Sylva begins budget process

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Sylva begins budget process

The Town of Sylva has begun its annual budget process. File photo

The Town of Sylva began its budget process last week with the first workshop of the year. Staff and elected officials discussed the possibility of a coming recession, ongoing projects in the town, as well as budget needs for the coming year.

The town ended 2022 with a property tax collection rate of 97.96%. Sylva’s current property tax rate is $0.44 per $100. The current budget for the fiscal year 2022-23 totaled $5.8 million but was reduced by over $100,000 after the first of the fiscal year upon the county’s approval of eight paid fire department employees instead of 11.

“Tax collections are directly affected by the economy that we stand in at the time,” said Town Clerk and Tax Collector Amanda Murjada. “As we prepare for what analysts have said with the recession coming up, a decrease in collections is quite possible. It did happen with the recession in 2008, 2009, 2010. It’s not usually recognizable at the very beginning, it takes a tax cycle or two for it to be realized. So most likely if we see a recession that comes later in 2023, we’re looking at probably the end of next year or even the following fiscal year when our revenue would go down.”

With a possible recession, in addition to the coming work on N.C.107, Murjada says the town is looking at a major decrease in its tax value over the next two years. While the town does need to plan for this decrease, it is impossible for town staff to know how much values will change in the coming years.

“When we bill in September, we’re going to be down right at $2.9 million in value from the eight properties they’ve taken so far,” said Murjada. “That’s right at $15,000 [in tax revenue].”

Expected start date for the N.C.107 project is July 2024.

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Up to a 2.5% increase will be recommended in the upcoming budget to keep up with salary study recommendations and cost of living adjustments. Consumer price index proposed for the year is 6.4% but will be based on what the town can afford.

“I think that’s another indicator of where we’re headed with the recession,” said Dowling. “You can’t grow 9% and 6.4% year after year, something has to reset.”

Primary sources for Sylva’s general fund include property taxes, ABC revenue, local option sales and use tax and utilities franchise tax.

“Shrinking these revenue sources shrinks the budget we can spend,” said Dowling.

Upcoming budget projects include N.C.107 sidewalks, for which the town has budgeted $200,000 over the past four years, and Skyland Drive sidewalk, for which the total town portion is $381,200. The town currently has a budget ordinance of $2.3 million for Allen Street Slope repair and has $3 million from the state budget for Bryson Park playground equipment and capital improvements. For downtown restrooms the town has $390,000 from state capital infrastructure grants. The town has budgeted $390,000 for the Bridge Park project; estimated total cost is almost $700,000 and the town is planning to apply for the JCTDA Tourism Capital Project Fund grant for the remainder of the cost.

In the coming year, public works will need $41,525 for a light truck replacement, which includes 10% for cost inflation. Painting town hall and the public works facility, cleaning and fixing cracks is estimated to cost $23,500. The department is also requesting $11,000 for a 52-inch mower to keep up with the replacement schedule, and $3,250 to upgrade the diagnostic computers for fleet maintenance to be able to scan newer vehicles.

The police department will need a new vehicle this year that will cost an estimated $30,000, plus $15,000 for outfitting. Additionally, the police department recently decided to remove the small gym it has inside its building, in part because local gyms offer very low rates for police officers. This room now needs to be installed with shelving and workspace to keep up with accumulating files. Rehab for the whole room is estimated at $20,000 and would be a space to keep files organized and secure. The department is currently working through an audit to ensure compliance with North Carolina General Statute when it comes to file storage and retention.

“Can we do without it? We probably could, but we’re going to have to do something with it sometime, and I don’t know that it’s going to get any cheaper,” said Chief of Police Chris Hatton.

Another possibility Hatton touched on is an application that serves as a mental health tool for police officers and their families. To set the system up it would cost the town just over $6,000 and to maintain it thereafter it would cost the town about $3,000 per year.

According to Dowling, town administration would like to make the Main Street Sylva Association director a full-time position, something she said the town would likely need a tax increase to accommodate. The increased time from the position would focus on business and economic development, especially in the face of the changing business landscape around the N.C.107 project.

“It’s incredible what you’ve done as a part-time employee, and your engagement of the downtown business community is incredible,” said Commissioner David Nestler. “Expanding that to a full town economic development director, or however you guys decide you want to define that, with the 107 changes coming up, I think it would be critical to have someone in that role full time.”

The fire department will need $70,000 for a first responder vehicle, and the building needs repainting on the inside which will cost around $20,000. This year or next year, the department will have to replace one of its pumpers at about $450,000, and will be able to use some of its fund balance for the cost.

Sylva Commissioners also discussed their budget priorities for the coming fiscal year.

Mary Gelbaugh is interested in the metal building at Mark Watson Park being relocated and a skate park going in that facility, a project she wants to pursue with the county commission. Ben Guiney would like to see accommodations made for increased pedestrian safety. Natalie Newman expressed interest in better communication with the public, whether that be through a quarterly mailer or other form of communication. Nestler noted the vital need of keeping up with inflation and cost of living for employment compensation. Greg McPherson would like to see entry signs on the way into Sylva. Commissioners also discussed conducting a new pedestrian safety plan, considering the changes and updates coming to town properties in the coming years, as well as a recurring payment into a Sylva art fund.

Budget discussions will be ongoing in the coming months. Department heads will submit their official requests for funding to the town by March 3, the next budget work session will take place March 23 and staff will submit a balanced draft budget to the town board by April 19. A public hearing on the budget will take place May 25, and the board is scheduled to approve the document on June 8.

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