Sylva ponders tax increase

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Sylva ponders tax increase

Protestors hold signs opposing a plan to increase taxes to fund additional police officers during a public hearing on a different topic the board held at Bridge Park April 1. Holly Kays photo

Sales tax receipts are booming in Sylva and a newly completed property revaluation will bump real estate values by about 14.5 percent this year — if tax rates stay the same, the town would expect to receive $345,000 more in the coming fiscal year than in the current year’s budget.

That increase equals 7.86 percent of the estimated general fund revenues for 2021-22, but three of the town’s five commissioners say they support an increase to the tax rate as well.

Despite the marked increase in projected revenue under the current tax rate of 42.5 cents per $100 of value, Town Manager Paige Dowling told the board that the town will have to pull $52,000 from fund balance to cover some essential items in its budget, and that even that wouldn’t include the $81,000 needed to fill new positions requested by the police and sanitation departments.

“Pretty much what I’m saying is this budget accomplishes what we’re currently doing,” she said during a March 25 work session.

Paying for personnel

The biggest drivers for anticipated increases in the estimated 2021-22 budget are salaries, insurance and retirement benefits for town employees.

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Of the $218,000 estimated increase for the police department, $126,000 is for salaries and benefits. The remaining $92,000 is for standard vehicle replacements that had previously been funded through the town’s capital reserve fund and so had not appeared in the budget as a police department expense. The $40,684 increase for the street department is primarily for salaries, as is the $28,685 for administration. Of the $62,396 increase in miscellaneous expenses, $25,000 is for separation allowances, a type of retirement benefit that police officers receive.

The heightened salary expenses stem from the standard 1.4 percent cost-of-living increase the town gives its employees combined with a 2.5 percent merit increase that the town board voted on earlier this year. Retirement benefits and health insurance cost increases figure in as well.

The $52,000 Dowling suggested that commissioners take from fund balance would include setting aside $20,000 to go toward sidewalks during the N.C. 107 project, $18,000 to cover increased fire department costs following the revaluation, $7,000 for a pay study of the town’s workforce and another $7,000 for a feasibility study on building a public restroom downtown — though a follow-up discussion April 8 indicated town staff would take on the bathroom feasibility research to avoid the $7,000 cost.

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Police Chief Chris Hatton says his department needs more officers to respond to skyrocketing calls for service, but some say the graph is misleading and that police officers are not the best choice to respond to the types of situations making up most of that increase. Donated graph

None of that would fund the two police officers and one part-time sanitation employee that department heads begged commissioners for during an earlier budget work session Jan. 29.

Police Chief Chris Hatton told commissioners that he needs two additional officer positions, which would cost $69,500 apiece for salary plus additional costs like equipment and training. Public Works Director Jake Scott asked for a part-time sanitation employee, which would cost $12,000. Because these positions would be ongoing costs, the money can’t come from fund balance, which is treated more like a savings account used to defray one-time expenses.

A question of timing

The conversation between board members March 25 for the most part was not about whether or not there is a justified need for more police and sanitation employees. Rather, it was about whether 2021 — mid-pandemic, post-revaluation — was the time to pay for them.

“What I’m hearing from people is, ‘I just had the worst financial year of my life this year, and yet my property value went up,” said Commissioner David Nestler. “I don’t think it’s a good year to say we’re going to also raise your tax rate on top of that.”

After the last revaluation took place in 2016, property values went down drastically, as it was the first revaluation following the recession of 2008. The average home in Sylva was worth $162,000, while following the 2021 revaluation that average value rose to $171,500. That means a person with the average home value in 2016 would owe the town $688.50 in annual property taxes under the current tax rate, but that bill would rise to $728.86 following the revaluation.

In 2016, lower overall property values combined with perennial budget shortfalls prompted commissioners to increase the tax rate from 30 cents per $100 to 42.5 cents per $100. Some town residents may have expected that the reverse would be true following a revaluation yielding a substantial increase in value. Nestler made multiple comments to that effect, saying that he “didn’t want to stomach” a rate increase at this time.

“So when do you want to stomach it?” asked Commissioner Ben Guiney. “Do you want to do it next year?”

Providing quality services is one of the town board’s biggest roles, Guiney said, and without sufficient funding the town can’t provide quality services.

“Chris (Hatton) and Jake (Scott) have made a compelling case, at least to me, that the staffing needs to increase now, not a year from now, and I think we should pay for it,” he said.

During the Jan. 29 meeting, Hatton told commissioners that demand for police services was skyrocketing — officer actions and calls for service increased 64.7 percent from 2019 to 2020 — even as staffing had remained the same for 13 years. Officers are routinely called in to work extra shifts on their days off to cover for colleagues who are on vacation, off sick or away at training — it drains morale, impairs retention and strains services, Hatton said.

Meanwhile Scott said his crews have been dealing with an explosion of solid waste, removing 22.5 percent more tons of trash in 2020 than in 2019.

“My opinion is I think we need both of the additional personnel costs,” said Mayor Lynda Sossamon. “We may have to give something else up if nobody wants to raise taxes, but I definitely think those are needed for services.”

“Where are you going to find $81,000 in savings without a tax increase?” asked Nestler.

Commissioner Mary Gelbaugh agreed with Nestler’s view, pointing out that many businesses weren’t able to make their usual income this year and that their budgets may be worse off than the town’s is right now, without the tax increase. Meanwhile, Commissioner Barbara Hamilton said she would support a tax increase if it meant taking some of the burden off of the town’s existing police force.

“We have lost so many officers within the last couple years because they can go to Waynesville, they can go to Asheville, they can go to other places and have some benefits and know they can have time off with their families,” she said. “I’m not for a tax increase but my goodness, if you were in their spot, how would you feel if you had to do that every single day?”

It might not be popular, she said, but the town needs to fund at least one new officer position.

During an initial straw poll of board members’ thoughts on the subject, Commissioner Greg McPherson swung the majority to the side of foregoing a tax increase this year, but his position changed when Hatton presented some new information about the state of his department.

Last year, officers stayed past their scheduled time to go home for a total of 620 hours, and over the last three years the department has logged an average of more than 1,000 hours of overtime per year.

“That information is new to me,” said McPherson. “That much overtime justifies a new position to me.”

Gelbaugh raised the possibility of securing the funds through some other means besides property tax. Perhaps, she said, the town should consider an occupancy tax.

“Our traffic count has changed with tourism,” she said. “Some of the responsibilities of the police have increased, and I just want to be more creative in where we look for that income besides just property tax alone.”

Nestler pointed to the $400,000 the town expects to receive from the federal American Rescue Plan over the next two years as another possible funding source. That money can be used only for specific purposes, and police officer salaries would not qualify. However, he suggested, perhaps the town could fund some of its other budget needs with those federal dollars and thereby free up money for personnel.

Public opposition

Some town residents are speaking out against increased police department spending. A group of about 10 people attending the board’s outdoor quasi-judicial hearing regarding apartment permits April 1 held signs with slogans like, “No Tax Increase for New Cops” and “aHousing, aFood, aMedical Care, XMore Cops” to display their opposition.

During the board’s April 8 meeting, Georgia Mitchell spoke against an expanded police force during the public comment portion of the agenda.

She pointed out that even though officer actions have increased dramatically, the increase is mainly due to security checks at banks, businesses, parks and churches — actual crime is down. During his January presentation Hatton said that officers took fewer incident reports and did fewer investigations in 2020 than in 2019 but that they dealt with more situations related to illegal drug use, mental illness, poverty and homelessness. Police response is not the best way to address those concerns, Mitchell said.

“If you want to raise taxes, especially during a pandemic but just in general, you need a really good reason,” she said. “Logically I just can’t find any reason to increase the number of cops in this town. At some point filling our community with armed law enforcement when you don’t have any data showing that you really need it isn’t preventative anymore. At some point, it does just kind of become a waste of money, and if you keep increasing it, at some point I can only interpret it as aggression toward the community.”

It’s an ongoing discussion, but one that will have to come to a conclusion before long. The new fiscal year begins July 1, and commissioners must pass a new budget — and set a tax rate — before that time. Commissioners expect to receive a balanced budget by April 20 and to discuss it in a work session at 9 a.m. April 29, to be held via Zoom. A public hearing on the proposed budget is tentatively scheduled for 5:30 p.m. May 27, and commissioners will vote on a final document June 10.

An earier version of this story incorrectly stated that Georgia Mitchell told commissioners that while calls for service had increased, actual crime is down. The story has been updated to state that it was officer actions, not calls for service, that increased last year.

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