Proposed city budget would not raise property tax rate

 

The budget proposed by Oak Ridge City Manager Mark Watson on Tuesday would not increase the property tax rate. Instead, the budget would hold the property tax rate steady at $2.52 per $100 of assessed value.

It could be the 10th year in a row without a tax rate increase. That’s if the Oak Ridge City Council approves the city manager’s proposed budget.

Watson said it’s essentially the same budget as last year, with some capital improvements and funding for an energy savings plan for lighting, heating, and cooling systems in the city and schools.

Fully funding a request from Oak Ridge Schools for 2.5 percent pay raises for teachers and staff would require the equivalent of a four-cent tax rate increase, Watson said during a special City Council meeting on Tuesday.

He said the budget could again include about $538,000 in one-time spending for Oak Ridge Schools, this time for capital projects and other non-recurring needs. Members of the Oak Ridge Board of Education have hoped to make that additional funding a recurring source of funding, although it’s not clear that the city will agree to do so.

Besides receiving the $538,000 again, the school board had asked for an additional $318,000 to fund the 2.5 percent pay raise for teachers and staff.

But Watson said that extra $318,000 would require a property tax rate increase of four cents. That would push the tax rate to $2.56 per $100 of assessed value.

It’s not clear yet whether City Council will agree to raise the property tax rate for school pay raises, or whether members will seek to hold it steady in the next fiscal year.

Among the capital project allocations cited by Watson during his budget presentation on Tuesday:

• electrical/HVAC improvements—$8 million
• Municipal Building security upgrades and renovation—$165,000
• Civic Center/Senior Center remodel—$2.2 million
• transportation and safety improvements—$2.5 million grant
• outdoor pool improvements—$200,000
• Recreation Facility/ADA improvements—$50,000
• Main Street Oak Ridge public infrastructure—$1 million

Building design could occur in the next fiscal year for another capital project, the new Oak Ridge Preschool, which will be built at Scarboro Park, Watson said.

The budget for the next fiscal year, which starts July 1, doesn’t include pay raises for city employees, but a compensation study is being completed and the proposed budget includes about $360,000 to help address possible increases, Watson said.

Projects that have lingered for several years, Watson said in a “Time to ‘Get it Done'” slide, include:

• Extreme Energy Makeover Program
• Installation of the Friendship Bell in a new monument setting
• Providing new facilities for the U.S. Department of Energy public education and outreach center
• Renovation of Blankenship Field
• Design and reconfiguration of the five-way junction at Pennsylvania Avenue and Providence Road, with help from the Tennessee Department of Transportation
• Establishment of the CSX “Rails to Trails” project

Here is some information on economic development programs:

• Explore Oak Ridge could receive a $40,000 increase for event promotion, community recognition programs, and stronger performance—$365,000
• Economic consultants would be retained for project recruitment and implementation in Fiscal Year 2018
• Funding of the City/Chamber Economic Development Initiative would be sustained at $175,000
• Celebrate Oak Ridge special events programs would be included at a funding level of $65,000, with $13,000 worth of in-kind support

Watson said the city budget must transition to absorb state reductions of revenues, including the phase-out of the Hall Income Tax, the reduced food tax, and changes in the gas tax allocation.

Budgets must anticipate a primary reliance on sales tax, Watson said. They must also consider a continued erosion of payments in lieu of taxes and a temporary surge of sales tax revenues expected to be created by construction of the Uranium Processing Facility at the Y-12 National Security Complex, the city manager said.

The budget totals $196 million in all funds, including in the general, waterworks, electric, capital, school, and other funds. The general fund totals $23.2 million. The money transferred to Oak Ridge Schools could be around $15 million, depending upon exactly how much the Oak Ridge City Council decides to transfer.

There will be a public hearing and first reading of the budget at 7 p.m. Monday, June 5, in the Oak Ridge Municipal Building Courtroom.

There will be a second public hearing and the second and final reading of the budget at 7 p.m. Monday, June 12.

More information will be added as it becomes available.

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