7-cent tax increase headed to full board

Squeeze until it hurts. A 7-cent tax increase will remain in McMinnville’s budget as city officials try to cut corners to avoid what could have been an even larger tax increase.

While going over the 2007-2008 city budget, Finance Committee members made the departmental budgets tighter while making room to pay for the preliminary work on phase II of the Downtown Revitalization Project.

The changes allow for $50,000 to be placed in the Main Street phase II budget, an increase of $142,173 in the beginning balance and an increase of $209,134 in the projected ending cash balance.

Although the tax increase won’t reach 10 cents, one alderman voiced his disapproval for the 7-cent hike.

According to Alderman Billy Wood, city residents have been given a water rate increase, a garbage pick-up increase, and now they will be handed a 7-cent city tax increase. All these increases are after a 25-cent tax increase last year.

‘Do without,’ said Wood. ‘Those are the two words I keep hearing from city residents. We can’t continue to tax and spend. If you listen to the voters, they are fed up with it. We could cut our salaries in half effective immediately and save a penny right there.’

Alderman Patti Nunley says she hasn’t heard any complaints, even though the city is raising its taxes while the county is keeping its tax rate unchanged.

‘Part of the problem is that last year the county held at zero and we went up,’ said Nunley. ‘This year the county is holding at zero and we are going up. One of these years, based on what I’m reading here in this newspaper, the county is going to have to go up.’

As published in the Southern Standard, the county’s 2007-2008 beginning fund balance on July 1, 2007 will be just under $2 million. The ending fund balance on June 30, 2008 will be less than $186,000.

‘You can’t continue to go down,’ said Nunley. ‘Every time you hold at zero, you are actually cutting your budget because expenses have gone up. Nothing costs the same as it did the year before.’

The 7-cent increase for city taxpayers will go toward funding the much-needed heat and air system at the Civic Center. Officials have decided to go with the geothermal system for its long-term savings.

Although the new system will cost an estimated $641,000, the savings over the life of the unit, compared to installing traditional heating and air units, could be between $748,475 and $898,170.

The 7-cent tax increase amounts to a $14 increase on a $75,000 house, and a $17 increase on a $100,00 house.

The budget was accepted Thursday by the Finance Committee and will now be presented to the Board of Mayor and Aldermen at its regular meeting Tuesday night at 7 p.m.

Thanks to changes, the city will have a beginning fund balance of $2.67 million and an ending fund balance of $935,314. The changes include:

‘ Revenue in the General Fund ‘ McMinnville Water In Lieu of Tax went from $160,000 to $60,000, and a Parks and Recreation revenue increase of $5,000.

‘ Restricted Funds ‘ A decrease in cash balance in the drug fund of $255, a capital improvement fund increase of $16, a solid waste collection and disposal decrease of $31,152, street aid decrease of $5,158 and a water and wastewater decrease of $117,445.

‘ Department budget changes ‘ McMinnville Police Department lost two vehicles at $46,000, communication equipment at $7,758, office machinery and equipment at $869, and other machinery and equipment at $21,334.