Multiple town tax hikes proposed

Published 6:36 pm Tuesday, April 30, 2019

By Frederic Lee

Staff writer

Smithfield Town Manager Brian Thrower is proposing both tax and utility rate increases to fund new personnel, a town hall renovation to create a mayor’s office, staff pay raises, increased water and sewer operating expenses and more.

Thrower proposes a 19-percent increase in the real estate tax rate, adding 3 cents, from 16 to 19 cents per $100 in value, plus a 3-percent increase in water and sewer rates, as well as a 43-percent hike in the cigarette tax. 

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The increases are needed to support a $13.6 million general fund budget for fiscal 2020, up 18.6 percent from this year’s budget of $11.46 million. {mprestriction ids=”1,2,3,4,5,6″}

Mayor Carter Williams and several Town Council members balked at the tax rate increases, but other members called them unavoidable. 

The proposal of a town hall renovation plan at 310 Institute Street, financed in fiscal 2020 in the proposal, also came under scrutiny by council members. 

Presented during a budget work session Tuesday, the 3-cent real estate tax increase would create an additional $332,406, according to Thrower. The added revenue, he said, is based on a 98-percent collection rate. 

“Looking at the last time the town did increase property taxes, from my records, the last real property tax increase was FY 1995,” said Thrower, adding that back then, the Town Council that was in place raised it from 22 cents to 23 cents, and that it has since been decreased to the town’s current 16 cents per $100 of assessed value. 

Thrower said that increasing the real estate tax rate would make it equal to the average rate of towns in Virginia, based on locality data from the Weldon Cooper Center for Public Service. 

Thrower’s proposal estimates that an increase to the cigarette tax, from 35 cents a pack to 50 cents a pack, would generate an additional $75,000. 

Combined, the additional revenue generated from the increases would equal $407,406, with the net increase to the town’s operating expenses proposed at $405,770.   

Town Council member Randy Pack said that he’d be willing to bet that no council members were excited about raising taxes. On raising the real estate tax, he said, “Is it something that we’re going to have to do eventually? Probably.” Pack then referenced a recent property value reassessment that showed a 2-percent increase in value to single family homes in the town of Smithfield. 

Later on, Pack argued for delaying the town hall renovation project until money was freed up by the completion of the Pinewood Heights relocation project as a way to avoid raising taxes now. Williams also said that once Pinewoods Heights is complete, more money will be freed up for future projects. 

“We eventually are going to have to do something to increase our revenue,” said Town Council member Denise Tynes, adding that, “In the last 10 years … we have added a beautiful park, we’ve upgraded The Smithfield Center here, we’ve built a sports complex for the youth, but we have not raised taxes, okay? Ask yourself that question. Where have we taken the money from?” 

“If we raise taxes,” said Tynes, “citizens are going to be upset, but eventually, we’re the ones who are going to have to get out there and explain to them why we are doing these things.”

According to a memo from Thrower about the proposed budget, the additional revenue is needed to fund personnel items such as a 2-percent cost of living and a 1-percent merit-based personnel raises ($88,740), a new Parks and Recreation maintenance specialist ($43,242), personnel health insurance premium increases ($37,719), a Windsor Castle Park site manager ($25,835 for half a year), employee recognition funds ($15,000) and other staff adjustments, valued at a combined net increase of $224,764. These changes, plus $106,006 in debt service to finance town hall renovations in fiscal 2020 and a contingency of $75,000, have the budget proposal showing a net increase of $405,770 to town expenses.  

A proposed town hall renovation would create a mayor’s office, currently nonexistent, and relocate the town manager’s office to 310 Institute St. from 911 South Church St., among other modifications. 

Preliminary budget estimates for the town hall renovation expense the project at $625,000, with $361,000 going toward the actual renovation, $125,000 for the painting and carpeting of non-renovated spaces, $50,000 for design fees, $25,000 for mechanical, electrical and plumbing fees, $27,900 for furnishing plus a 10-percent contingency of $36,100. 

Tynes questioned the need for a mayor’s office in the town hall renovation plans, calling the position “ceremonial.” 

“It’s not ceremonial,” replied Town Attorney William Riddick, and Williams said that as the town grows, there’s an increasing demand for a private meeting space for the mayor.

Tynes later argued that the town should consider putting off renovating 310 Institute St. and instead contribute the $625,000 for that project towards a new town hall building. “Right now we have parking issues downtown, major parking issues. Where are we going to put the people … There’s no parking there,” she said. 

Thrower said that because of the “terrible” condition of 310 Institute St., there needs to be something done in the immediate future, adding that the notion of building a new town hall is many years out. “You’ve got to do something with that current building,” said Thrower. 

Proposed capital expenditures for fiscal 2020 include the town hall renovation ($625,000, to be financed), treasurer’s office software conversion ($66,850), two new police vehicles ($66,000, combined), an alternatives analysis for the town’s portion of the proposed Park to Park bike and pedestrian trail ($226,000, including VDOT funds), work on the Route 10 bypass intersection at Benn’s Church Boulevard ($884,800, including VDOT funds), the Joseph W. Luter Jr. Sports Complex turn lane ($1.05 million, including VDOT funds), Phase 4 of the Pinewood Heights relocation project ($2.4 million, including Virginia Department of Housing and Community Development funds), a truck for the town’s Parks and Recreation department which, according to Parks and Recreation Director Amy Novak, is currently without one ($26,000), vinyl tile for The Smithfield Center ($26,000) and dam alteration permit documents for the Public Works department ($315,000).  

Town Council and staff also discussed limiting or even cutting funding to some civic organizations, but council did not come to a firm consensus one way or the other.

The next budget meeting is on Tuesday, May 7 at 5 p.m.   {/mprestriction}