Sylva leaders opt for lower tax increase than expected earlier

By Lynn Hotaling

Town Manager Richard McHargue told members of the Sylva Town Board the town had received a total of $126,000 in unexpected state-distributed funds. This amount included $10,000 from the beer and wine tax, $45,000 from utility taxes and $71,000 from sale of telecommunication. After holding out $10,000 for expenses in the current year's budget, the remaining $116,000 was available either to shore up the budget for the next fiscal year or to place in fund balance, McHargue said.

After discussion, the consensus of board members was to follow Mayor Brenda Oliver's recommendation and use $65,000 of that amount to fund planned capital improvements - $35,000 for a garbage truck, $14,666 to reimburse First Methodist Church for Cowan Street storm drain improvements and $15,000 for a driveway at Bryson Park - and place the remaining $51,000 in next year's budget to cut an anticipated $132,454 shortfall to $81,000.

The draft budget proposed taking money for the capital projects from Sylva's fund balance, which is currently around $350,000, McHargue said.

Because each penny collected in taxes generates $20,000, that $81,000 represents "a smidgen over a 4-cent tax increase," Oliver said.

Though board members said they would prefer a smaller tax increase - or no tax increase - they agreed to support a 5-cent tax hike.

"If we go 4 cents, we'll just be right back in the same boat - squeaking by," said board member Eldridge Painter, who also said he regretted any increase in taxes. "This is not the right time for any tax increase. People are having a hard time."

Next year's proposed budget includes an average 6 percent raise for town employees as the first step toward implementation of the pay plan that resulted from a recent personnel study by Rebecca Veazey, a consultant recommended by the N.C. League of Municipalities, McHargue said.

It does not include bringing the manager's salary up to the minimum $50,000 recommended in Veazey's study; the draft budget only includes a cost-of-living increase for the manager, McHargue said.

It was reported in April that town leaders might have to raise taxes by 7 cents to break even next year.

Sylva's current tax rate is 40 cents per $100 property valuation. The proposed budget will be based on 45 cents per $100, which means that a town resident with property valued at $100,000 would pay $450 in town taxes.

Sylva's budget for the next fiscal year will be presented during tonight's (Thursday's) 7 p.m. meeting. A public hearing on the proposed 2003-04 budget will be held Monday, June 30, at 9 a.m. with a special meeting to adopt the budget to follow.

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