New fees, utility rate increases in proposed budget

May. 20, 2013 @ 09:07 PM

There is no tax increase in High Point City Manager Strib Boynton’s proposed budget, but residents face new fees and utility rate increases under the draft spending plan.
Boynton presented his suggested budget to the City Council Monday.
At council’s request, it maintains the property tax rate at 67.5 cents per $100 of assessed value.
However, it would add a $5 per month garbage collection fee for 37,000 residential and small-business customers. And the annual fee all High Point vehicle owners pay the city would increase from $5 to $10.
Retail electric rates would increase 4.9 percent and water and sewer rates would rise 4 to 6 percent at some point later in the fiscal year that begins July 1.
Boynton’s recommendations are a starting point for budget negotiations the council will undertake in the coming weeks before adopting a final spending plan in June. Some city leaders were struck by the proposed rate increases and new fees and said some residents won’t be able to afford them.
“It is shifting costs to a segment of our population that probably can least afford to pay,” said Mayor Bernita Sims. “It’s almost to the point where it’s too expensive to live in High Point for some people.”
Boynton last year proposed raising the tax rate from 66.2 cents to 68.5 cents to make up for the loss of about $2 million stemming from a 3.3 percent decline in High Point’s total tax base following Guilford County’s 2012 property revaluation. This would have brought in the same amount of property-tax revenue, but council did not approve the full increase, costing the city about $882,200, Boynton said.
Without this money and with the expected loss of about $1 million the city has historically received through the state, High Point faces a total shortfall in revenues of about $1.8 million, he said.
Without a tax increase, the new fees are necessary to help close the gap, he said.
In addition, reduced service levels, limited filling of vacancies, accelerated early retirements, deferred maintenance and “few salary adjustments” are proposed to make up for the shortfall, he said.
The garbage fee, projected to generate $2.7 million, is also needed to begin financing the city’s cost of providing the service, which is $13.75 a month per customer, the manager said. Some of the money would go toward a proposed new $5 million automated and upgraded recycling sorting system.
The increased vehicle fee would help pay part of the annual cost of street resurfacing.
The electric rate increase would cover a 5 percent, or $4.7 million, rise in the city’s cost to purchase power from ElectriCities, the public power provider of which High Point is a member. The water and sewer rate increase would help finance debt service for various water and wastewater system improvements.
Council last year granted city employees a 1.5 percent salary increase. No pay raises are proposed this year, but Boynton said High Point’s neighboring communities are granting increases, which could put the city at a competitive disadvantage when it comes to attracting and retaining quality employees. A 2 percent raise would cost $1.5 million and a 1.5 percent increase would cost $1.125 million.
Boynton said the city’s loss of state funds could be greater than anticipated if the N.C. General Assembly adopts proposed tax reform legislation. This would cost High Point utility franchise tax revenues, privilege license fees and other levies totalling $6.9 million over two years.
Public hearings on the budget are scheduled for June 3 and June 6, with final adoption expected June 17.