Town proposing 25 cent per month increase in garbage fee

TRYON – The Town of Tryon is proposing a budget for next fiscal year that is three cents under the revenue neutral tax rate, no increases to water or sewer rates and a 25-cent per month increase to its garbage rates.

Following three budget work sessions, the Town of Tryon set a public hearing on the fiscal year 2017-2018 budget for Tuesday, June 20 at 7 p.m.

Tryon Town Council met May 16 and heard from town manager Zach Ollis about the proposed budget. Ollis said the budget draft was finalized earlier May 16 with some cuts made in some departments and council deciding to set aside money for the downtown sidewalk project, to fix Aspen and other streets, to pave and fix infrastructure on Howard Street and put money into the town’s fire and sanitation funds.

The town is keeping the same base tax rate at 50.28 cents per $100 of valuation, which is more than three cents lower than what the town’s revenue neutral rate would be following the county’s recent property revaluation. The revenue neutral tax rate would have been 53.35 cents while the revenue neutral with growth rate factored in would have been 53.4 cents.

The county sets the Harmon Field and Tryon Fire tax rate, which are scheduled to be the revenue neutral rates. Revenue neutral means the local government adjusts the tax rate to receive the same amount of property tax revenues it did the previous year following revaluations. Tryon’s overall property tax values decreased during the revaluation, which was effective Jan. 1, 2017.

Council decided to increase the sanitation rates by 25 cents per month with Tryon Mayor Alan Peoples saying the discussion was that the town needs to do small increases over the next four to five years.

Tryon’s budget for fiscal year 2017-2018 is for a total of $4,032,575, including $1,543,186 in the general fund, $136,562 in the Powell Bill fund, $311,332 in the fire department fund, $186,000 in the Harmon Field fund, $19,500 in the tourism fund, $1,617,814 in the water/sewer fund and $218,181 in the sanitation fund.

General Fund

The draft budget’s general fund totals $1,543,186, which is a $423,780 decrease from the adopted fiscal year 2016-2017 budget. Ollis said the decrease is due to changes in revenue estimation, changes in expenditure estimation, strategic budget cuts, the removal of appropriation from fund balance and cost sharing implementation across all funds.

Revenues

There are no tax increases proposed for next fiscal year with most people likely seeing a decrease in property taxes, depending on how the property revaluation affected their property values. Ollis said the board should seriously look at raising taxes in the near future for the town’s long-term financial health.

Tryon’s property tax base is estimated by the Polk County Tax Office to be a total of $153,571,589, which will produce $772,157 in revenue for the town. One penny on Tryon’s tax rate generates approximately $15,357.

The town is expecting next fiscal year to receive about $213,000 in sales tax from the state as well as hold harmless fees expected to be $195,000 next fiscal year.

The town’s general fund balance was a total of $979,383 as of June 30, 2016 with an unassigned fund balance of $210,000. The town does not expect to use any fund balance next fiscal year and anticipates placing $40,328 back into the fund balance.

General fund expenditures

The town’s general fund expenditures expected for next year include $52,884 for the governing body, $541,767 for administration, $667,318 for police and $281,217 for streets.

Police makes up 43.2 percent of the general fund budget, while administration makes up 35.1 percent, streets make up 18.2 percent and the governing body makes up 3.4 percent.

Powell bill funding

The town receives state funding every year to help maintain its streets with next year’s Powell Bill fund being $136,562. The town plans to appropriate $71,562 from the Powell Bill fund to accompany $65,000 from this year’s Powell Bill funding. The money will be used to cover debt service as well as new projects the board of commissioners has asked to be included, including the sidewalk improvement project on Trade Street between Palmer Street and Foothills Realty, the paving of Howard Street with the sewer replacement being paid out of the water/sewer fund and improvements on Aspen Street for emergency access.

Fire Department

Ollis said the operating budget for the fire department fund has been adjusted to make the department more financially stable. Revenues for the fire department are estimated at $311,332, which is the revenue neutral rate set by the Polk County Board of Commissioners. The tax rate at revenue neutral went down to reflect property value increases.

Also in the fire department, Ollis said non-essential operating expenses have been cut across the board to adjust for revenue estimates. Changes include the $32,000 expense for the fire department repayment plan to the town’s general fund and a $45,317 administrative service charge included to pay for administrative, dispatch and communication support services provided by the staff from the town’s general fund.

“This budget provides the same services citizens expect while also shrinking the budget by $72,177,” Ollis said. “This budget also allows the department to place $18,145 back into the fire department fund balance.”

Harmon Field

Harmon Field’s revenue and expenses total $186,000 with no serious changes to revenue following Polk County’s revenue neutral tax rate. Ollis said the Harmon Field Board of Supervisors have adjusted usage fees and rental rates in order to boost revenue and there have been small changes to account for increases in materials and decreases in vehicle costs.

Tourism

Tryon’s tourism budget for next year has been scaled back because of the projections based on the past fiscal year’s taxes, according to Ollis. Occupancy taxes have been estimated at $18,000, which is a $4,000 shortfall from the previous year, according to Ollis. Expenditures were adjusted to reflect the decrease with the budget covering operating expenses such as the audit, administrative service charges, money for website management, Facebook advertising and other marketing.

Water/sewer

Tryon’s water and sewer budget for next fiscal year is proposed to increase by $15,057, according to the proposal. The total is for $1,617,814 with next year’s budget removing the appropriation of funds to the general fund. Ollis said the water/sewer budget also estimates the charges for water and sewer in a more conservative way.

The water/sewer budget provides $80,000 for the sewer portion of the town’s Howard Street project. The budget also allots for $30,918 to be placed back in the water/sewer fund for savings for depreciation with the town hoping the following year to put back $50,000 in the water/sewer fund.

Sanitation

Next fiscal year’s sanitation budget is expected to be slightly less than the current year by $6,104, according to the draft. The total budget will be for $218,181, including the extra revenue for the garbage rate increase. The town also increased garbage rates this fiscal year by 25 cents per month.

The lower budget is due to the estimations for sanitation charges being less than the previous year, Ollis said.

“With the town working to conservatively estimate figures, the sanitation fund was directed to work off a smaller budget,” Ollis said. “No services have been cut but some line items have seen small cuts. The budget still allows the department to put back $9,269 into its fund.”

A 25-cent per month increase in garbage rates will bring in an additional $2,181 per year for the fund, based on 727 customers. The town plans to put the extra revenue and savings toward debt service to replace the town’s current 15-year old garbage truck, possibly during the 2018-2019 fiscal year.

Revenue neutral

The total tax evaluations for Tryon decreased during the recent revaluation to an estimated value of $169,447,285 from last year’s total assessed property values of $179,797,713. In order to go revenue neutral next fiscal year, Tryon would have had to raise the tax rate to 53.35 cents per $100 of valuation.

“Revenue neutral rates can be somewhat misleading as tax bills will change,” Ollis said. “The owners of property that did increase in value would see a higher bill while those with decreasing values may see some change.”

Ollis said by leaving the tax rate the same the town will be receiving less revenue next fiscal year in property taxes. Ollis said he feels confortable not raising the rate to equal revenue neutral next year because the town has some debt coming off and the town has made some cuts so the town will be able to absorb the cut.

“There are going to be a lot of people who see decreases in taxes,” Ollis said. “We’re just trying to do what we can to help the average citizen.”

The 50.28 cents per $100 of valuation does not include the Harmon Field tax or the Tryon Fire Department tax. Polk County is scheduled to adopt revenue neutral rates for both, including 3.34 cents per $100 of valuation for Harmon Field and 6.35 cents per $100 of valuation for the fire department. Tryon’s total tax rate including all taxes will be 59.97 cents per $100 of property valuation. The current year’s total tax is 60.58 cents. Revenue neutral rates for Tryon fire dropped the rate from 6.8 cents to 6.35 cents and dropped the Harmon Field rate from 3.5 cents to 3.34 cents, according to the county’s figures.

The town’s full budget proposal can be viewed beginning today on the town’s website.

Tryon is expected to adopt the new budget after hearing public comments on Tuesday, June 20. The new fiscal year begins July 1.