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Rate hikes killed
Council kills water, sewer rate increase
Thursday, April 24, 2014
By MICKEY POWELL - Bulletin Staff Writer
Higher water/sewer rates are not ahead for Martinsville utility customers.
In a unanimous vote during a budget work session, Martinsville City Council on Wednesday removed increases in those rates from the proposed budget for fiscal 2015, which will start July 1.
The council also voted unanimously to implement a measure that will keep businesses with gross receipts of $100,000 or less in a year from paying Business, Professional and Occupational License (BPOL) taxes.
An ordinance along that line eventually must be approved by the council, according to Ruth Easley, the city’s revenue commissioner.
The votes came after Finance Director Linda Conover said she expects the city will have $3.2 million more in its fund balance — which includes reserve funds — than she anticipated when the current fiscal year ends June 30.
City utility customers are billed monthly for no less than 4,000 gallons of water and sewer. Under the increases, customers billed for those minimums would have seen their bills go up by a total of $4.80, or 11.2 percent.
The increases would have generated a total of roughly $400,000 in extra revenue that officials have said is needed toward operating, repairing and maintaining the water and sewer systems.
Conover had projected a total of $14,616,551 being in the fund balance at the end of the current fiscal year. She now expects a total of $17,822,217, which is $3,205,666 more than she originally projected, a report shows.
Those figures will change as a result of the council’s votes, according to Conover.
But the numbers are “quite a bit better” than anticipated, said Vice Mayor Gene Teague. He attributed that to city revenues being slightly more than expected and city employees doing “a good job” of controlling expenses.
Due to revenues being stagnant as operating costs have risen, the city has used reserve funds to balance its budgets in the past few years. That has to end “at some point” to keep from depleting the reserves, Teague said.
However, he said he thinks the fund balance will be enough as of the end of June to take $400,000 from it to put toward water/sewer system expenses in the coming fiscal year.
Teague made a motion to remove the water/sewer rate increases from the proposed fiscal 2015 budget. Councilwoman Sharon Brooks Hodge seconded the motion. She recently said she would not support the increases.
Hodge made the motion regarding the BPOL tax measure. It was seconded by Councilman Danny Turner.
The city will have to use a little more than $39,000 in reserve funds to make up for the revenue lost by the measure, officials said.
Different types of businesses pay different amounts for their licenses. Most pay small percentages of their total gross receipts.
Council members voiced a desire to reduce BPOL taxes to help attract new businesses to Martinsville and keep ones already in the city. They noted that Henry County’s rates are lower.
The council’s decision regarding BPOL taxes should particularly help small businesses, members said.
Easley said she thinks rates for certain BPOL classifications are too high.
She said she hears the most complaints about the rate for financial, real estate and professional services, which is 0.0058 of gross receipts.
Council members expressed interest in eventually making more changes to BPOL. Teague said, though, that the city cannot afford to do so now.
Easley advised the council to carefully consider how much it should reduce BPOL rates in the future, if it decides to do that.
Also Tuesday, motions by some council members to reduce funding to the Martinsville-Henry County Economic Development Corp. and eliminate funding proposed for The Launch Place and the Community Dental Clinic failed due to a lack of support from a majority of the members.
More about that will be reported in the Martinsville Bulletin on Friday.