Claremont
If the council formally votes to add the revenue before finalizing the budget this month, it would reduce the estimated tax increase to around 40 cents from 74 cents, a $60 annual increase on a property assessed at $150,000.
City Manager Ryan McNutt’s proposed spending plan will be presented at a public hearing on June 13, with the possibility the council will approve a budget that evening for the fiscal year that begins July 1. A 40 cent tax increase would bring the municipal rate to $15.24 per $1,000 of assessed valuation.
On Thursday, the council had an in depth discussion about adding non-tax revenues based on actual amounts from previous budgets that have come in higher than estimated.
Assistant Mayor Allen Damren first recommended four areas to add the money — yield taxes from timber cuts, interest on taxes, licenses and permits and department revenues — but accepted a recommendation from Finance Director Mary Walter and McNutt to add the money to the bottom line. Walter and McNutt would then determine which revenue line items it should be applied to.
Walter said interest on taxes — which increase in a good economy as people have a better ability to pay — and motor vehicle registration fees are the two areas that are most likely to come in above estimates.
Walter said the city registers 15,000 motor vehicles a year and in a strong economy with low interest rates, the city registers more new vehicles which brings in higher revenue.
“Those are the two areas you would have the flexibility to be less conservative,” Walter said.
Damren said $290,000 was a reasonable and realistic figure.
“I am doing that trying to keep a number conservative and if I wanted to be ‘unconservative’ I would be proposing much more in comparison to previous years,” Damren said.
On Friday, Walter said she prefers conservative revenue estimates because she can’t “control” revenues the way she can expenses. When revenues come in above estimates, the city can build up its reserves but when revenues fall short, it affects the tax rate projections.
“I don’t like putting up front a tax rate I can’t meet or having to request a deficit appropriation,” Walter said.
Mayor Charlene Lovett said the city has had lean budgets for the last several years with no appreciable expense increases and now it is time to be more aggressive on revenues.
“If we do the revenue a little bit differently and look at the trends and take the conservative approach, we are not suggesting adding more than the lowest figure. But if you budget revenues and pay attention to them as much you do expenses, maybe that will push initiatives a little more on how to increase your revenues streams,” Lovett said.
“You can just vote $290,000 and I’ll add it anywhere but it might not be real by year’s end and I’ll be coming back to you,” Walter said. “And it means that much more won’t be dropped into fund balance.”
Damren, a former business manager with the school district, said his goal was to cut the estimated tax rate increase.
“What I am trying to get to is some kind of balance,” Damren said. “On the front end, it seems to me with property tax increases the way they are, this budget does a lot of very good things and I just think we ought to go carefully and give citizens an easing of that initial tax burden. Eighty cents or whatever is proposed is way too much,” Damren said.
On the expense side, the council discussed at length a position budgeted for $70,000 to assist city employees with legal issues that is in this year’s budget but never filled. A motion to cut the figure by $20,700 because the person would not be hired in the first quarter of fiscal year was tabled because the council wanted more information on the position, which is not an attorney but a legal assistant.
Without a full-time attorney in house, Walter said employees without legal training have to make decisions on hiring, assessing, writing ordinances and more and she worries about putting the city in jeopardy.
“We don’t have anybody with enough legal experience. We really need somebody,” said Walter in response to a statement by Lovett that she didn’t think the position was necessary at this time. “When you don’t do things right, you open yourself up for a potential lawsuit.”
Patrick O’Grady can be reached at pogclmt@ gmail.com.
