Commission tackles budget; public gets chance for input

By Kathy Helms-Hughes
and Thomas Wilson

STAR STAFF
khelms@starhq.com;
twilson@starhq.com

   Carter County taxpayers will have opportunity to voice their opinions on the proposed 2003-2004 budget at a public hearing to be held at 6 p.m. June 30. The meeting will be held prior to a special session of the County Commission, which will meet at 7 p.m. to adopt the budget.
   Persons wishing to express their views must submit a written request to County Finance Director Jason Cody five days before the June 30 meeting.
   Cody said Friday that the county slightly missed the legally designated 10-day window to advertise a public hearing on the county budget. "In the 1981 (Financial Management) act there is a requirement of having an additional public hearing before the Budget Committee before it is voted on," he said. "You have to have a public hearing with the budget committee for citizens who want to express their opinion."
   The Budget Committee, which traditionally holds unannounced public meetings one hour prior to County Commission meetings, will meet at 6 p.m. tomorrow, followed by the commission meeting at 7. It will be the first time the full commission will get a chance review the 2004 budget as one body.
   "I think there will be some light discussion since we've had several different workshops," Cody said.
   The county's Buildings and Grounds Committee on Friday approved three items Cody said would be brought before the full commission and funded under this year's budget.
   The committee will request the commission appropriate $4,500 to purchase an approximately half-acre tract of land off U.S. Highway 321 in Little Milligan. The property tentatively would be used for a fire department/emergency medical service site to provide fire and rescue service between Hampton and Elk Mills.
   Other proposals include renovating the first floor of a county-owned house behind the Courthouse and expansion of the Register of Deeds office. The committee voted to renovate the house with an HVAC system before relocating the offices of planning and veteran services from the second floor of the Courthouse, where they are presently located.
   In previous budget workshop meetings, committee members discussed a 1.5 percent cost-of-living increase for all full-time county employees, including school paraprofessionals. The committee also voted to hold the county property tax rate at $2.22 per $100 assessed value and to move 4 cents from Debt Service to the General Fund to try to improve the fund balance.
   The $2.22 tax rate would include 72 cents for the General Fund, 8 cents for the county road fund, $1.24 for schools, and 18 cents for Debt Service.
   Key assumptions in the Fiscal Year 2003-2004 budget include a 12-15 percent increase in health insurance, a 3 percent increase in Worker's Compensation, no longevity pay, a 3.5 percent interest rate assumed for debt, and a 98 percent collection rate for property tax.
   The proposed budget includes a $5 increase in tipping fees for the Elizabethton/Carter County Landfill -- from $25 per ton to $30 per ton.
   "Most people, if they take a quarter-ton truck, let's say, it's basically $1 a load," Cody said at a previous committee meeting. The increase is not out of line with what is charged by other areas, he said, and will help defray maintenance costs on heavy equipment.
   Most county departments which get their money from the General Fund will be taking a 2 to 3 percent cut, if the proposed budget is approved. Also planned is a 5 percent cut to most outside agencies, with the exception of Dawn of Hope, which was cut completely.
   The budget committee did vote after lengthy discussion to restore proposed cuts of $1,875 to each of the county's seven fire departments.
   As the budget committee and county commission grapple with the 2003-2004 budget, Cody said they also need to be forward thinking in regard to capital projects.
   At a previous meeting, Cody said, "One thing to remember is we will have a note that will be taken off of our books in August 2004. It was originally issued for $6 million." The county recently took advantage of lower interest rates and refinanced $1.2 million of the Hampton school note through Security Federal, saving more than $20,000.
   Once that note is paid off, the county probably will have to look at spending money on the Carter County Jail. "There's a lot of research being done right now. We're not certain what those solutions are," Cody said. "The construction option obviously is one route, but there are other alternatives that are being researched as well."
   Cody said there also has been talk of building a new school, possibly replacing Unaka Elementary. Commissioner Jo Ann Blankenship, who attended the meeting, said Unaka Elementary is "not a good school for learning in the technology age." Also, she said, because of the gym's condition, "It's very difficult to concentrate on ball games."
   Commissioner Jeff Treadway, who also is on the budget committee, said, "There are different ideas, I guess, about what to do with that money once we have the loan paid off. We've got two different notions here: Schools and jails. We are going to have to do something with our jail.
   "I know this won't be popular, but I really think we ought to look at it right now, before we're mandated or required, or somebody else tells us that we need to look at capturing some revenue to take care of something we know they're going to get us for."
   Cody and Commissioner Amos Stevens, who also was in attendance, agreed.
   But the reality of any capital project is that it is going to come with a price tag, which must be measured against projected revenue.
   "We're looking at a 2 percent growth rate for our revenue in general," Cody said. "Probably the biggest challenge is that your expenses for major items like health insurance tend to grow faster than your revenues. So it's one of the things that you have to struggle with in trying to balance and maintain your cost."
   Interest rates can be forecast at 3 to 5 percent for municipal rates. "Right now we're closer to the 3 percent level, but as you extend the term, you're probably getting closer to that 4 to 5 percent. Really what drives your forecast when you're planning ahead is what capital projects you choose," Cody said.
   Another consideration is state budget cuts. "I don't know if anybody really knew probably a year ago that we would be faced with some of the cuts that we're faced with now," he said.
   Cody gave committee members a preview of dollar amounts, financing terms, and potential impact to the property tax rate.
   To finance $6 million over 12 years at 5 percent would be a 14-cent increase in the property tax rate, he said. "That's just basically to cover the additional debt service of that note, the principal and interest on it. That's a 6 percent increase based on our current property taxes of $2.22.
   "To finance $9 million over 15 years at 5 percent is almost 18 cents in property tax, and that's just to cover the principal and interest from year to year," he said. That would be an 8 percent increase in property tax based on our $2.22 number."