During our May 13th May 16th and May 28th meetings, the Oak Ridge city council will determine your property tax rate for the next year via our annual budget. Our decisions will directly affect your personal finances. Of greater consequence, however, we will establish our city’s competitive position.
Currently, Oak Ridge has the third highest property tax rate in East Tennessee at $2.39 when you add in the Anderson County rate of $2.35. Each penny of our rate equals approximately $90,000 of spending. We have a tremendous opportunity to make Oak Ridge more competitive and attractive to prospective residents and businesses without sacrificing our quality of life.
In addition to increasing our revenues (I’ve suggested converting select city-owned assets into taxable properties, eliminating tax abatements and negotiating voluntary PILT agreements), we must ensure the highest and best use of each and every penny you entrust to us. During our meetings, I will make the following motions to immediately reduce our tax rate and/or improve our marketability to outsiders:
- Eliminate excess funding for acquiring and demolishing blighted properties (Line 967 Housing Initiatives). Total fund balances for this same expenditure remain largely unused at $530,000. Also, over $370,000 is already budgeted for the same purpose through EDI and CDBG grant funding. Savings to taxpayer: $150,000 or 1.6 cents off the property tax rate.
- Refund a small portion of the Economic Development Fund. I applaud Mr. Watson for identifying waste in this fund; however, I am disappointed that of the $1.1 million (12.4 cents), he failed to refund any of it to our taxpayers. Among other items, his proposal continues to fund lobbyists and special events at over $317,000. I propose cutting that amount by just under one third. Savings to taxpayer: $90,000 or 1 cent off the property tax rate.
- Reduce travel expenditures. About $1.45 million (16 cents) of your property tax rate funds local and non-local travel expenses. While much of that travel is necessary, there is ample room to reduce non-essential spending. Council and the city manager alone are budgeted to spend nearly $70,000 in FY2014 ($54,000 for travel and $16,000 for vehicle use). We can do better. Let’s explore alternatives such as Webinars, teleconferences and cheaper modes of transportation. It costs as little as one tenth the price of airfare to take the Mega Bus (a nice coach bus with free WiFi) to just about any major city in the eastern half of the U.S. And in some cases like Washington D.C., the travel time is nearly the same as it would be flying with a single connection. I propose a 20% reduction of total city travel expenditures. Savings to taxpayer: $290,000 or 3 cents off the property tax rate.
- Reduce club membership costs. Besides the monies budgeted for inclusion in economic development groups like the Chamber of Commerce, ACEDA and Innovation Valley, some $60,000 of your taxes pay for various membership dues. I propose a 50% reduction in these line items to allow for time to determine their true value. Savings to taxpayer: $30,000 or .33 cents off the property tax rate.
- Reduce library funding. I love our library and am likely one of its most frequent patrons. However, our per capita spending is $48 compared to the $16 per person spent by the Blount County Library. Theirs is the only library servicing Maryville and Alcoa and is funded by all three municipalities. I propose we reduce our spending to that same level. Savings to taxpayer: $952,000 or 10.5 cents off the property tax rate.
- Reduce the Recreation and Parks $3 million budget by 10%. In FY2013, the city of Maryville budgeted $1.4 million for both their library and parks departments. We’ve been spending that much on just our library. If my proposal is accepted, we’d still retain phenomenal services and assets while saving our taxpayers money. Savings to taxpayer: $300,000 or 1/3 cent off the property tax rate.
- Reduce non-critical positions through attrition. Again, compared to Maryville, who has 300 full time employees (FTEs), we are heavily funded with 396 FTEs. Annually, the city sees about a 5% turnover rate. This year that number may be higher given that 13% of our workforce is eligible for retirement. I propose that we reduce FTEs by 2.5%. Savings to taxpayer: ~$632,500 or 7 cents off the property tax rate.
- Transition the tax-funded portion of our refuse contract to the individual rate payer’s bill. The $7 per month you see on your monthly bill only pays for half of the total garbage pickup contract. 18.6 cents of your property taxes fund another $1.7 million of the contract. While there would be no actual cost savings, lowering our tax rate by that amount would significantly increase our competitive advantage. Furthermore, it may help residents better assess the value and necessity of the contract perks come renewal time (i.e. backdoor pickup, annual brush and trash collections, etc.)
- Redirect Red Light Camera Funds towards permanent replacement solutions. Though I believe without a doubt that at least two of the four cameras have had a positive impact on improving the safety of our pedestrians, I cannot ignore the detriment they have had to both our reputation and our businesses. The proposed budget plans to spend $485,000 for road safety improvements and $600,000 for contingency expenditures. I propose that council direct our city manager to research alternative safety solutions in advance of next year’s contract negotiations and dedicate all camera monies towards that end.
One statement you’ll never hear in any government budget presentation is, “This year, we are flush with cash.” It’s always the tightest budget in the toughest of years and untold needs remain unmet. Clearly, that is not the case in Oak Ridge. We’ve been blessed with a plethora of non-essential services for many, many years. But our spending has come with a huge price tag that we can no longer sustain.
If we are to secure a viable future for Oak Ridge, we have to start living within our means. These options may provide a piece of that puzzle while allowing us to preserve both the critical and luxury services that we’ve grown so fond of. Best of all, each cut can easily be restored once the much-anticipated new revenues materialize from the developments currently underway.
I look forward to hearing my fellow councilmembers’ ideas for reducing expenditures and am open to exploring all possibilities. As always, I encourage our citizens to attend our meetings and share your thoughts for moving Oak Ridge forward. You can follow the results of all of our meetings, to include voting records, at my website trinabaughn.com.