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Clarksville mulls sewage hike, adjusted tax
SoVaNow.com / May 21, 2014Clarksville Town Council is considering a budget for the coming year that would raise the real estate tax rate by one cent and impose a 15 percent sewer increase, although only the latter change would represent an increase in the average cost to town citizens.
In presenting his draft budget to Council members last week, Town Manager Jeff Jones explained that the 1-cent tax hike offsets a slight drop in property values under the new countywide tax reassessment. The 28 cent rate in the coming fiscal year would raise roughly the same amount of revenue as the 27 cent rate in the current fiscal year — making it a so-called “revenue neutral” adjustment.
The 2014-15 town budget is due to go into effect July 1.
The 15 percent sewage rate increase would cover $30,000 in revenue lost with annexation, which led to some customers no longer paying higher, out-of-town rates. Also, the proposed hike would cover $75,000 in debt service related to the Kinderton Sewer Project and allow the town to begin building a capital contingency fund.
Other highlights in the budget, which Council has advertised for a public hearing May 29 at Town Hall, include:
An 11 percent increase in health care costs for town workers
A 1 percent state-mandated Virginia Retirement System salary adjustment and a 2 percent salary increase for all employees. The 1 percent salary adjustment does not go to the employees, but directly to VRS.
Jones said that as he and budget committee members — Vice Mayor Connie Torres, councilman Chris Clarke, and town treasurer Tara Murphy — began work on the 2014-15 budget, they focused on the financial impact from annexing 669 acres into the town last year, at the same time real property values have decreased overall. They also faced an 11 percent increase in health care costs for town workers.
At the same time, “We were committed to restoring some of the cash reserves the town had depleted over the years,” said Jones. The committee agreed the town needed to consider a tax rate increase as well as fee restructuring.
Real estate values in Clarksville took a $6 million hit after the county reassessment was completed this year, according to Jones. To generate nearly the same in real estate taxes in 2014-15 as in the prior year, the committee recommended raising property taxes by one cent. A homeowner whose property is valued at $150,000 will pay an additional $15 per year or $1.25 per month, provided the assessed value of the property remained stable.
Even with a one-cent increase, Clarksville’s real estate tax rate would be the lowest among towns in Mecklenburg County. Boydton’s rate is 33 cents, Chase City’s rate is 39 cents, and South Hill’s is 34 cents per $100 in value.
The decision to raise the sewage rates was more complicated, said Jones. Clarksville is about to embark on a major sewage improvement project. Before the funding for this project is approved, the town was told by the state granting authority that it had to take steps to make the sewage fund fully self-funded. In years past, deficiencies in the sewage fund were covered using general fund monies.
Jones said he was also concerned that the town has depleted its capital contingency fund. One of his priorities is to rebuild that fund, said Jones.
These factors as well as the lost revenue from annexation and additional debt service are the reasons behind the boost in sewer rates, which for in-town users is $10 to $75 (paid bi-monthly) and for out of town users is $22.30 to $170 (paid bi-monthly).
In comparison to other towns, Clarksville residents will pay, on average, the highest rates in the county. Boydton’s sewage rate for someone using 10,000 gallons in two months is $71.68, Chase City charges $55.70, and South Hill charges $67.05.
The public is encouraged to give their input to this proposed budget at a public hearing on May 29 at 7:30 p.m. at town hall. The final budget approval is scheduled for June 17 at 7:30 p.m., also at town hall.
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