- Published on Friday, 25 May 2012 23:02
- Written by Super User
By WILLARD KILLOUGH III
KURE BEACH - The Kure Beach Town Council was presented with a proposed 2012-2013 budget at their Tuesday May 15, meeting.
The proposal calls for a two-cent property tax increase as well as water rate increases for every 100 gallons above the first 3,000 gallons per month. The Council will hold a public hearing on the proposal at their June 5, meeting at 6PM at Town Hall. The Council must adopt a balanced budget before July 1 when the 2012-2013 fiscal year officially begins.
According to Arlen Copenhaver, Town Budget and Finance Officer, the proposed budget is balanced and totals $5,378,849 for all operations.
He said the proposal meets goals set by the Council at their annual retreat held in January 2012.
Those include completing the ocean front park downtown on Atlantic Avenue, addressing various storm water issues throughout Town and strengthening the water and sewer fund reserve fund for replacement of waterlines in the Town's historical district.
Additionally, to provide more financial stability, including funds for beach renourishment and replacement of a fire truck.
Copenhaver explained, "Real property within New Hanover County was reappraised as of January 1, 2012. The impact for the county as a whole was a decrease in value of approximately 17 percent. However, the impact on Kure Beach was much more dramatic. The Town’s tax base has decreased 32.8 percent, from $1,185,650,035 to $796,500,000."
He explained,” As required by N.C.G.S., Section 159-11 (e), in each year that a general reappraisal of real property has been conducted, a statement of the revenue-neutral tax rate must be presented for comparison purposes. The revenue-neutral tax rate is the rate that is estimated to produce revenue for the next fiscal year equal to the revenue that would have been produced for the next fiscal year by the current tax rate if no reappraisal had occurred. To calculate the revenue-neutral tax rate, a rate that would produce revenues equal to those produced for the current fiscal year must be determined and then the rate is increased by a growth factor equal to the average annual percentage increase in the tax base due to improvements since the last general reappraisal. This growth factor represents the expected percentage increase in the value of the tax base due to improvements during the next fiscal year."
The current tax rate is $0.1625 per every $100 of property valuation generating $1,926,681 in tax revenues based on a $1,185,650,035 tax base for the entire Town.
To generate the same amount of tax revenue for next fiscal year at $1,926,681, Copenhaver explained the revenue-neutral tax rate for Kure Beach would be 24.15 cents ($0.2415) after application of a negative growth factor of 0.15%.
He proposed a 2-cent increase on the tax rate above revenue neutral bringing it to 26.15 cents per $100 of value. For a home valued at $400,000, annual increase will be $80.
He explained, "The revenue-neutral tax rate is intended to be revenue-neutral for the Town as a whole, not for individual property owners. Therefore, some taxpayers may receive a higher tax bill even if the revenue-neutral rate is adopted."
Copenhaver explained the two-cent increase saying, "We need to continue to pay for the existing Town services" and, "Support one of those goals I originally had listed to provide financial stability. With that, one of the most significant challenges facing the Town and other beach towns is that of beach renourishment and whether that is going to continue to be funded."
He explained, "There's been a lot of suggestion that beach towns should start to save for those projects. One reason we need to save is it's not something that can be financed. If we all of a sudden need to spend a couple hundred thousand dollars on beach renourishment we are not going to be able to get a loan to do that. We have to have the funds available."
Copenhaver said in 2014 the Town will need to replace a fire truck to maintain their state insurance rating. He said, "When the rating changed a couple of years back everyone should have seen a significant decrease in their home owners insurance.
If we are going to continue to see that we are going to have to have a replacement of one of our fire trucks to maintain that rating. A fire truck is fairly expensive."
Copenhaver explained the General Fund also includes a 36-cent per month increase for the recycling fee. He said, "The fee will go from $4.52 to $4.88. We need to cover the cost associated with curbside recycle service that's provided and also to provide recycling containers at the beach accesses. That small increase will cover that cost."
He said employees will get a 2% merit pay increase based upon performance and a 2.6% cost of living adjustment.
The Council decided earlier this year to reinstate Town Council compensation and continue to forego cell phone allowance. That has a $6,750 effect on the budget.
The budget also includes $8,000 for the Pleasure Island Concert Series and $3,300 for the Kure Beach Christmas Show. It also includes $15,000 towards dredging of the Carolina Beach Inlet. The Council decided last year to participate with Carolina Beach, New Hanover County, Wrightsville Beach and Wilmington to help fund maintenance dredging.
The budget also includes money for a police vehicle, software purchases and other items.
Copenhaver said there is a contingency fund of $156,000 built in for beach nourishment funding and a down payment for replacing a fire truck.
For the water and sewer fund, he explained, "Fiscal year 2013 budget is about 12.9% higher than the fiscal year 2012 budget. That's really an increase in operating expenses of about 3.6% and then an increase in capital outlay and strengthening of reserves of 104%."
He said, "The main change is to propose increases to the water and sewer rates for usage above the 3,000 gallon minimum which will remain unchanged. It's actually when you go over that amount."
Copenhaver said per 100 gallons over the monthly minimum the increases are:
• Residential Water – 12 cents
• Residential Sewer – 15.5 cents
• Commercial Water – 18.5 cents
• Commercial Sewer – 19 cents
• Out of Town Water – 21 cents
• Out of Town Sewer – 27 cents
He said the increases are needed for future infrastructure improvements by building the water and sewer reserve fund. Such improvements include replacing aging water and sewer lines.
A copy of the proposed budget for Fiscal Year 2012-2013 including the budget message, budget ordinance and fee schedule is on file in the office of the Town Clerk for viewing and available on the Town’s website under “Town News” located at www.townofkurebeach.org.