Note: This story was last updated at 3:18 a.m. June 2.
The budget proposed by the Oak Ridge city staff on Monday includes a one-cent increase in the property tax rate. It would help maintain city services and allow for a 2 percent pay raise for city employees, Oak Ridge City Manager Mark Watson told City Council members.
Meanwhile, the budget proposed by Oak Ridge Schools asks for the equivalent of a seven-cent tax increase. It would help cover a deficit and add money for salaries and staff, including a 3 percent pay raise. That budget has already been approved by the Oak Ridge Board of Education.
The two requests total eight cents. They were presented to the Oak Ridge City Council on Monday.
It’s not clear yet if the seven-member City Council will agree to any increases for the city or schools. The Council will consider the budget in the first of two readings on Monday, June 8, and on second and final reading on Monday, June 15.
The property tax rate is now $2.39 per $100 of assessed value.
Watson said the proposed one-cent rate hike for the city would generate about another $90,000 in revenue. He said it would cost the owner of a $145,000 house another $3.63 per year.
“It’s very nominal, but it does give us an increase because of the drop in sales tax,” Watson said.
Commercial properties would have higher increases.
The total eight-cent request could add about $29 per year to the property tax bill on a $145,000 house.
Watson said the city and schools are in the equivalent of a revenue valley, or canyon, and will have to sustain operations for the next two years.
“We’re going to be fairly austere,” he said. “There won’t be a lot of major projects.”
Watson presented the municipal budget—which includes $25.2 million in the General Fund, $19.6 million in the Waterworks Fund, $55.2 million in the Electric Fund, and $19 million in other funds—to the City Council on Monday. Oak Ridge Board of Education Chair Keys Fillauer presented the $59.6 million schools budget.
Watson said there are few increases in the General Fund budget, and most expenses are about the same or reduced.
“Our budget is going to be very much the same as we have seen the last two years, only there is less funding,” Watson said. “We’re kind of in this two-year mode to sustain the services that we have.”
He said there has been a dramatic drop in sales taxes collections in the western portion of the city, which is in Roane County, primarily at Oak Ridge National Laboratory.
“We’ve seen a $700,000 drop in our budget this year,” Watson said. City officials had to dramatically lower costs and expenses to balance those out, he said.
Watson said Oak Ridge officials are working with the ORNL staff to try to determine the trend line.
But there has been steady growth in the Anderson County side of the city, where most of Oak Ridge is located. Much of the 2 percent increase in the Anderson County side of the city can be attributed to new businesses such as new restaurants and the new Kroger Marketplace shopping center, Watson said.
Although there isn’t much money available, the city staff did propose using some money for capital projects, Watson said. Among the proposed expenses:
- $150,000 for the city match’s on a long-anticipated, state-funded $400,000 project to add an eighth lane at the Oak Ridge rowing course at Melton Lake Park,
- $200,000 for roof repairs at Willow Brook Elementary School,
- $50,000 for professional support for a pre-K building review,
- $25,000 more for professional fees to rebuild the structure for the Friendship Bell, and
- $195,000 in reserve for unspecified emergency maintenance.
The municipal budget would also:
- add one dispatcher funded with 911 revenues;
- keep funding for the Oak Ridge Chamber of Commerce for tangible economic development at $175,000;
- keep funding for the Oak Ridge Convention and Visitors Bureau at $325,00, with $25,000 held to mid-year to determine collection levels;
- provide $108,000 for two economic consultants: Ray Evans and Steve Jones; and
- reduce funding for festivals and special events to $50,000, plus $25,000 for July 4 fireworks and two summer concerts.
Still unknown is how the five-year property reappraisals in Anderson and Roane counties will affect the state-certified tax rate in the counties and the cities within them. The overall property assessment in Anderson County has dropped 4 percent. Property tax revenues can’t change because of the reappraisals, so if the property assessments drop overall, then the tax rate has to be increased.
Anderson County has done well in terms of the reappraisal timetable, but the “Roane County side is really in a pickle,” Watson said, and a number of reappraisals are not even completed yet.
“They are behind the eight-ball with respect to the timetable,” he said.
That means that the City of Oak Ridge probably won’t be able to adopt a tax rate for the next fiscal year, which starts July 1, until after July 1. So tax bills may not be sent until July or later, Watson said.
The Oak Ridge Board of Education last week approved a budget that would use $1.75 million from the school system’s fund balance and ask the city for about $650,000. That’s the equivalent of a seven-cent tax rate increase, municipal officials said Monday.
School officials are hoping to cover a deficit of roughly $638,000 and meet a total of $1.75 million in other desired expenses, or “additional investment.” Those include:
- 3 percent pay raises with benefits, or about $1 million total;
- step increases based on experience, or roughly $484,000; and
- approximately $211,000 for staff, including a communications director, four technology-related positions, and a teacher’s assistant for an elementary behavioral class.
Oak Ridge School employees received no cost-of-living increases in four of the last eight fiscal years. They received raises of between 1.5 and 3 percent in the other four years. A large number of teachers have “topped the schedule” and no longer get step increases, Fillauer said.
“Raises for our staff have been of the highest priority,” he said.
Fillauer said school officials were able to whittle down their starting deficit and could share the duties of the communications director with the city in an attempt to save money.
He said school officials thought it best to use part of their fund balance before asking the city for more money.
“This is certainly not best practice,” Fillauer said of using the fund balance.
The City of Oak Ridge provides a little less than one-third of the school system’s funding. Other funding sources are the state and federal government and county tax revenues. The amount currently allotted to the schools from the city is about $14.3 million.
Separate from the reappraisals and their impact on the certified tax rates, officials in Clinton and Roane County are considering possible tax rate increases, and educators in Anderson County have asked for the equivalent of a 22-cent tax rate increase to help pay for 4 percent pay raises for all employees and technology initiatives and capital projects.
There will be a public hearing on the Oak Ridge budget on Monday, June 8.
The Anderson County budget will be presented to the Anderson County Commission on Monday, June 15.
In Roane County, there will be a public hearing and work session on the budget for next year on Tuesday, June 2. The public hearing starts at 6:30 p.m. Tuesday in the Qualls Commission Room at the Roane County Courthouse in Kingston. The Roane County Budget Committee will meet after that public hearing, and then the Roane County Commission will meet in a work session to discuss the FY 2016 budget, also in the Qualls Commission Room at the Courthouse in Kingston.
All these meetings are open to the public.
More information will be added as it becomes available.