After tweaking budget numbers the past two weeks, Newton City Council is preparing to consider a budget plan that will leave property taxes, and water and sewer rates unchanged for the year ahead.
The $40 million budget for fiscal year 2011-12 will also provide a 1 percent cost-of-living increase for city employees, although it will also make dental insurance optional and raise other health insurance rates on employees' dependents. The proposed budget will increase electric customers' rates 5.5. percent.
The total budget of about $40 million represents roughly a 21 percent increase over the amended budget for the fiscal year that ends June 30; however, it also includes a capital improvement plan, which plans $8 million in spending for water and sewer line rehabilitation, a police records system and other vehicles and equipment.
Newton City Council is expected to consider budget approval after a public hearing on the spending plan during Tuesday's regular monthly meeting.
"I think this budget, as a whole, is a conservative, frugal budget," said Newton Mayor Robert Mullinax. "There is an increase in the dollar amount because we have invested in the security of our city by adopting a capital improvement plan. ... It was a necessary and bold step for our Council to take to ensure Newton can continue to grow and continue to be a viable community for families to come and make this place their home."
Mullinax also notes that after two consecutive years of dramatic water and sewer increases, the proposed budget does not include any hike for those city services. It also does not include a property tax increase.
The budget includes a 5.5 percent electric rate increase, which is down from a 6.3 percent increase originally proposed in City Manager Todd Clark's budget revealed May 3. For an average Newton power customer using 1035 kWh per month, the increase means electric bills will climb $6.93 per month to $116.90. Over a year, the power increase amounts to $83.16 for the average customer.
During a work session Tuesday night, Council member Robert Abernethy Jr. opposed a motion to set the electric rate increase to 5.5. percent.
"In an effort to ease the burden on our citizens, we received an electric rate increase from our electric provider, and we did not impose that entire increase on our citizens," Mullinax said. "This Council has made every effort to keep down the cost of living in the city of Newton, while providing quality services at a most reasonable rate and to continue to provide a place where you want to call home."
The proposed budget provides Newton's 176 city employes with a 1 percent cost-of-living adjustment (COLA). Originally, Clark's budget included a 2.5 percent COLA, but during Tuesday's workshop, City Council voted 4-2 to reduce that increase to 1 percent. Council members Mary Bess Lawing and Abernethy voted in opposition to the COLA change that will reduce city expenses across all funds by $116,900.
A portion of those savings will go toward funding $56,500 in special appropriations that also received an approval Tuesday. Those funds will benefit various cultural organizations throughout the city. Abernethy voted against funding those organizations.
Newton employees will also be affected by the city budget as it will make dental insurance optional, and employees will be required to pay the cost of that benefit — about $7.02 per week, Clark said in his May 3 budget message. Newton will also change insurance providers — going to Blue Cross & Blue Shield of N.C. — and the city will see about a 20 percent increase in the cost of covering employees. That 20 percent increase would have also been part of the city's previous health insurance provider, Clark said, and with the new insurance provider, there will be no change in co-pay or benefits. Employees will see a similar increase for their out-of-pocket costs for any covered dependents.
On Tuesday, City Council voted 4-2 to increase Newton Fire Department fees and charges, with Council members Wayne Dellinger and Abernethy casting dissenting votes. Those charge changes will be included in the budget, as well.
"I think it is a great step forward for the city to position ourselves with this budget," Clark said, adding that with the CIP, the budget will help replace equipment and infrastructure in "dire or critical" need of replacement. "We are doing that without a tax increase this year, and the City Council worked very hard to contain an unavoidable electric rate increase. This is a conservative budget that, operationally, did not increase significantly."
Newton City Council meets at 7 p.m. in the council chambers at Newton City Hall. The meeting and a public hearing on the budget are open to the public.