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The original item was published from 5/24/2017 5:55:00 PM to 6/21/2017 10:31:27 AM.

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Danville, VA Local Government News and Announcements

Posted on: May 24, 2017

[ARCHIVED] Council finds consensus on closing budget gap

Photo of exterior of Municipal Building

City Council reached a consensus Tuesday night on how to balance the proposed budget for the next fiscal year, which begins on July 1. The measures include, for example, an increase in the attrition rate, an upward revision of revenue forecasts and a delay in the purchase of several pieces of equipment.

The consensus was developed during a special work session arranged to discuss how to close a budget gap of $1.4 million. With the gap closed, the next step is to advertise the proposed budget to the public.

A public hearing will be held at City Council’s June 6 meeting. City Council will vote on adoption of the budget at its June 20 meeting. The final budget will serve as a framework for city operations from July 1, 2017, through June 30, 2018.

The budget gap developed last week when a proposed one percentage-point increase in the meals tax — from 6 percent to 7 percent — failed to garner a sufficient number of votes among City Council members in support of the increase. The percentage-point increase would have provided an additional $1.2 million in revenue for the next fiscal year.

In addition, City Council decided last week to allocate $200,000 more than previously proposed for Danville Public Schools operations for the next school year.

Last night, City Manager Ken Larking presented options to Council members. He grouped the options into four tiers — each with a list of of measures to consider. Following debate of more than two hours, Council members reached consensus on accepting the measures in the first tier.

The increase in the attrition rate, revision in revenue forecasts and delay in equipment purchases all were included in the first tier. The tier also included moving several employee positions from the General Fund to other self-supporting funds and using money set aside in the George Washington High School stadium fund to cover the additional $200,000 approved last week for school operations.

The proposed budget for the next fiscal year includes additional crime reduction initiatives, invests more money in public schools and continues projects designed to grow Danville.

Reducing crime, improving public schools and growing Danville are the three focus areas that City Council identified during a retreat in October that it wanted to work with the city manager and staff to address.

The proposed budget will upgrade police equipment, purchase and equip additional police vehicles, hire civilian personnel to assume tasks currently handled by police officers, and fund a targeted recruitment and retention effort for new police officers.

Schools will receive an additional funding of $1.6 million for operations, bringing the total to nearly $20.6 million or 8.42 percent over the current level.

To grow Danville, the budget funds further study of riverfront development, creation of gateway corridor plans and a review of zoning and development codes to ensure the permitting process is as business friendly as possible.

In addition to costs associated with the City Council focus areas, the proposed budget maintains municipal services remain at current levels and sets aside funds for employee raises and increases in employee health insurance, employee retirement contributions and medical supplies for inmates at the City Jail.

The proposed budget includes increases in the real estate tax rate, personal property tax rate and lodging tax as follows:

  • 7 cents in the real estate tax rate, from 73 cents to 80 cents per $100 in value.
  • 50 cents in the personal property tax rate, from $3 to $3.50 per $100 in value.
  • a one percentage-point increase in the hotel/motel lodging tax from 6 percent to 7 percent.

The increase in the real estate tax rate is the first since fiscal year 2003. The current tax rate of 73 cents is second only to Williamsburg for cities and 33 cents lower than the state average. Under the new 80-cent rate, a homeowner with a house valued at $75,000 will pay an additional $52.50 per year or $4.38 per month

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