.
Around $2 million of it was designated to help balance the present (2013-2014) fiscal year budget if needed, but Jones told the board Friday that this has not been dipped into so far — with four months left in the year.
The city’s fund balance represents 110 percent of Mount Airy’s annual budget, well above state-recommended standards.
Board members said they would be willing to take that down to the 80-percent level, or about $8.6 million, which would free up around $3.3 million to spend on needed projects.
Several items top that list, including grading a site at Westwood Industrial Park to accommodate a new company; providing more parking for Reeves Community Center, which could include developing spaces on Cherry Street, among other action; and adding restrooms at Blackmon Amphitheatre, which many citizens believe are badly needed.
Also looming as concerns are capital needs by city departments forecast for the next fiscal year — including three new vehicles for Mount Airy police, to cite just one example.
“Some of these things have been put off, and they’re needed,” the city manager said. “We’ve got to do some capital (projects).”
Jones added, “It’s just like in your own home (when) everything’s broken at once.”
The municipal government’s relationship with the real world became part of that discussion as well as the tax-cut talks. Commissioner Cawley said he couldn’t feel good about accumulating millions of dollars in savings.
“I can’t celebrate (it), because it’s not our money,” he explained. “I can’t celebrate the fact that we’ve got $13.2 million in the bank and lots of people are broke.”
“One hundred and ten percent is probably more than you need,” the city manager agreed.
Yet Jones also cautioned against dipping into the savings too deeply.
“You don’t want it to go low enough where if the economy goes bad again,” she said, “you have to do knee-jerk reactions.”
Tom Joyce may be reached at 336-719-1924 or on Twitter @Me_Reporter.