To boost revenue, the city of Danville may look into increasing property taxes for the next fiscal year.
City officials met Thursday evening at city hall so each department could present its budget concerns, as the city begins the process of creating the 2013-2014 fiscal year’s budget, which must be completed by June 30.
City Manager Ron Scott told commissioners they should decide if they want to continue keeping property taxes at a compensating tax rate, which refers to the minimum property rate required to produce a revenue equal to the year before.
Scott said Danville’s current rate is about 13 cents per $100 assessed value, which is lower than most cities similar in size to Danville. The average home in Danville is worth about $200,000 which would generate about $250 a year in taxes.
Scott is advocating the city consider implementing what is called an “allowable rate,” which calculates what tax rate is needed to produce a 4-percent increase in revenue. Scott said the exact rate would be calculated by the state, but he estimates it would add about $53,000 in revenue to the $1.3 million the city is generating from property taxes now. He said the amount added to each homeowner’s tax bill would be so minimal they “likely wouldn’t even notice it.”
“We’re not keeping up with inflation,” Scott said.
He said the city needs to “step back and say, ‘Should we raise that or not?’ Look at what our needs may be and keep an open mind.”
Scott said that was just one of his suggestions to bring in some revenue as the economy picks back up.
He also addressed a popular concern of local residents, which is the alcohol tax. In the 2012-2013 fiscal year, the city generated $506,000 in alcohol tax revenue. As Scott has explained in past meetings, he reminded commissioners there would be “no rationale in reducing it.”
Scott said the tax provides an important source of revenue for the city. In addition, he said Danville has been wet a short while and needs to wait out any major decisions on fees.
Scott briefly touched on a few other suggestions, such as maintaining family health coverage for city employees, updating computer software, adopting a new 911 center agreement, implementing trails around the city, and expanding or building a new swimming pool.
He said an important question for this fiscal year is, “What do we do with our neighborhood parks?” Scott asked the commission to review his outline, offer suggestions and bring ideas to the next City Commission meeting on March 25.
Mayor Bernie Hunstad said it would be difficult to deviate from the budget too much.
“Ninety percent of our budget is fixed on the things that we have to do,” he emphasized.
In other departmental budget news:
* City Clerk Donna Peek said the city is in the process of hiring an assistant city engineer. She said with limited staff the city does “a wonderful job” at multitasking.
* Danville Police Chief Tony Gray said his department’s main concern is operating with enough personnel. He said the department needs at least 32 employees and the budget allows for 34.
“We are five persons short currently,” he said, adding there is a recruit in the academy and the department is screening background checks on recent applicants.
The department’s lack of officers is not a financial issue, he said, but rather an issue of retention. Gaining more officers will hopefully offset the department’s retention rate, because officers won’t feel as overworked, he said.
* Danville Fire Chief Woody Ball said most of the fire department’s expenses are personnel, as well. He also said the department will be needing a new fire truck soon.
* Director of Communications Robin Parks said the 911 center lost a quarter of its employees last year, but call volume increased.
“Manpower is our issue, and it always has been,” she said, explaining the center needs more employees.