Fayetteville is expected to trim its general fund budget Thursday night in keeping with another year of falling property tax values. The meeting will also see a proposal for a sewer rate increase that will be offset by a nearly equivalent decrease in the sanitation rate. And as for the millage rate and a likely roll-up, those numbers are expected next month.
The $9.359 million budget set for adoption Thursday night is one that has more than $107,000 trimmed off the current general fund budget period that ends Aug. 1. Public safety services, such as fire and police, account for nearly two-thirds of the budget, or $6.082 million.
The expected fund balance for FY 2013 will be nearly $809,000 and is accompanied by another 3 months of operating reserves.
Revenue projections include a 13 percent decrease in the property tax digest, a 2 percent increase in local sales taxes and business taxes, a 1 percent increase in licenses and permits and a millage rate roll-up to offset the decreases in the tax digest.
Sales and property taxes are the largest revenue sources for the general fund budget, with sales taxes representing 25 percent of revenues followed by property taxes at 23 percent. Business taxes account for 17 percent of the budget followed by franchise taxes at 14 percent and fines and forfeitures at 12 percent.
On the expenditure side, the budget proposal would shrink the budget by 1.13 percent, add a 2.1 percent increase to employee salary and benefits, continue the hiring freeze and voluntary reduction of hours that has been in place for several years. The proposed budget would see city employment numbers drop to 124 full-time equivalents for 2013, down from 163 FTEs in 2008.
The council on Thursday will also consider an amendment to the sewer rate that would increase fees by 2.1 percent, equivalent to a 57-cent increase in the average residential sewer bill. A nearly equivalent decrease in the sanitation rate is being proposed to offset the sewer rate increase.
If approved, the minimum residential rate would go from $15.95 to $16.28, the senior rate would go from $13.56 to $13.84 and the commercial rate would go from $27.95 to $28.54. The proposal is based on the current Consumer Price Index of 2.1 percent.
Assistance Finance Director Ellen Walls noted that sewer rate options were discussed during the council retreat in March to insure the city’s ability to meet the required debt service obligations as outlined in the 2010 Series Water and Sewer Revenue Bonds. The options included a partial refinancing of existing debt, or a possible merger of water services with the County and/or a sewer rate increase or combination of options. Unfortunately, it will be another twelve months before there are any bonds eligible for refinancing and a merger with the county is not possible at present with the appraisal and other requirements pending. The last option is a sewer rate increase, which is necessary in order to maintain our required debt service coverage, Walls said.
As for the anticipated millage rate roll-up, Finance Director Lynn Robinson said the city expects to have more definitive tax digest information in the coming weeks once it is available from the county.
