Last updated: June 05. 2014 2:33PM - 425 Views
By - cberendt@civitasmedia.com

Chris Berendt/Sampson IndependentThe Clinton City Council listens to a presentation of the recommended 2014-15 budget, which includes no tax hike, during a public hearing earlier this week. The budget is scheduled to be adopted later this month.
Chris Berendt/Sampson IndependentThe Clinton City Council listens to a presentation of the recommended 2014-15 budget, which includes no tax hike, during a public hearing earlier this week. The budget is scheduled to be adopted later this month.
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A no-tax hike, no-change City of Clinton budget was officially presented to the public at a required hearing this week, around the same time news began to trickle down to towns across the state of legislative action that would adversely impact key revenue streams.

Senate Republicans have unveiled a wide-ranging tax bill that would eliminate next year the authority of North Carolina towns and cities to levy local business taxes, called privilege license taxes, not only scale it back like the House agreed.

Last week, the Senate Finance Committee approved legislation that makes adjustments to last year’s tax overhaul, creates a new excise tax on the nicotine cartridges for electronic cigarettes and eliminates a House tax break for people who buy manufactured or modular homes.

The biggest budget-shaker, however, would be the elimination of the privilege license taxes.

The House approved a version last week that limits municipalities to setting privilege license taxes to $100 annually per business starting July 1, 2015. The Senate wants to eliminate such taxes all together on that date, which could mean a cumulative loss of $62 million annually for N.C. cities.

For the City of Clinton alone, it would mean an annual revenue loss of $120,000. Other towns in Sampson would take similar hits.

According to city manager Shawn Purvis, effective immediately, the city only has authority to levy a privilege tax on companies with a physical office in Clinton. In the past, that tax was on any entity conducting business in the city, regardless of their physical location.

“This will create the need for an adjustment of about $7,000 for this year,” Purvis told the Independent. “We will have to monitor the potential effect on (2014-15). Because of the way the tax is billed, the invoices are sent out in June for the upcoming year. If the law stays as is, we will have to make adjustments for 2014-15 because the invoices in June of 2015 would be for licenses in 2015-16, which is the year the authority repeal begins.”

Purvis said city officials have been told by representatives in the General Assembly that they expect to address the lost revenue as one of the first pieces of business in the 2015 long session.

“If a resolution for restoration of revenue is not devised by the (General Assembly) early in 2015, we may have to look at an adjustment of approximately $120,000,” Purvis stated. “This is nearly 2 cents tax rate equivalent. We are hopeful the General Assembly will present cities with an avenue to recoup revenue in a fair manner.”

The budget

In outlining the budget to City Council and the general public earlier this week, Purvis noted the tax rate would stay firm at 40 cents per $100 valuation.

The 2014-15 recommended budget totals approximately $13.7 million for all city operations, capital improvements and debt service requirements, about $1.14 million, or 7.7 percent, less than the 2013-14 amended budget.

“The budget is fiscally sound, and although it does not fund all the requests made by departments or external agencies, it does address the top priority needs of the city and will allow us to maintain a high level of service for Clinton citizens,” Purvis stated in his budget message.

There is a recommended 1.5 percent hike in water and sewer rates, specifically an increase in water base rates from $12.19 to $12.37 and sewer base rates from $12.70 to $12.89. Water and sewer consumption rates would also rise from $1.83 to $1.86 and from $1.78 to $1.80 per 100 cubic feet, respectively, under the proposed plan.

The recommended budget includes $150,000 from fund balance for capital expenditures, specifically $50,000 for a new fire engine and the remaining $100,000 for other vehicles and equipment.

In addition to vehicle requests to update the citywide fleet, other budget highlights include:

• $171,500 for street resurfacing

• $50,000 to construct sidewalks along Barden Street

• $1.7 million to replace water lines throughout various city neighborhoods

• $2.4 million (USDA loan) for the water plant and well site expansion, half the entire $5 million project cost. The entire project will take about 18 months to complete and will be over the course of two budget cycles. The Southwood elevated tank, for which the city previously received a zero percent interest $1.77 million state loan, will be constructed at the same time as the water production expansion project.

As he wrapped up his presentation on the General Fund, Purvis pointed to city operations as being highly efficient despite economic distresses of recent years.

“If there ever is an argument with ‘we’ve done more with less,’ this is it,” Purvis said. “We’ve really worked hard, we’ve been efficient. The cautionary part of this is there is always a baseline and I would offer, if we’re not there, we’re very close to it.”

In other business this week, the City Council:

• approved a conditional use request by Regina Lucious to operate a recording studio located at 211 Vance St., in a CB Central Business District, with the stipulation that certification be presented that verified the studio’s soundproofing.

• tabled discussion on the adopting of the Clinton Recreation Department’s naming rights’ policies and procedures to further consider length and cost of naming rights’ contracts. The proposed policy will likely be taken up again at the Council’s June 17 meeting, where the budget is expected to be adopted.

Chris Berendt can be reached at 910-592-8137 ext. 121. Follow us on twitter @SampsonInd.

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