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Council Finalizes Budget - No Tax Increase
Posted on 05/28/2021
budget discussionStatesville City Council finalized the 2021-2022 budget during Monday’s budget work session, deciding to leave the current tax rate and the $120 annual Solid Waste Fee intact. Council also decided that the proposed 20% increase in water/sewer rates was necessary.

In his proposed budget, City Manager Ron Smith recommended a 5.22-cent tax increase, as way to eliminate the residential Solid Waste Fee. This fee generates revenue equivalent to three and a quarter cents on the tax rate. He also proposed two additional pennies to pay for needed capital items, previously approved salary increases and the addition of new personnel.

At the start of Monday night’s meeting, Smith announced that revised revenue projections from Iredell County and Statesville Recreation and Parks allowed staff to drop a penny from the proposed tax increase. With a vote of 5-3 to retain the Solid Waste Fee, another 3.24 cents was also removed. Council then instructed staff to find an additional $225,000 to bring the budget down so there is no tax increase for the second year in a row.

A recent Water Asset Inventory revealed that the City’s aging underground infrastructure is badly in need of repair. The cost to fund these projects is around $12 million. Because the Water and Sewer user fees are the primary source for funding of the water/sewer system, a rate increase was proposed. Council recognized the impact of the problem and voted 6-2 to keep the proposed 20% increase in the budget.

Council also voted unanimously to borrow the money to pay for the new fire station, scheduled to start construction later this year. Originally, Council decided to use Fund Balance monies to pay for the estimated $5.7 million facility. Council determined that the loan terms were favorable and agreed that leaving the $5.7 million in fund balance will make it available for other capital needs.

The revised budget will be presented at the June 21, 2021 meeting for final approval.