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Fredericksburg City Beat

This blog includes news about City Hall, city schools and other 22401 news.

Pamela Gould reports on City Hall. You can reach her at 540-735-1972 or pgould@freelancestar.com. Robyn Sidersky reports on city schools. You can reach her at 540-374-5413 or rsidersky@freelancestar.com.

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Tax rate set at 53 cents

The City Council blew way past the deadline for the print edition of The Free Lance-Star last night. But they did some pretty important stuff in Tuesday’s waning hours. Here’s the story you don’t see in the paper this morning:

Fredericksburg council approves 53-cent tax rate

BY EMILY BATTLE

Fredericksburg residents can expect to pay a 53-cent real estate tax rate next year.
At about 11:30 p.m. last night, the City Council approved  the tax rate, along with its $78.4 million budget for the fiscal year that begins July 1.
Five council members voted for it.
The other two—Debby Girvan and Hashmel Turner—said they believed the city could adopt a 50-cent rate by bumping up the city’s revenue projections by $1.4 million.
Their colleagues called that move irresponsible, reckless and politically motivated.
City staff members who work on the budget defended their revenue estimates as appropriately conservative.
When the city brings in more money than it has budgeted for, Budget Manager Mark Whitley said, it first has to look at how that lines up with what it spent over the same period.
If it spent less than it brought in, any surplus goes into what’s called the “fund balance.” That balance provides a cushion that protects the city against crises like economic downturns and unexpected large expenses.
It can also be used for one-time expenses. The city has used it in this way to pay for two new schools, the parking deck and other capital projects.
But using that money to balance a budget, as Girvan proposed, is risky, and doesn’t look good to bond rating agencies, city staff warned.
The city has done it before. In the current budget, fund balance money was used to avoid a real estate tax increase.
However, in that budget, City Manager Phillip Rodenberg warned that the one-time money was a boost to get the city through to the reassessment year, and would not be available to balance future budgets.
Vice Mayor Kerry Devine and other council members criticized Girvan for proposing a lower real estate tax rate without looking for ways to decrease operating spending.
She said the only cut she’d heard Girvan propose was eliminating the $60,000 the city spends to give people free garbage bags.
“While helpful, that’s not going to get us to a 50-cent tax rate,” Devine said.
“If you want to get down to 50 cents, show us where we can reduce expenditures,” Councilman Matt Kelly said.
He also pointed out that next year, the city is likely to see an additional $1.3 million in expenses lopped onto its budget solely from the Rappahannock Regional Jail.
Paired with all of the other things that city leaders had talked about wanting to do in this budget but put off to save money, Kelly said that makes it an even worse time for the city to reduce its fund balance.
Girvan suggested that the city should cut down on its capital expenses to deal with the decreased fund balance.
But Councilman George Solley asked how she’d do that. He said all of the capital projects on tap for next year that are being funded by city money address core infrastructure needs like roads, bridges and water lines.
Other less crucial projects, like riverfront development, aren’t being funded directly with real estate tax money, but with things like the sale of the hotel property at Caroline and Charlotte streets.
“It’s as tight as it can get,” Solley said of the capital plan.
He also pointed out that Fredericksburg’s real estate tax rate is lower than those in Stafford and Spotsylvania counties, and than in many other cities of its size.
Councilman Marvin Dixon—who ran for office a year ago saying he didn’t think the city would have to raise taxes this year—said he and other council members had tried as hard as they could to hold the rate to 50 cents.
He said Girvan’s proposal was “reckless and irresponsible,” and amounts to saying, “Let’s go raid the rainy day fund.”
Councilman Hashmel Turner, who aside from Girvan cast the only  vote for the 50-cent rate, said he was motivated by an 87-year-old woman who called him and asked him not to raise  taxes.
“I’m a man of faith. I can’t always see things. That’s the reason my faith is so strong,” he said in explaining his vote.
Council members also approved increases in city lodging and meals taxes last night. They will have to take the second of two required votes on all tax increases, along with the budget itself, at their next meeting.
Emily Battle: 540/374-5413
ebattle@freelancestar.com

Permalink: http://news.fredericksburg.com/citybeat/2007/05/23/tax-rate-set-at-53-cents/

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