By Brad Hicks
Erwin residents will see a nearly 4-cent increase on their municipal property tax rate in the 2017-18 fiscal year.
The Erwin Board of Mayor and Aldermen on Monday, Aug. 28, unanimously approved the second and final reading of the town’s budget for the new fiscal year, a measure that included the fixture of the town’s 2017-18 property tax rate at $1.447 per $100 of assessed value on real estate and personal property.
This rate is 3.7 cents higher than the $1.41 municipal property tax rate for the 2016-17 fiscal year. It is also 5 cents more than the $1.397 state-certified tax rate provided to the town as part of the 2017 reappraisal in Unicoi County.
The certified tax rate is provided by the state after reappraisal cycles and updated property values. This rate is essentially the property tax rate needed for a government to bring in the same property tax revenue it did the prior year.
Although the certified tax rate is provided by the state, governments may deviate from the amount when setting a municipality’s actual property tax rate. The need for the town to exceed the certified tax rate was discussed by the Erwin Board of Mayor and Aldermen during budget workshops held on July 27 and July 31.
During the July 27 meeting, members of the BMA learned that the town’s projected 2017-18 expenditures were expected to exceed anticipated revenues by approximately $39,000. This meant that a tax increase of 3.06 cents over the state-certified rate would be needed to erase the shortfall as each penny on the town’s property tax rate will generate $12,764 in tax revenue during 2017-18.
The board during the July 31 workshop was presented with and discussed two options – the one that included the more-than-3-cent increase over the certified tax rate and another that included a 5-cent increase over the state-provided rate.
Both options included the financing of more than $1 million on two capital outlay notes to save the town approximately $170,000, with these savings going toward the purchase of several new police cars, fire department equipment, and a truck for the town’s public works department.
However, the 3-cent option did not include funding to cover the maintenance of beautification projects completed along the town’s portion of Interstate 26, the maintenance of the skate park and adjacent playground, and funding for computer and office equipment upgrades.
The maintenance and equipment costs raised the anticipated $39,000 shortfall to approximately $64,000, meaning a 5-cent increase over the certified tax rate would be needed to balance the budget.
The consensus among BMA members during the July 31 workshop was to move forward with the option including the 5-cent increase over the certified tax rate.
Erwin’s 2017-18 fiscal year budget reflects $6,664,083 in total projected revenue against $6,727,872 in expenditures.
Approximately $3.683 million of the town’s 2017-18 revenue is anticipated to come from local taxes. This includes $1,787 million 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 revenue from business taxes is projected at $72,000.
Payments in lieu of taxes from local utilities providers and the housing authority, which are included in the local taxes revenues, are projected to 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 at $12,000.
Intergovernmental revenues for 2017-18 are projected at approximately $621,400. Most of this is made up of state sales tax revenue, which is projected to come in at around $494,000. Licenses and permits, which includes building and plumbing permits, is expected to generate $53,300, and municipal fines, fees and court costs are expected to bring in $26,000.
Revenue related to the town’s receipt of state and federal grant funding is projected at more than $1.5 million.
Other revenues, which includes interest income and the rental income the town receives for the U.S. Post Office located next to Erwin Town Hall, is projected at around $764,900. This category also includes $250,000 under a line item called “sale of asset,” which represents the amount the town hopes to receive from the sale of the former Morgan Insulation property currently under the town’s ownership.
Erwin’s 2017-18 budget also calls for the transfer of $50,000 from the town’s fund balance to help balance the budget.
Legislative costs, which include the salaries of the BMA’s members, are projected to make up around $29,400 of the town’s 2017-18 expenditures. Costs associated with the city attorney and municipal judge are projected at approximately $33,000.
Anticipated expenditures under the central staff agencies category, which includes the salaries and benefits of employees at Erwin Town Hall, as well as equipment, supplies and training expenses, are around $353,000.
Costs associated with the town’s communications specialist position are projected at more than $78,300. This includes the position’s $31,200 salary, more than $10,000 for marketing and around $26,300 to go toward town-sponsored festivals and events.
Planning and zoning expenditures are projected at more than $66,500 for 2017-18. Expenses associated with the town’s buildings department, which includes town hall utilities and maintenance costs, are projected at nearly $104,800.
The total 2017-18 budget for the Erwin Police Department is approximately $1.120 million. This includes approximately $705,000 for departmental salaries and around $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.
Total expenditures for the Erwin Fire Department are expected to come in at around $666,3000 in 2017-18. These costs include around $370,500 for salaries and $67,400 for departmental health insurance. Also included in these 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 expenditures for the town’s Public Works Department are estimated at approximately $832,000. These include 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 2017-18, and parks and recreation expenditures are projected at around $302,500. The town’s debt services is projected at around $1.169 million.
The town’s 2017-18 expenditures also include more than $2,037,868 for capital projects. Town Recorder Glenn Rosenoff previously 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 along the Erwin Linear Trail, and the utilization of Tennessee Valley Authority InvestPrep funding the town received last year to demolish the former Morgan Insulation property in order to ready the site for industrial development.
Erwin’s 2017-18 budget also includes 3 percent pay raises for its employees.
The Erwin Board of Mayor and Aldermen during its Aug. 14 meeting approved the first reading of the town’s budget and the fixture of the municipality’s property tax rate.