Preparing each fiscal year’s budget is usually a painstaking process spanning several months. It begins with the Town Retreat, held this year on March 5, where department heads present wish lists for capital improvement projects or equipment purchases.
Whether a project or items are included in the budget depends on sales, property, fire and franchise tax returns as well as revenues from the town’s enterprise funds – electric, water/sewer and sanitation. Sales, property and fire taxes are self-explanatory. But the franchise tax usually brings blank stares.
A franchise tax is a state tax paving, sidewalk repairs, and equipment purchases.
“We are dealing with a lean budget with cuts this year,” said Mayor Pat Taylor.
Typically, decisions aren’t made at budget worksessions, but last Thursday, commissioners unanimously agreed to pay construction manager D.R. Reynolds $35,000 to establish the Maximum Guaranteed Price for the fire department construction.
“This is a one-time cost which will give us a guaranteed maximum price. The Finance Committee and the Public Safety Committee both approved the proposal,” said Town Manager Josh Ward. D.R. Reynolds will report back in six weeks with a firm price.
Once D.R. Reynolds gives a final maximum price which is expected to be in the vicinity of $6 ½ million, the town will finalize loan terms with BB&T for either a 15-year or 20-year loan bundling both the property purchase and the fire department construction.
Ward said the loan will likely be for $8 million and will require the Local Government Commission approval.
“We want to go forward with the contract to get the guaranteed max price and wait on that price to see exactly what it will be before we move forward. There will be two parts of the loan – $1.5 million for the property and whatever the construction of the building comes in at. So, I would advise to wait and see what the price is before we finalize loan,” said Ward.
Even if the town chooses to hold off on the construction, commissioners agreed to go ahead and purchase the land since that loan can be serviced with fire tax proceeds. Also, discussed were health insurance options which could change due to a 10% increase from last year.
“We had a bad year claim-wise this past year,” said Ward.
Last year, the town moved from BCBS to MedCost which came in without an increase. The 10% increase would cost the town $62,364 and employees an $11,000 increase.
Meanwhile, the town is expecting proposals by the end of April from other insurance companies.
Commissioner Marc Hehn suggested the town pick up the employees’ cost.
“I think it would be an admirable thing to do for our employees during this pandemic,” said Hehn. “They are still working, and we should show them we appreciate them.”
Commissioner Brian Steihler said he thought town employees should be rewarded in some way but wasn’t sure Hehn’s suggestion was the answer
“We have to be careful. We are going to take a hit in areas,” said Steihler. “There are a lot of people out of work and they are struggling so it would be hard to justify that. But I do think the employees should be rewarded in some way.”
As to capital improvement projects, no final decision was made but commissioners did work off the post Covid-19 budget Ward proposed.
“Sales tax was ahead prior to this, so we expect sales tax to meet our projection of $1 million by the close of FY ‘19-‘20. We are at $835,000 now but we don’t know about utilities and how they will be coming in,” he said.
Rather than sunset the 1.5 cent Recreation tax which has been in effect for five years, Commissioners discussed keeping it and using it to pay for the many paving and sidewalk projects on its list for the years ahead.
On the proposed list for this year are paving projects for the remainder of Cullasaja Dr., Hickory Street, Church Street Alley, Chowan Drive and Pinecrest Road.
Sidewalk repairs still on the list are at Loafers Bench on Main Street, at Reeves on Main Street, Satulah Road and Pierson Drive to the school, of which salt and paint striping is a part.
Commissioners also discussed changing out all town lights to LED lights, something the mayor feels strongly about saying they are energy efficient and in line with the dark sky initiative.
“This is something we have been doing slowly over the years,” said Ward. “As lights burn out, we replace them with LEDs. The Post Covid-19 option is what I recommend, due to the uncertainty of the economy this second half of 2020. After the FY 2020-‘21 budget is adopted, the Town Board has the ability to allocate funds for additional projects as the year progresses, if they so choose.”
Pictured at the top of the article is a photo of a video conference from last Thursday’s Finance Committee meeting.
- By Kim Lewicki, Highlands Newspaper