North Augusta’s preliminary budget, revised at the direction of Mayor Bob Pettit to include a 3-mill property tax increase and a 1 percent increase in the hospitality tax, has been posted on the city’s website and will be voted on by city council for the first time Oct. 16.
“This budget is based on a key belief by a consensus of Council members: the excellent level of services currently being provided to residents must be maintained,” Pettit wrote in a three-page foreword to the budget document.
The property tax increase will add about $24 to the yearly bill of the owner of a $200,000 house. A half-mill of the total will go to the Capital Projects Fund. An additional $238,000 will be raised by the 2.5-mill portion and about $48,000 will come from the leftover half-mill.
Additionally, the hospitality tax increase is expected to bring in about $700,000. The extra percentage point will add about 40 cents to a $40 restaurant bill, Pettit said in his foreword.
The budget also contains two other increased sources of revenue.
Membership fees for Riverview Park Activities Center will go up by about $25, bringing in $42,000 to the general fund.
The wastewater rate will increase by 25 cents per 1,000 gallons. This “pass-through” covers the city’s portion of renovations to upgrade the Horse Creek Treatment plant and adds no revenue.
The increases all are necessary to keep services at their current level, Pettit wrote.
“The draft budget (originally) prepared by staff had no provisions for new or replacement equipment or vehicle purchases in the General Fund, no new personnel hires in the General Fund, no merit raises for employees, no provision for a contingency account to react to unexpected events or equipment/vehicle breakdowns or failures, and no funds designated for the Capital Projects Fund,” Pettit wrote.
The city has added staff in recent years, including nine for Public Safety, and employee merit raises haven’t been given since 2007, the mayor noted.
Another big expense driving the increases in the preliminary 2018 budget is the city’s contribution to the state retirement fund, which has a $24 billion shortfall. That contribution will be $400,000 this year and will increase by $30,000 a year through 2022.
“It is no longer possible to absorb these, and other increased expenses while maintaining the level of service our residents expect within current revenues,” Pettit wrote.
He expects to hear from residents who might link Riverside Village and SRP Park to the shortfall.
“I, and the members of Council, know there are those who will say this is due to the city’s investment in facilities at Riverside Village. That is not accurate,” he wrote. “No increased revenue from any of these sources will be used for Project Jackson bond payments.”
After two budget work sessions, Pettit seems to have a majority of council on his side, but Fletcher Dickert isn’t one of them.
Known as a budget hawk, Dickert said he thinks the first draft of the budget didn’t offer up realistic cuts to make it balance.
“What should be presented is truly a balanced budget. Staff should assume that council will not raise taxes,” Dickert said. As presented, the draft “cut things that we knew we had to have to operate.”
He’d be more comfortable if he could say, “It’s either this, or raise taxes. (But) We don’t know what the alternative would have been. We weren’t given a choice any of us could accept,” he said.
The next steps for the budget are three votes and a public hearing. Council will have first reading on Oct. 16; second reading with a public hearing on Nov. 6; and third reading for final approval on Nov. 20.
Dickert’s not ready to say he’ll vote against it, but he’s keeping his options open.
“I won’t take a definitive position prior to reading and reviewing it, but I highly doubt I will be able to support it,” he said.
Reach James Folker at (706) 823-3338 or firstname.lastname@example.org.