Smyrna Town Council discussed the 2013 budget Monday night at the council meeting, but made no formal vote.
The Finance Committee has yet to make a recommendation to council regarding the budget, but members wanted to get input from council before moving forward in the budget process.
Mayor Pat Stombaugh started the discussion by informing council of the number of projects included in the budget. However, the talk quickly changed to the lack of a tax increase and possible use of reserve funds…ideas some council members disagreed with.
Difference in philosophies
Stombaugh was in the middle of explaining why the Finance Committee felt it was important to balance the 2013 budget without a tax increase when Councilman Anthony DeFeo, a member of the committee, cut in with a difference of opinion. DeFeo informed council that the committee hadn't actually voted on the budget and there was some disagreement with the way the committee hoped to balance the budget.
DeFeo said if the town doesn't have a tax increase next year, the residents could be faced with one big tax increase later on: "We can't turn a blind eye on this."
But Stombaugh disagreed with gradually increasing taxes.
"If we balance the budget without a tax increase, we give the citizens a chance to plan for it," she said.
Eventually DeFeo asked Gary Stulir, the town's Manager of Finance, what the possible tax increase would be in 2014 if the town moved forward with no tax increase in 2013 and the planned projects for 2014. Stulir said a "back of the envelope answer" would be roughly a 13-cent tax increase per $100,000 of assessed value.
Stombaugh said if council were to have a tax increase next year to start preparing for future years, she wants to make sure that money is set aside for that purpose.
Using reserve funds
Council also heavily discussed the Finance Committee's suggestion to use money from a General Fund Reserve and Rainy Day Fund to balance the budget. The Finance Committee suggested taking roughly $500,000 from the two funds, but Stulir noted the amount needed to be covered by the reserves would actually be $799,000.
Councilman Jeff Flairty spoke out against use of the reserves to balance the budget.
"If we use the funds to balance the budget one year, what's going to happen the following year," Flairty said. "I'm not really comfortable with it."
Town lawyer Terry Jaywork said use of the Rainy Day Fund is only permissible for unexpected contingencies or for upfront expenses related to repairs, and the suggested uses for the reserves in the 2013 budget don't fall under the permitted uses.
Page 2 of 2 - What's next?
Council members will now email their suggestions for the budget to Stombaugh by the end of the week. The Finance Committee will go back to work on the budget at the Wednesday, Nov. 14 committee meeting in hopes of Town Council approving the budget at their next meeting.
Email Jennifer Dailey at email@example.com.