06/27/11 — Mount Olive town board OKs budget

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Mount Olive town board OKs budget

By Steve Herring
Published in News on June 27, 2011 1:46 PM

MOUNT OLIVE -- Town commissioners Wednesday night rescinded then readopted the same $5.1 million budget that they had approved just two weeks earlier on a "contingent" basis.

"There is no such thing as contingent budget ordinance," said William Rivenbark of the School of Government at the University of North Carolina at Chapel Hill. "Either it is a budget or it is not. The law does not allow for a contingent budget."

As such whether the board had voted to rescind the budget or not would have been a moot point since a budget had not been approved the first time, he said.

Mayor Ray McDonald Sr. told the board that town attorney Carroll Turner had advised him that the second vote was needed.

"I am going to take that advice so I am going to ask that someone make a motion that we rescind the budget that we approved at our last board meeting," McDonald said. "I had said no we weren't going to do that, but I will say it to his face and I will say it to his back he (Turner) has never given me any advice that wasn't pretty good so I took it."

Commissioner Kenny Talton's motion to rescind the budget was unanimously approved and McDonald then asked Town Manager Charles Brown to present the budget.

"The figures that we will be asking you to approve tonight will be the same as you have in your hands given at the workshops -- the same figures that we had the last time," Brown said. "It is the budget for 2011-12 to be adopted in the amount of $5,123,546 maintaining the same tax rate of the prior year of 59 cents per $100 value of valuation."

Commissioner Gene Lee's motion to approve the budget was unanimously approved.

Leaving the tax rate as is will still mean that most property owners will pay more in town taxes since property values, for the most part, increased as result of the countywide property revaluation.

Brown said Wednesday that one thing the board did not have "set in concrete" at the last meeting "and quite frankly we don't have set in concrete today either" are the new property values.

"We had a phone call telling us what our property revaluation is," he said. "What they (county tax office) think it is, but we do not have written confirmation of what the new tax base for the town of Mount Olive is.

"We have calculated what a revenue-neutral rate would be if the numbers that we have now were to hold up, but I know Goldsboro finally did theirs (budget) yesterday. We are sort of really doing those calculations on a supposition that we have been told it accurate."

Brown never said what the revenue-neutral rate, which is required by state law, would be. However, City Clerk Arlene Talton said later that information Brown provided to commissioners showed the rate would be 57 cents.

McDonald also called on Brown to talk about state General Statute 159-15 regarding budget amendments.

"What it basically states is that the governing board can amend the budget ordinance anytime after the budget ordinance is adopted in any manner as long as it adheres to the statutes," Brown said. "No amendment, however, can increase or decrease a property tax levy after the budget is passed except if after July 1 the local government receives revenues that are substantially more or substantially less than the amount they anticipated in their budget. They may, prior to Jan. 1 following adoption of the budget, amend the budget ordinance to reduce or increase the property tax levy to account for the unanticipated increase or reduction in revenue.

"In other words you can amend the budget anytime, but you can only amend it to change the tax rate between July 1 and Jan. 1. Then if you have a substantial increase or decrease in your revenues you can actually change tax levy during that time. You have six months after the passage of this budget if something unforeseen happens."

McDonald said the fate of a state one-cent sales tax was "not a done deal" at the time the budget was adopted the first time.

"That would have affected us," he said. "It would also affect the school system to the tune of about 14,000 jobs or so. I thought it was a big enough problem that if they cut it out and right now it is cut out.

"They did take it out and we needed to make sure that everybody was onboard that we may have another meeting and that we may change things."

McDonald asked if the sales tax had been finalized or if it was still in committee. Brown responded that the governor's veto of the budget that eliminated the sales tax had been overridden by the General Assembly.

"However Judge Howard Manning is still going to look at the budget in terms of the education part of it," Brown said. "If he determines that the state is not following the law in terms of providing an education for children in North Carolina I think he can tie that budget up in court I am pretty sure."