Hendersonville leaders voted on first reading Tuesday to adopt a $57 million budget that spends nearly a million dollars more than it takes in and eliminates entirely the annual assessment fee residents pay for residential trash pick-up. The budget also calls for a more than 13 percent property tax increase.
Tuesday’s meeting was a continuation of a June 13 BOMA meeting in which members voted to approve 20 amendments to Mayor Jamie Clary’s 2019-2020 fiscal year budget. Clary’s initial balanced budget included merit increases for city employees, five new police officers, an increased debt service and more than $2 million in additional paving funds. Clary also proposed a 10-cent property tax increase that he said would be offset by a reduction in the amount homeowners pay for trash collection.
Amendments made on June 13 included the hiring of an additional IT employee, $83,000 for land preservation; $120,000 for streetlights for Homestead Place and Savo Bay; an increase in fire department salaries to allow for three battalion chiefs; $40,000 for additional turn-out gear for the fire department; $50,000 for roof repair at a fire department maintenance building; and $190,000 for LED lights in Drakes Creek Park.
On Tuesday, BOMA voted to amend the budget further by adding:
*$35,000 for the purchase of a water pump from the city’s storm water utility fee.
*$60,000 for HVAC system at Country Hills Golf Course.
*$300,000 for drainage improvements to the intersection of East Drive and Indian Lake Road from the storm water utility fee.
*$60,000 from the city’s general fund for improvements to Rockland Road. This is a 20 percent match of federal funding of around $300,000.
*$48,000 to continue a pilot recycling program for 120 days until a decision is made about a citywide recycling program.
*$338,142 for cost of living increases for city employees.
According to acting Finance Director Robert Manning, even with Clary’s proposed 10-cent tax increase, the additions made to the budget increase the difference between spending and revenue by about $958,000, and leaves the city with a $2.1 million ending fund balance.
Leaders voted 9 to 4 to approve the budget on first reading.
They then discussed setting the annual assessment fee for garbage collection. The current fee is $293 and is included as a separate line item on homeowner’s annual tax bill. Leaders voted in May to move from twice-a-week to once-a-week back-door trash pick-up – a move that is estimated to save the city around $2 million.
While Clary proposed cutting the annual assessment by around $47, several aldermen said they were in favor of eliminating the annual fee altogether and paying for the cost of garbage collection from the city’s general fund.
Ward 6 Alderman Eddie Roberson said he wanted to know more about how the change would impact businesses who don’t currently pay for trash collection, but whose property tax bill would increase.
“I’m afraid this will significantly damage businesses,” said Roberson.
Jonathan Hayes of Ward 5 had similar concerns.
“I like the transparency of this, but I’m wondering if there’s some way we can do this without burdening businesses,” he said.
Manning estimated the change would increase Hendersonville Medical Center’s tax bill by about $13,000 a year.
Manning also estimated that those who own a $200,000 home would save around $152 a year if the trash fee is rolled into the general fund.
Ward 3 Alderman Arlene Cunningham said she’d like to see what the overall effect the move would have on smaller businesses would be before voting on the change on second reading.
A motion made by Ward 2 Alderman Scott Sprouse to eliminate the annual garbage assessment fee passed 8 to 5.
Although Manning estimated the city would need to set a tax rate of around $1.21 per $100 of assessed value to cover the cost of the added spending as well as the cost of trash pick-up by eliminating the annual assessment fee, aldermen voted 9 to 4 on first reading to set the property tax rate at 85 cents per $100 of assessed value.
They also agreed to not vote on second reading to set the tax rate until a certified tax rate is presented by Sumner County Assessor of Property John Isbell. Since the county is currently going through an appraisal process that occurs every five years, Isbell has said he wouldn’t have a certified rate until August.
The city’s current property tax rate is 75 cents per $100 of assessed value.