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Sylva budgets for future uncertainty

Sylva budgets for future uncertainty

Town Manager Paige Dowling officially presented the proposed 2023-24 budget to the Sylva Board of Commissioners during its May 11 meeting. Next, the public will have its opportunity for input during the 5:30 p.m. T, May 25 meeting of the town board.

“This budget was built to address current needs along with strategic planning, which will put Sylva in a position for future growth and improvements,” said Dowling in her budget message.

The town’s proposed general fund budget totals $5,967,489, including grants and other proceeds, an increase of almost $120,000 or about 2% from the original 2022-23 budget. The increase is attributed to funding the full-time economic development director position, prefunding post-employment benefits, supply cost increases and general operating costs.

A one-cent tax increase, for a tax rate of $0.45 per $100 of property valuation, is proposed in the budget for the purpose of funding a full-time economic development director position. Transitioning the part-time Main Street director to a full-time economic development position was the board’s top budget priority this year during the budget planning work session.

The average increase in property taxes for residential property owners if the one-cent tax increase is implemented would be $19 for the year, and a one-cent tax increase would cost the average commercial property owner $75 for the year.

In addition to the Main Street Sylva Association, the new position would focus on business and economic development throughout Sylva beyond Main Street, which the board has deemed especially important in the face of the changing business landscape around the NC 107 project.

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“The town should expect revenue losses over the next two to four years as the changes in tax values and revenue fluctuate as acquisition dates vary,” said Dowling. “The next property tax revaluation will be in 2025, which is during construction. The town will not realize the complete loss in property value until after the 2025 revaluation. Sales tax revenue will also be negatively affected during the construction project, as a majority of the project area covers the primary commercial corridor. The degree of impact on sales tax is unknown, therefore the town will budget conservatively for future cycles.”

With the infusion of federal funds and state grants, many long-term needs and priorities of the board are possible in the coming fiscal year. The board is planning to use American Rescue plan funds, combined with other grant funding, to complete the Bridge Park stormwater project. The town received state and federal funds to help with the Allen Street slope failures, capital improvements, equipment for Bryson Park and construction of a public restroom downtown. Because these grant projects are underway, they are not included in the budget.

The town currently has over $2.3 million in the Allen Street Slide Capital Project Ordinance, $3 million for Bryson Park Improvements, $390,000 for downtown public restrooms and $418,000 for the Bridge Park Stormwater project.

In addition to the new full-time town employee, one of Sylva’s top financial needs is funding post-retirement benefits at the recommended level. Currently there are five retirees that receive OPEB benefits and three retirees that receive separation allowance. In the 2023-24 fiscal year, two additional employees will be eligible for retirement.

In capital needs, the Public Works Departments will purchase an F-150 pickup truck at a cost of $41,525 and a 52” mower for $10,759. The police department will replace one vehicle in the upcoming year to keep up with its replacement schedule. The patrol SUV, including equipment, will cost the town $55,993. The Police Department will also purchase two rifles for vehicles for $1,450, two tasers for $4,000 and four ballistic vests for $3,400. These purchases will come out of the Police Department budget, which is proposed to total $1,710,225.

During a March 23 budget work session, town staff recommended extending the Police Department’s vehicle replacement schedule to eight years. Historically, police vehicles have been cycled out after seven years, public works vehicles after about 10 years, large fire trucks every 20 years and small fire trucks every 10 years.

By extending the replacement schedule for patrol vehicles to an eight-year rotation, and putting in additional money for maintenance, the town can avoid having to replace three vehicles in one year.

“The best thing is, we’ve got several years where at a seven-year replacement schedule, we’d buy three patrol cars a year,” said Dowling. “Sylva can afford to buy one or two, but three would strain the budget, so if we stretch it out to eight years and add in a little more for maintenance, we can avoid the years we’re having to buy three cars. We need to make that change.”

Part of the reason that the town will be able to extend the lifetime of its patrol cars is because of the switch from Dodge Chargers to SUVs like Ford Explorers and Dodge Durangos.

“We’re seeing a lot better life expectancy out of the SUVs that we’ve been purchasing for the last several years,” said Public Works Director Jake Scott. “Cutting out the year where we have to make a three-car purchase, it’s basically two per year until 2040 is how far we’ve gone out with the schedule.”

The proposed budget does not appropriate from the capital reserve fund; money had not been added to the capital reserve fund the last three fiscal years, mostly due to the Allen Street project. Since the town has not added to capital reserves and has appropriated from that fund in recent years, there is currently $218,384 in capital reserves.

“This is low when looking at upcoming capital needs,” said Dowling. “The Public Works Department needs to replace large equipment in the near future, and we need to plan for this in the capital reserve fund. Considering upcoming equipment needs, the town needs to rebuild the capital reserve fund when possible.”

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