Berlin Council Members Question Mayor’s Proposed Flat Tax Rate; Officials Seek More Information On Potential Deficit

Berlin Council Members Question Mayor’s Proposed Flat Tax Rate; Officials Seek More Information On Potential Deficit
File photo by Chris Parypa

BERLIN – Council members questioned Mayor Zack Tyndall’s recommendation not to raise taxes this week in light of a projected deficit.

Tyndall on Monday proposed maintaining the town’s current tax rate of $.80 per $100 of assessed value for the coming fiscal year. Council members expressed concern regarding the rate and the associated general fund shortfall.

“I don’t know how this is possible,” Councilman Troy Purnell said of the $.80 rate.

At the first reading of the proposed tax rate Monday, Tyndall said he recommended keeping the rate the same as it was last year, or $.80. He added, however, that revenues were projected at $6.4 million while expenditures were estimated at $6.5 million.

“At this present moment with those rough numbers coming in we do have about a $130,000 deficit between those two numbers,” Tyndall said. “Despite the roughly $130,000 shortfall I’m very confident that we can close that gap without having to increase the tax rate, without anyone being in jeopardy of losing their job and without cutting any of our critical services that we provide to the community.”

Tyndall said the pandemic had been hard on everyone.

“The last thing I would like us to do as a council or governing body is increase that tax rate and provide even more stress on some families and our residents that live in the community,” he said.

Purnell said he didn’t understand how Berlin could maintain the same tax rate when the town had made significant cuts and held off on capital improvements for the past two years.

“After hearing from (auditing firm) PKS this year, how did you come up with 80 cents?” Purnell said. “I know there’s an awful lot of improvements that still need to be made.”

Tyndall said the projected deficit was partially due to proposed capital expenditures.

“We do have some capital items that are in this budget that have been requested by staff which are in part what’s getting us to that deficit that we’re in, but there’s also a little bit of room for some wiggling to be able to keep us in the confines of that tax rate, to be able to still make some of the investments we need to make,” Tyndall said.

Purnell said he hadn’t seen projections or figures yet.

“I’d love to see the facts you used to come up with those numbers if there’s any way you can share those with us,” he said.

Tyndall said he would but added that his meetings with department heads weren’t until later in the week.

“We have a draft of the budget already created that we could share with the council but … you’re going to have to know that’ is very much in its infancy,” he said.

Councilman Jack Orris asked why the council had to set the tax rate so early in the budget process. Finance Director Natalie Saleh said setting the rate early meant revenue projections could be done.

“Knowing the revenue for the general fund is helping us know what capital budget we can structure,” she said.

Councilman Jay Knerr asked Tyndall why he was suggesting maintaining the current rate when it didn’t come with a balanced budget.

“I do have to present a balanced budget to council but that does not have to be done at the time of the tax rate being set,” Tyndall replied.

Knerr went on to ask what the mayor was considering cutting from the proposed budget to eliminate the deficit, but Tyndall said it was too early to say since he hadn’t met with department heads yet.

Saleh said she recommended the town consider incremental tax increases so the council wouldn’t have to focus on making cuts every year.

“When the department heads projected and requested, they’ve been asked to ask for or plan only must have items,” she said. “The draft we have basically is not something where we are toying with ideas. It’s pretty much what’s needed.”

Councilman Dean Burrell asked if the department heads would have input on what items were cut from the budget.

“They’re going to be very integral in that,” Tyndall said. “That’s why I’m also not going to stand here and say we’re going to cut something without having the opportunity to first speak with our department heads.”

He added that he didn’t consider the proposed budget bare bones.

“I wouldn’t be presenting an 80-cent tax rate and keeping that constant if I did not know with some sense of confidence that we can achieve that goal while still making the investments we need to make,” he said.

Town Administrator Jeff Fleetwood said staff began working on the budget a month ago and would be reviewing departmental requests with Tyndall this week. He added needs, not wants, had been included in the spending plan.

“I firmly believe this is a bare bones request from the department heads,” he said.

He added that the tax rate being introduced was not locked in.

“If you at some point decide as a collective body that rate needs to go down or that needs to go up, that’s a decision you’ll have to make,” he said.

A public hearing on the tax rate is set for the March 22 council meeting.

About The Author: Charlene Sharpe

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Charlene Sharpe has been with The Dispatch since 2014. A graduate of Stephen Decatur High School and the University of Richmond, she spent seven years with the Delmarva Media Group before joining the team at The Dispatch.