Loudon budget, tax rate gets initial nod

Adam Delahoussaye news-herald.net

Deficit increases, taxes stay stagnant

The Loudon City Council voted on first reading to approve their annual budget and set the property tax rate for the 2025-2026 fiscal year at the May 27 voting meeting.

The property tax, which currently sits at $1.19 per $100 of assessed value, remains unchanged from the previous fiscal year’s rate. The motion to keep it stagnant passed unanimously, despite some concerns regarding the annual budget intrinsically attached to it.

The motion for approval was made by Council member John Cardwell, who would later vote against the budget approval, with a second from Council member Eric Newman.

MORE PERSONNEL AND PAY RAISES

Among the biggest additions to this year’s budget, according to Loudon City

Mayor Jeff Harris, is more personnel. Salaries for an assistant recorder to aid city recorder Melissa Huskin, another firefighter and police officer as well as a few promotions that come with pay raises are all on the list of new expenditures heading into July 1.

With the current Public Works director also slated for retirement, City Manager Kevin Goins is also looking to split that job back into two roles: a Director of Parks and Recreation, and a Maintenance Director, which were both consolidated into one position back in 2021.

The budget approval saw a 4-1 vote, with Council member Cardwell being the lone dissenting voice. Cardwell was an outspoken critic of the reimagined city budget at the May 12 workshop, offering final comment on the new proposal again on May 27.

The new budget sees about half of the city’s capital fund balance put to use over the next year. It’s a move that, if it were to become a trend, Cardwell thinks would set a precedent that could yield irresponsible consequences.

“This puts us in a budget deficit of about $800,000,” Cardwell said. “And I don’t think it’s fiscally responsible or fiscally conservative to take an action and then later figure out how to try to pay for it.

“I think we need to hit the pause button, figure out how to pay for this and not burden the taxpayers down the road with it.”

Cardwell also expressed at the City’s workshop meeting that a large facet of that struggle is the lack of adjustment for revenues in regards to inflation. Loudon has barely seen any aid or assistance financially to keep up with rising prices, as well as a sales tax that could decrease according to early projections.

The lack of an influx of revenue has been a big talking point for the City Council heading into their next fiscal chapter.

“Cash flow is what keeps you alive, it’s the Band-Aid on the wound, so the fund balance is everything,” Cardwell said.

Though City Manager Kevin Goins said that balancing the checkbook is far from a one-year fix … At the May 12 workshop, Goins expressed an interest in finding other avenues for spending that could better allocate the funds the city has allotted themselves — making the most of taxpayer dollars as well as their annual allowance.

Goins also stated that he’s been in talks with the frequently used Shpigler Group to reassess expenditures and find ways the city can cut down on paying outside sources for internal jobs.

Mayor Harris is willing to give some time for adjustment, given their new City Manager has only been in his position for seven months. He also acknowledged that the big fixes were a multi-year project. Council member Eric Newman, while voting to approve the budget on first reading, echoed some of the worries that made others averse to this approach.

“Its important throughout the year that all of us as a Council keep in mind this budget and this conversation, and that we cannot continue down that horse,” Newman said.

Despite some immediate concerns, Harris expressed that he wasn’t overly worried about the deficit in an interview with The News-Herald. While he doesn’t want to make a lack of revenue a regular occurrence, it’s far from an irregularity.

“We project that the revenue coming in is going to create a deficit with the new positions and things we’re adding,” Harris said. “But we’ve had that before, and we just have to take it out of the general fund, but you don’t want to keep doing that. You can’t continue to do that.”

GIVING THE NEW MANAGER BREATHING ROOM

With the recent addition of Manager Goins in December, there’s a lot of adjustment and re-alignment that’s expected to happen within the city over the next few years. Harris said he felt it unfair to shortchange Goins when a number of different variables could increase revenue beyond bottom line expectations early into his tenure.

“I think we’ve got to give [Goins] a chance to familiarize himself with all the departments and how they run,” Harris said. “I’m sure he’ll have some ideas going forward on how we can save money and how we can do some things differently, so I think we’re giving him an opportunity to do that.”

Harris also added that while an increase to the property tax rate was considered, it was again discarded as to allow some breathing room for the City’s newest hire. Harris said he didn’t want to have Goins “start off on the wrong foot,” with an immediate tax raise.

The initial motion for the budget approval was made by Vice Mayor Tim Dixson, with a second coming from Council member Eric Newman.

In other news, Loudon City Council:

• Approved its Downtown Master Plan and subsequent Downtown Coordinator Kathy Price, to aid Loudon in revitalizing its downtown in an effort to become a Main Street Community.

• Approved on first reading a new drought management plan, including emergency management, alerts and other preventative measures in case of extreme weather conditions. The plan would have a tiered system of payment to prevent excess use, attempting to provide equitable access to city resources.

Manager Goins said its effect would most likely not be felt, as Loudon sits right next to one of the state’s largest bodies of water. The plan is one that comes as a recommendation from the state as a precaution.

• Made its final amendments to the 2024-2025 fiscal year budget.

A second and final reading for Loudon’s new budget will be held on Monday, June 23, at 6:30 p.m. in the City of Loudon & Loudon Utilities Administration Building.