Sylva forecasts a tight budget year
Two years after the Sylva town board enacted a 42 percent increase in the city’s property tax rate, budget time has found the town without any extra cash to work with. In fact, Sylva will have to take $236,000 from its reserves in order to cover needed expenditures.
Despite that reality, none of the town commissioners brought up the possibility of a tax increase during their last budget work session March 29. In 2016, the town boosted its tax rate from 30 cents per $100 of property value to 42.5 cents per $100 in order to increase revenues that continually fell short of covering expenses for basic town functions.
Of the $236,000 that the town currently plans to take from reserves next year, $180,600 will come from fund balance — akin to a savings account — and $55,500 will come from the capital reserves account.
The biggest expenditure to come out of fund balance will be $100,000 to fill in missing sections of sidewalks along N.C. 107, part of the N.C. Department of Transportation’s upcoming R-5600 road project. That’s a budget item likely to be repeated over the next couple years, with Town Manager Paige Dowling estimating the total cost will be $200,000 or more. However, she told the board, the sidewalks are basically “too good of a deal to pass up,” as the DOT will pay 80 percent of the cost if the town funds the remaining 20 percent now.
Fund balance will also pay for $54,900 to train a new public works director, who will work alongside Public Works Director Dan Shaeffer until his retirement next April. Another $6,000 will go toward repairing the roof on the fire department and highway patrol office, and $20,000 will be for the next phase of repairs at the city pool.
Meanwhile, capital reserves will fund $35,000 for a new bucket truck, $5,500 for sweeper truck parts and $10,000 for a new truck for the police department.
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“The definition of ‘balanced’ is balancing your expenditures and your revenues,” Dowling told the board March 29. “You can appropriate from fund balance for one-time things. Dan (Shaeffer’s) succession planning — one-time thing. Roof on highway patrol — one-time thing. The only thing really in here that’s continual is going to be the pool. That wasn’t accounted for when we set the tax rate. But that’s where we are right now.”
The town is seeing a squeeze in areas of its regular budget, which would be $4.2 million according to the preliminary estimation, up from $3.7 million in 2017-2018.
“Pretty much every department is having an increase of some degree,” said Dowling. “That’s just costs going up.”
Insurance has gone up 3 percent, and in order to make up for lower contributions in the past the town has to substantially increase its contributions to plan for future retirement benefit costs. Workman’s compensation went up, and the K-9 unit saw an $800 increase in expenses.
None of the town commissioners said anything to indicate they felt any of the planned expenditures to be unnecessary. Far from it. The bucket truck the public works department currently uses is failing, with the bucket having fallen twice with someone in it — Shaeffer said they always keep a man by the emergency switch to prevent an injury from occurring.
Likewise, said Police Chief Tammy Hooper, the police department needs a truck. Trucks last longer than cars on the rotation, have a higher resale value and can be used to block traffic and haul equipment that can’t fit or be safely transported in other vehicles. For instance, said Hooper, the police department recently recovered a stolen bicycle and had to rely on the suspect to bring the bike in.
Making the planned fund balance appropriations would bring the fund down to 57 percent of the money required to operate for a year. The town’s goal is 73 percent, with an internal requirement that it not drop below 40 percent. The state mandates municipalities to keep at least 8 percent in fund balance.
“We would hope we would put money back in from departmental savings that would go back in fund balance at the end of the year,” said Dowling.
While expenses are increasing, there are some encouraging signs on the revenue side, said Dowling. The town’s property tax collections are “aggressive,” said Dowling, leading to a good collection rate compared to other towns, and a change in bank will lead to an estimated $19,500 increase on interest from investments in 2018-2019. In addition, sales tax revenues are going up. The town expects to see a $108,500 increase in sales tax revenues in the new fiscal year.
Sylva’s next budget work session will be 10 a.m. Thursday, April 26, following the regularly scheduled town meeting at 9 a.m.
