Smithfield Herald

Smithfield council gets first look at budget proposal

Smithfield’s new town manager, Michael Scott, gives a budget presentation to the town council on Monday.
Smithfield’s new town manager, Michael Scott, gives a budget presentation to the town council on Monday. abennett@newsobserver.com

Smithfield residents and businesses wouldn’t face a property-tax increase under the town manager’s 2016-17 budget proposal.

Even better, Smithfield customers would pay less for electricity under the budget Michael Scott presented to the town council on Monday.

Under Scott’s first budget request as town manager, Smithfield’s property-tax rate would remain at 57 cents per $100 valuation of property. Electricity rates, meanwhile, would fall 2.7 percent overall and up to 3.7 percent for residential customers. Depending on how much electricity they use, customers would see their light bill fall anywhere from $1 to $10 a month.

But that’s where the good news ends for Smithfield property owners and utility customers. They will likely pay more for water and sewer, though how much more remains up in the air, and they will take on more debt to avoid a tax increase and even higher water and sewer rates.

Smithfield hasn’t increased its property-tax rate in 13 years. And to avoid an increase this year – and to keep cash reserves healthy – the town manager proposes to borrow $250,000 to balance the general fund books. Mostly that money would pay for new vehicles.

The town manager also wants to borrow $660,000 to keep water and sewer rates from rising drastically in the fiscal year that starts July 1. The town would need the state’s permission to borrow that money.

Taking on debt to avoid tax hikes and utility-rate increases is common, said Greg Siler, Smithfield’s finance director. “The governing body can decide to use fund balance or raise property taxes instead of taking out loans,” he said, “but we’ve used this before.”

Elsewhere in the budget, town department heads had requested a total of 12 new employees, including six more firefighters. But Scott, the former police chief, recommends hiring just two, both of them police officers. But the new hires wouldn’t cost Smithfield taxpayers any money; at least not yet. A grant would pay the new officers for two years.

The proposed budget does include some good news for town employees, who would see a 2-percent jump in pay starting July 1. Scott’s budget favors across-the-board raises over merit-based increases.

Scott said he would ask the council to weigh in on what he called Smithfield’s financial elephants. They’re mostly capital projects, and most of them have big price tags. They include:

▪  Improvements to the electricity substation on Brogden Road, $1.5 million.

▪  A water-line project on Booker Dairy Road, $3.5 million, with some money coming from the N.C. Department of Transportation.

▪  Rebuilding a crumbling Venture Drive, $681,000.

▪  Filling in the Eva Ennis Pool in East Smithfield and creating green space there, $10,000.

▪  Sewer system improvements, $2.5 million.

▪  Economic-development efforts, $100,000.

In all, Scott proposes a general fund of $12.78 million, down nearly $1 million from the current year.

Abbie Bennett: 919-553-7234, Ext. 101; @AbbieRBennett

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