The Wilkes County commissioners included a 1-cent property tax rate cut, while the Wilkesboro and North Wilkesboro governing bodies kept their tax rates unchanged in fiscal 2019-20 budgets approved this week.
Budget decisions for the coming fiscal year were influenced by a countywide revaluation of property, completed this year and the first reappraisal since 2013.
With increased property tax bases due to the revaluation, town and county officials discussed whether to leave property tax rates unchanged and therefore raise more tax revenue than the prior year or lower them to “revenue neutral” rates and raise roughly the same revenue as in 2018-19.
The county commissioners opted for a revenue neutral rate of 66 cents per $100 of property valuation, while the Wilkesboro and North Wilkesboro governing bodies approved budgets that left their rates the same at 48 cents and 52 cents, respectively. The Ronda commissioners are expected to leave their tax rate unchanged at 40 cents.
County chairman’s appeal
Keith Elmore, chairman of the county board, on Tuesday night again requested that the county property tax rate stay 67 cents rather than drop by 1 cent as included in the budget recommended by Wilkes County Manager John Yates.
Elmore said in a recent budget work session that considering the amount of the county’s undesignated fund balance being used to balance the budget, the tax rate should be left at 67 cents to help avoid a considerably higher tax rate in a few years. The budget approved Tuesday night takes $4.96 million from the fund balance.
Commissioner Gary Blevins made a motion to approve the budget Yates recommended, but with an additional $240,124 in expenditures Yates listed earlier in the meeting.
When told by County Attorney Tony Triplett that the motion had to specify a tax rate, Blevins said 66 cents.
Commissioner David Gambill seconded the motion and said lowering the tax rate a penny was the board’s way of giving back to taxpayers after they “stepped up” earlier and paid tax rates higher than 67 cents. Gambill noted that 66 cents was the “revenue neutral” tax rate.
Blevins’ motion passed unanimously.
“Revenue neutral” means the 66-cent rate should raise about the same revenue as a 67-cent rate due to the county property tax base increasing by nearly 3 percent in the new revaluation. The rate has been 67 cents since it was lowered by 2 cents in 2016-17.
Even with a 1-cent drop in the tax rate, owners of property that rose in value by more than nearly 3% will see higher county tax bills. One cent of the tax rate will raise about $580,000 for the county.
A 66-cent tax rate will generate about $38.5 million if it all is collected. A 67-cent rate would raise about $580,000 more property taxes than in 2018-19.
Commissioner Eddie Settle said a lot of funding requests next year would have to be denied to avoid using more of the fund balance. He said county finances would benefit from the debt from building four middle schools being paid off next year. Settle and Blevins voiced optimism about the county having more sales tax revenue than projected when fiscal 2018-19 ends June 30.
Yates listed $240,124 in appropriations commissioners added to the budget he recommended: $100,000 more for the Wilkes school system, $100,000 toward the county’s local match for a grant for resurfacing the airport taxiway, $38,124 for restoring a Wilkes Register of Deeds position and $2,000 for the Lincoln Heights Recreation Corp.
The additional amount discussed earlier for restoring the register of deeds position was $24,220, but it was increased to $38,124 to include benefits. Yates said that with the additional $240,124 coming from the undesignated fund balance, the new budget uses $4.96 million from that reserve fund.
The new budget includes a 2% across the board cost of living pay hike for county employees, as well as $56,000 for pay hikes exceeding 2% for 26 Wilkes Sheriff’s Office positions. It includes about $200,000 for a 4% increase in the cost of funding health insurance for all fulltime county employees.
“Lean year” in North Wilkesboro
In addition to leaving the tax rate unchanged at 52 cents, the 2019-20 North Wilkesboro budget approved Tuesday night takes no money from the fund balance and is conservative with capital improvement.
North Wilkesboro’s revenue neutral tax rate is 49.5 cents and leaving the rate at 52 cents is projected to raise about $114,400 on property tax revenue than in 2018-19.
The new budget has no utility rate increases.
“Sometimes times are lean; sometimes times are not lean. This is one of those lean years,” said Ed Evans, interim town manager, during the meeting. Evans said of the town staff’s charges this year from the board was, “to go really lean and not spend fund balance. We prepared a budget that does that.”
The new budget’s largest capital expenditure is $216,000 for a new dump truck to replace a 2006 model that town officials said cost too much to keep on the road. Town officials plan to fund it with an installment loan.
It also includes $140,000 for buying four new police vehicles. Police Chief Joe Rankin asked the board for eight new vehicles purchased over a period of two to four years. This would allow each officer to drive a patrol vehicle to and from home, as is the case with the Wilkesboro Police Department and Wilkes Sheriff’s Office.
The $2.1 million police department budget is the largest of any North Wilkesboro department, accounting for 31% of the total budget. Other top-funded departments include sanitation (13%), fire (8%), streets (6%) and recreation (6%).
The budget includes increased funding for contingencies (unexpected expenditures), from $279,026 in the prior budget to $308,026, to balance the general fund budget at $6.74 million, which is slightly higher than in recent years, said Evans.
The water and sewer fund is balanced at $2.87 million.
Evans said that at the direction of the board, the budget includes no funds for re-paving streets. The 2018-19 budget had $485,000 for paving.
The budget also has a 2.5% cost of living pay raise for all town employees. A 4% increase was included in each of the past two years.
Evans said it’s a good budget and added that Connie Bauguess, town finance director, was tremendously helpful in the process.
Speaking from the audience, Martha Nichols made the only public comment Tuesday before the budget was approved. “In all my years of sitting here listening to this (board), this is the best presentation I have ever heard. It made sense. We need to keep him (Evans).”
Interviews with town manager and town planner candidates are continuing this week. Evans has been interim manager since Feb. 27.
Wilkesboro industrial sewer rate upped
In addition to leaving the tax rate unchanged at 48 cents, Wilkesboro’s 2019-20 budget includes a 10 percent increase in the town’s industrial sewer rate and no increase in the industrial water rate. This means an effective 5 percent increase in the town’s combined industrial rate for water and sewer services, starting Oct. 1.
This 48-cent tax rate is projected to raise $3.48 million in property taxes in 2019-20—about 5% ($174,000) more than in 2018-19 due to the revaluation. Wilkesboro’s revenue neutral rate is 45.6 cents.
Bob Urness, town finance director and assistant manager, said earlier there is a realistic chance of an across-the-board utility rate increase by Jan. 1. This would affect all rate classes, including residents.
He said the potential across the board rate hike is partly due to lower water usage by Tyson Foods Inc., the town’s largest water customer and county’s largest employer, which recently made facility improvements allowing more efficient use of water. Urness said it’s also partly due to two large capital water projects looming in 2019-20, including phase one of $19 million in improvements to the town’s raw water intake system on the Yadkin River.
The utility rate bump would be the first such increase in five and a half years, Urness added. At present, no increases in residential utility rates are proposed.
The new budget includes a 2.5 percent cost of living increase.
“I feel like we’ve had a good budget process this year,” said Urness. “Our organic growth (growth of existing businesses) and revenue are up. Our reliance on financed capital equipment is down. And our reliance on fund balance to balance the budget is as low as it’s been” in 20 years.
Urness said the council’s cuts in the proposed budget on May 20 reduced undesignated fund balance spending from $385,000 to $74,000. He added that if less is spent than budgeted in the coming fiscal year, $225,000 to $250,000 could be added to the town’s fund balance.
“It’s a very fiscally sound budget from the general fund perspective,” said Urness. “Overall, I’m quite pleased with the budget.” All of the council members concurred.
No public comments were made during a public hearing for Wilkesboro’s 2019-20 budget Monday evening.