Strasburg discusses improvements plans
STRASBURG — The town is looking at ways it can go about fitting improvement projects into a five-year capital improvements plan.
During a work session Monday, Director of Finance Dottie Mullins and Acting Town Manager Jay McKinley presented two five-year scenarios to the council.
The scenarios included estimates for future as well as on-going projects such as the Route 11 gateway, the business park and the façade improvements.
“We acknowledge that we have a lot of needs,” McKinley said. “We’re just looking at the next … five years and whether or not we can fit these projects in.”
McKinley said the scenarios presented are “theoretical ideas” and ways to balance the budget if the town were to tackle all of the projects it is considering.
The primary difference between the scenarios was the inclusion of the business park — which was estimated for this scenario at $6 million for roads, water and sewage.
In order to balance the budgets in both situations, the town would raise taxes as well as water and sewage rates.
While explaining scenario one, Mullins noted, “The proposed rate of increase from these projects would be an increase in real estate tax of 3 cents in 2016.”
Mullins added that the town would need to increase the water rates by 3 percent each year and sewer rates by 5 percent each year beginning in 2017.
“What we’re shooting for at the end of five years is to be back in black, so that we’re not running negative in any of the funds,” McKinley said.
The town would also, Mullins said, “increase the sewage rates by 5 percent starting in 2017.”
In the second scenario, Mullins noted that they included the proposed business park — roads, water and sewage — “at an estimated cost of $6 million,” with a loan term of 20 years at 3 percent.
Councilman Robert Baker said, “We may even be premature in discussing this whole thing, because we don’t know what’s going to happen in the business park.”
The second scenario would cause a tax increase of 6 cents total between 2016 and 2020.
Tax rates would increase from 16 cents to 20 cents in 2016-2017. After that, rates would increase two cents to 22 cents between 2018 and 2020. Rates would then level off at 22 cents for 2020-2021.
Water rates would also increase 4 percent, while sewer raters would increase 5 percent starting in 2017, Mullins noted.
Councilman Scott Terndrup said that, to him, it is practical to balance the budget and tackle those projects over a period of five years.
Terndrup added that the town “needs to look at a 20-year timeline, not a five-year timeline. You have to let revenues multiply over time in order to pay for expensive projects.”
Newman agreed, saying, “Five years to do everything we want to do is … pretty ambitious.”
It was also noted at Monday’s meeting that the scenarios do not account for infrastructure improvements the town needs to make.
McKinley that the town has “lost revenue opportunities” from water leaking from the systems, representing “about $1.2 million per year.”
Based on town estimates for water usage, production and capacity, McKinley noted that for every 3 gallons the town produces, “one goes out in the ground someplace.”
“The only way we could benefit from that would be to shut the town down, haul everybody out, tear up all of the infrastructure and then put it all back in place brand new,” McKinley said.
Because of the long-term nature of the town’s infrastructure needs, McKinley added that he does not see this as “a revenue-maker for us in the short-term fix for the [capital improvements plan].”
Some council members indicated that the town should be focusing more on the infrastructure improvements in the short term.
Councilman Seth Newman said, “Every year that you don’t fix part of it, that’s just another year that something else is going to break and you just get further behind.”
However, by allocating funds in the budget for public works, McKinley said the town is “on the right track” in regards to water infrastructure improvements.
In the end, the council decided to take a closer look at the numbers presented to see if there are additional solutions beyond increasing taxes and water rates.
“We gotta decide whether we want to do all of it or whether we can afford to do a little bit,” Taylor said in regard to the improvement projects. “We’ll talk about revisiting it here soon.”
Contact staff writer Kevin Green at 540-465-5137 ext. 155, or firstname.lastname@example.org