Franklin proposes to hold tax rate
Town of Franklin Manager Summer Woodard recently presented the town council with a proposed budget for 2019-20 that would maintain the current property tax rate and increase the cost of water and sewer for customers.
Woodard is proposing to maintain the town’s property tax rate of 32 cents per $100 of valuation after the town council voted last year to increase the tax rate from 28 cents to 32. While property tax rates will stay the same, the overall budget is down just slightly from $8,992,245 to $8,984,893.
Woodard’s proposed budget also recommends increasing water and sewer rates 4 percent for customers in order to keep up with the cost of infrastructure needs. Projected water and sewer revenue for 2019-20 is $3.86 million, which represents a $257,750 decrease in expenditures over 2018-19.
“The town continues to experience slow growth in water and sewer revenues. It is paramount that the Town of Franklin ensures water and sewer revenues can sustain expenditures and debt service payments in order to maintain existing infrastructure along with future water and sewer infrastructure,” she wrote in her budget message.
This is the second year in a row the town has recommended a 4 percent increase to water and sewer rates, and much of the town’s debt service is dedicated to water and sewer projects. The town took out a loan in 2012 for general water and sewer projects — the current amount of $1.96 million will be paid off by 2024. Another loan for water and sewer projects was taken out in 2010 — the $1.5 million loan should be paid off by 2025.
The town is also undergoing a major renovation project at the water treatment plant. The town has a state revolving loan for the project in the amount of $3.1 million, scheduled to be paid off by 2038. Phase one was completed in the last fiscal year and phase two of the project is underway. In 2019-20, the town is estimated to pay $844,928 in principal plus $181,975 in interest on its water and sewer debt service.
A recent revaluation done on Macon County properties showed that overall property value growth is still fairly stagnant throughout the county, but there has been some growth within the town of Franklin. The revaluation process produced a tax base of $701,176,156 — an increase of $667,832 in assessed value from $700,508,324 in 2018-19.
Using the new tax base, it would take a tax rate of $0.3197 to produce a revenue neutral budget for 2019-20. However, Woodard recommends keeping the same tax rate of 32 cents due to the decrease of $123,449 in the general fund pertaining to current ad-valorem taxes and rents.
“The two biggest contributors to this decline includes tax exemptions and releases,” Woodard said. “Rents are also expected to decrease by $22,000. This decline is due to the sale of the old town hall property located at 188 West Main Street. The town should continue to plan for unexpected revenue loss at the state and federal level.”
On a positive note, Woodard said the town has a healthy fund balance — enough to cover 63 percent of the town’s annual expenditures. The town’s fund balance, which can be used for one-time capital expenses or emergency situations, has increased 12 percent since 2016-17. This budget also allots $30,000 in contingency in anticipation of unexpected revenue loss or unexpected expenditures.
The budget includes a 1 percent payment based on salary for all full-time employees suggested to be paid out in December 2019, but it doesn’t include a cost-of-living adjustment. While the town’s dental, life, property, and workers compensation premiums are expected to stay the same, its health insurance is expected to increase by 8 percent.
As for upcoming capital costs, the town will pay out $50,000 in the 2019-20 for a comprehensive plan — the total $95,000 cost was split between two fiscal years. The town will also pay $10,000 this coming year to complete phase two of a town banner project.
The streets department is requesting a $10,000 zero-turn lawn mower and the police department will replace one patrol vehicle for $36,000. Public works department is requesting a $25,000 half ton pickup truck and Franklin Fire and Rescue is asking for $38,000 to replace a pumper truck.
One of the town’s top priorities this year is to utilize state Powell Bill money to complete some more sidewalk projects. Slated for this year is East Main Street in front of Seay’s Farm Supply; East Main Street by Budget Inn; East Palmer Street from PNC Bank to Motor Company Grill driveway; Porter Street between Lazy Hiker Brewing and Palmer Street; West Palmer from Tastinger’s Floor Covering to Sprinkles Surveying and Phillips Street by the Franklin High School’s band practice area.
For the complete proposed budget, visit https://www.franklinnc.com/proposed-budget-franklin-nc-2019-2020.html.