Berlin Council Delays Tax Rate Hearing

Berlin Council Delays Tax Rate Hearing
Mayor Zack Tyndall speaks at Monday's council meeting. Photo by Charlene Sharpe

BERLIN– Town officials delayed a hearing on the tax rate until April 11 in an effort to get a better understanding of the budget.

After contentious discussion Monday, the Berlin Town Council voted unanimously to table the public hearing on the tax rate until April 11. The move came after much discussion of the $462,000 deficit in the current draft of the budget and Mayor Zack Tyndall’s disappointment in staff for not proposing cuts.

“What I will say is the disappointment is that there was no feedback,” Tyndall said. “I didn’t receive anything from any department that even said ‘I can’t budge.’”

Earlier this month, the town introduced an ordinance that would maintain the current tax rate of $0.815 per $100 of assessed value. On Monday, however, Tyndall asked the council to delay adoption of the tax rate. He said he wanted the town to pursue the concept long advocated for by Councilman Jack Orris of working on the budget and tax rate in unison. He said that with a more than $400,000 deficit in the proposed budget, cuts needed to be made. He said he hadn’t heard from staff or the majority of the council about how the budget could be balanced.

“I did not receive anything back from our department heads which I am rather disappointed about,” he said.

Tyndall said Orris had the right idea when he proposed developing the tax rate during the budget process and not before.

“Then we can set a tax rate and a budget side by side, looking at what those revenues are, what the expenditures are and where we need to actually come in,” he said.

Police Chief Arnold Downing said departments had all met with the mayor and two council members to talk about their budgets. During those sessions, they told officials they were presenting bare bones budgets and Tyndall did not question what they’d proposed, according to Downing.

“We don’t want to go ahead and blindside anybody but we don’t appreciate someone saying I’m disappointed in you,” Downing said. “I’m looking across here, and these folks work hard every day. For someone to go ahead and make a statement like that it’s truly not appreciated. I don’t think it’s fair.”

He added that while Tyndall had reached out to some departments, he had not reached out to Downing. He stressed that departments had been advised to put forth their needs, not wants, and that that was what they had done.

Finance Director Natalie Saleh echoed Downing’s comments. She said she hadn’t even been consulted regarding the budget presentation Tyndall had displayed Monday.

She said staff hadn’t suggested cuts because there were none.

“Those are must haves,” she said. “There is no room to wiggle. The cost of material, chemicals, services, professional services, everything went up through the roof… Every single department head called me assuring that what they have requested and discussed is what they need to operate and provide services to the town.”

Tyndall urged the council to come together and to delay the tax rate hearing until May. He said the currently proposed rate would leave the town with a deficit.

Councilman Troy Purnell called for an increase.

“We’ve been kicking this can down the road,” he said.

Councilman Dean Burrell said it was the mayor’s duty to propose a realistic tax rate.

“I have heard from the department heads that the budget they presented is bare bones, no wiggle room, so I would expect from you a legitimate tax rate,” Burrell said.

Tyndall agreed that it was his duty to present the budget and tax rate.

“But what we have in front of us this evening is a tax rate without any dialogue, other than a sit down session with department heads to discuss what their requests were, that’s it,” he said.

Councilman Jay Knerr said Tyndall wanted to keep the tax rate the same even though the issue of the deficit couldn’t be solved unless taxes were raised.

Knerr said wasn’t comfortable setting a tax rate unless the council had all the relevant information. Tyndall said that information could be discussed at the budget work sessions.

Burrell asked if Tyndall would keep the tax rate consistent if it meant jeopardizing services or safety.

“I’m going to do everything I can possibly do so those fees and taxes do not have to go up but if there was no other way, that’s why we have taxes, we have fees,” Tyndall said. “To that example I recommended to this body that we pursue fee increases for our enterprise funds. Because we can’t even cover a $15,000 infrastructure improvement. I disagree with having to do that but it is an obligation that we have.”

Burrell called on Tyndall to be a leader.

“A leader is someone who inspires passion and motivation in followers,” Burrell said. “A leader is someone who ensures their team has support and the tools to achieve their goals. Mayor right now I’m asking for your leadership.”

Tyndall said he just didn’t feel officials were fully prepared to make a decision on the tax rate this week.

Town Administrator Jeff Fleetwood said it was “very unrealistic” to cut $462,000 in expenses from the general fund.

“I disagree,” Tyndall said. “The only way we’re going to truly find the answer to that is hard work. Right now we’ve got to put some hard work into the budget, look at requests before us and at what we need to do to bridge that gap.”

Resident Tony Weeg said he heard department heads saying there was nothing they could cut.

“Aren’t you already aware through many years of knowledge of this town, kicking the tax can down the road is going to bite us in the butt and we cannot do it on the backs of our employees…,” Weeg said. “I just don’t understand it Zack and I’m a full supporter of you man but I don’t get this.”

Tyndall said the town always had budget work sessions in order to have conversations about expenditures and how they could be adjusted.

When asked what tax rate would cover the deficit, Tyndall said it would require a 9-cent increase. Staff disagreed and said that a 3.5-cent increase would generate more than $300,000 in additional revenue.

Tyndall continued to advocate for a tax rate discussion on May 9. Staff said that make it difficult to meet timing requirements.

“It’s becoming a big snowball if we’re pushing it that far,” Saleh said.

Instead, the council agreed to delay the tax rate hearing until April 11. That will ensure it occurs after the town’s budget work sessions, one set for April 4 and one set for April 11, have been held.

In a budget work session held in February, Saleh explained that property tax revenues would increase $143,948 even if the tax rate remained the same at $0.815 because the assessable base had grown. At that meeting, Saleh also included projections that showed how much the revenue would increase with different tax rates. A rate of $0.82 would bring in $311,973 in extra revenue while a rate of $0.83 would bring in an additional $360,127 and $0.84 would bring in $408,280.

For a property assessed at $300,000, a tax bill at the current rate would amount to $2,445 while the $0.83 rate, for example, would equate to about $2,490, according to the February projections.

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.