No tax rate hike planned for Colonial Heights
By James Peacemaker, Jr., Managing Editor
Apr 18, 2013, 17:22
COLONIAL HEIGHTS — The city manager is calling for a slight increase in spending and a couple of new employees for the upcoming fiscal year.But for homeowners, that won’t mean an increase in the tax rate.
City Manager Thomas L. Mattis told City Council last week that the city is in a good position with income from businesses such as the restaurant sales tax, lodging tax, sales and use taxes. He said the city typically ranks among the top five localities in Virginia for taxable sales per capita. He was cautious however, noting that there were fluctuations in these revenues and there was a possibility of changes in the lodging tax due to the massive new Army lodging facility on Fort Lee.
Mattis said the budget is based on keeping the current real estate tax rate the same but assessments could increase due to improvements in the housing market, resulting in a higher overall tax bill. His budget predicts a 1 percent total increase in property taxes.
The $74.5 million budget for the fiscal year that runs from July 1, 2013, through June 30, 2014 is a 3.5 percent increase in spending from the previous year but that includes some grants and one-time expenses. Mattis said there will be no layoffs and no deficit spending and tries to maintain the same high level of service.
The proposed budget is split into five basic parts: $33.3 million for the General Fund, which includes traditional city services; $36.2 million for the School Fund, which is set aside for public schools; $240,000 for the Recreation Fund, which includes youth sports, events and classes; $470,000 for the Stormwater Management Fund; and $4.3 million for the Water and Sewer Fund. The last three are managed as enterprise funds, which means they are funded only by fees charged for the services.
Mattis also said at a work session on Tuesday that there will likely have to be an increase in the water and sewer rates to keep up with maintenance. An independent study is currently under way and will be used to make a recommendation for a new rate.
The School Fund will see an increase of 2.8 percent and about $14.7 million of the total will come from the state and federal governments.
There are a few significant projects included in the 2013-2014 budget that would boost spending, but they are partially offset by grants.
$150,000 is slated as part of a multi-year effort to replace the 8000MHz radio system used by all city public safety services. The current system will be obsolete in 2016 when the equipment will no longer be supported by the manufacturer and parts will no longer be available. The $150,000 next fiscal year and another $100,000 the following year will be used for planning and design for a new system, which is estimated to cost a total of $5.3 million.
Another $230,000 is planned for a 9-1-1 switch upgrade, which will be necessary for the city to continue emergency services. The Fire/EMS department has obtained a $150,000 grant that will help offset the cost.
The new city courthouse will also result in additional maintenance costs of $30,000 in the 2013-2014 fiscal year. A full year would cost an extra $40,000. A more accurate picture of those costs would be more apparent after a few years.
At the City Council work session on Tuesday, Sheriff Todd B. Wilson also spoke of a need for more deputies in order to do security at the larger building. The new courthouse will have three courtrooms instead of two, leaving him one short if all three courtrooms were being used at the same time. The state helps pay for deputies, but Wilson said their standards are outdated, only compensating localities for one deputy in District Court and two in Circuit Court.
The budget also includes money to make improvements at Shepherd Stadium. A new LED scoreboard will cost $34,000 and a new audio system will cost $16,000.
The city manager is also expecting to absorb a significant increase in health insurance costs for the upcoming fiscal year. The increased cost for the city is $262,000, a 10 percent increase. The budget also calls for a 2 percent cost-of-living pay raise for city employees, starting Jan. 1.
The budget includes 340 employees, 248 of which are full-time.
Two new positions will be added if the budget is approved. One will be a groundskeeper to help keep up with additional parks and the new city courthouse. The second will be a full-time director of economic development.
The city currently spends about $50,000 a year on a contract basis for economic development. The new position would cost about $106,000.
On Tuesday, a few City Council members seemed concerned about the cost.
Councilman John T. Wood said there needed to be some way to measure the cost effectiveness of the economic development position and said they need to re-evaluate the need after a time.
Councilman W. Joe Green Jr. said it could take a few years for the investment to show its worth. He said the new hire would need time to make contacts and build a rapport.
Councilman T. Gregory Kochuba questioned whether the government should subsidize the businesses when city assets could sit vacant.
Mayor C. Scott Davis said having this position is key to redevelopment in the city, not just to draw in businesses to fill vacancies but to keep existing businesses from leaving. He said almost every city has someone dedicated to this role.
Mattis said this salary is needed to be competitive to draw candidates that have the right kind of experience to be effective.
City Council is scheduled to hold a public hearing on the budget at 7 p.m. April 30.
The proposed budget can be found online at http://www.colonial-heights.com or at Colonial Heights Public Library or at the Office of the City Clerk in the City Hall.