Hearings on budget, rates continued to June 14

Published 7:18 pm Friday, June 3, 2022

Windsor Town Council held public hearings concerning the town’s proposed fiscal year 2022-23 operating budget, Capital Improvement Plan, tax rates and water rate on May 26 and chose to continue all the hearings to its regularly scheduled meeting Tuesday, June 14.

Two members of the public were present and spoke during the May 26 hearings.

The proposed tax rates for tax year 2022 include a 4-cent increase for three different rates: real estate, service corporations and mobile homes. There is also a proposed 10-cent increase on the cigarette tax.

Lastly, the town is proposing to increase the town water rate by 50 cents per 1,000 gallons.

Dale Scott, who is a member of the Windsor Planning Commission, was the member of the public who came forward to speak May 26. He did not say he opposed the proposed budget and tax levies, but he did note that he was concerned about the tax rate increases happening during this current time of inflation, and he was curious to learn what expenses were leading the council to believe it should raise rates.

Another member of the public arrived at the meeting during Scott’s comments and stated from his seat that he also shared Scott’s concerns.

Later in the special called May 26 meeting, Windsor Mayor Glyn T. Willis made a point to specifically address Scott’s question about what expenses had led the majority of council members to believe rate increases were needed.

Willis said Windsor Town Manager William Saunders had mentioned in a previous meeting that the town needed $80,000 to $100,000 in additional revenue, and this would help cover rising health insurance expenses, along with enhanced retirement benefits for law enforcement officers.

“It was a 19% increase in the retirement benefits without the law enforcement enhancement,” Saunders said. “It’s just (that) the regular (benefits) went from 5.22% to 6.22% of the portion that the town pays. And then there was an 11% increase in health care costs. That was two of the things that appreciably increased just this year.”

Willis added, “The extended pension that we’re looking at for law enforcement was another factor in that.”

“And the conversion of the part-time position in Public Works to full time,” Saunders said.

Councilwoman Kelly Blankenship then added, “But then also there were already some (American Rescue Plan Act) monies being put into play, like with the (Windsor) Town Center, so that $80,000 would have been $100,000 had we not deferred the ARPA money toward the town center, because that would have come from (the) general fund, so that gap would have been larger.”

Willis said, “And we had a sensitivity of using ARPA money for things that I will characterize as operating expenses as compared to one-time projects.”

All ARPA money must be spent by the end of 2024.

Willis acknowledged a general, though not necessarily unanimous, consensus from the council May 26 to direct Saunders to make three changes to the proposed FY 2022-23 budget, a budget that entered the May 26 meeting totaling a little more than $5.9 million.

Saunders highlighted extra needs in connection to insurance ($500) and police overtime ($7,500), the latter of which is impacted by the Windsor Police Department having been operating with a vacancy on its staff.

“I would recommend adding the $500 in the insurance line item and the $7,500 in the police overtime line item to the FY 23 draft, and what I would do to offset those on the revenue side is increase the bank franchise tax by the corresponding amount,” Saunders said. “We don’t get that in until May every year, and it was more than what we expected, so I feel like it’s reasonable to assume that we can take this $8,000 difference and apply it to the bank franchise tax revenue line to balance it.”

As Saunders shared in a memo to the mayor and council, the enhanced retirement benefits for law enforcement are available at two different levels. One level features a 1.70% multiplier and the other level features a 1.85% multiplier.

Saunders stated that in the case of an unreduced basic benefit, the calculations would be as follows: an officer’s average salary would be multiplied by either the 1.70% or 1.85% multiplier, and that result would then be multiplied by the officer’s total years of service to equal their annual retirement benefit.

Saunders noted in the memo that per a Virginia Retirement System actuarial study, the cost of first-year premiums for the enhanced benefits would be $64,490 for the 1.70% multiplier and $72,126 for the $1.85% multiplier.

The 1.70% multiplier was programmed into the draft FY 23 budget presented at the May 26 meeting.

Windsor Police Chief Rodney “Dan” Riddle shared some details on the level of competition he is facing as he works to fill out and retain his roster of officers.

He provided an extensive list of localities in Virginia that have moved to offering the 1.85% multiplier.

“What I will tell you is now under state code, all sheriff’s offices are under that 1.85% multiplier,” he said.

He noted that his department’s vacancy had been open, at that point, for 12 to 13 days with an advertisement published, and he had received zero applicants.

“So in this environment, you’ve got to try to be as competitive as you can, and so this is just another thing,” he said. “And again, I understand it comes down to money and funding things, and it’s hard to do sometimes.”

He pointed out that his department’s direct competition for staff in the county, as well as other neighboring localities, offer the 1.85% multiplier benefit.

Looking across the state, Riddle said, “There are some super small towns that are doing the same thing.”

“You want the best you can get, and it’s a battle between people not wanting to do this job and agencies stealing from each other left and right, and there’s no shame to it,” he said.

He indicated that a gentleman’s agreement used to exist between agencies to not recruit each other’s employees.

“But back in August, Virginia Beach just threw that in the trash can,” he said. “They took the gloves off and said, ‘Hey, we’re coming after your best guys. We’ll pay them what we’ve got to pay them to get them to come work for us, and that’s it.’ What do you do?”

Later in the meeting, Saunders told council members, “If you all wanted to make a change on the multiplier for the enhanced benefits for law enforcement, for the next year and a half, that can come from ARPA money. Should you want to do that, it would just be a matter of offsetting that with the corresponding amount of ARPA money.”

Councilman J. Randy Carr said, “I think we were more in favor of the 1.70%, but now by looking at the reports and all and trying to keep our staff at its fullest, we really have no choice but to go to the 1.85% or we’re not going to be able to compete with everybody else.”

“I agree with that,” Councilman George Stubbs said.

Near the end of the meeting, the subject of the multiplier came up again, and Willis asked what council would like to do about it.

“Maybe not unanimous, but the general direction is that we should include the 1.85%,” he said. “I’m seeing general nods of heads here at least in half the room.”

The council also continued its discussion on whether or not it should commit to raising the real estate tax rate by 4 cents to 14 cents per $100 of assessed value.

Blankenship continued to be the primary voice in opposition to the increase.

“I think, this year, we have a unique opportunity to use some of the ARPA money to offset the cost and not do the increase, and this town needs to focus on bringing in some new revenue,” she said. “We need to go find some businesses, we need to bring some more revenue in. The increase in taxes should not be the solution. In my opinion, we should use that ARPA money.”

Carr said that if businesses do not come in and bring the needed revenue, the town will be right back where it is now in 19 months when the ARPA money is no longer available, and then the town will have to increase tax rates even more.

Blankenship countered by saying that based on the previous conversation the council had been having, it sounded like the proposed 4-cent increase for FY 2022-23 was just the beginning and that more increases would be needed later anyway.

Councilman Walter Bernacki emphasized that the last increase to the real estate tax rate in Windsor was in 2005, and he asked if the town was going to let the gap between its expenses and revenues get bigger for 19 more months until the ARPA money is no longer available.

Blankenship responded by saying, “The real estate tax is a fairly small amount of our revenue, so if that’s the way we plan to adjust our deficit every time we have it, we are going to have to significantly raise taxes. Four cents is not going to get it. So that’s what I’m saying is we need to focus on new revenue opportunities, not just tax increases.”

Bernacki said he agreed, and he mentioned that the Windsor Economic Development Authority has been trying to find new revenue opportunities, but he advocated for the 4-cent increase as a little portion that could help right now and be a buffer, and he said that if the town is able to bring in additional revenue in the next 18 to 24 months, then more rate increases may not be necessary.

Carr indicated that new revenue is not going to come overnight, and Stubbs questioned how many years it would take for the town to see any income from a new business, allowing time for it to become established.

Blankenship said the town’s strategic plan had other revenue-creating ideas, including creating events that would draw people to the town.

“We had a lot of revenue-generating thoughts in our strategic plan, and we really haven’t been able to do anything with it just because of COVID and everything that happened from the time we created the plan,” she said. “We need to get that plan out and get it moving.”

Carr asked Saunders what the impact of the proposed 4-cent increase would be on the average homeowner.

“It’s about $100 on a $250,000 house (annually),” Saunders said. “It’s about $20 on a $50,000 mobile home.”

The June 14 meeting will take place at 7 p.m. at Windsor Town Hall, which is located at 8 E. Windsor Blvd. The meeting will include continued public hearings on the FY 2022-23 budget, the FY 2022-23 budget and CIP adoption ordinance, the FY 2022-23 tax ordinance and the FY 2022-23 water rate ordinance.