With numerous deferred utility projects and uncertainty surrounding the coronavirus crisis, the Purcellville Town Council is beginning deliberations on the leanest budget the town has seen in recent years.
Town Manager David Mekarski presented his proposed Fiscal Year 2021 budget Wednesday night to a Town Hall vacant of residents—with the town opting to prohibit the public from physically attending. Mekarski outlined a proposed $21.7 million budget, which, including the Capital Improvement Program, is down by $2 million from the current fiscal year and includes a 2-cent real estate tax rate increase, a half-cent Fireman’s Field tax district increase, and 5-percent water and sewer rate hikes. Mekarski is also proposing a 3-percent salary increase for the town’s close to 90 employees.
While the General Fund budget would see a 5 percent increase, Mekarski said his proposed budget is lower primarily because fewer capital improvement projects are planned.
In the current budget, about $751,000 is included for four water projects to complete this year. In Mekarski’s proposed budget, $100,000 is set aside for only one water-related project—Hirst Reservoir improvements.
Perhaps most anticipated in the budget presentation was talk about the town’s water and sewer funds as a whole, which shrunk in Fiscal Year 2020 by 39 percent and 16 percent over the previous fiscal year, respectively.
With the help of 5-percent utility rate increases, which will be calculated using a new four-tier rate structure, the water fund will increase by nearly $110,000 while the sewer fund increases by nearly $90,000. Compared with Fiscal Year 2019, the water fund is still down by about $1.9 million and the sewer fund is still down by about $600,000.
Currently, the average single-family household, which uses 8,000 gallons of water, pays $217.57 for water and sewer service on each bi-monthly bill. It is not yet clear how much the rate increases and tier changes will increase homeowners’ bills.
In noting that he felt the budget should be even leaner, Councilman Nedim Ogelman said the town should first look elsewhere to pay off utility debt and fund utility projects before turning to taxpayers.
“These dire, kind of lean times call for creative measures,” he said.
Mekarski also proposed the town increase the real estate tax rate from 22 cents per $100 of assessed value to 24 cents. That means the average single-family household—which is valued at about $500,000, according to the Commissioner of the Revenue’s 2020 Annual Report—will pay $1,200 annually on real estate tax. That’s about $163 more than last year, seeing that the average single-family home in 2020 is valued at about 6 percent more than last year.
The owner of the average townhome, which the commissioner of the revenue has valued at about $374,000, will pay about $898 annually on the tax—about $131 more than last year, seeing that the average townhome in 2020 is valued at about 7 percent more than last year.
The proposed budget also includes a half-cent increase to the Fireman’s Field Tax District rate, up to 3.5 cents per $100 of assessed value. Mayor Kwasi Fraser said he would like to see the Fireman’s Field complex generate $50,000 annually on its own via events and other programming before the town asks taxpayers to put in more. Currently, revenue from the special tax district provides the Parks & Recreation fund with 81 percent of its total revenue.
Although he originally proposed a 1-percent increase in meals tax, Mekarksi said that was no longer the case, noting that many businesses are struggling to stay open during the coronavirus crisis.
He emphasized that, while his budget anticipates the town will pull in nearly $3 million in revenue from the meals tax in the next fiscal year, the town could lose 25 percent of that revenue given the current economic climate.
Mekarski said that in light of the situation, the town staff is taking “great pains” to preserve its unassigned fund balances. Throughout the town’s General, Parks & Recreation and Utility funds, that balance is about $32 million.
The council is scheduled to discuss the budget May 24 and 26; April 1, 14, 22 and 28; and May 6. It could vote to adopt the budget as early as May 26, but no later than June 9.