“The operating budget is sufficient, but current revenues are not adequate to achieve the Board’s mission and goals or meet future capital replacement needs without accruing more debt,” Town Manager Paige Dowling wrote in her budget message.
Much of the reasoning behind hiking the tax rate last year was a desire to make the budget solvent and stop dipping into the town’s fund balance — akin to a savings account — to cover routine expenses. However, the 2017-18 proposed budget would take $21,500 from fund balance to cover unexpected tax losses following property tax appeal settlements with Lowe’s Home Center and Food Lion. The Lowe’s settlement resulted in a loss of $17,200 and the Food Lion settlement resulted in a loss of $3,400.
“Our hope is that this appropriation (from fund balance) will remain in contingency and will not be utilized or that savings within departments can compensate for this revenue loss,” Dowling wrote.
Sylva’s fund balance currently sits at $2.5 million, or 70 percent of the town’s operating costs for the year. The proposed budget would push it down to 68 percent. That level more than satisfies town policy, which requires a fund balance of at least 40 percent, but falls below its goal of 73 percent, which is the average for a town of Sylva’s size.
The proposed budget focuses spending on five priority areas, with the number one being post-employment benefits. Those benefits would cost the town a total of $155,000. In recent years, when budgets got tight the town had opted to cut contributions to these funds, paying in below the recommended level. Now they’re playing catch-up so that when people retire the money will be there to meet the town’s obligations.
The budget would also satisfy communication needs for the police force, with $15,900 allocated to add GPS to police cars. An ordinance review of land use and planning, conducted by J.M. Teague Engineering, will continue over the next seven months, and the town will implement a recently completed pay plan to keep town salaries competitive — implementation will cost about $56,000. In addition, Sylva will also purchase $60,000 in equipment, including items such as weed eaters, a tire balancer, tasers and a new police car.
While Dowling has repeatedly commended town commissioners on their efforts to build a more stable, solvent budget for the town, her budget message makes it clear that Sylva will face financial obstacles in the long term. Sylva’s tax base doesn’t typically grow much between revaluations, so tax revenues are unlikely to grow much over the years absent tax rate increases.
The cost of health care is one of the major wildcards. The town’s employee medical insurance plan is set to expire in 2018, and it will likely cost both the town and its employees substantially more to purchase a comparable plan.
While the current budget covers routine operating expenses, it doesn’t include anything extra to plan for major capital improvements or to achieve the board’s goals for the town. Among the many desired projects discussed during a February planning retreat were a mountain biking trail plan for Pinnacle Park, purchasing public art for the downtown, hiring a part-time Main Street director and installing bathrooms on Main Street. The budget doesn’t include funding for any of these projects.
Sylva will hold a public hearing on the proposed budget at 5:30 p.m. Thursday, June 8, at the Sylva Town Hall. The board will likely approve a 2017-18 budget during its meeting at 9:15 a.m. Thursday, June 22.
The proposed budget is online at http://bit.ly/2qZ2XSP with a hard copy available for review at Sylva Town Hall.