Sylva's budget doesn't include tax increase

By Lynn Hotaling

Town Manager Richard McHargue presented the draft $1.62 million budget to Sylva officials during their June 6 meeting. A work session is set for tonight (Thursday) at 5 p.m., and a public hearing on the proposed budget will be Tuesday, June 25, at 7:30 p.m.

Sylva board members will likely adopt the coming year's budget during a special meeting to follow the June 25 hearing.

Sylva was able to avoid a tax increase and raise salaries despite the loss or anticipated loss of some $206,000 in state funds, McHargue said. Some $206,163 normally acquired from utility franchise taxes, wine and beer taxes, intangibles tax, business inventory tax, food stamp reimbursement and homestead exemptions is not included in the draft budget.

"We feel it is most prudent not to assume these funds will automatically be received," McHargue said.

At this time Gov. Mike Easley's proposed state budget does not affect utility franchise taxes or wine and beer taxes.

Sylva's proposed budget uses money from the town's fund balance to replace uncertain revenues rather than turning to a tax increase to make up the difference, McHargue said.

"With the general fund balance in good shape, it has been possible to balance the budget with reserves while still leaving a respectable fund balance in place for future needs," McHargue said.

Some $127,000 from departmental and general fund balance is included in the fiscal year 2002-03 budget, McHargue said, leaving the reserve at 26 percent of general fund expenditures, which is more than triple the N.C. Local Government Commission's required 8-percent minimum.

Sylva's property tax rate will remain steady at 40 cents per $100 valuation, which means a town resident pays $200 in taxes on a home valued at $50,000. Including a cost-of-living increase for town employees in the budget is an investment in the employees themselves, McHargue said.

"Without such investment, morale may be affected in a negative manner, thereby inhibiting the quality of service," he said.

Town employees' insurance coverage will change in July, McHargue said. In order to keep costs down, employee coverage through the Municipal Insurance Trust will be downgraded to the MIT's "Med 500" plan, which will be supplemented by a medical gap plan offered by American Fidelity.

Town employees have been covered by MIT's HealthPlus program, McHargue said, but the town faced a 38 percent ($33,000) per year increase to remain with HealthPlus. Switching to the Med 500 and gap plan will reduce the town's additional cost to $9,400 during the next budget year.

A number of capital expenditures are included in the proposed budget. These include:

- The draft budget includes a mini-pumper to replace the Sylva Fire Department's existing one. The $25,000 down payment will be derived from the firefighters' fund balance, McHargue said.

- The street department allocation includes $18,000 for the initial installment on a five-year lease/purchase agreement for a knuckle-boom loader to assist in the collection of residential trash and white goods.

- Included in the Sylva Police Department's budget is $24,000 to replace two detective cars. This request fits into the department's scheduled vehicle rotation, McHargue said. Existing vehicles are to be replaced with used Highway Patrol cars priced at $12,000 each; the present cars will then be sold to offset some of the cost, he said.

- The administration line item includes $6,000 to purchase a new radio and repeater system. Funding for this upgrade will be derived from the fund balances of the departments that use the radio system, McHargue said.

- Included in the inspections department budget is a total of $4,500 for capital improvements. Of that amount $1,000 will go toward the new radio system, and $3,500 will be used to purchase a new computer to enable the zoning administrator to access county tax maps from City Hall.

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