Loudon fails to adopt new budget for fiscal year

Vicky Newman News-Herald

It has never happened before, that anyone recalls, a fact some officials find slightly disconcerting.

The  City of Loudon will enter a new fiscal year July 1 without a new budget.

The Loudon City Council approved a resolution Monday to continue operating under the existing funding levels established by the FY 2010-2011 budget. Uncertainty about revenues were the force behind the decision to delay. Falling property values and lowered assessments have resulted in a decrease in appraised values, leaving officials uncertain whether a tax increase will be necessary. Rather than set a tax rate too low and face shortfalls, the board adopted a wait-see approach.

"We will continue under the budget at the same levels we are operating under until we have a little better handle on a budget," Lynn Mills, city manager, said. "We need more firm information, and maybe we will have that by Aug. 1."

Aug. 1 is the deadline for Tate and Lyle and Kimberly Clark to file further appeals with the state of their appraised property values.

"If they choose not to appeal, we will know the numbers and we can proceed and set the tax rate," Mills said. "If they appeal further, we can try to come up with a resolution with revenues to budget next year. Maybe this will buy us enough time. We will continue with no increases or decreases until we have further information."

The original proposed budget of $6.35 million, adopted on first reading had included a 2-percent, across-the-board salary increase for city workers.

The public hearing for the budget ordinance and tax rate had been set for 7:15 p.m. June 20, prior to the regular meeting. No citizens appeared to provide input.

With that budgeting situation, council members were hesitant to spend anything.

Councilman Lynn Millsaps suggested that any purchases that could be delayed should be delayed. A firehose power roller to help firefighters handle the larger, 5-inch hoses that will equip the new ladder truck was questioned. Bids were slated to be accepted for the roller; funded by the sale of the existing ladder truck to Blount County Fire Department for use training and for replacement parts. In addition, the a purchase of a police vehicle to replace a vehicle wrecked last year was on the agenda.
On a motion by Councilman Mike Cartwright, seconded by Councilman Jimmy Parks and unanimously approved, the board voted to authorize Mills to study purchases, determine if items were necessary and continue if he deemed it necessary.

Millsaps said, "I don't like to put off the budget and taxing, but until there are hard numberrs, I don't see we have a choice. Even after August we might have no idea of he revenue we could lose. I hate it happened; it's kind of put us in a bind."

Mills added, "It is a new experience with our actual revenues going down with devaluation of property. This year's and last year's ..."