tax collection

Another big topic we discussed at our annual retreat is our budget strategy for the upcoming fiscal year. Revenue for the current fiscal year continues to be strong. As of the end of January, ad valorem property tax receipts are just over 100% of budget. Sales tax receipts through the end of December (half the fiscal year, which does not include the full impact of Christmas) are at 56.5% of budget. On the expense side, most line items are on track with our budget.

As a result of this, we are looking at a pretty healthy surplus when we close out the fiscal year at the end of June. Part of our strategy for the current fiscal year was to take a fairly conservative approach to the budget, and if the economy bounced back faster than anticipated, we would use some of the resulting surplus on outstanding capital projects.

So, staff presented four options for prioritization for the current year. Those were the Splash Pad, Skate Park, Dog Park, and the next phase of improvements to Rocky Branch Park. After some discussion, we decided to prioritize the Skate Park and the Rocky Branch Park improvements, which together will consume roughly $220k of this year’s surplus.

Looking ahead to next year, capital projects will likely continue to be a focus. Given how strong our revenues have been and continue to be, I suggested that we, as a Council, take a look at our property taxes to determine if we need to make any adjustments to the tax rate. The City has seen very positive growth in both our tax base and our sales tax collections over the last few years, so I think this may create an opportunity for us to implement a small cut to the tax rate while still accomplishing the goals that we have for the City. Prudence would suggest that whatever we do on that front should be measured, and the rest of the Council agreed to take a look at this at an upcoming workshop. So, we will take a look at this over the next few weeks as we get into building the budget for next year.

An update from our meeting on Monday:

At the top of our meeting, one of the actions we took via the Consent Agenda was raising the minimum starting salary of our police officers to $45,000 (from the current $39,749). Generally, most of the police officers hired by the City start at a salary above the minimum due to various certifications, experience, etc. that they bring to the job. However, the number for the minimum starting salary is the number used when the department advertises new positions, so it is important that it be competitive with what other municipalities offer. The new $45k level we adopted is more in line with what other peer cities offer. There is minimal impact to the budget as a result of this (as most of our officers already make above that level), but it will make us more competitive in recruiting new talent.

There were two major land use decisions on the regular agenda, and the first was for the Dixon Village neighborhood proposed by Habitat for Humanity. We received a lot of public comment on this project during our meeting (both for and against). And Habitat actually made several substantive changes to their proposal between last week’s Planning Board meeting and our hearing on Monday. As a Council, we weighed the pros and cons of sending it back to the Planning Board to give them a chance to review the changes, but we ultimately voted against doing that and then proceeded to approve the proposal unanimously.

I think what Habitat has proposed for this neighborhood is a positive step forward in addressing affordability in our area. Additionally, they have been very receptive to all of the feedback they have received on this project over the last few weeks, and a lot of that was reflected in the final proposal we saw Monday night. They have clearly put a lot of thought into making this neighborhood a very nice place to live, and the mixed-income approach they are taking is not something that has been tried in our area before. So, I am very excited to see how this project turns out.

We also heard the proposal for the Smith property across from the new middle school. This development calls for a mix of 42 single-family homes and 57 townhomes (99 units total) while also providing for the realignment of Belwood Drive. The Council discussed this project at length. There was an overriding concern about the density of this development. Most of the larger properties south of Stowe Road (including the middle school property right across the street from the Smith property) are zoned to a maximum density of 3 dwelling units per acre.

By what appears to be a unique set of circumstances, the Smith property was not included in the overlay district that down-zoned much of the peninsula, so the zoning on this property is set at 3 dwelling units per acre but may go up to 6 units per acre on a project-by-project basis. The proposed development would have a density of 4.3.

My view is that this property probably should have been included in the overlay district that limits density to 3 units per acre, so while the property can technically be developed at up to 6 units per acre, the fact that the land use code allows this on a “project-by-project” basis seems to imply that that density is not automatic. In this case, I think the most appropriate density is 3 units per acre as that is consistent with similarly situated properties along South Point Road. I think when you also consider the impact that an additional 99 homes would have on the traffic infrastructure in that area, the lower density also makes sense from that perspective.

For an idea of the impact this seemingly small change in density would have on this project, consider that 3 units per acre on 22.84 acres would result in about 68 homes, which is a 31% drop in the number of units from the proposed 99. Presumably, this would also mean 31% fewer cars on South Point Road as a result of this development too.

The general feeling on Council was that this project is too dense, and we provided that feedback to the developer. The development team seemed open to revising their project to incorporate our feedback. So, rather than voting the project down, which legally would preclude them from applying for another rezoning for 12 months (and would also mean that any realignment of Belwood Drive would have to wait another 12 months), we deferred action on their application until our March meeting to give them time to revise their project and come back with another proposal.

I think this was actually a very positive outcome. I definitely want to see Belwood Drive fixed, but we do also have to be cognizant of the impact this development will have on the surrounding area. Based on the tone of our conversation, I look forward to seeing what they come back with, as I do think there is an opportunity for a win-win situation with this property.

If you have any questions on anything, let me know!