Property tax discount may be abolished

By Thomas Wilson
STAR STAFF
twilson@starhq.com

   Diminshing returns and stagnated sales tax revenues are requiring City of Elizabethton administration to find savings wherever possible.
   The city's finance department will recommend to City Council Thursday night the elimination of the 2 percent discount given to citizens who pay their property tax within the same month in which they are billed.
   "As long as we were gaining 6 or 7 percent on our investments it wasn't that bad," said Bradley Moffitt, city clerk and director of finance. "This year we are gaining less than one percent on our investments. We can't afford to make that up in volume."
   Eliminating the discount will effectively save the city $20,000. The resolution was factored in to balancing the city's 2003-2004 budget. The city's general fund for fiscal year 2004 is $11.8 million -- including an 11 percent reduction in various city departments from last year. The city's 2002-2003 general fund budget was cut by 13 percent from the previous year. City finance and administration have sought avenues to balance the city's budget.
   Moffitt said he expects to present new proposals to redefine the city's land line and cellular telephone systems to save money over the next five years.
   Both proposals would likely come up for council consideration in August, Moffitt said. "In the next three to six months, we likely will be coming back with a proposal on our computer systems because we can't afford the maintenance we are incurring on it," he added. "Those are the only three rabbits I've got to pull out of the hat."
   In other cost-saving moves, Moffitt will present the Council an option to refinance over $2 million in general obligation bonds issued almost five years ago. The city offered $2.275 million in general obligation bonds in December 1997 through Cumberland Securities of Morgan-Keegan firm. The city will present two refinance options from Morgan-Keegan and Coastal, a Texas-based investment firm that recently opened a branch office in Tennessee. Coastal estimates total savings of $97,712 while Morgan-Keegan estimates savings of $98,924 for the city.
   The bonds issued funded $1 million capital improvements to the city school system, $425,000 to purchase a new fire truck and $800,000 to fund utility and street infrastructure improvements in the Blackbottom community. The city has an outstanding principal of $1.8 million with a total debt service just over $2 million for bonds.