Divided council approves upcoming budget, tax rate
By Matt Ward —
Split over whether or not to balance utility funds, a divided Fredericksburg City Council approved their 2013-2014 budget Monday night by a 3-2 vote.
Councilmen Tim Dooley and Gary Neffendorf opposed the budget as the city’s electric, solid waste and drainage funds are projected to operate at a deficit in the coming year.
While there was division on budget issues, the council unanimously approved the effective tax rate of $0.2600 per $100 valuation, a rate which is $0.0047 lower than the current rate of $0.2647.
Worried about low reserve balances in the city’s utility funds, Neffendorf moved to balance the budgets (deficits in parenthesis) on the electric ($70,200), water and sewer ($123,200), solid waste ($56,100) and drainage ($73,100) funds.
Mayor Jeryl Hoover asked why other funds, such as the golf fund, did not also need to have a balanced budget.
“It’s in the general fund, which has $5 million in reserves and I think that’s too much,” Neffendorf said. “Three months’ reserve is a formula and if you’re carrying too much money in reserves, you’re sitting on other people’s money that they put there with rates or taxes and so I think it’s justification to take that down. In electric, the reserves are low. In water and sewer, they’re adequate.”
Neffendorf’s motion failed by a 3-2 vote with only Dooley and Neffendorf in support.
Originally, the water and sewer fund was expected to operate at a deficit as well, but a 4-1 vote with Councilwoman Kathy Sanford opposed will require city staff to reduce their expenditures in order to balance the budget.
It is expected that $125,000 of the $200,000 allocated to fund replacement water and sewer lines will be removed from the budget.
The city council is expected to discuss reserve fund balances at an upcoming council retreat next month.
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