City officials seem confident in being able to fund major capital items in the next fiscal year such as police cars needed for everyday operations, but beyond that — not so much.
Since late 2020, the Mount Airy Board of Commissioners has devoted much attention to a five-year capital improvements package totaling $11.6 million. Capital needs are big-ticket items, generally costing more than $10,000, related to buildings, infrastructure projects and equipment for city government operations, including vehicles.
In addition to that operational category, municipal department heads and the city manager have prepared a separate “visionary list” containing what can be considered enhancements rather that basic necessities.
That list, totaling $6.8 million, features such line items as a new indoor waking track and outdoor pool renovations including a splash pad at Reeves Community Center, building a fire-suppression training center and extensive sidewalk installations, among others.
Officials discussed the capital improvement needs during a meeting Tuesday afternoon, when City Manager Barbara Jones suggested focusing on just the operational list at this point.
Even those are challenging, based on discussion among board members.
“I think the important is, where do we find the money?” Commissioner Tom Koch said at one point in the session — led by Doug Carter, a financial adviser from Charlotte hired by Mount Airy.
“As it stands right now, we really don’t have excess money for capital improvements,” Koch remarked.
More efficiency sought
In recent years, capital items have been handled on a piecemeal basis in the annual municipal budget, sometimes with only relatively small sums of funds devoted to that area — which was the case in a pandemic-ridden 2020.
Other times, major projects or equipment additions have been delayed, keeping overall expenses low and avoiding property tax increases except for a 25% hike imposed in 2018. In turn, capital needs have accumulated.
City officials largely have adopted a pay-as-you-go philosophy to supply those items in addition to meeting routine costs such as salaries.
“That’s why it’s taken us so long,” Commissioner Marie Wood, who was elected in 2021, said of delays in funding capital projects.
“It takes us years and years to get things accomplished,” Wood added. “And we’re always behind the eight-ball.”
She asked Carter how long it would take to get major projects completed using only the “pay-go” method.
“A very long time,” the consultant replied, saying he was basing that on present appropriation levels. “Ten years or longer.”
“We can’t keep going one year at a time,” Wood said of the need to plan for the future.
Along with believing that a formal procedure is required to meet capital needs on a more timely and systematic basis, the present crop of commissioners is eyeing various ways to supply the revenues for doing that.
Commissioner Jon Cawley pointed out during this week’s meeting that 100% of the city’s available revenues are now committed to basic everyday costs. This includes ongoing salary commitments that have expanded due to raises being granted most years, which Cawley has been concerned about.
He reiterated this week his support for a quarter-cent increase in the sales tax in Mount Airy.
Cawley reasons that this would place some of the burden on tourists — whose presence requires extra municipal services and costs — rather than solely on the city’s 4,300 property owners, which would be the case with higher taxes or new fees.
Yet this would require approval by state legislators, who have been reluctant to do so in the past.
Loan option debated
Models presented by the Charlotte consultant this week include the option of borrowing a total of $8.25 million over the five-year period. This would be paid off in increments during that time for an overall debt-service figure of $2.7 million.
City officials already have taken the loan route to a limited extent, deciding in late January to borrow money to pay for a new fire truck and two automated garbage trucks that had been placed on next year’s capital list.
However, Commissioner Koch expressed reluctance this week about embarking on large-scale indebtedness as a financial tool.
“Once we start borrowing and spending we’ll have no option but to raise taxes,” he warned, with Mayor Pro Tem Ron Niland saying that another unpopular alternative would be slashing services to residents.
Koch referred to the 25% increase in 2018. And he says another hike of more than 30% — 19 cents from the present 60 cents per $100 of property valuation — would be needed to supply all the capital items listed, while acknowledging possible changes in individual components.
Tuesday’s reference by Koch to the 12-cent tax increase in 2018 — before he was elected — seemed to irritate Commissioner Steve Yokeley, who has been in office since 2009.
“I hope we don’t have to keep bringing up the 25% tax increase,” Yokeley said.
“We can’t keep doing things the way we’ve done them in the past,” he commented. “I think we need to plan for the present and plan for the future and not look back at the past.”
The commissioners did agree for capital needs in the operational category forecast for the next fiscal year beginning on July 1 to be met through existing revenues without higher taxes.
Those items have been estimated $1.81 million, including the new fire and garbage trucks. Other vehicle purchases that were listed for 2020-21 include a dump truck for the city’s public services/streets unit ($160,000), a leaf machine ($120,000), police patrol vehicles ($115,749), a police vehicle used for vice investigations ($26,250) and a truck for Reeves Community Center ($35,000).
The board also voted this week to create a special Capital Improvement Fund (CIF) to include money from budgetary savings or proceeds from sales of municipal assets.
It further agreed to move $758,000 from the municipality’s fund balance, or surplus, into that CIF, which discussion indicated could be used for next year’s capital expenses.
Carter mentioned that Mount Airy will benefit from the latest federal stimulus package, although firm figures are not known at this time, and an upcoming countywide property revaluation done periodically to reflect present market conditions.
Based on higher values of 7% overall, the revaluation will generate an extra $360,000 annually for the city government, according to Carter’s presentation.
Source: https://www.mtairynews.com
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