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Additional cuts needed to balance next year’s budget

Pulaski Town Council’s public hearing on its 2009-10 real estate tax rate isn’t until next Tuesday, but it appears the 30-cent advertised rate is the figure that will be needed to achieve a balanced budget.
Even with the rate set at 30 cents, the budget was still more than $158,000 “out of kilter.”
During a Tuesday afternoon work session, council members worked with Town Manager John Hawley, Finance Director Sherry Boyd and several department heads to find additional cuts to bring expenditures in line with the approximately $7.6 million in projected revenues for the next fiscal year.
Refinancing the remaining debt of a $5 million loan for the James Hardie project is a way council chose to bring revenues and expenditures closer together. Hawley said the town has a more than $300,000 balloon payment coming due during 2010 that could be reduced to about $63,000 if the remaining payoff is refinanced for five years.
Hawley said interest on the original loan was 3.7 percent and he hopes the refinanced rate will be around 4 percent. “It won’t exceed 5 percent,” he said.
Mayor Jeff Worrell said he thinks the refinancing is “definitely the way to go.”
Hawley said he is hoping to be able to use $93,000 in excess funds in the sewer account to cover the $63,000 because any sewer-related projects (except labor) the town covered at the Hardie site could be “reimbursed” from the sewer account.
Additional funds were able to be picked up in a reduction of the town’s Redevelopment and Housing Authority’s (PRHA) request for nearly $48,000 in the upcoming fiscal year. Town Council chose to, instead, level fund the authority at $5,000.
Councilman Morgan Welker said the authority’s request “sounds like an awful lot of money.”
Worrell agreed, saying “the timing couldn’t be worse.”
Hawley said the authority wants to hire an executive director by having the town dedicate one cent of the real estate tax rate to cover that position. However, he pointed out that one cent will not completely fund the position because only about 93 percent of that penny will realistically be collected.
Worrell said the PRHA request “keeps jumping out at me” when he looks for possible areas to reduce costs – “not because they don’t deserve it, but because it will require another penny of real estate tax increase.” He pointed out that PRHA has been willing to help the town with anything the town requested, “but that’s a big chunk.”
Welker said PRHA may need to “settle for some kind of part-time” position.
Worrell asked that Hawley find out how PRHA used the $5,000 allotted to them for the current fiscal year.
Hawley said he had requested a report, but hasn’t received one.
Another area Welker suggested Hawley consider making cuts, if possible, is in each department’s books and subscriptions.
The town newsletter, which hasn’t been published for a while, also was cut from the town council budget, freeing up $250.
At the end of the meeting, Hawley still needed to find about $52,000 in cuts to make the budget balance. If not enough cuts can be found to make the budget balance, Hawley said the town has enough un-appropriated reserve funds (beyond the 10 percent required reserve) to dip into that if necessary to balance the budget.
Hawley and Boyd said revenues, particularly meals tax and business license tax, have been “conservatively” estimated, so it is possible they will end up higher than projected. If that is the case, Hawley said the reserve funds will not be needed.
The proposed budget includes a half-step grade change for town employees, which accounts for about $15,000.
Welker said he feels it is important to include the grade changes in the budget to “get everybody where they need to be.”
Worrell agreed, saying, “we’re always saying we’re going to do it and we don’t.” He said he is proud of the budget in that the town isn’t having to furlough or cut staff positions like many other localities are having to do. Plus, he pointed out they were able to include a small pay raise for staff.
“If we don’t go with 30 cents (tax rate), there won’t be any pay raised or step changes, but if you keep doing that you can dig yourself into a hole over time,” he said. He also pointed out that a 30-cent rate on $100,000 of property value will result in a $20 tax bill increase under the new property assessments.

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Additional cuts needed to balance next year’s budget

Pulaski Town Council’s public hearing on its 2009-10 real estate tax rate isn’t until next Tuesday, but it appears the 30-cent advertised rate is the figure that will be needed to achieve a balanced budget.
Even with the rate set at 30 cents, the budget was still more than $158,000 “out of kilter.”
During a Tuesday afternoon work session, council members worked with Town Manager John Hawley, Finance Director Sherry Boyd and several department heads to find additional cuts to bring expenditures in line with the approximately $7.6 million in projected revenues for the next fiscal year.
Refinancing the remaining debt of a $5 million loan for the James Hardie project is a way council chose to bring revenues and expenditures closer together. Hawley said the town has a more than $300,000 balloon payment coming due during 2010 that could be reduced to about $63,000 if the remaining payoff is refinanced for five years.
Hawley said interest on the original loan was 3.7 percent and he hopes the refinanced rate will be around 4 percent. “It won’t exceed 5 percent,” he said.
Mayor Jeff Worrell said he thinks the refinancing is “definitely the way to go.”
Hawley said he is hoping to be able to use $93,000 in excess funds in the sewer account to cover the $63,000 because any sewer-related projects (except labor) the town covered at the Hardie site could be “reimbursed” from the sewer account.
Additional funds were able to be picked up in a reduction of the town’s Redevelopment and Housing Authority’s (PRHA) request for nearly $48,000 in the upcoming fiscal year. Town Council chose to, instead, level fund the authority at $5,000.
Councilman Morgan Welker said the authority’s request “sounds like an awful lot of money.”
Worrell agreed, saying “the timing couldn’t be worse.”
Hawley said the authority wants to hire an executive director by having the town dedicate one cent of the real estate tax rate to cover that position. However, he pointed out that one cent will not completely fund the position because only about 93 percent of that penny will realistically be collected.
Worrell said the PRHA request “keeps jumping out at me” when he looks for possible areas to reduce costs – “not because they don’t deserve it, but because it will require another penny of real estate tax increase.” He pointed out that PRHA has been willing to help the town with anything the town requested, “but that’s a big chunk.”
Welker said PRHA may need to “settle for some kind of part-time” position.
Worrell asked that Hawley find out how PRHA used the $5,000 allotted to them for the current fiscal year.
Hawley said he had requested a report, but hasn’t received one.
Another area Welker suggested Hawley consider making cuts, if possible, is in each department’s books and subscriptions.
The town newsletter, which hasn’t been published for a while, also was cut from the town council budget, freeing up $250.
At the end of the meeting, Hawley still needed to find about $52,000 in cuts to make the budget balance. If not enough cuts can be found to make the budget balance, Hawley said the town has enough un-appropriated reserve funds (beyond the 10 percent required reserve) to dip into that if necessary to balance the budget.
Hawley and Boyd said revenues, particularly meals tax and business license tax, have been “conservatively” estimated, so it is possible they will end up higher than projected. If that is the case, Hawley said the reserve funds will not be needed.
The proposed budget includes a half-step grade change for town employees, which accounts for about $15,000.
Welker said he feels it is important to include the grade changes in the budget to “get everybody where they need to be.”
Worrell agreed, saying, “we’re always saying we’re going to do it and we don’t.” He said he is proud of the budget in that the town isn’t having to furlough or cut staff positions like many other localities are having to do. Plus, he pointed out they were able to include a small pay raise for staff.
“If we don’t go with 30 cents (tax rate), there won’t be any pay raised or step changes, but if you keep doing that you can dig yourself into a hole over time,” he said. He also pointed out that a 30-cent rate on $100,000 of property value will result in a $20 tax bill increase under the new property assessments.

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