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Fredericksburg City Council tries to wrap up its budget

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BY PAMELA GOULD / THE FREE LANCE–STAR

Fredericksburg homeowners have faced the prospects of everything from no tax increase to a 9-cent rate hike on their property tax bill during this spring’s budget deliberations.

Now, with a deadline of Wednesday to appropriate funding for the city schools, it’s decision time for the City Council.

Mayor Mary Katherine Greenlaw thinks it’s likely there will be some increase in the real estate tax rate.

With a priority to give city and schools employees a raise for the coming year, she thinks a 1- or 2-cent increase is possible.

“I don’t think it’s realistic to have a zero increase and I think our employees need a raise and deserve a raise,” Greenlaw said.

The current real estate tax rate is 74 cents per every $100 of assessed value. Each penny increase in the real estate tax rate raises about $345,000.

The median priced home in the city is assessed at $256,200, meaning every penny increase in the tax rate raises that owner’s bill by $25.62.

City Manager Bev Cameron proposed a 3-cent increase when he presented his budget for fiscal 2014, which begins July 1. His proposal included a 3 percent raise for employees, which includes 1 percent to cover the cost of their contribution to the Virginia Retirement System.

The possible tax rate went as high as 9 cents when the majority of the council sought to show city residents the price tag for the new courthouse.

Councilman Fred Howe, the most vocal on that effort, wanted people to see that the annual cost to pay for the $35 million courthouse will be $2.1 million for the debt payment and $1 million for operating expenses once it’s finished.

That $3.1 million annual bill equates to a 7-cent increase in the real estate tax rate. With other possible increases, the majority of the council voted to advertise a 9-cent rate increase. Once advertised, the rate can be reduced but not increased without another ad and hearing.

Council members have recently discussed everything from no increase to a 4-cent rise in the rate.

Councilman Matt Kelly said it’s possible to balance the budget with no increase but he would support a 1-cent increase if it includes the 3 percent raise for city and schools employees.

Kelly said he wants to avoid any new expenses until the council evaluates its priorities and understands the financial commitments those priorities will require.

Councilwoman Bea Paolocci, who led the push to reduce the impact on small-business owners of the city’s Business, Professional and Occupational License tax, said she would like to keep the tax rate steady “if at all possible.”

She favors an employee pay raise but wants to be sure schools and city government employees get the same increase.

The council meets in a budget work session this evening.

It is scheduled for a preliminary vote on the tax rate and city budget at Tuesday’s meeting.

It also has scheduled votes on preliminary and final approval of the schools appropriation at Tuesday’s meeting.

A work session is scheduled before Tuesday’s council meeting in case details still need to be ironed out. Paolucci said she hoped both budgets could be resolved by Tuesday.

“I think if we’re all able to give a little and take a little, we’ll get there,” she said. “It’s all compromise.”

BUDGET CRUNCH

The Fredericksburg City Council is scheduled for three meetings that could finalize the next city and schools budgets.

The City Council holds a budget work session at 5:45 p.m. today in room 214 of City Hall, 715 Princess Anne St.

The City Council will hold a work session at 5:30 p.m. Tuesday in the second floor conference room of City Hall.

The council holds a regular meeting at 7:30 p.m. Tuesday in Council Chambers.

A vote on the tax rate, final approval of schools funding, and preliminary approval of the city budget are scheduled.

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