THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Tuesday, June 11, 1996 TAG: 9606110318
SECTION: LOCAL PAGE: B1 EDITION: NORTH CAROLINA
SOURCE: BY PERRY PARKS, STAFF WRITER
DATELINE: ELIZABETH CITY LENGTH: 81 lines
There may be a way to pay for buying and renovating a new City Hall building besides a property tax increase, the City Council decided Monday.
The council has spent the last two months of its budgeting season working toward what seemed to be a certain 2.5 cent per $100 valuation tax increase to pay for extra administrative space on Colonial Avenue.
But a suggestion by Councilman Lloyd Griffin has revealed another option.
Griffin proposed at a budget work session that the city consider paying for the building and renovations through its utilities departments - electric, water and sewer - known together as the ``enterprise fund.''
By using a small portion, probably less than half a percentage point, of those money-generating funds, the city could raise the $115,000 per year needed to retire the debt on extra office space.
The 10-year debt includes the $450,000 cost of buying the BB&T building next to City Hall, and an additional $400,000 to renovate the old and new administrative buildings.
``I sincerely hope that the manager can find a way, though the enterprise fund, to do the project without an increase,'' Mayor H. Rick Gardner said after the meeting.
The proposed tax increase also was intended to pay for the city's new fire station, which is expected to be built by the end of this calendar year. But City Manager Steven Harrell said the initial payment on that structure could be deferred until July 1997.
Harrell will return to the council Monday with a proposal for using the enterprise fund to pay off the BB&T and City Hall building expenses. Officials said the task might be accomplished by juggling money within the funds, by raising utilities rates slightly, or by combining those options.
The council is expected to approve a 1996-97 budget after a public hearing June 17.
Officials will have to decide at that time which method of payment - the property tax increase or what Harrell proposes for the enterprise fund - is a lighter load for city residents.
On Monday night, Harrell and council members seemed confident that Griffin's idea would beat the proposed property tax increase.
``That certainly shows a lot of thinking on your part,'' Gardner told him.
A plan without a tax increase will probably have a better chance of easy passage. Councilman Zack Robertson has already said he will not vote to raise property taxes. And Griffin has voted against the last two city budgets, both of which included tax increases.
Also on Monday, the council approved a new policy for city retirees' health insurance benefits.
The policy largely leaves employees and retirees alone. It will continue to pay for all health insurance for retirees who worked 20 or more years for the city.
Present employees who retire after 20 years or more of service will have full benefits paid until age 65. Then, the city will pay up to $1,200 per year for supplemental insurance.
The biggest changes will be for employees hired after July 1. From that date, only 30-year employees, 65-year-old retirees or 55-year-old retired police officers will be eligible. And even those retirees will receive no city assistance after turning 65.
A council committee passed the plan to an audience of more than 50 city workers and retirees. Some retirees had been angered by an earlier proposal to cancel their benefits at 65. The council reversed that idea last week.
But many employees were still angry that the city will not fully pay their supplemental health insurance when they turn 65. The $100 a month may not be enough, they said.
``Nobody likes this,'' said retiring Police Capt. Olin Leary, who later learned he would be eligible for full benefits. ``This is not right.''
The city pays 58 retirees' monthly supplemental benefits now, at a cost of $195 a month, totaling $135,000 a year. But officials said individuals can get supplemental insurance for much less than that from other plans.
In essence, argued Councilman Robertson, the city makes its future costs more predictable while adding little to what employees will pay when they retire.
``They can buy it cheaper,'' Robertson said. ``If you give them $100, you can buy plenty of insurance.
``We didn't really take away from anybody, but we did lock in the cost. . . to the taxpayer.''
The city will begin to realize some savings from the new plan in about 15 years, when people working now retire and reach 65. Major savings will come in several decades, when future employees who get no coverage begin to retire. by CNB