News

Hendersonville, Laurel Park raising taxes by 3 cents

By Bill Moss and Miranda McFalls, Published: June 5, 2014

The Hendersonville City Council adopted a 2014-15 budget on Tuesday that raises the tax rate by 3 cents per $100 valuation, an increase city leaders said was needed to cover this year's expanding debt payments and catch up on road paving.

Meanwhile, Laurel Park residents will see a 3-cent property tax increase if the Town Board adopts a proposed $2.2 million budget when it meets on June 17.
The budget would raise taxes to 39 cents per $100 valuation — or about $68 a year for the average household, town officials said.
The Hendersonville City Council booted a recommended 3-cent tax increase last year, choosing in an election year to balance the budget instead with reserves. In a work session last month, council members agreed that they could out off the increase no longer. The city's debt service rises by $453,791 this year as the city pays off money it borrowed for the last two blocks of the Main Street makeover, a new fire station on Sugarloaf Road and a fire truck. No one spoke against the budget during a public hearing Tuesday. Besides a 5 percent across the board cut of department heads' proposed 2014-15 spending, City Manager John Connet recommended delaying $300,000 worth of improvements at Berkeley Park.
As in Hendersonville, Laurel Park Town Council members chose to leave the tax rate the same in 2013 but they have agreed on a 3-cent increase in a budget they're expected to adopt on June 17.
The increase covers pay and benefit increases for employees, fire protection for residents and health care premiums for town employees, town leaders said.
In the past two years, the town has absorbed higher costs equal to a half-cent worth of property tax revenue for fire service, 2 cents in health insurance premiums and 1.7 cents from employee raises based on a pay and classification study. Water and sewer rates are unchanged in the proposed 2014-15 budget.
Despite the tax raise, the proposed budget of $2,160,900 is $5,000 less than the current year's budget. The difference is the Town Board is not using reserves to balance the budget, which covers July 1, 2014, to June 30, 2015.
Mayor Carey O'Cain defended the tax increase, saying the town board wanted to avoid any further drawdown of reserves.

"Three major factors will require a budget increase for this fiscal year," he said. "The first increase to the budget is for fire protection for our residents as approved by the Henderson County Board of Commissioners. Second, health care premiums for the Town employees have increased 29 percent over the last two years. In 2013, the increased premium was $42,000 followed in 2014 by an additional $32,000.
"Finally, in 2011 the Town Council initiated a pay and classification study to evaluate the Town's employee salaries and benefits in comparison with other municipalities in Western North Carolina. The results of the study indicated that the Town needed to increase the pay and benefits in order to maintain a suitable work environment and to minimize employee turnover. This pay and benefit restructuring was initiated in 2012 and fully implemented in the current budget year at an average cost of $60,000 annually."
The council decided that it should not use reserves to balance the budget.
"The Town of Laurel Park, unlike many municipalities, has no debt and therefore, no debilitating debt service," the mayor said. Instead, the town saves up money for a period of years to replace aging equipment on a planned schedule, he said.
Included in the improvements is street repaving, set for this summer.
"The main thing is that [the tax increase] is going to help maintain the town's financial stability and security," said Town Manager Alison Melnikova. "We can start tackling our ongoing needs in terms of road maintenance and improvements."
The town will start on Hebron Road and Laurel Park Highway and after bids come in determine what roads it may get to next, Melnikova said. In the planning stages for the new budget year, too, is a renovation to make Town Hall handicap accessible.
A public hearing for the budget and tax increase is set for 9:30 a.m. on Tuesday, June 17, at the Laurel Park Town Hall.

Laurel Park budget

Total budget: $2,160,900

Revenue sources: property tax, $1,325,500; sales tax, $500,500; beer and wine tax, $8,000.

Tax rate: 39 cents per $100 (up 3 cents)

Cost per average homeowner for tax increase: $68

Public hearing: 9:30 a.m. Tuesday, June 17.

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Hendersonville budget

Total: $34.7 million

Tax rate: 41 cents (up 3 cents)

Highlights: Debt service grows by $453,791 in 2014-15; city will spend $700,000 to buy and clear an acre of land for the Wingate-BRCC-Pardee health sciences building; $150,000 of tax increase goes to street paving.