By Brad Hicks
After weeks of crunching the numbers, the Erwin Board of Mayor and Aldermen has set a date for when it will consider final approval of the town’s 2017-18 fiscal year budget – a budget that could include a nearly 4-cent property tax increase.
The board on Monday, July 31, held what will likely be its final budget workshop before the new budget’s first reading to give the figures one last look and to discuss a couple of budgetary options, one that would include a more-than-3-cent increase over the town’s certified tax rate and the other that would include a 5-cent increase to that rate.
The board had also met on Thursday, July 27, and BMA members learned during that workshop that projected expenditures for 2017-18 were expected to exceed anticipated revenues by a little more than $39,000, meaning a tax increase of 3.06 cents over the certified tax rate would be needed in the new fiscal year to close the budgetary gap as each penny on the town’s property tax rate generates $12,764.
This option included the refinancing of more than $1 million on a pair of capital outlay notes to save the town approximately $170,000. These savings would be used to purchase several new police cars, fire department equipment and a truck for the town’s public works department. Also included in the budget under this option was a 3 percent salary increase for municipal employees. However, this option did not include funding to cover the maintenance of the beautification projects that have been completed along Interstate 26, maintenance of the town’s skatepark and the adjacent playground, and new computer and office equipment for Erwin Town Hall.
Board members were presented with a new option during Monday’s workshop that would include everything within the first option, along with the maintenance of interstate beautification projects, maintenance of the skatepark and nearby playground, and funding for computer and office equipment upgrades.
This second option would include a 5-cent property tax on the certified tax rate to offset the approximately $64,000 gap between expenditures and revenues.
The certified tax rate is described as the property tax rate to bring in the same amount of property tax revenue a government brought in the prior year. These rates must be set after reappraisal cycles, which occur every five years in Unicoi County and are based upon updated property values. This year marked a reappraisal year for Unicoi County.
The 2017 certified tax rate for the Town of Erwin is $1.397 per $100 of assessed value, which is slightly lower than the town’s actual property tax rate of $1.41 for the 2016-17 fiscal year.
Governments are not bound to the provided certified tax rate when setting the jurisdiction’s actual property tax rate.
Although the final reading of the budget and the town’s property tax rate must be approved by the Erwin BMA during a regular meeting before becoming official, the consensus among the board’s members during Monday’s meeting was to proceed with the second option that includes the 5-cent property tax increase.
If effected, this 5-cent increase would be added to the $1.397 certified tax rate rather than the town’s actual current property tax rate. This would bring the town’s property tax rate to $1.447, meaning the actual increase in the town’s rate for 2017-18 would be 3.7 cents.
The BMA is set to consider the first reading of the town’s 2017-18 budget on Aug. 14. It will consider the second and final reading during its Aug. 28, and a public hearing on the budget will be held on that date.
Erwin’s proposed 2017-18 budget reflects $6,664,083 in total revenue against $6,727,872 in expenditures.
Approximately $3.683 million of the projected revenue is anticipated to come from local taxes. This includes $1.787 from current property tax collections and $55,000 from the collection of delinquent property taxes. Local sales tax revenue is projected at $880,000, and business taxes revenue is projected at $72,000 for 2017-18.
Also included in the local taxes revenues are payments in lieu of taxes from local utilities providers and the housing authority. These revenues total more than $640,000.
The town’s wholesale beer tax revenue for 2017-18 is projected at $180,000, the mixed drink tax revenue at $3,000, and the package stores & tax revenue $12,000.
Total intergovernmental revenues for 2017-18 are projected at nearly $621,400. The bulk of this is made up of state sales tax revenue, which is projected to come in at nearly $494,000 in the new fiscal year.
Licenses and permits, which includes building and plumbing permits, is expected to generate $53,300 in revenue in 2017-18, and municipal fines, fee and court costs are anticipated to bring in $26,000.
Revenue associated with the town’s receipt of state and federal grants is projected at more than $1.5 million for the new fiscal year.
Other revenues, which includes interest income and the rental income the town receives for the U.S. Post Office adjacent to Erwin Town Hall, is projected at $764,943. This also includes $250,000 under a line called “sale of asset,” which represents the amount the town hopes to receive from the sale of the former Morgan Insulation property currently under its ownership.
The proposed budget calls for the transfer of $50,000 from the town’s fund balance to help balance the budget.
On the expenditures side, legislative costs, which include the salaries of the BMA’s members, are projected at nearly $29,400 for 2017-18. The costs associated with the city attorney and municipal judge are projected at approximately $33,000.
Projected expenditures under the central staff agencies, which includes the salaries and benefits of employees at Erwin Town Hall, as well as equipment, supplies and training expenses, are around $353,500.
Expenditures for the town’s communications specialist position are projected at more than $78,300. This includes the communications specialist’s $31,200 salary, more than $10,200 for marketing and $26,325 that is to go toward town events and festivals.
Planning and zoning expenses are projected at more than $66,500 for 2017-18. Costs associated with the town’s buildings department, which includes town hall utilities and maintenance expenses, are projected at nearly $104,800.
The total 2017-18 budget for the Erwin Police Department is estimated at around $1,120,200. This includes nearly $705,000 for departmental salaries and approximately $152,000 for departmental health insurance. These projected expenditures also include $14,000 for operating supplies, $2,500 for education and training, $28,000 for gas, oil and tires, and $8,000 for machinery and equipment.
Expenditures for the Erwin Fire Department are expected to come in at approximately $666,300 in the new fiscal year. These costs include around $370,500 for salaries and $67,400 for departmental health insurance. Also included in the projected expenditures are $2,500 for education and training, $68,000 for fire hydrant rentals, $4,200 for equipment repair and maintenance, $6,000 for station repair and maintenance, $3,000 for gas, oil and tires, and $5,000 for machinery and equipment.
Total costs associated with the town’s Public Works Department are estimated at approximately $832,300 for 2017-18. This includes more than $366,600 for departmental salaries and $93,000 for health insurance, as well as $28,000 for operating supplies, $30,000 for equipment maintenance and repairs, $28,000 for gas, oil and tires, and $22,500 for machinery and equipment.
Municipal sanitation costs are projected at $176,000 for 2017-18.
Welfare and social services expenditures, which are made up of the town’s contributions to local nonprofit agencies and organizations, are projected at $176,148 for the new year, and parks and recreation expenditures are projected at around $302,500. The town’s debt service is projected at $1,168,925.
The town’s 2017-18 expenditures also include more than $2,037,868 for capital projects. Town Recorder Glenn Rosenoff said while the town receives grant funding for the majority of its capital projects, these grants require a match from the town. Rosenoff said included in the town’s 2017-18 capital projects list are the tunnel to be constructed under Harris Hollow Road, Surface Transportation paving and striping projects, work on a spillway bridge located along the Erwin Linear Trail near Indian Creek, and utilization of the Tennessee Valley Authority InvestPrep funding the town received last year to demolish the former Morgan Insulation property to ready the site for industrial development, as well as roadscape and beautification projects.