The Foxfire Village Council unanimously approved a three cent tax increase following a public hearing and adoption of the Fiscal Year 2012-2013 Budget before a supportive crowd on Tuesday, June 12.
Based on the new rate of 35 cents per $100 valuation, the nearly $1 million dollar budget includes funding to purchase a new police vehicle, demolish the unplayable tennis courts, upgrade the community website, increase road maintenance work, and meet the Village's debt service obligations.
Finance Director Leslie Frusco said the Council did not reach the decision to raise taxes easily or lightly.
“It was 2004 when we had our last tax increase," Frusco said, "when the rate went to 32 cents. It has not changed since that time. Foxfire has the second lowest municipal tax rate in Moore County and will continue to do so even with this increase.”
“I believe this Council is very cognizant of the impact; but it is clear to us, from long range planning and the survey report, that even though we must focus on debt service, we can’t do that to the detriment of the existing village. We can’t forego mowing or all road service. It is not in our best interest to shut down the pool or let it go. These things need to be maintained.”
The three cent increase will result in $90 in additional property taxes per year for a $300,000 home; or $45 additional per year for a $150,000 condo.
Debt service remains a top concern
Debt service on the Woodland Circle extension road loan has been an urgent concern in the budgeting process following the donation of a 160-acre parcel to the Village in lieu of the $1.4 million assessment on the property.
That property remains for sale, listed with a local agent. Frusco has taken proactive steps over the past two years to manage the unanticipated debt load, by negotiating for two years of interest-only loan payments, paying down the principal using a portion of the Village’s fund balance, re-amortizing the loan, and successfully requesting a lowered fixed interest rate.
During the public hearing on the proposed budget, only one resident spoke, offering conditional support of the increase.
“I know the Council worked long and hard on this, but I would hope the tax increase is focused on servicing our debt,” said former Councilman Ed Lauer. “When that is serviced, I hope that we, as a Village and Council, will consider a reduction based on our property values and everything that goes into that process.”
“I urge you to focus the tax increase on debt reduction. I support it 100 percent on that basis. I feel very strongly that we need to get that debt put behind us,” he said. “But I don’t want those taxes going to something we’d like to have . . . $90 more on a fixed income can be a lot. I’m not criticizing the budget, but I just hope the focus is on getting us [financially] healthy.”
Frusco said she understood those ramifications and also had undertaken a substantial analysis of the Village fund balance.
“I wish I could tell you when we will sell that property, but I can’t give you that timeline," she said. "Once it is sold, those funds will go toward paying off the debt. This has not been an easy decision.”
Total debt service includes the Woodland Circle loan at $1,897,527; the Village Green Park loan at $180,000; and water system loans at $388,621.
Fiscal Year 2012-2013 Budget
Offering a brief summary of projected revenue, Frusco said the total budget of $949,125 assumes a collection rate of 97 percent on real and personal property taxes and 100 percent of motor vehicle tax -- which, taken together, represent 59 percent of revenues. Additionally, Foxfire Village will receive $150,000 in local option sales tax, plus unrestricted state revenues of $56,000 and an estimated $39,000 in Powell Bill funds, which are restricted to road maintenance projects. Woodland Circle assessments are anticipated to bring in $94,500, and $39,500 will be appropriated from the fund balance.
Projected expenses include an overall five percent reduction, primarily due to a major decrease in the streets budget.
The salaries budget also shows an overall decrease of $11,292, based on a decrease in the required retirement contribution rate and no separation of allowance payments; however, Village employees will receive a two percent salary increase.
Administration costs, anticipated at $176,395 and representing nineteen percent of total expenses, are also expected to decrease by five percent, primarily, Frusco explained, because there is no unemployment insurance or election expenses in the new fiscal year. Planning and zoning services have been contracted to the Village of Pinehurst with pass-thru costs paid by building permit fees.
Public safety expenses – representing the bulk of the projected total budget at 34 percent -- includes $214,900 for the police department, with a twelve percent increase for the purchase of a new police vehicle. The cost of contracted fire service with West End Fire & Rescue remains the same, at $102,000.
An eighteen percent decrease is anticipated in the streets and roads budget, estimated at $143,650. However, Powell Bill funding will be used toward the first phase of crack sealing, asphalt repair, installation of new traffic control signs, and regularly scheduled mowing and roadside maintenance.
At $61,200, the pool and park budget shows a fifteen percent increase, which includes $5,000 to demolish the unplayable tennis courts, and increased funding toward pool maintenance and the purchase of a new pool cleaning machine.
Debt service of $203,350 is nineteen percent less than the current fiscal year, primarily because of the modification to the loan agreement, which reduced the fixed interest rate from 3.97 percent to 3.19 percent but extended the loan term by five years.
The Fiscal Year 2012-2013 Budget also includes $25,000 set aside in capital reserve as a contingency fund.
Following the public hearing, Mayor George Erickson thanked Frusco for her efforts in leading two meetings inviting citizen input on the budget, as well as three marathon-length work sessions by the Council.
“We have worked very hard and diligently, and Leslie led us through,” he said.
