By Kirk Ross
Staff Writer
Noting that the town’s debt service increases are not keeping pace with revenue growth, Chapel Hill Town Manager Roger Stancil is asking the Town Council to shift $3.8 million from the town’s reserve fund and raise the tax rate by 2 cents in order to make ends meet.
The changes would raise the town’s tax rate to 54.1 cents per $100 valuation.
In his presentation to the council on Monday, Stancil said that the opening of the Homestead Road Aquatics center late in the year will add to the town’s ongoing expenses. Bonds that paid for the center are part of a $29.36 bond measure approved by voters in 2003. The debt service on the bonds is equivalent to 4 cents added to the tax rate over the 20 years.
Like the other governments in Orange County, Chapel Hill also took a hit in lower sales tax revenues from a 1-cent local option sales tax.
In his budget message to the council, Stancil says sales tax are projected to be $700,000 less than what was expected to come in for the fiscal year that ends June 30.
The council was scheduled to hold a work session on Wednesday.
Other budget pressures Stancil points to are:
- Nearly $1 million in annual costs for adding 21 additional positions, primarily in public safety;
- A downtown Development initiative that will cost approximately $500,000 this year;
- A change in the formula for federal reimbursements for public housing that will lead to a $176,000 shortfall in the public housing budget.
A public hearing on the budget is scheduled for May 16 at 7 p.m. at Town Hall. The full budget can be downloaded at www.townofchapelhill.org/index.asp?nid=1318