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WILMINGTON, NC (WECT) – The City of Wilmington continued the process of setting its budget for next year at Monday morning’s briefing. Last month, council members were told they would be looking at around a $13 million shortfall, but after some elimination of projects that number has fallen to $4.5 million.
The new projections are based on cutting $5.6 million of capital projects and $2.9 million of merit and benefit contributions.
While the reduction in the shortfall number is good news for the Port City, the number still presents problems. City Council is deciding at what rate to set taxes due to the current property revaluation. In order to collect the same amount of tax money as it did during the last budget cycle, the City would have to raise taxes to the revenue neutral rate of 41 cents.
If the City votes to set the tax rate at 41 cents and makes no other changes to its budget, officials will have to find a way to make up the $4.5 million shortfall. Council members were given a look at what a $4.5 million hole would look like for city services. If Council goes with this plan, there could be a reduction of up to 60 jobs, potential fire station closings, as well as other reductions to public safety.
City staff also presented Council with tax rate scenarios of 43 cents and 45 cents. A 45-cent tax rate would equal a $1.1 million reduction to the current service level. Up to 20 positions could be eliminated.
Deputy City Manager Tony Caudle said even with a 45-cent tax rate, 53% of homeowners will still pay a lower amount of taxes when the new value of homes are taken into account.
Mayor Bill Saffo stressed that all of these numbers are preliminary, and no final decisions can be made until the County completes the tax revaluation. Currently, the County is still going through the appeals process with homeowners who want a second look taken at the value of their homes. The County has until April 1 to give City officials the final numbers.
At Monday’s meeting, meeting Mayor Saffo suggested forming a committee to specifically look at each Capital Improvement Project item and report back to the full Council.
City Council will receive another budget update from staff at its April meeting, followed by a work session in May. Caudle said he hopes to have a final budget to present to City Council by its May 15 meeting.
Copyright 2012 WECT. All rights reserved.