Smithfield agreed to borrow, now must find way to pay

April 19--Smithfield Town Councilman Randy Pack floated the idea of raising the town's real estate tax rate to offset the town's debt service costs Tuesday, during the first budget work session of the year.

The biggest challenge facing the town in the coming fiscal year is the debt service from the $5 million the town borrowed last year to finance large projects. That includes roughly $775,000 to buy land for the Joseph Luter Jr. Sports Complex and a $2 million contribution toward the Windsor Castle Park restoration.

The town must pay roughly $277,472 in debt service on the loan during fiscal year 2018.

"An option would be to start looking at tax raises," Pack said. "I know we have to talk about it, if nothing else."

Town Manager Peter Stephenson said the town must "find a way to address the debt service."

"It has to be paid for," he said. "We made these commitments to these large projects without assigning revenue to them -- and now it's time to address that."

Smithfield Mayor Carter Williams anticipates no real estate tax rate increases during fiscal year 2018.

Williams said one big challenge facing the town council this budget season is a rise in employee health insurance costs, estimated at $100,000. The council will try to trim where possible to...

Smithfield Mayor Carter Williams anticipates no real estate tax rate increases during fiscal year 2018.

Williams said one big challenge facing the town council this budget season is a rise in employee health insurance costs, estimated at $100,000. The council will try to trim where possible to...

Town Treasurer Ellen Minga presented three options for the general fund for the coming fiscal year, which range from $7.7 million for operating expenses, to $8 million.

The current fiscal year's operating expenses are budgeted at roughly $7 million.

Minga's first option, which costs $8 million, includes a 2 percent cost-of-living adjustment for all town employees. It also includes raises for employees based on their time in the position. This option would cost the town roughly $496,000.

Option two includes no raises, but would cost the town an additional $230,000 due to non-salary related increases.

Option three includes no raises, but adds one park maintenance supervisor and an additional planner position. This option would cost the town an additional $357,650.

Councilwoman Connie Chapman asked what it would look like if the town kept its employee health insurance coverage, but stopped covering family health insurance costs. The town currently pays 50 percent of an employee's family health insurance costs.

Minga said cutting the family health insurance coverage, without a raise or cost-of-living increase, would put some employees roughly $6,500 in the hole.

The proposals include a $127,000 savings from reducing recycling pick up from every week to every other week. Not yet included in the budget proposals is a $180,000 request from the Parks and Recreation Department for operating expenses, like grass cutting and insurance, Minga said.

Minga said one of the largest decisions for council this budget season will be employee salaries.

"Determining whatever we decide to do with labor and benefits," Minga said. "Everything (else) is pretty flat."

Smith can be reached by phone at 757-510-1663.

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