By Emily Ford
eford@salisburypost.com
SALISBURY — City Council received an austere budget proposal Tuesday that includes cutting jobs, raising the tax rate, increasing water and sewer rates and reorganizing some city divisions.
The 2011-12 budget totals $69.6 million. Council will hold a public hearing at 4 p.m. May 17.
For four years, the city has held the line on the property tax rate, City Manager David Treme wrote in his budget message.
“Each year, in order to balance the budget our financial staff has had to prioritize and chip away at the meat of our organization,” Treme said. “We are now down to the bone.”
Tax increase
The city’s current tax rate is 59 cents per $100 of valuation. Treme recommends increasing the tax rate next year by 5.2 cents — nearly 9 percent — to bring in the same amount of revenue.
The new tax rate of 64.2 cents would be “revenue neutral,” meaning the city would neither lose nor gain revenue.
The city’s tax base fell 8 percent this year as a result of Rowan County’s recent revaluation. This marks the first time in Salisbury history that the city’s tax base declined, Treme said.
In addition to the decline in tax base, city staff had to find ways to close a $2.7 million budget gap caused by the poor economy. Salisbury faces a $610,622 increase in mandated costs like insurance and retirement.
Some Salisbury residents will pay more in property taxes next year, while others will pay less. It depends on whether their property value went up or down in the revaluation.
Where property values dropped 8 percent of more, the city tax bill will be the same or smaller, Treme said. People whose property didn’t drop by 8 percent will pay more in taxes.
“This is the line of demarcation in the shifting of the tax burden in our community,” Treme said.
Job cuts
The budget calls for eliminating 36 full-time and 11 part-time positions.
Most of the jobs were already vacant, the result of a rolling freeze that started several years ago, said John Sofley, the city’s former management services director and new assistant city manager. Sofley made the budget presentation in the absence of Treme, who was in Raleigh advocating for the city in the battle over community broadband.
The city laid off four employees last month. Those are the only workers who will lose their jobs according to the proposed budget, Sofley said.
The city’s payroll also has decreased as employees take early retirement. The city offered three-month severance packages.
The number of people who have taken early retirement was not available Tuesday. The elimination of 47 positions, plus the early retirements, are expected to save the city $2 million, Treme wrote.
Treme plans to promote Sofley to assistant city manager and have the parks and recreation and public works departments report to him. City Council had asked Treme to decrease the number of departments reporting directly to him.
“John’s tenure with the city has ranged many decades, and his service has been pivotal to moving our city forward,” Treme said.
Water and sewer rates
The budget calls for increasing water and sewer rates by an average of 2.86 percent, the smallest increase in eight years, Sofley said.
Recycling fees will go up 58 cents per month.
No other fees or charges will increase, including charges for Fibrant, the city’s new broadband utility, Sofley said. The 2011-2012 general fund budget marks a new era in local government in Salisbury, Treme said. Property values have declined, sales tax revenue and state shared revenues, such as Powell Bill funds, have fallen significantly.
Simultaneously, the costs of doing business are increasing, most notably gas, oil and utilities.
Treme proposes realigning the city’s organization to increase efficiency and prioritize services.
“Our goal is to hold the line and stabilize the budget for the future, and the organizational realignment accomplishes both objectives,” he said.
He will combine several city divisions, including consolidating the maintenance and landscaping operations and placing all facility management activities in one department.
City Planner Joe Morris will now oversee the Development Services Division, which has been placed under Community Planning Services Department.
Communications and marketing efforts have been consolidated, and the Public Works Department will take on storm water and traffic management.
“We have to be adaptable in this changing environment, while still providing the services our citizens depend on most at a price they can afford,” Treme wrote.
The budget is available at City Hall and will be available Wednesday afternoon
on the city’s website at www.salisburync.gov. The Post will supply a link.
Budget proposals
• 5.2 cent property tax increase. The rate is “revenue neutral,” meaning even though it’s higher, the city will generate the same amount of property tax revenue as last year.
• Cut 36 full-time and 11 part-time positions. Most of the jobs were vacant due to a hiring freeze that began last year.
• Continue rolling freeze. Only essential positions would be filled.
• Increase water and sewer rates by an average 2.86 percent.
• Realign and consolidate several divisions into functional units to increase efficiency.
• No merit or cost of living increases for third year.
• Cut funding to nonprofit groups by 10 percent.
• No increase in Fibrant rates.