BY MARK J. CRAWFORD
Starke commissioners have approved a lower proposed property tax rate for the 2024-25 fiscal year.
Mayor Scott Roberts offered the suggestion during the city’s budget workshop last week.
The lower tax rate, he said, could help offset the higher cost customers will be paying for water and sewer service.
The proposed tax rate of 4.3879 mills is 10% lower than the current rate. Even lower than adopting the rolled-back rate, the proposed rate would result in a tax cut.
The base and variable water and sewer rates are each going up 5% the commission confirmed with a final vote on July 16.
During the first reading of that ordinance on July 2, City Manager Drew Mullins explained the necessity for the continuing rate increases for water and sewer. The city committed to raise rates in exchange for the USDA funding needed to reconstruct the city’s wastewater plant.
More than $10 million of the funding was borrowed, so rates will continue increasing to repay the debt.
The tax cut would benefit property owners, most of whom are also utility customers. Some customers pay little or no property taxes, however. The tax relief would not benefit them.
The tax cut amounts to around $135,000, according to Operations Director Jimmy Crosby. The utility rate hikes are projected to raise an additional $175,000.
Commissioners agreed with Mayor Roberts about the tax cut. Roberts said the city’s approach to the budget — which has included budget cuts and reducing the reliance on utility revenue to fund general government — allowed the commission to support a lower the millage rate.
“I think, with the decisions that we made up here on everything, I think that we put ourselves in a position to do that and cut some slack to taxpayers,” he said.
Later at their scheduled meeting, commissioners voted 5-0 to lower the tax rate.
Budget for utilities and streets
Mullins presented the proposed enterprise and transportation fund budgets during the July 16 workshop. The former grew from $20.9 million to $34.4 million. This is primarily due to ongoing infrastructure projects. An increase from $5.4 million to $16.1 million represents state and federal revenue paying for those projects.
Debt payments have grown from $150,344 to $708,150. The budget is also showing an increase in reserves from $1.1 million to more than $5 million, and the city’s contract with Woodward and Curran to run the wastewater plant has increased service costs from $249,155 to more than $1.1 million.
At the same time, the city is spending less on electricity due, with purchases projected to drop from $7.1 to $5.7 million. The city is not selling less power, Mullins explained. Lower natural gas prices have reduced generation costs.
As for transportation, reserves have grown from $1 million to $1.14 million. Mullins budgeted $200,000 for street projects. He said they plan on doing more roadwork next year. Maintenance, materials, insurance and salaries bring the total transportation budget to almost $1.58 million.
The budget does not rely on a transfer of utility revenue to balance government spending in the general fund. Commissioner Shannon Smith did, however, eye more than $90,000 in projected revenue in late payment fees paid by customers and suggested it be used as a “donation” to fund improvements in the city’s parks.
The order in which the parks’ needs will be addressed was up for discussion, with Thomas Street Park noted by Commissioner Janice Mortimer as the most lacking. Securing restrooms against vandalism was also mentioned, but Mortimer pointed out Thomas Street lacks any restrooms.
Starke’s public budget hearings have been set for Sept. 5 and 17 at 5:30 p.m.
