By Greg Ellison
Council says mayor’s plan to keep old rate won’t work
(March 25, 2021) The Berlin Town Council spent two hours Monday night vetting a proposal from Mayor Zack Tyndall to keep property tax rates static for FY22 but eventually voted for a minor increase to 81.5 cents per $100 of assessed value.
Tyndall remind the council that it was advised at its March 8 meeting that a $130,000 shortfall existed between expenditures of about $6.5 million revenue and projections of $6.4 million.
Since that point, Tyndall said efforts to reduce the budget gap indicated that ledgers could be balanced without increasing Berlin’s current 80-cent real property tax rate.
“I thought we could do it without raising taxes,” he said. Tyndall said employee health care costs and revised revenue projections would be forthcoming.
Town Administrator Jeff Fleetwood said department heads were in attendance that evening to answer questions and provide clarifications.
“Yes, the budget is balanced but take a look at the guts of how you got balanced,” he said.
Fleetwood stressed the importance of providing resources for departments to perform adequately.
“We’re all part of the same team,” he said. “It’s a monumental decision on your part.”
Among other means to flatten the budget differential, Tyndall proposed keeping salaries flat for FY22.
Questioning that approach was Planning Director Dave Engelhart, who asked council members to confirm if proposed department funding allocations were on par with initial budget requests.
“It’s balanced on the backs of employees,” he said.
Economic Development Director Ivy Wells said additional input regarding potential budget cuts would have been welcome.
“We were told what we had to cut,” she said.
Berlin Police Chief Arnold Downing said the current budget process has been the most difficult in his two-plus decades in charge.
“The employees are actually taking the hit,” he said.
Downing said withholding pay increases this year would only serve to exacerbate the situation in subsequent budget cycles.
“Who better than me to tell you what’s needed in the budget?” he said. “Nobody makes an educated guess better than people that do it full time.”
Downing said the decision to forgo pay and benefit considerations for FY22 was not communicated properly.
“The council didn’t tell us anything [because] they didn’t know anything,” he said.
Town Finance Director Natalie Saleh said the 60 percent of the general fund comes from tax revenues.
“We can cut the budget to the bare bone but what do we do in two to three years?” she said. “Three years in a row we’ve been tightening.”
Fleetwood said employee heath care rates remain an unknown variable.
“We won’t know until early April what heath care will do,” he said.
While 3 percent is the largest increase to health care costs absorbed over the last decade, Fleetwood said rates have spiked up to 40 percent annually in the past.
Asked why the tax rate would need to be set in advance of pending budget hearings, Saleh said prior to 2019 the order was reversed.
“In the past we would draft the budget and leave the tax rate until the end,” she said.
Councilman Dean Burrell said the tax rate conversation thus far had been one sided.
“If I’m not considering other points of view, what good is talking?” he said. “The only point of view that we considered is yours,” he told Tyndall.
Burrell championed treating employees fairly in terms of compensation and benefits.
Tyndall said as mayor his charge is to present tax rates and a balanced budget.
The goal is trying to avoid job cuts or layoffs, Tyndall said.
Councilman Troy Purnell highlighted the importance of assuring adequate roads funding existed.
“We need to put this money aside or we’re going to have pot holes,” he said.
Tyndall said in lieu of financing road repairs on Grant Avenue and Stevenson Lane, funds would be used to purchase a new street sweeper in FY22.
“We can pave two streets or sweep them all,” he said.
Councilman Jay Knerr suggested tax rates should be bumped up to 81.5 cents.
Saleh said the increase would produce roughly an extra $60 for real property assessed at $300,000.
Tyndall said twice that sum would be required to fully cover the budget deficit.
“We would need 3 cents to cover $130,000,” he said.
Engelhart proposed delaying the tax rate decision that evening.
“The budget has to be received 32 days prior to the end of the fiscal year … so the charter would allow us to delay the decision,” he said.
Tyndall disagreed with the approach.
“We put the work in [and] I’m comfortable with 80 cents,” he said.
After Purnell’s motion to set tax rates at 86 cents failed to gain traction, Burrell followed with a motion for 83 cents that also lacked a second vote.
Concurring with Burrell’s suggestion was Saleh.
“My professional opinion was 83 cents,” she said.
Tyndall acknowledged Salah’s input but disagreed.
“I understand your professional opinion, but mine is different,” he said.
Fleetwood also argued that 83 cents was the minimum number required to stabilize the FY22 budget.
Another motion for the 83-cent rate from Councilwoman Shaneka Nichols managed to garner a second from Burrell but was rejected by members Knerr, Purnell and Jack Orris.
The council eventually voted 4-1, with Purnell opposed to set property tax rates at 81.5 cents.