City Manager Bailey suggests 5-cent hike in property-tax rate

Emphasizing a need to increase municipal wages and the removal of dilapidated buildings, Lenoir City Manager Lane Bailey unveiled his 2008-09 fiscal year budget proposal Tuesday night that requests a 5-cent property tax increase.

The plan was released at the Lenoir City Council meeting in the former council chambers at Lenoir City Hall.

The $25.93 million plan is a 10.6-percent increase above last year's $23.45 million blueprint. If approved as is by the city council, the property tax rate would rise to 59 cents (9.26 percent) per $100 valuation, meaning that a $100,000 home in the city would be assessed an extra $50 per year, or $590 in city taxes. A resident's total property tax bill, county and city, for the same example home would be $1,249.90.

The council has scheduled a budget work session for Monday, May 12 at 6 p.m. in the former council chambers on third floor of Lenoir City Hall. Other work sessions are set for Friday, May 16 at 8:30 a.m. and, if needed, at the Committee of the Whole meeting Tuesday, May 27 at 8:30 a.m.

By state law, Lenoir must have its budget in place before the beginning of the new fiscal year July 1.

In his written budget message to the council, Bailey said, “We have made improvements in the financial condition of the city during the past couple of fiscal years ... Now is not the time to stop moving ahead. Now is the time to keep moving forward.”

A key component of the budget request is a 5 percent increase in city wages, effective Jan. 1, 2009. Bailey said preliminary reports from a pay and classification study show Lenoir is behind other comparable sized municipalities in its wage structure.

Bailey believes the pay disparity threatens the city's ability to recruit and keep its workers. He said the study's final report will determine how and where the extra money will go.

“Retention is becoming an increasingly challenging issue,” Bailey said. “We are losing employees to other communities because of our pay scale.”

According to Bailey, 1 cent of the property tax increase would be devoted to demolishing decaying structures.

Broken up into three parts, the city's general fund has been budgeted for $17.06 million, up 11.8 percent from the current fiscal year. The downtown district gets $284,904 that includes a $240,504 transfer from the general fund.

Meanwhile, the revenue producing water and sewer operation is set to see an 8.7 percent increase in receipts to $8.82 million. The council previously has authorized a 4.6 percent increase in water and sewer rates. Bailey said the increase is not due to reduced revenues brought on by residential conservation of water due to the drought. He cites the rising cost of petroleum-based PVC pipe and improvements to the water and sewer system for the rise.

Other highlights from the budget include:

€ The addition of six new firefighters, paid for in large part by the federal SAFER grant.

€ A new public information position within the Economic Development Department.

€ Equipment items in the budget include, a sanitation truck and a leaf collector, along with a new tractor trailer for the Gunpowder Creek wastewater treatment plant.