2006-11-20 (2) - Laserfiche WebLink

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6 TRAFFIC), OF THE CHARLOTTESVILLE CITY CODE, 1990, AS AMENDED, RELATING TO PRORATION OF VEHICLE LICENSE FEES” (carried over) REPORT : BUDGET GUIDELINES AND ADOPTION OF BUDGET CALENDAR Ms. Leslie Beauregard, Budget Manager, reviewed the FY 07-98 budget process, financial forecasts, proposed budget guidelines, and budget calendar. Mr. Taliaferro asked about the status of the utility tax, and Ms. Beauregard said that there is the potential for up to a $1.2 million loss in revenue because of the changes. She said the State will now collect the tax and reimburse localities, and the tax was reduced from 10% to 5%. She noted, however, that the projected loss is a pure guess. Mr. Lee Richards, Commissioner of Revenue, said that the Department of Taxation will now be managing collection of the utility taxes, with no increase in staff at the current time, and there is the possibility of receiving less revenue, but we will not know until March or April. Mr. O’Connell said staff feel we should be conservative in the projection until we know what is going to happen with the revenue. Ms. Hamilton asked about the $10 million projected cost for equipment and vehicle replacement, and asked why it is such a large hit. Ms. Beauregard said it is for all types of vehicles, including sedans and dump trucks. She said we have not been able to keep up with the cost of replacement, and we need to get caught up as well as fund ongoing costs. Mr. Norris said he appreciates the observation about the tax rate cuts. He said he would like to continue or expand the tax rebate program as he is concerned with the hit residents are getting. He said Council visions do have dollars attached to them, and he thinks it is vital that we address entrenched issues in the community. Mr. Lynch said he would like to set a policy that we keep the real estate tax increase to 6% or less. He said we may want to consider reducing the rate for residential properties if allowed by the General Assembly. He said we will still have growth in assessments as assessments catch up. He said we have the opportunity for substantial growth in commercial taxes. He said he thinks we should look closely at under assessed commercial properties so we can hold residential at 6%. Ms. Hamilton expressed sympathy with Mr. Lynch’s remarks. She said homeowners are also concerned about the increasing amount and number of fees. She said she does not want to move the cost around by cutting taxes and raising fees. Mr. Lynch said he is not necessarily suggesting we go there with fees, but would prefer to have a different rate for commercial versus residential properties. Dr. Brown said that before going with the idea of holding the increase at 6%, Council needs to look at where they want to put money, including priorities, salaries, and stormwater costs. He said he is not willing to commit to the 6% at this time, but wants to wait and see how the budget develops. He said we can look at ways to benefit low and moderate income residents rather than across the board reductions. Referring to the guideline designating 1% to debt service, Mr. Lynch noted that when the meals tax was increased it started as an earmark for school capital projects, but later there was a compromise with three-quarters going to the schools and one quarter for general projects. He said the language proposed is drifting away from the original intention. Mr. O’Connell noted that when Council recently issued bonds, close to $10 million was for school projects.