Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, April 24, 1990 TAG: 9004240433
SECTION: VIRGINIA PAGE: B1 EDITION: METRO
SOURCE: LESLIE TAYLOR STAFF WRITER
DATELINE: LENGTH: Long
In a proposed $58 million budget presented to council Monday night, Smith suggested that rates be increased by a percentage that is just enough for the Water Department to pay for itself, yet not enough for the Sewer Department to avoid "coming up short," Smith said.
To correct the Sewer Department's deficit, the city is exploring alternatives that could result in a restructuring of sewer rates, Smith said.
Current monthly water rates for both domestic and commercial customers is $1.20 per 1,000 gallons for the first 50,000 gallons used and $1.10 per 1,000 gallons for the next 450,000 gallons. Any amount over that in one month carries a rate of $1 per 1,000 gallons.
Monthly sewer rates are $1.45 per 1,000 gallons, based on 100 percent of monthly water consumption. The minimum rate for one month is $6.
Nearly $3.5 million of an upcoming $5 million bond issue has been earmarked for sewer-system improvements - correcting inflow and infiltration problems, repairing faulty lines and extending existing sewer lines. Targeted areas include the Lee Mitchell and Heidelberg Estates subdivisions and the North Mill Road area.
Two of the targeted areas became part of Salem as a result of annexations. The Heidelberg subdivision was part of Roanoke County property annexed into Salem in 1985. The North Mill Road area - where some households are without indoor plumbing - was annexed from the county into Salem in 1966.
"Revenue from those utilities should go toward funding debt service to pay off the bonds," Smith said. To make a point, Smith asked the city finance director to take the water and sewer bills of each council member and increase them by 17 percent.
"That's where it hits home, when you see it in your bill," Smith said. The results will be made available to council members during budget sessions scheduled for May 7-9.
The proposed spending plan for the next fiscal year includes $37 million in general fund money, the bulk of which reflects $18.2 million in school funding. The enterprise fund comprises $21 million of the budget.
The budget is 4.7 percent higher than the current fiscal year budget of $55.4 million. The budget maintains the current real estate tax rate of $1.18 per $100 of assessed value and a personal property rate of $3.20.
Smith has suggested that $369,000 in meals and lodging tax revenue be allocated for new landfill equipment (a tractor-excavator), new equipment for the Sewer Depatment and to complete funding for the $1 million James I. Moyer Sports Complex.
The meals tax has generated between $800,000 and $1 million a year in revenues for Salem since it was imposed in 1988.
A projected 11 percent growth in sales tax revenue will provide $300,000 in additional revenue. The growth reflects new businesses that have sprouted in Salem during the past year such as Wal-Mart and the Lakeside Plaza shopping center.
The city has realized a slight decrease in federal and state revenue, or rather, federal money channeled through state sources, Smith said. But the decrease is such that it hasn't hampered city finances, he added.
"We haven't depended on a lot of state and federal funding," he said. "There are programs that other people get into that in five years, the funding has dried up. If we had been dependent on that funding, the impact could have been worse."
"It's a Catch-22," he said. "We keep getting mandates without money. Education is a beautiful example."
The city school system will need $9.2 million in local funding next year, $550,000 more than the city provided in the current budget. All but beginning teachers would receive a 6 percent pay raise in the proposed budget, one that exceeds the state-mandated 5 percent increase.
The proposed budget does not include any payment to a proposed consolidated Roanoke and Roanoke County government for public facilities in territory identified as being allowed to become part of Salem if there merger is approved by voters.
"Money for that would come out of the reserve fund should we happen to get together on the purchase," Smith said. "We would pay out over 5-10 years."
Smith said there has been no movement on negotiations for payment since January. The city offered $12 million for what consolidation negotiators wanted $26 million, Smith said.
"We're in a deadlock," he said. "There have been no further Christmas cards."
A 42.8 increase in hospital insurance rates has prompted Smith to suggest that the city no longer pay 100 percent of the employee share. He has recommended that the city solicit bids with the school system to see if better rates can be obtained on a combined group.
"We had a couple of catastrophic claims filed," Smith said, explaining the rate increase.
The new rates, if any, would be effective Oct. 1. "We'll suffer the higher rates for three months," Smith said.
Other budget highlights include:
A recommendation that a portion of the 1989-90 year-end balance be placed in reserve and applied toward solutions on sewage treatment, landfills, solid waste disposal and recycling;
A 4.5 percent cost-of-living raise for city employees;
Nine new positions, including a five-person crew that will be charged with identifying faults in the city sewerage system.
by CNB