Town spending is expected to increase by $2.5 million – 12 percent – in order to pay for a new stormwater program, six new positions including three new firefighters, and employee merit pay under Morrisville’s proposed 2013 budget.
As part of the $24.4 million draft budget, the tax rate will remain the same at 36.65 cents per $100 of assessed value.
The biggest challenge with the budget is that spending outpaces revenue.
Morrisville is projected to bring in $22.1 million in property taxes, sales taxes, fees, permits and investments in 2013. In order to make up the shortfall staff recommends dipping into reserves. Town council had previously nixed talk of a tax increase.
The town will take $934,184 from its fund balance and transfer $1.3 million from its capital reserve accounts to cover the additional expenses.
But some of the costs, such as salaries and benefits for the six new employees, are recurring. Without a consistent revenue stream the town will continue to face budget shortfalls.
Mayor Jackie Holcombe said the proposed budget doesn’t make mathematical sense and she is unsure if she will vote for it. The council got their first chance to discuss the budget at their meeting Tuesday.
“My concern is primarily what happens in (fiscal year 2014) and beyond,” Holcombe said. “I’m looking for a budget that addresses more than one year. We needed to talk about whether revenue is sufficient enough.”
She said either the town needs to cut spending or increase revenue by raising the new stormwater fee from $15 to $33 and the tax rate by 2 cents.
“There’s a reasonable chance that I could vote against the budget if this is the final budget,” she said. “I wish we could do everything we wanted to with our current tax rate. It is not mathematically possible.”
She points to the town’s struggle to maintain existing assets, like the roof over the information technology department, the air conditioning at town hall and street repairs.
“I hope we can have a really solid financial future,” Holcombe said. “We can’t get there overspending revenue. We hear ‘run the town as a business.’ There is no business that is successful run this way.”
Councilman Mark Stohlman has opposed raising taxes and the stormwater fee. While he agreed that the proposed budget uses one-time transfers to pay for expenses, he argued there are a lot of one-time expenses as well.
Stohlman said he’s looked through the budget and identified $2.5 million in one-time expenses such as bond consulting services, sidewalk projects and stormwater mapping, that would bring the 2014 budget to $21.8 million, making future years more manageable.
Stohlman said new recurring expenses could be paid for by growth and efficiencies in town departments.
“We haven’t even started to scratch the surface with efficiencies. Everything is on the table,” Stohlman said.
It is unclear how much efficiencies could help. History shows the town’s revenues aren’t keeping up with spending. The town has had to rely on transfers into the general fund from other capital reserve and capital project accounts in the past three years in order to make budget.
Stohlman said for the most part he supports the proposed budget. He would like to remove the grants administrator position and hire a consultant instead.
Councilman Michael Schlink has spoken out against the increased spending and said he is also unsure whether he will support the proposed budget.
He said he doesn’t support the $330,000 for employee merit pay. He said he would like to see a one-time bonus instead. He would like to see the fire department use volunteers instead of hiring three new firefighters.
“I don’t think I can stop it,” Schlink said about the proposed budget. “ I don’t know if my one ‘no’ vote with a 1-6 vote on the council will make a difference.”
The public can weigh in on the budget at a May 22 hearing, or by visiting townofmorrisville.org.