Tax, fee increase could be underway for Ranlo

Ranlo officials are considering major belt-tightening measures as part of the upcoming budget process, which could lead to increased property taxes and fees for city residents after July 1.

Ranlo City Manager Jonathan Blanton unveiled his budget proposal during a special three-hour session in March that recommended a 25% increase in property taxes, of 40 cents per $ 100 of property tax. property at 50 cents per $ 100 of property value.

For example, someone with a $ 150,000 home would pay $ 750 in municipal property taxes, an increase of $ 150 from the current rate. The person should also pay the county property taxes.

This is not the only hike offered. Water and electricity customers would see their bills increase by a minimum of $ 6 per month, with $ 10 to $ 12 per customer a more likely figure.

Both increases are necessary, according to Blanton, as the city seeks to straighten out its financial vessel after years of plunging into the city’s general fund balance to enable the purchase of basic necessities, like garbage trucks, and pay the city fixes. reporting of infrastructure.

How did we get there?

Since 2017, Ranlo’s general fund income has grown at an average rate of 5.5%. General fund expenditure increased by an average of 23.8% over the same period.

The city’s operating revenues from 2017 to 2019 exceeded expenses, but that relationship reversed in 2020, with expenses exceeding revenues by approximately $ 124,000. Capital expenditures over the four-year period and the city’s 2017 net fund balance of $ 2.2 million were reduced by approximately half at the end of 2020 to stand at $ 1.00. $ 15 million.

That’s not the whole story, according to Mitch Brigulio of Charlotte-based Davenport Public Finance, who recently reviewed Ranlo’s audited statements. The city’s unallocated fund balance – cash that can be mobilized immediately – is only $ 575,000.

“That’s all we have at our discretion,” Blanton said last week. “If we had an emergency right now, that’s all we would have to call.”

Ranlo’s true financial situation has been somewhat of a mystery in recent years, Blanton said.

When he was hired as the city’s first manager just over a year ago, the city had not submitted an audit – an important step in financial monitoring that must be performed by governments annually. local – to State officials since the 2015-2016 fiscal year.

The long-awaited 2017-2019 audits were completed, submitted to state officials, and posted for public review until last August. An audit for FY2020 was subsequently completed and submitted to government officials.

Blanton said the analysis was grim.

The city’s general fund would likely be insolvent within two to three years if the city continues with its current financial practices, he said. Raising taxes and fees could help bolster the city’s bottom line, but add further financial hardship to residents who have already suffered from a year-long pandemic that has yet to reach its conclusion.

Over two years, the increase in taxes and fees could bring the city’s unallocated fund balance to $ 1.1 million.

Making smart financial decisions – increasing her fund balances and performing audits on time – could also help Ranlo manage her debt to pay for costly necessities. He said the city’s financial situation has made it uncompetitive for the types of loans and grants that many local governments use to defer the costs of infrastructure spending.

Ranlo is currently facing the prospect of spending over $ 1 million to repair the road to a major subdivision on Boulder Court, near George Poston Park, and the water and sewer upgrades are long overdue. .

“Putting over half a million in the fund balance over the next two years assumes that nothing major happens by then that we have to pay for,” Blanton said. “Actually, if we could add $ 300,000, I’d love to.”

Blanton has offered to cut his salary expenses by $ 2,500 a year, while executives at Ranlo could cut their annual compensation by almost two-thirds to just under $ 1,100 a year.

Commissioners will review Blanton’s proposal in the coming weeks.

Contact Adam Orr at 704-869-1828 or [email protected]

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