Pinehurst property will likely be spared a tax increase next year, in part to help ease the impact of the COVID-19 crisis.
Four of the five members of the Village Council agreed on that Thursday afternoon as they wrapped up nearly eight hours of discussions and debate on the fiscal year 2021 budget over two work sessions. They feel the village has the financial wherewithal to put off an increase at least for a year and still be able to meet current future needs.
Council member Jane Hogeman said the half-cent increase would generate $187,000 for a budget totaling more than $20 million. She said this is not the year to ask residents to pay more in taxes to the village.
"Because there are a lot of people in this very unusual year who are suffering and struggling," Hogeman said. "It is the better part of valor not to raise it this time. We can absorb it."
Mayor John Strickland and council member Lydia Boesch, who were elected last November along with Hogeman, also favor delaying a proposed property tax increase, which was prescribed under a five-year financial plan adopted by the previous council. It called for increasing the tax rate in half-cent increments, starting in fiscal year 2021 at 30.5 cents per $100 of value and capping out at 32 cents in fiscal year 2024.
Kevin Drum and Judy Davis, who were members of the previous council, objected to the idea, though Drum offered conditional support as long as the other members would stick to the plan for future increases that are needed to cover needed projects and other expenditures.
Strickland said he had given it a lot of thought and that the council can “work it out in future years how we recoup that and meet those obligations.” He said this “not just for optics.”
“I really believe there is an impact across the community that would benefit citizens from not seeing that tax increase,” he said.
Drum said the five-year plan adopted by the previous council is “strategically sound and based on facts.” He said he had no fundamental problem with leaving the tax rate unchanged next year, but he sought assurances from his fellow members not to abandon the plan to fund what he called “land minds ahead of us” regarding some significant capital expenses in the coming years.
“You can see how problematic it is if it doesn't happen in years two, three four and five,” he said of future tax increases. “I have a concern that this reduction will be an excuse to gut the budget of all the things we are supposed to do to help the public. … We are here to solve the problems that we have identified. … I understand we want to give some relief to our citizens.”
Boesch said the staff identified a number of projects and expenditures that could be delayed if revenues are worse than expected but that they will still be in the budget.
"We will pay for them only if we have the money," she said.
Drum said he was OK with that. But he said that based on the “facts now,” the tax rate will have to be increased in fiscal year 2022 “or we are in trouble.”
“When you guys (previous council) did this, there was no COVID on the landscape,” Boesch of the previous council’s plan. “I do not want to slam the brakes on our planning. “I think we need to hope for the best and plan for the worst. We are doing that
Hogeman said she is not “locking” herself in about what the council may do next year or beyond.
“We don’t know what will happen in the future,” she said. “Next year we will take a look at where we are. There may be a whole different set of circumstances.”
Sanborn had included the half-cent increase in his proposed budget, agreed with Hogeman’s assessment that the village can get by with $187,000 less in property tax revenue next year.
“It is a minor blip,” he said.
Sanborn said if the revenue situation is worse than expected on the sales tax front next year and beyond, “it gets ugly,” referring to the village’s operating margins and having to rely more heavily on its reserves, called a fund balance.
Davis did not waiver on her position that the village should enact “a modest increase.” She noted that the village has the “lowest tax rate by a lot” in the county.
“We have a lot to do and we need to have a long term view," Davis said, adding that the needs are “real and legitimate.”
Strickland said he is not advocating eliminating any projects now, though some things might need to be delayed if the revenue picture is worse than expected.
“We need to move forward, and we will on the projects we need to do,” he said.
As part of his formal budget presentation to council on May 12, Sanborn said village staff identified $855,750 in capital projects and other expenditures that could be delayed at least until after the first quarter of the new year to allow more time to assess the actual revenue situation.
During the work session Thursday, council members reviewed the list and agreed that three of those items, totaling $448,000, should not be delayed.
That includes $250,000 for sidewalks and walking paths in the neighborhoods around Pinehurst Elementary School to connect with the Cannon Park Community Center. A group of residents from those areas made a case to council earlier this year that they are needed to improve pedestrian safety.
“I feel strongly about not deferring sidewalks,” Hogeman said of those areas. “It is a safety issue.”
Sanborn said the village has not yet identified the specific streets where sidewalks would be installed.
The other two items council wants to keep on track next year are:
* $103,000 for parking at the corner of Rattlesnake Trail and Magnolia, where the old community pool was located
* $95,000 for a highly specialized camera to inspect water and sewer pipes to identify where repairs are needed.
The council agreed on delaying the other items on the list proposed by staff. Those include:
* Accelerate paying off the village’s remaining debt a year early, $52,000
* Wicker Park maintenance storage expansion, $60,000
* Magnolia Road streetscape improvements, $250,000
* Close the Welcome Center for the first quarter, $23,000
* Defer hiring a transportation planner until Oct 1., $22,750
All totaled, the potential worst-case scenario for lost revenues would be well within the $1.45 million hit Sanborn said the village could absorb and still keep its reserves above the minimum level under council policy.
“We can absorb this,”Strickland said.
The council will hold a legally required public hearing on the budget during their meeting next Tuesday at 4:30 p.m., which will be conducted remotely online using the ZOOM platform.
Residents can either submit comments in writing ahead of time by email to publiccomments@vopnc or live. Those wishing to speak during the meeting must contact Village Clerk Beth Dunn at (910) 420-1631 or by email at email@example.com prior to the start of the meeting or by coming to Village Hall.
The council will vote on adopting the budget at its June 9 meeting.
Contact David Sinclair at (910) 693-2462 or firstname.lastname@example.org