Wednesday, May 22, 2024

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Elon town manager proposes budget plan with tax rate 14 percent higher than “revenue neutral”


Elon’s town manager has unveiled a proposed spending plan for the new fiscal year that promises more funds for municipal services, capital projects, and staff compensation – as well as a new property tax rate that amounts to a 14 percent hike in the financial burden on the town’s property owners.

This recommended budget, which town manager Richard Roedner formally presented on Tuesday, ultimately calls for $10,296,808 in expenditures from the town’s general fund, a repository for various taxes and fees that pays for most of the municipality’s programs and services. This total, which represents an increase of $837,503 over the budget that the council adopted last spring, is also $84,521 higher than the cumulative sum of all the departmental budget requests that Roedner received earlier this year.

Elon town manager Richard Roedner

In order to cover this prospective jump in the general fund’s allocations, Roedner has proposed a new municipal property tax rate of 35 cents for every $100 of property value.

Although this rate is 10 cents less than the town’s current levy on property, it is nevertheless 4.34 cents more than the estimated “revenue neutral” rate of 30.66 cents that the town would need to break even after Alamance County’s latest property tax revaluation.

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In justifying this 14.2-percent departure from revenue neutrality, Roedner pointed to the ever-growing demands on the Elon’s municipal coffers.

“We have had the same tax rate of 45 cents since 2017 while the cost of goods has increased,” the town manager explained during a regularly-scheduled council meeting on Tuesday. “So, we have obviously not been keeping up with the cost of living.”

Roedner went on to estimate that, with this recommended rate, the town’s levy on property would raise $3,192,000 in the new fiscal year, as compared to the current year’s haul of $2,675,000. Roedner also projected a total of $367,000 from the special fire tax paid by property owners outside the town’s municipal limits. This prospective sum is based on a proposed rate of 8.65 cents for this special tax, whose revenue neutral figure has been placed at 7.92 cents.

In addition to the proceeds from these two property taxes, Roedner also expects to take in $3.45 million in sales tax receipts – an increase of $50,000 over the current year’s take.

Meanwhile, Roedner recommended a transfer of $1,325,000 from the general fund’s savings, or “fund balance,” which he noted has more than enough usable revenue to cover the general fund’s outlays for a full fiscal year. Roedner added that his ultimate goal is to bring these reserves down to the council’s previously enunciated target of 40 percent of the fund’s annual outlays.

“I don’t want to get into the habit of supplementing our budget with fund balance,” he added. “My goal over the next few years will be to gradually minimize what we’re taking out of our fund balance as we make a soft landing toward that 40 percent.”

Roedner went on to describe some of his priorities for the revenue that he expects to the general fund to take in next year. First and foremost, he pointed to some anticipated increases in the town’s payroll expenses.

“We are in a competitive environment for wages and benefits,” he went on to explain. “We’re looking at about a 10 percent increase in wages and benefits…and that includes a new firefighter and a couple of new part-time positions.”

Roedner proceeded to suggest a 3-percent cost of living adjustment for all of the town’s municipal staff members as well as the continuation of a “temporary” 2-percent bonuses that the town’s current budget extended to town employees.

Roedner also alluded to a new outlay on mass transit due to the council’s recent decision to join Burlington’s Link Transit bus system. In the meantime, he called for $153,000 to continue the construction of a sidewalk along West Trollinger Avenue, $378,000 to restore several emergency vehicles, $292,000 to upgrade recreation facilities and develop a new skate park, and $100,000 to buy furnishings and Christmas decorations for a new downtown plaza that the town has agreed to construct.

Other significant expenditures in the manager’s budget include $120,000 for new police cruisers, $112,000 for sidewalks and streets, $40,000 for policing equipment, and another $75,000 to design a new police station.

Aside from his recommendations for the general fund, Roedner predicted a 5 percent rise in the cost of the water and sewer services that Elon receives from the city of Burlington. He went on to propose a 5 percent hike in the town’s own water and sewer fees to cover this increase.

The town council proceeded to hold a public hearing on Roedner’s proposal budget that drew nary a peep from the community’s residents. The council could render its own verdict on the manager’s spending plan as early as May 22.

Read the newspaper’s editorial views on the proposed increase in property taxes significantly above a “revenue neutral” level:

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