Revenue won't be neutral in city
By Ty Johnson
Published in News on June 21, 2011 1:46 PM
Budget revisions that freed up an extra $223,815 in the city's 2011-12 fiscal year will be supplemented with even more revenue from taxes if the City Council approves its budget as amended today at 5 p.m.
The council recessed its meeting Monday night and will reconvene today for a special evening meeting to approve the budget. The Finance Department will be busy all day today making the changes the council outlined Monday, which included estimates of the additional funds the city can expect from the recent property revaluations and an additional $18,000 the city expects to collect this year with a $1 increase in greens fees at the municipal golf course.
During Monday's work session, Finance Director Kaye Scott advertised the city's revenue neutral rate as .5942, meaning that the city could lower the tax rate from .65 to that figure and still collect the same amount of tax revenue this year as during fiscal year 2010-11. Since it was first distributed to council members May 2, the budget has been based on a revenue neutral tax rate, so when the council voted to keep the tax rate at .65, the additional revenue was not budgeted into any line items.
The additional funds freed up from the golf course and tax revaluation, however, were budgeted. The tax revaluation and golf course revenue increase amounted to a $223,815 surplus, which was dispersed into different items -- $70,000 will go into a budget for the city to hire a public information officer and $20,880 will be used to meet the requirements of the contract the city has entered to hire the new city manager in August.
More than $86,000 in revenue will also be freed up by eliminating two maintenance positions at the golf course and replacing them with temporary positions, leaving $200,000 for the city to work with to give city employees a slight pay raise. City employees last received raises in 2010, when a merit raise was included in the budget.
Mayor Pro tem Chuck Allen engaged in heated discussions of further budget cuts with Downtown Goldsboro Development Corp. Director Julie Thompson. The revised budget included $24,000 for the DGDC's business incentive grant that was initially cut from Ms. Thompson's requests, but Allen set his sights on the DGDC's advertising budget, which he said should be reduced from $14,000 to $3,000. He also wanted to reallocate some DGDC events from the DGDC's municipal service district fund into the city's general fund to free up DGDC more for economic development projects, but Ms. Thompson said that would be the kiss of death for many of her events. She said, in the budget climate the city finds itself in, it will be far too easy in the future to favor a police car over a downtown event, such as Lights Out Downtown.
"The MSD funds should be put directly into downtown," Allen said, explaining to Ms. Thompson that he felt business owners would want to see "tangible" results.
Ms. Thompson noted that her organization's charter was not solely to bring businesses downtown.
Following a short discussion about the public information officer line item, Allen introduced the idea of a further cut of 2 percent from the overall budget.
"Nobody wants to cut 2 percent, but it won't kill anybody," he said as District 2 Councilman Bob Waller voiced his agreement. "I don't care where you cut it, just cut it."
But Interim City Manager Tasha Logan said an additional cut of 2 percent across the board would begin impacting services.
"I don't know where you're going to find an additional 2 percent in these numbers," she said, adding that the budget already provided for more than a million dollars in attrition.
Goldsboro Fire Department Chief Gary Whaley spoke out, as well, noting that the 2 percent cut would severely impact his department before Mayor Al King pointed out that the time for drastic changes to the budget was over.
"We're in the 11th hour," he said. "We have a proposal that balances the budget and nobody's happy with it. I don't think staff is happy with it either, but it's balanced."
District 6 Councilman Jackie Warrick moved to approve the budget as presented and District 4 Councilman the Rev. Charles Williams seconded it quickly thereafter, though he continued to question other items on the budget.
A vote approved the budget 5-2, with Waller and Allen dissenting.
That left setting the tax rate, which Williams said should stay the same, though there seemed to be confusion as to whether he meant the revenue-neutral rate or the city's current rate.
Ms. Logan proposed setting the rate at the Tuesday meeting the council had just set up, but the board put it to a vote during the work session, approving the .65 tax rate 7-0.