The town board decided that this year’s budget will include a 4.75 cent rise in property taxes as part of the $26 million bond approved by voters in 2015.
As first proposed by town staff, the draft budget didn’t include any changes in the town’s property tax rate of 38.5 cents per $100 of appraised value. The bond-related increase, as it’s imposed, would raise the overall tax rate to 43.25 cents.
Board members said they feel pressure from residents to complete road improvement projects as quickly as possible. The decision to introduce the increase in the upcoming 2016-17 fiscal year – two years ahead of schedule – would also yield two years of revenue not tied to debt payments. Debt service payments on the bond are slated to begin in 2019.
After the board indicated at a May 17 budget meeting that it would support the higher tax rate in the upcoming budget, discussion focused on how the town would use the resulting $2.6 million in extra funds.
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Three members of the board of commissioners urged town staff to earmark the money for further transportation spending.
“If we could designate that money to improve congestion and traffic, that would be a good thing to do,” Commissioner Jason Wunsch said. “Personally, I would be in favor of doing it immediately if it could be designated for traffic.”
Town Manager Adam Mitchell, though, warned against any action that would limit the money’s potential uses. He recommended keeping the money in consideration for facilities and personnel spending in the case of greater-than-expected growth. Besides, he said, the town is not legally able to wall off money from appropriation by a future town board. The extra money likely will go into the town’s debt-service fund.
“But (the board members) wanted their intent on record so any future board would at least have to explain why they chose not to use those funds for transportation,” Mitchell said.
Traffic is perhaps Fuquay-Varina’s most-discussed problem, and board members said they felt it was their responsibility to ensure residents’ tax dollars are set aside for projects that address the town’s chronically congested road network.
“I think what the citizens have told us to do is fix the roads,” Commissioner Charlie Adcock said. “And I think we should do what we told them we were going to do.”
Mitchell reminded the board that any new appropriation of bond money would have to come before the commissioners for a vote.
According to projections offered when the bond was first proposed in August last year, the 4.75 cent increase proposed by town staff would result in about a $100 increase in property tax for the town’s median homeowner. Voters overwhelmingly agreed to shoulder a tax increase of up to 6.75 cents, but the town’s success in securing a Locally Administered Projects Program (LAPP) grant through the Capital Area Metropolitan Planning Organization (CAMPO) helped bring that rate down.
Of the $26 million in spending voters approved in November, $21 million will be set aside for improvements to the town’s roads, specifically targeting Main Street intersections and the completion of Judd Parkway’s northwest section. The other $5 million, for sewer and water service expansion, will come from development-related fees rather than a tax increase.
The board and town staff agreed, though, when it came to levying the tax this year rather than waiting three years until the town’s first debt service payment is due.
“There will also be an infusion of new citizens who did not have a say in the bond referendum who might have something to say about that,” Mitchell said.
As proposed earlier this month, the budget addresses the town’s growth and would add 15 full-time employees to the town’s payroll and increase one part-time employee’s pay to full-time. That includes new positions in both the police and fire departments.
The budget also includes $3.1 million for the Fuquay-Varina Arts Center.
Water and sewer fees, though, are expected to increase
Gargan: 919-460-2604; @hgargan