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Martinsville Bulletin, Inc.
P. O. Box 3711
204 Broad Street
Martinsville, Virginia 24115
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City budget OK'd

Wednesday, May 29, 2013

From Bulletin staff reports

Martinsville’s real estate tax rate and garbage collection fees will rise when the new fiscal year begins July 1.

The increases are part of a nearly $88.7 million budget for fiscal 2014 that received Martinsville City Council’s final approval in a 4-1 vote Tuesday.

Vice Mayor Gene Teague made a motion to approve the budget, which was seconded by Councilwoman Sharon Brooks Hodge. Councilman Danny Turner, who often has been critical of city budgeting, cast the dissenting vote.

The real estate tax rate will increase from $1.01816 to $1.0621 per $100 of assessed property value. As a result, the tax bill for a home assessed at $100,000 will increase by almost $44, from $1,018.16 to $1,062.10.

But the rate hike does not mean that real estate owners will automatically pay more in taxes.

According to City Manager Leon Towarnicki, a recent reassessment showed an overall decline in real estate values citywide of 4.14 percent, which would cause the city to lose about $260,000 in tax revenue.

The rate hike is an equalization measure allowing the city to basically keep collecting the same amount of real estate tax revenue it now gets. Whether property owners see higher tax bills will depend on whether their properties increased or decreased in value, and by how much, officials have said.

The vehicle tax rate is to remain at $2.30 per $100 of assessed value. The rate for manufacturing machinery and tools is to stay at $1.85 per $100.

The monthly residential garbage collection fee will increase from $16.25 to $18.50. The fee for emptying large, business-type trash containers will jump from $24.50 to $26 per empty. Businesses without such containers will pay twice the residential rate for twice-weekly collection, the budget shows.

Expenditures budgeted for fiscal 2014 total $88,698,746 while revenues amount to $84,638,852. The $4,059,894 difference will be made up from reserve funds and transfers from utility funds. Profits from those funds are used to support city services.

The approved budget ordinance shows the city is expected to have about $13.3 million in its fund balance when fiscal 2014 ends on June 30 of that year.

The general fund balance is expected to have a little more than $1 million in undesignated funds that can be used to pay unforeseen expenses or maintain cash flow in months when lesser amounts of tax revenue comes in.

In an interview before Tuesday’s council meeting, Towarnicki said he thinks the fund balance is sufficient for now.

Yet the fund balance has been used to balance the budget for the past few years, and that practice cannot continue indefinitely, he said.

The city is not in a financial crisis, Towarnicki emphasized.

Due to conservative budgeting practices, revenues each fiscal year typically are underestimated while expenses usually are overestimated, he said.

Still, “we need to pay close attention (to the reserve funds and general budgeting practices) and plan for the future,” Towarnicki said.

For city officials, he said, “it’s time to sit back, look at the data and draw conclusions” as to how Martinsville will handle its budget constraints in the future “instead of waiting until the last minute” when they might be under pressure.

Turner thinks the budget situation is more dire. He said he perceives the city will be “in worse shape next year.”

He added that he foresees no new economic development, such as companies that would provide new tax revenue for the city.

Except for Turner’s remarks, council members did not comment on the budget before it was approved.

The city schools will receive $6,360,531, which is what they requested. The schools originally were set to receive $6,013,985, but the council decided to give them the higher amount to help them hire new employees and meet the state Standards of Quality, among various other reasons.

Pam Heath, the schools’ superintendent, thanked the council for its support.

For the current fiscal year, the city raised its meals tax on prepared foods and beverages from 6 to 6.5 percent, and that rate will not change.

But officials recently realized that an ordinance amendment needed to put the current year’s increase into effect permanently had not been adopted. Basically, it was an oversight, said city Finance Director Linda Conover.

The council on Tuesday unanimously approved such an amendment on first reading. Final approval will be considered at the June 11 council meeting.

Also, the council appropriated $10,459 from sources such as donations and reimbursements into the current fiscal year’s general fund. The money will be used by the police and fire departments, commonwealth’s attorney’s office and Senior Center toward various expenses, a document shows.

A $16,187 contribution from the state Rescue Squad Assistance Fund was appropriated into the current fiscal year’s capital reserve fund to reimburse the city’s emergency medical services for the cost of two defibrillators.

 

 
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