Havelock residents could see a two cent property tax increase to go along with an increase in trash pickup under a proposed budget introduced to commissioners on Monday.
However, the proposed tax increase met with opposition from the board and Mayor Jimmy Sanders.
"I’ve got three letters — D.O.A," Sanders said, calling the tax increase dead on arrival. "When you look at no growth, or very, very minimal growth, it’s not time for a tax increase. We will do what we have to do to stay under budget. That, in my mind, does not include a tax increase."
Lee Tillman, city finance director, presented the proposed 2013-14 budget to commissioners on Monday. The spending plan proposes to raise the property tax rate of 46.5 cents per $100 in property value to 48.5 cents. That would mean an increase of $27 per year for the average home in Havelock valued at $134,830.
"Two-cent tax increase for me, at this stage, is a no go," Commissioner George Liner said. "They are going to have to prove to me why we can’t cut something else. We’re either going to cut people or we’re going to cut some services. I don’t want to do that, but I’ll do that before I go to a two-cent tax increase."
The proposed budget is $15.6 million. It is 27 percent less than the $21.5 million budget for the current year, which included a one-time expenditure of about $3 million for the sewer expansion project.
Commissioner Danny Walsh gave City Manager Jim Freeman and the staff credit for reducing expenses in the budget but also opposed the tax increase.
"My opinion is that this is not a time for a tax increase," he said. "Things aren’t that good. Our future doesn’t look that bright. People aren’t tearing down the doors to get here. We’re not expanding, and that’s not a time when you go up on the people that are here. You give them a break is my opinion.
"For several years I’ve been saying we’ve been needing to save for a rainy day and the rainy days are here and we’ve got to be tighter on our expenses."
The budget also proposes an increase in trash service from the current $13.95 per month to $16.77. No water or sewer rate increases are included.
The board directed staff to come up with a budget that didn’t include a tax increase, but Tillman said sales tax receipts and other revenue the city relies on have been decreasing.
"We did try to balance the budget as per the board’s directive but we just couldn’t," she said. "This is a very flat budget. Even at a two-cent tax increase it does decrease personnel by 1 1/2 positions.
"We’ve weathered a lot of storms without having to come to this, but unfortunately that time is now. This budget takes us into learning to live within our means. Usually I can find a bright spot, but this is a dismal budget."
Commissioner Will Lewis said he understood the economic situation.
"Well, my initial reaction is that I don’t like a tax increase. None of us do," he said. "We don’t want to see a tax increase, but we do understand the realities of the budget and as we work on it more, we’re going to see what we can do about it.
"I think the entire board is going to be very focused on making sure we do not have a two-cent tax increase, but the reality of not having that tax increase is going to mean service cuts, and so we’re going to have to work hard to find a balance between service cuts and a tax increase. I’ll be clear that none of us wants a tax increase. It’s just going to come down to what we can cut that makes the most sense and if we can balance that and not have the tax increase."
Commissioner Jim Stuart said the budget process was early on, and he believed a tax increase would not be necessary, even if it meant taking money out of the city’s reserve fund to balance the budget.
"The revenues coming in are less than the expenditures going out for services, and whenever that happens, it’s just like balancing a checkbook for the house," he said. "There’s just not enough to go around. It is really tight. I just think that the recession has finally trickled down to where Havelock is now feeling the effect of it."
Commissioner Karen Lewis said she did not want a tax increase.
"We’re going to do everything possible to further cut the budget in order to not increase the taxes on our citizens," she said. "So as we go forward in the next few days, our intent is to find out where the cuts need to be made."
Commissioners have scheduled budget work sessions from 6 to 9 p.m. Monday and Wednesday at Havelock City Hall. Those meetings are open to the public, but there is no scheduled time for public comment. Residents will have an opportunity to voice their opinions on the budget during a public hearing scheduled for 7 p.m. on June 10 at Havelock City Hall.
Commissioners have until June 30 to approve a budget for 2013-14.