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Posted April 9, 2014 | Leave a comment
Edinburg leaders look to raise vehicle tax, utility rates
By Alex Bridges
Edinburg residents may pay more next year for utilities and in vehicle taxes.
Town Council voted this week to advertise a public hearing for proposed tax rates, utility fees and a 2015 budget. Council proposes to increase the personal property tax from 90 cents to $1.08 per $100 of assessed value, Town Manager and Mayor Daniel Harshman said Wednesday.
The town will hold a public hearing on the proposed rates and the fiscal 2015 budget on April 23.
Harshman's proposed fiscal 2015 budget includes funds to give a 2 percent salary increase to the town's nearly dozen employees. The current budget allocated money for a 1 percent raise.
"We've got a very hard-working, very small group," Harshman said at council's regular meeting on Tuesday. "I think they deserve way more than that but we can't afford it."
An increase in the personal property tax rate should give the town about $16,000 in new revenue, Harshman said.
"Being a small town, small amounts mean a lot to us," Harshman said.
Council chose not to change the town's real estate tax rate. Harshman pointed out that Shenandoah County recently began efforts to reassess real estate values.
"We're staying away from the real estate tax," Harshman said. "We want to see what the reassessment does and also the county proposing [a real estate tax increase].
"I think that part of the rationale for personal property tax was that fact that it kind of spreads an increase over a lot of the people that don't own real estate, the renting population of the town," Harshman said.
The town also seeks to increase what utility customers pay for the minimum amount of water and sewer used per month. The proposal calls for the town to increase the minimum water-use rate from $22.75 to $24.75 per month. Sewer service would increase from $21.75 to $24.00 per month under the proposed rates. Edinburg deems the minimum use for each utility as 3,000 gallons per month. If approved, a customer using the minimum amount for both utilities would see his or her water and sewer bill increase from $44.50 to $48.75.
The town needs to raise more revenue for its water and sewer service to pay for ongoing maintenance of its utility system. The water treatment plant went online in 1998 and the town upgraded the facility in 2002, Harshman said. The town continues to spend money to maintain the plant. Harshman said the membrane plant comes with maintenance issues.
"One of the things that we've discovered there is initially, when everyone put those membrane plants online, we were all told that the membranes were going to last at least 10 years and they were going to go down in price," Harshman said. "The next time we were told, 'well, maybe it's not 10 years; maybe it's only five years.' Now, in three years, you better be thinking about replacing them and they haven't gone down in price."
The town's plant uses 30 of the membranes to treat the water it distributes to customers. Each membrane runs about $1,200.
The town needs to keep up with maintenance of its sewer plant, built in the late 1980s. Edinburg has made some changes to the plant in order to meet stricter regulations on the amount of e. coli allowed in the water released from the facility. The town spent about $40,000 in the current budget cycle to make improvements to the plant. But Harshman estimated the town spends about $5,000 per week on repairs to it.
"We're going to hold off on having to upgrade for as long as we possibly can because ... we're talking about big bucks," Harshman said. "For a community that has such a small tax base as ours, and a small customer pool, that would be a really hard thing for us to take along."
Town Council also may consider approving a budget for fiscal 2015 that calls for Edinburg to spend less money than in the current period even with the rate increases. The current budget includes $815,607 in the general fund. The town proposes to spend $774,323 in the general fund. Spending by the town's utilities would decrease from $580,000 in the current budget to $575,000 in the next fiscal year.
Harshman attributed the decrease in the budgets to spending items that won't appear next year. The town borrowed $50,000 for the current budget to make utility repairs. The town also collected additional revenue in water and sewer tap fees from a small housing development, Harshman said. Edinburg also received a winfall from the state as a result of snow removal. The Virginia Department of Transportation reimburses the town when Edinburg performs snow removal.
"It's not that we're talking about spending less money; we just know we're going to get less in," Harshman said.
Contact staff writer Alex Bridges at 540-465-5137 ext. 125, or firstname.lastname@example.org
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