Council agreed to trim 1.37 cents (about 3%) from city manager’s original proposed tax rate of 49.73 cents (which was 21.3% over ‘revenue neutral’)
Burlington’s city council has approved a new budget that largely mirrors a proposed spending plan that the city manager unveiled earlier this spring – albeit with a modest reduction in the manager’s recommended property tax rate for the city.
The new budget, which received a unanimous nod from the council on Tuesday, features a new levy of 48.36 cents for every $100 of property value – a dip of 1.37 cents from the rate that city manager Craig Honeycutt had proposed to the council a month earlier.
Although a substantial drop off from the previous figure of 59.73 cents, the new levy nevertheless amounts to an increase of about 18 percent over the “revenue neutral” rate of 41 cents that would offset the results of Alamance County’s latest property tax revaluation. Even so, the city’s elected leaders hailed the new budget as a fine calibration between fiscal conservativism and the operational needs of the city.
“We’re really worked on cutting corners, being frugal,” Burlington’s mayor Jim Butler declared shortly before the budget’s approval. “However, I do believe we’re at a point where revenues have to increase beyond organic growth if we’re going to sustain the level of service that our city has to have in order to thrive and grow.”
In many respects, the city’s new budget is quite similar to the spending plan that Honeycutt had pitched to the council last month. Like it’s earlier incarnation, the new budget calls for some $78.8 million in outlays for the city’s general fund, which relies on revenues from various taxes and fees to bankroll most of the city’s department’s and services. It also increases the city’s water and sewer rates by 5 percent in order to cover the $33.6 million that has been set aside to operate these public utilities.
Among the highlights of the new budget’s allocations from the general fund is a $3.2 million outlay to cover police pay raises that the city council approved in December, another $1.1 million to increase the salaries of each of the city’s firefighters by $6,500 a year, and $1 million to fund a 4-percent cost-of-living adjustment for the entire municipal staff. Also included in his proposed spending plan are two full-time recreation positions, one part-time post for downtown development, and nearly $2.4 million to fund various inflationary increases.
In spite of these assorted seven-figure expenditures, Honeycutt assured the council that his focus in crafting this budget has been to safeguard the city’s existing assets – including its veteran staff members. Prior to Tuesday night’s vote, Honeycutt recalled the numerous difficulties that he had to overcome in order to attain this seemingly modest objective.
“We’ve had record high inflation, a high property reval, and high employee costs,” he reminded the council, “and in trying to fit all that into one budget and providing the services that citizens expect, it has really been a challenge.”
In order to make ends meet, Honeycutt had initially proposed a property tax rate of 49.73 cents – an increase of 21.3 percent over the city’s estimated revenue neutral levy. During a city council work session on Monday, Butler and other council members challenged some of the revenue assumptions that had led the city manager to land on this figure. In particular, they second guessed Honeycutt’s relatively pessimistic sales tax projections when compared with the much more ebullient numbers that managers in other municipalities have been using in their budgets.
During the work session, Butler suggested a property tax rate of 47 cents as an alternative to Honeycutt’s proposed levy. The mayor argued that this rate could be obtained given a more mainline approach to estimating sales tax receipts, although he left it to the city’s administrators to confirm his hypothesis before the council’s next meeting on Tuesday.
That evening, Honeycutt acknowledged the inherent caution in his sales tax projections in comparison to his peers in other local municipalities.
“I’m very conservative with respect to how we budget revenues,” he admitted. “In my thirty years of budgeting, we’ve always under-estimated revenues to a certain extent and over-estimated expenditures.”
Honeycutt went on to inform the council that he had rejiggered his sales tax projections in line with Butler’s suggestions and increased his proposed allocation from the city’s financial reserves. As a result, he was able to tamp down his suggested tax rate from 49.73 to 48.36 cents – a figure that the mayor ultimately found much easier to accept.
“I feel much more comfortable about that than where we were,” Butler insisted before Tuesday’s vote.
Harold Owen, the city’s mayor pro tem, concurred with Butler’s assessment of Honeycutt’s revised property tax rate.
“The number we have here we can certainly work with,” he said, “and still provide quality services.”
The revised budget also received a thumbs up from city council member Kathy Hykes.
“I really liked the idea of taking care of existing assets that you used to decide where the budget needed to be,” Hykes told the city manager. “But we also have to prepare for future growth.”
In the end, the council voted 5-to-0 in favor of the revised budget after a state-mandated public hearing drew nary a peep from the city’s residents.