Elon’s town manager has unfurled a budget for the new fiscal year that proposes to increase the town’s property tax rate from 35 to 36 cents for every $100 of value in order to cover a roughly 6 percent bump in its annual expenses.
This spending plan, which town manager Richard Roedner formally debuted on Tuesday, got a decidedly mixed reception from the town’s six-member council that evening. Although some of its members were content with the town manager’s efforts, others found themselves angling for ways to lower the proposed 1.5-cent tax hike as well as an accompanying 7-percent increase in the town’s water and sewer fees.
“This has been a difficult budget to put together this year, and several departmental priorities, including additional staffing, have had to be sacrificed in order to reduce increases in expenditures.”
– Elon town manager Richard Roedner
These conflicting opinions convinced Elon’s mayor Emily Sharpe that she and her colleagues will have much to discuss when they convene their next regularly-scheduled gathering at 6:00 p.m. on April 21.
“I would come to the next meeting knowing we’re not going to get out until 9:00 [p.m.],” she declared at the end of Monday’s 2-hour-40-minute confab. “So, everybody understands the assignment? We will have a more in-depth conversation and we will come with ideas.”
“I think the budget takes in account a lot of what we’ve talked about as a council. I don’t want to increase taxes, and I don’t want to increase fees. But I also don’t want to lay off employees . . . and I’m not comfortable with the unpredictably of the economy right now.”
– Elon mayor Emily Sharpe
The cost of doing business
Roedner, for his part, assured the council that he has already done a great deal to minimize his recommended levy on property.
“This has been a difficult budget to put together this year,” the town manager acknowledged in a memo that accompanied his proposal to the council, “and several departmental priorities, including additional staffing, have had to be sacrificed in order to reduce increases in expenditures.”
In the end, Roedner decided to propose $11,893,860 in allocations from the town’s general fund. A repository for various taxes and fees that bankrolls most of the municipality’s operations, this fund was cleared for nearly $11.2 million in outlays when Elon’s town council adopted the town’s current budget last spring. Roedner’s proposal would, if approved without edits, add about $700,000, or nearly 6.3 percent, to this fund’s annual expenditures.
One of the chief beneficiaries of this potential increase in spending is Elon’s fire department. According to the line-item version of Roedner’s proposed budget, the fire department would get an extra $257,468 in the coming financial cycle. These additional funds will enable the department to acquire new breathing apparatus for its firefighters and replace the HVAC units in one of its two fire stations.
Roedner has also recommended two additional firefighters, which he observed would be partially subsidized by Elon University are the only new staff members he has seen fit to endorse.
In addition to giving the fire department’s bootstraps a lift, Roedner’s spending plan would provide $250,000 to pay for streetscaping in the downtown business district. The proposed budget would also fund renovations to the public works building, cover inflationary increases in things like fuel, utilities, and employee health insurance, and enable the police department to replace three cruisers and acquire a new arsenal of Tasers for its entire force. It’s worth noting, however, that the manager’s budget has slated the town’s police force for a slight decrease in its annual outlays.
A taxing dilemma
In order to cover the tab for these new allocations, Roedner told the town council that he squeezed all he could out of every revenue source at his disposal.
“My approach to the budget starts with revenues,” he elaborated during his presentation on Tuesday. “One of our major sources of revenue is property taxes. It’s our second highest source, preceded by sales tax revenue.”
Roedner went on to admit that the financial pressures facing the town have compelled him to overcome his usual reluctance about the variability of the town’s sales tax receipts. Given that the state anticipates a slight increase in this levy’s current yield of about $4 million, the town manager said that he deigned to nudge up his previous projection of $3.6 million to a more ambitious goal of $3.9 million.
In the meantime, Roedner conceded that he has confronted some uncertainty over the town’s levy on property. The town manager said that data from Alamance County’s tax office suggests that, during 2024, the overall value of Elon’s property tax base actually slipped from $911 million to $910 million. In spite of this unexpected dip, Roedner said he has projected a $5 million increase in the town’s tax base – albeit with the disclaimer that he’s still waiting on fresh figures from the tax office to confirm his prediction.
In any event, Roedner told the council that all these contingencies have convinced him to move up the dial on the property tax rate, which currently stands at 35 cents for every $100 of property value. He added that his first inclination was to propose a 2-cent hike in this levy.
“However,” he added in the aforementioned memo, “some lower costs on insurance, tighter analysis of anticipated expenditures, along with identifying staff time that is more appropriately charged to water and sewer, I was able to reduce the proposed tax increase.”
The town manager said that he eventually settled on a proposed hike of 1.5 cents based, in part, on input from a “budget liaison committee,” which includes two members of Elon’s town council. According to Roedner, this increase, which amounts to an extra 4.3 percent on the tax rate, would add about $60 a year to the tax bill on a $400,000 home. In the meantime, the town would gain roughly $135,000 in annual revenues based on the estimate of Elon’s mayor that a penny on the tax rate is worth about $90,000.
In addition to this adjustment in the town’s own property tax rate, Roedner has proposed a higher rate for Elon’s extraterritorial fire district. Property owners within this district, which lies outside of Elon’s municipal boundaries, currently pay an extra 8.65 cents on their county property taxes to help subsidize Elon’s fire department. Roedner has suggested raising this surcharge to 10 cents for every $100 of value, which he said would bring in an additional $60,000 for the fire department. This hike, even if endorsed by Elon’s town council, would still need a final nod from Alamance County’s commissioners before it can take effect.
Spillover into water and sewer
Among the measures that Roedner said have allowed him to tamp down his proposed property tax increase is a reallocation of staffing between the town’s general fund and a water and sewer fund that pays for Elon’s public utilities.
The town manager acknowledged that, in his proposed budget, he has sloughed off some of the town’s public works staff onto the water and sewer fund, which relies on utility fees rather than taxes to cover its costs. He added that, while reducing the general fund’s liabilities, this move will result in a 2 percent increase in the town’s water and sewer fees.
Roedner went on to concede that these fees will be further affected by an anticipated 5-percent hike from the city of Burlington, which supplies Elon with drinking water and processes the town’s sewer emissions. Elon’s town manager said that if Burlington follows through with this upward adjustment, it would bring the proposed increase in Elon’s water and sewer fees to 7 percent.
During the council’s discussion of Roedner’s proposed budget, the town’s mayor tried to shed some perspective on this prospective spurt in the town’s water and sewer rates.
“At the place where I go to get coffee,” Sharpe said by way of illustration, “it costs 35 percent extra for one pump of chai. So, I get it. Costs are going up. But costs are also going up for the town, and to me, 7 percent seems extremely reasonable.”
One for the council
Sharpe took a similar tack on Roedner’s proposed increase in the town’s property tax rate.
“I think the budget takes in account a lot of what we’ve talked about as a council,” she assured her colleagues. “I don’t want to increase taxes, and I don’t want to increase fees. But I also don’t want to lay off employees . . . and I’m not comfortable with the unpredictably of the economy right now.
“It sucks, and I’m saying that for the record,” the mayor added. “It sucks that costs have gone up. Costs have gone up for individuals, and costs have gone up for the town.”
In the meantime, councilman Michael Woods saw Roedner’s proposed budget as reasonable attempt to split the difference between competing demands on the town. Woods added that, as a member of the budget liaison committee, he spent a great deal of time poring over the manager’s spending recommendations in order to reduce the suggested tax hike from 2 to 1.5 cents.
Elon’s mayor pro tem Monti Allison, who also served on the committee, concurred that with Woods that the proposed tax hike shouldn’t be too much of an imposition as he considered the potential impact on a $400,000 home.
“For people who live here in Elon, $60 a year is not going to put you out on the street. But if we can reduce it, great.”
– Elon mayor pro tem Monti Allison
“For people who live here in Elon, $60 a year is not going to put you out on the street,” the mayor pro tem added. “But if we can reduce it, great.”
Allison went on to suggest that the council could eliminate the need for a property tax increase entirely simply by readjusting Roedner’s sales tax projections to reflect this levy’s actual receipts.
Meanwhile, other members of the council zeroed in on the town’s savings as another potential means to avoid a property tax hike.
According to Elon’s most recent annual audit, the town’s general fund boasted a cushion of about $11.4 million in “unassigned” dollars – which at the time, exceeded the fund’s revenues for the entire year.
During Tuesday’s discussion, Roedner reminded the council that the general fund’s savings recently dropped by $2 million in order to pay for a new fire engine. The town manager added that he has penciled in $1,273,994 from the fund’s unassigned dollars to cover next year’s anticipated outlays. He added that he’d be reluctant to dig any deeper into these savings in light of the financial uncertainty facing the town.
The idea of allocating more of the general fund’s savings nevertheless found favor with councilman Quinn Ray. In response to Roedner’s reticence about tapping into this revenue, Ray acknowledged that he comes to this issue from a different perspective since he, like most of the town’s other residents, doesn’t work for a public sector employer whose guaranteed pay raises would soften the blow of a tax hike.
“Haven’t we, each year, come back with a surplus? I’m poor. I don’t get a COLA [or cost-of-living adjustment]; I don’t get merit; I don’t get more money each year, so this affects me.”
– Elon town councilman Quinn Ray
“Haven’t we, each year, come back with a surplus?” the councilman said. “I’m poor,” he added with a hint of hyperbole. “I don’t get a COLA [or cost-of-living adjustment]; I don’t get merit; I don’t get more money each year, so this affects me.”
Roedner went on to assure the council that neither the proposed tax hike nor any of his other budget recommendations are etched firmly in stone. He pointed out that a budget amendment which the council approved earlier that evening has already changed the calculus of his proposed budget by moving tens of thousands of dollars in computer equipment off of the ledger for the upcoming financial cycle.
“That takes care of a $55,500 line item,” he added, “which brings [the tax hike needed to balance the budget] down to 1 cent.”
The council, for its part, resolved to give Roedner’s recommendations some more thought as they scheduled a state-mandated public hearing on the proposed budget for May 13. In the meantime, the town manager seems to have happily ceded the final decision on the property tax rate to Elon’s elected officials.
“My recommendation is 1.5 cents,” Roedner confirmed in a subsequent interview with The Alamance News. “But this is the manager’s budget just for tonight. After that, it’s the council’s budget.”
