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UNION — The City of Union’s proposed 2013-2014 municipal budget includes a tax increase to help balance the budget and a separate tax increase to help the city recoup a previous deficit.

Union City Council voted unanimously Tuesday to approve first reading of the proposed 2013-2014 budget. The proposed budget totals $41,870,350 including the Utility Fund ($34,056,240), General Fund ($5,716,480), and Solid Waste Management Fund ($772,760).

Council also voted unanimously to approve first reading of the ordinance setting the 2013-2014 municipal tax levy. The ordinance increases the millage from 80 mills to 92.5 mills.

Utility Fund

While it projects expenditures totaling $34,115,050 the Utility Fund budget projects revenues of only $33,786,270 leaving a projected deficit of $328,780. This would be balanced in part by a 10 percent increase in the water and a 15 percent increase in the waste water rates charged city customers. This would amount to a net increase of $7.25 a month for customers living within the city’s municipal limits.

Electric rates, however, would decline slightly for most city customers while the natural gas rates would remain unchanged.

The utility budget will also be balanced through the use of cash reserves and by obtaining grants or borrowing for capital improvements.

The budget also includes $92,000 for equipment for the utility department including a plotter ($5,000), utility truck ($38,000), pickup truck for the natural gas division ($24,000), and a pickup truck for meter reading ($25,000). It also includes $1,979,000 in capital construction for the utility department’s electrical ($305,000), water ($516,000), waste water ($533,000), and natural gas ($625,000) divisions.

Solid Waste Management Fund

The Solid Waste Management Fund budget projects $798,650 in revenue and $772,760 in expenditures leaving a balance of $25,890. This will be achieved through a $75,000 transfer from the general fund and a $1 increase in the garbage collection fee which would go from $14 to $15 a month. The increase in the fee is projected to generate $55,900 in revenue.

General Fund

The General Fund budget projects expenditures totaling $5,742,370 but revenues of only $4,789,670 leaving a projected deficit of $952,700. To budget is balanced by the 12.5 mill tax increase, a 10-cent increase in the per $1,000 rate for the municipal business license fee; and the transfer of $763,070 from the city’s fund balance to the general fund.

The proposed 12.5 mill tax increase, includes a 2.5 mill increase which is the maximum increase permitted under state law. It is 2.5 mills are projected to generate $36,050 in revenue. The increase means a municipal resident with an owner-occupied house valued at $100,000 will pay an additional $10 in property taxes.

The balance of the increase (10 mills) is permitted under state law which allows the cap on millage increases to be suspended to enable a local government to recoup a prior year’s deficit. The increase must be listed separately from the general tax millage and, once the prior year’s deficit is recouped, repealed.

The 10 mill increase means a city resident with an owner-occupied house valued at $100,000 will pay an additional $40 in property taxes or a total of $50 when the 2.5 mill increase is added in. That $40, however, will come off their tax bill when the prior year deficit is recouped and the increase repealed.

However, property owners with owner-occupied homes valued at $100,00 who qualify for the Homestead Exemption would only pay an additional $25 on their tax bill.

The prior year deficit totals $246,080 which would require a 17-mill increase to be recovered, however council opted for the 10 mill increase which will generate $144,000. This resulted in the amount of the transfer from the fund balance to the general fund being increased from $663,070 to $763,070.

Also included in the General Fund budget is a 10-cent increase in the per $1,000 rate of the municipal business license fee. The fee is being increased to enable the city to avoid its experience last year when, after changing its Business License ordinance to bring it into compliance with the 2012 North American Industrial Classification System, it experienced an $18,000 loss. The loss was due to 83 percent of the businesses in the city having their rate lowered.

The 10-cent increase in the per $1,000 rate would reverse, generating an addition $7,500 in revenue for the city while leaving the business license fee’s base rate the same.

The General Fund also includes $189,300 for equipment replacement.

Personnel

The proposed budget also includes a two percent cost of living adjustment for municipal employees as well as funding for three additional employees.

Editor Charles Warner can be reached at 864-427-1234, ext. 14, or by email at cwarner@civitasmedia.com.