City budget passes with tax increase

City budget passes with tax increase
Photo by Dan Andrews.
Councilmen Della Volpe and Stair opposed the city budget increase in last week’s meeting.

By Mike Steely

steelym@knoxfocus.com

As predicted last week by The Focus, the budget proposed by Mayor Madeline Rogero, some $384,611,930, passed City Council but not after a last ditch effort to cut it back and shelve the tax increase.

Councilman Nick Della Volpe led an attempt to cut the overall budget in the city council meeting Tuesday evening by cutting increases in funding to organizations, stretching funding of some groups to 2 or 3 years instead of one, and doing away with an upcoming issuance of $31.4 obligation bond.

The city’s new budget for 2014/2015 increases the tax rate to $2.7257 per $100,000 of assessed property value. The budget is about $2.2 million less than the current operating budget. It includes a mandatory 2.5% pay increase to all city employees and enough money to cover the growing pension fund contributions made by the city.

Della Volpe’s presentation would have cut $6.2 million from the general operating fund of the city of $200,502,920. His idea failed for the lack of a second.

If you live inside the city and have a home assessed at $200,000, your tax bill will increase by about $170 next year.

Councilman George Wallace said his main concern is the $34 million bond issue. Although he had voted for it initially, he advised that the city should postpone issuing it. He said he’d also like to postpone the budget vote for two weeks.

Rogero responded that the bond fund would find various projects including Prosser Road improvements and the Lakeshore Park improvements.

“We’re not going to issue that until we need to,” she said.

“I can agree with the 34 cent tax increase but not the bond issue,” Wallace said.

Councilman Marshall Stair said that while he agrees with the “path the city is on” he sees the pension funding as the biggest problem.

“We’re paying for the water damage and haven’t fixed the plumbing,” Stair said of the pension funding. He went on to say he was unable to support the budget until something is done to resolve the pension issues. Retirees and formerly elected officials have been permitted to name someone other than themselves as beneficiaries of their pensions. In some cases they have named an adult child, who legally could draw the retirement. It’s put the city in a financial quagmire.

But for now, the city is legally obligated to fund the pensions, just as the city is legally obligated to give each employee a 2.5% pay increase each year.

The council voted 7-2 to fund the budget, with only Della Volpe and Stair opposing the tax increase. Della Volpe said that while the tax rate had not increased in recent years the assessments on property value has gone up, which he called “33% increase.”

Proponents of the budget and tax increase spoke on the issue.

“It’s been 10 years since a tax increase,” said Councilman Nick Pavlis, who said he supports maintaining city services. He said the city has progressed with fewer employees than 10 years ago.

Councilwoman Brenda Palmer said there’s never a good time for a tax increase but added, “We need to maintain the momentum.”

Councilman Dan Brown said, “We have a good budget; if we choose to delay (proposed expenditures) it’s going to cost more.”

Councilman Finbarr Saunders spoke of the investment and momentum and said he wants to “promote and continue that.”

Councilman Mark Campen also said he supports the budget and increase.

In other action the council voted to approve a 246 apartment development at Northshore Town Center. Some opponents of the large development had accused Councilman Duane Grieve of being connected to the development, which he denied in a prepared statement.

He said that remarks were “inappropriate and untrue” and moved the question to a vote. Speaking against the development and rezoning were Eric Harrison, who called it “illegal spot zoning” and an intrusion on the Scenic Highway designation of Northshore.

Frank Slagle said rezoning for the apartments, if approved, would lead to “all sorts of changes” there. Margo Cline said the apartments were “not appropriate.”

The council also voted 7-2 to rezone the property of the Emerald Youth Foundation on North Central from residential and commercial for creation of a parking lot. Some discussion took place about the commercial zoning in another designation might be better and would prohibit other things, like a building on the site.

Campen, who represents the area, said that a 12-foot landscape buffer will be created to separate the site from the neighborhood.

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