Pikeville Town Board says tax hike could be likely next year
By Andrew Bell
Published in News on May 13, 2007 2:01 AM
PIKEVILLE -- The Town of Pikeville's Board of Commissioners said they will not only have to watch every dollar they spend during the next fiscal year, but also prepare themselves and the town for what appears to be an inevitable tax increase next year.
"Liars may number, but numbers don't lie," Town Administrator Bob Buchanan said during a meeting Thursday.
But aside from the talk of revenue and expenditures, commissioners spent much of their time at the meeting discussing how to rearrange the budget to provide the town administrator with a salary of $40,000 a year.
Current administrator Buchanan may resign from his post sometime in the next few months. Although there has been no official announcement and none of the commissioners would speculate as to when a change may occur, Commissioner Johnny Weaver said the town should be willing to advertise an acceptable salary if and when that day comes.
Buchanan's original recommendation to commissioners was to change some salaries across the board. Instead of a $40,000 salary, Buchanan recommended a $35,000 salary for the position. Police Chief Ken Barrett's salary would decrease from a requested $37,000 to $33,000 and his sergeant would earn $31,000 a year.
Weaver said that if Pikeville were going to lose good employees, lowering wages and salaries could have an effect on the town's ability to hire the best possible replacements.
Commissioner Bruce Thomas agreed, saying better candidates would be enticed to come to Pikeville if the town provided a higher salary than towns of similar size.
But Mayor Herb Sieger argued that Pikeville could only be a proving ground for administrators who stay for several years before moving on to a bigger municipality.
"We are going to get someone fresh out of school with no experience," Sieger said.
After discussing the matter, the majority of commissioners agreed to adjust the overtime compensation of the town's wastewater treatment supervisor to enable them to set the town administrator's salary at $40,000 .
But a bigger problem, officials said, is the need to reduce spending from town reserves and finding more sources of revenue.
Gary Pittman, the town's accountant, said the town will eventually have to find revenue sources to provide residents with the services and amenities they need and want.
"You can't have increased costs, increased salaries, nice parks and not have the money to pay for it," Pittman said.
The accountant and Buchanan agreed that revenue will need to increase by about $80,000 to supplement the fund balance spending and other expenditures.
While the funds coming from the town's water, sewer and electric services have continued to produce revenue, town officials said the general fund has become the biggest problem come budget time.
Whether it is money needed for parks and recreation, the town's cemetery, street repairs or the police force, those needs have to be funded through property and sales taxes.
As expenses and needs have continued to increase, the town has not generated enough revenue without the need to spend from Pikeville's fund balance reserve to fund the budget.
One of the expenses already considered for the next year include an upgrade to the town's electrical kilovolt system from 4 kV to 12.5 kV. That upgrade will allow the town to include more residential and industrial electrical customers, Buchanan said.
Although larger industries and more residential houses would help create more revenue for the town, Buchanan said Pikeville's wastewater treatment plant needs to be expanded so the town could accommodate a larger industry, which is something that isn't possible today.
But Buchanan said those expansions will need to be made in the next four to five years, which is another reason why Pikeville residents may see increases in their rates or taxes next year.
Other sewer line repairs throughout town should occur in the next year if the state legislature does not limit funding for the Clean Water Management Trust Fund. That fund provides grants to municipalities across the state to improve infrastructure needs. Since legislation in Raleigh is considering limiting the amount of grant money available, Buchanan said he did not budget for those funds yet.
But the town has not neglected to ensure improvements are being made to Pikeville. Buchanan said there are about $249,000 worth in improvements in the preliminary budget for the next year.
Town officials are considering using $15,000 to repair the town's backhoe, which has needed repairs for several years.
"We have to have it. This town can't provide service without a working backhoe," Buchanan said.
The town plans to also spend $35,000 each year for the next three years to supplement a grant that will improve the town's park. Initial plans include demolishing the old gymnasium and school cafeteria to make more space for a ballpark, which will be illuminated after three light poles are built. Water fountains, restrooms and dressing rooms would also be built.
The grant will also help build handicap-accessible ramps at the park's playground and a performing stage. Any other funds will be used to install a separate heating and air conditioning unit at the community building.
While there is still money available in this year's budget, Buchanan suggested to town commissioners to purchase a four-wheel drive, three-quarter ton truck. Aside from conducting town business, the truck would also be used for hauling equipment, trash pick-up and mosquito spraying.