Hiring freeze, cuts to schools also considered

FRANKLIN

Putting a hiring freeze on some of the city’s vacant positions, reducing Franklin City Public Schools’ local funding and delaying repairs to some city facilities were among the 2019-2020 budget cuts City Manager Amanda Jarratt recommended to Franklin’s City Council on Monday. But cuts alone won’t be enough to close the nearly $2 million gap between department funding requests and anticipated revenues for the coming fiscal year, the city manager said.

As such, Jarratt also proposed that the city increase its real estate tax, meals tax and cigarette tax.

For real estate, she recommended a 4-cent increase to a rate of $1.03 per $100 of assessed value, which is projected to generate $224,579 in additional revenue based on a 98.5-percent collection rate. However, the council voted unanimously to advertise a proposed tax increase of up to 6 cents in its public hearing notice, which is scheduled to be published on Sunday, April 14.

Per state law, a municipality cannot adopt tax rates higher than those advertised in its public hearing notice. The council still has the freedom to adopt a lesser tax increase, no increase at all, or even a decrease. Jarratt said that in the event the council does approve a 6-cent tax increase, the revenue exceeding what she had projected for the proposed 4-cent increase would be allocated to the city’s unassigned general fund balance.

For meals and cigarette taxes, she has proposed increasing the former by 0.5 percent, which is projected to bring in $72,500 in additional revenue, and increasing the latter by 10 cents.

The hiring freeze is proposed for four unfilled positions in the city’s police department, to include one part-time animal control position, but excluding the city’s search for a new chief; three positions in the city’s fire department, again excluding a new chief; two positions in the city’s E-911 dispatch office, one athletic specialist position in the parks and recreation department, one proposed DMV Select position in the commissioner of revenue’s office, and one payroll clerk position in the city’s finance office.

As for the city’s schools, Jarratt has proposed reducing the total local contribution the school division receives from council by $50,000. This, she said, will restore the school division to the same local contribution it received at the beginning of the 2016-2017 school year. The Downtown Franklin Association will also likely have to make do with less, as Jarratt has proposed a $20,000 reduction for that organization.

All other outside agencies and organizations that the city has historically funded can expect to receive the same funding each was given at the beginning of the current fiscal year, save for Paul D. Camp Community College, which she is recommending be given $11,785. Previously, the college had received $5,000 from the city.

Renovations to city facilities that have been put on hold due to the budget cuts include repairs to the building at Armory Park and to the electrical panel at the Public Works garage. Also cut were the city’s emergency building repair fund, funds for the replacement of dead trees and bushes, and money to purchase a new courtesy car for Franklin’s airport.

The combination of these budget cuts and tax increases, Jarratt said, will reduce the city’s dependence on transfers from its water/sewer fund and its electric fund to balance its general fund. The council requested at an earlier work session that each of these transfer payments be reduced by $200,000, with a commensurate $400,000 decrease in general fund spending, after city staff advised that it was not sustainable to continue to balance the budget through transfers from enterprise funds over and above what each brings in from providing services.

If a real estate tax increase is approved, it will be the first the city has seen since fiscal year 2015-2016.

During the 2014-2015 fiscal year, the city experienced an 8-percent decrease in property values due to reassessment and a $280,387 increase in Western Tidewater Regional Jail costs, which city staff at the time said would necessitate a 17-cent increase. However, the council only approved 6 cents. During fiscal year 2015-2016, an additional 3-cent increase was approved, though then-city manager R. Randy Martin had recommended 9 cents.

For the past few fiscal years, the city has avoided a tax increase by transferring money from its unassigned fund balance and enterprise funds to its general fund. But now, Jarratt said the fund balance is near its minimum required cash balance, and as such, continuing to pull from this source is likewise inadvisable.