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HomeMy WebLinkAbout05-09-17Minutes of the Budget Work Session held Tuesday, May 9, 2017 at 7:00 p.m. in the Council Chambers of the Municipal Building at 42 First Street, NW. There were present: Mayor: Robert N. Glenn Council: James A. Radcliffe, Gregory C. East, Joseph K. Goodman, David L. Clark. Absent/Excused, H. M. Kidd, Absent/Excused, Lane R. Penn Staff: Shawn M. Utt, Town Manager Nichole Hair, Deputy Town Manager Patricia Cruise, Clerk of Council David Quesenberry, Assistant to the Town Manager Spencer Rygas, Town Attorney Gary Roche, Police Chief Rebecca M. Reece, Finance Director Bill Pedigo, Town Engineer Others: Ike Jeanes Jay Jones Terry McPeak Town Employees: Justin Riggins Gary Martin Chris Phillips Dale Richardson Kim Caudill Suellen Palmer Angie Trail Mike Williams, Press B.J. Wood, Press At 7:00 p.m., Mayor Glenn called the meeting to order. He advised that Councilmen Kidd and Clark were absent/excused. He continued that the purpose of the meeting was to hold 3 Public Hearings. He explained the rules of the meeting. The first Hearing was in regard to a proposed 4% across the board increase in water rates. Mr. Utt reminded Council and visitors that in March of 2014, Davenport and Associates did an in-depth utility rate study for the Town. He continued that the Davenport study recommended a 21 % water rate increase to be implemented at 4% a year for 5 years. He noted that Davenport and Associates provided an updated utility study this year and recommended an extended five year plan of a 4% increase for 4 years and then dropping down after that. He reviewed the plan for Council. At 7:07 p.m., Mayor Glenn opened the Public Hearing. Justin Riggins addressed Council asking whether there was another way to fund the water increase rather than a water rate increase. Mayor Glenn responded that Council was trying to tighten the budget, however, the water and sewer fund stand on their own merit and he didn't know another way to handle the problem. At 7:11 p.m., there being no further comments, Mayor Glenn closed the Hearing. The next item for consideration was discussion of the proposed 4% across the board increase in sewer rates. Mr. Utt advised that the background for the sewer fund was basically the same as for the water fund. He added that Davenport and Associates brought up the concern they had with the sewer fund reserves when they provided their updated utility study this year. They were concerned because it appeared to be negative or very close to zero. He continued that the Town had some higher than average rain years and treated a lot of storm Page 1 of 3/May 9, 2017 water and the Peppers Ferry treatment costs were much higher than anticipated. This kept the reserve funds from growing in the sewer fund. Councilman Radcliffe inquired whether the Town was due a rebate from the Peppers Ferry Resource Authority this year? Mr. Utt responded that Peppers Ferry recently voted to reduce the $106,000 the Town normally pays for the sulfate reserve fund to $28,000 per year. He planned to place that money into the Town sulfate reserve fund for upcoming repairs. He continued that Peppers Ferry was also working on restructuring their Capital Improvements fund, which could help the Town. Councilman Penn commented that the reduction to $28,000 was for a four year period and Peppers Ferry would look at the situation after that. He asked if Peppers Ferry discontinued that payment, would the 4% increase still be needed. Mr. Utt responded that was one of the reasons that Davenport and Company reduced the amount of future increases. Councilman Penn advised that he was concerned with the increases each year because he felt that somewhere along the line, the County would raise their rates for garbage. He continued that while he could afford it, there were many in the Town who could not. Mayor Glenn and Mr. Utt clarified information regarding sulfates and charges to the businesses that produce them as well as monies in reserve. There being no further comments from Council, Mayor Glenn opened the Public Hearing at 7:30 p.m. No comments were received and the Mayor closed the Hearing. The next item on the agenda was a Public Hearing for a proposed 3 cent increase in real estate taxes. Mr. Utt advised that Council had a revised draft copy of the FY 18 budget at their dais. He continued that he had been working to prepare a balanced budget that did not have a deficit and was still able to fund some of the priorities that were set in place. He added that this budget does have some increases in water and sewer rates, but did not incorporate the real estate tax increase. He noted that it was a balanced budget with approximately $1,800 left over, which included funds set aside for compensation study implementation. He continued that the budget did not have funding for CIP or a Contingency line item. He proposed a 3% increase in real estate tax for FY 18, with the increase going only toward CIP projects. Mr. Utt advised that Ike Jeans had presented a comparison of data regarding tax rates from surrounding areas. Councilmen Radcliffe, East and Goodman spoke against the tax increase. Mayor Glenn opened the Public Hearing at 8:09 p.m. From the public, Justin Riggins and Terry McPeak spoke against raising taxes in the Town. Jay Jones advised that he did not want to have the taxes raised, but he would accept that if the Town would give Town employees a raise. He offered kudos for their work. Mr. Jeanes advised that he was not totally against a tax increase. He enumerated some of the problems the Town faced and acknowledged that a tax increase might be required to fix the problems. There being no further comments from the public. Mayor Glenn closed the Hearing at 8:33 p.m. Page 2 of 3/May 9, 2017 1 Mr. Utt confirmed that he needed to be prepared to present a concept for reserves for Capital items at the next meeting. Councilman Penn moved to adjourn. Councilman Goodman seconded the motion and carried on the following voice vote. Approved. Robe N. Glenn, Mayor Page 3 of 3/May 9, 2017