While sequestration talk was dominating Washington, Mount Airy officials spent much time Wednesday weighing the need to fund major expenses such as new fire trucks against a desire to slash property taxes.
It is not headed off a fiscal cliff, but “the city does have some fiscal challenges,” Mayor Deborah Cochran said as she and other municipal officials kicked off a two-day planning retreat in a conference room at Bank of America.
Later Wednesday, heads of the fire, police, public works, recreation, planning and other departments would outline business and equipment-related needs envisioned over the next five years, ranging from copiers to vehicles.
The list totals more than $16 million through the 2017-2018 fiscal year, with $3.8 million eyed during the next fiscal year that begins on July 1.
“I wouldn’t call it a wish list,” City Manager Barbara Jones said. “They’re very legitimate-need items, but we can’t fund them all at once — so we have to prioritize what we can fund.”
Capital (or building- and equipment-related) needs are something Mount Airy officials have largely sidestepped in recent budget years. They instead have embraced a policy of putting off many major expenditures and making do with what’s available to maintain services to citizens without raising taxes.
Yet continuing that further could prove to be fiscally problematic, officials said at various times during Wednesday’s retreat session designed to set long-term goals.
“Capital outlay purchases have been delayed,” Finance Officer John Overton acknowledged while providing an update on city finances. “When you do that, you do postpone the day of reckoning on that.”
“We have done some things, but very minimally,” said the city manager, who is concerned about reaching a disastrous tipping point. “We don’t want everything to break at once.”
Fire Truck Issue
While other department heads cited needs for various vehicles and other equipment to run their operations, Fire Chief Zane Poindexter’s breakdown included some of the more high-ticket items: two new fire trucks.
One is sought for 2013-2014 and the other in the 2017-2018 fiscal year, each projected to cost $400,000.
“We have two pumpers that were bought back in the early 1990s,” the fire chief explained. Both have logged high mileage and pump hours, and illustrate the greater expense that can come from delaying replacement.
Not only has the cost of maintaining those vehicles become a problem — even more important is being able to count on them when needed from a public safety standpoint. The suspension on one truck broke while coming out of the fire station and left it sitting on the axle as it was on the way to an emergency call, the fire chief related.
“That’s one of our fears,” Poindexter said of the equipment breaking down when needed most.
He also mentioned the costly repair bills for an old ladder truck the city maintained for years, which was still too unreliable to use. It finally was replaced in 2011, ensuring firefighting capability when larger structures are involved.
Poindexter added that it is best to be proactive with such equipment replacement.
Among the items noted by other department heads was the installation of a new telephone system that city officials delayed several years ago due to the large price tag involved. It is now projected at $279,000 for next year along with $93,000 for cabling infrastructure.
Meanwhile, $108,403 in vehicle and equipment needs are targeted for the police department in 2013-2014.
Another $927,000 is sought for next year by the public services division, including $600,000 for sewer and water line rehabilitation.
Parks and recreational needs of $779,000, led by improvements such as $225,000 for new lighting at Westwood Park, also were presented.
Money To Be Tight
Coupled with the daunting needs will be the loss of several revenue sources next year, Cochran and Overton stressed Wednesday.
These include the loss of “hold-harmless” funds, money from the state government that was designed to replace the latter’s elimination of inventory and intangibles taxes that were key revenue sources.
More than 10 years ago, state officials authorized an additional local option-sales taxes to make up for the resulting negative budget impacts on localities, but those revenues did not offset the losses from the earlier tax repeals. Given that impact, hold-harmless payments were approved to Mount Airy and others for a transitional 10-year period, which is now ending.
This means the city will lose $310,439 from that source next year, when “zero” hold-harmless revenue is expected, Overton said.
Also, $142,000 is to be lost in 2013-2014 from privilege licenses for electronic gaming businesses due to those operations being declared unlawful.
On the plus side, the municipality has accumulated more than $220,000 in budget savings. That’s despite city officials last year halting a trend in which the property tax rate was systematically reduced, from 63 cents per $100 of assessed valuation in 2007 to 56 cents at present.
Commissioner Jon Cawley also would like the city to sell the timber from the forested areas of Westwood Park, since lumber prices are high and the time is right to harvest trees that otherwise will fall down and be lost.
“This is going to be a difficult year, as last year was,” Commissioner Steve Yokeley summed-up regarding 2013-2014, referring to a property revaluation that resulted in lower real estate assessments this fiscal year.
But nearly all the commissioners said Wednesday when outlining some of their goals that they would like to see property tax cuts resume.
The mayor also said she wants to see a reduction to lower the cost of doing business for affected taxpayers and allow them to stay open in some cases.
Yokeley said he is optimistic that the commissioners won’t be forced to raise taxes, even with the funding priorities it faces, and possibly can find a way to reduce the rate.
Reach Tom Joyce at 719-1924 or email@example.com.