Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Property Tax And General Fund topic
No spam. Unsubscribe anytime.
Rocky Mount councilors signal support for 4¢ property tax increase to shore up fund balance and cover employee pay
Summary
City staff presented tax-rate scenarios and budget cuts; council members gave informal consensus to pursue a 4¢ increase while prioritizing fund balance replenishment and employee COLA/merit funding. Council directed staff to return with detailed allocations after the year-end audit.
Rocky Mount City Manager Benjie Daniels presented scenarios showing how one penny of the city tax rate would generate about $600,000 and laid out how 1–5¢ increases would translate into household impacts. After extended discussion, a majority of council members gave staff informal direction to proceed with planning for a 4¢ property tax increase, with the understanding that final allocations will await the city’s audit and formal adoption.
Daniels said the city’s current rate is 58¢ and that a 1¢ increase would raise roughly $600,000; the manager also calculated that a 4¢ increase corresponds to roughly a 2.4% revenue increase. “Our recommendations align with the best practices in the industry,” Daniels said during the presentation on potential “real dollar impacts.”
Why it matters: Council members repeatedly cited the city’s weakened general-fund balance and a Local Government Commission (LGC) minimum they are trying to reach. Daniels estimated the general fund would be at about $5.5 million at fiscal year end and said the council’s goal was to restore the fund balance toward an 8% policy target. Daniels also said the proposed budget already includes $1.5 million to return to reserves.
Discussion and priorities
The council spent substantial time weighing revenue adjustments against cuts and employee pay. Daniels and finance staff said they had identified about $900,000 in possible cuts to outside/“non-departmental” agencies; Daniels said additional small adjustments, including a likely library reimbursement, could push that nearer to $930,000.
Several council members said their preference is that new revenue go first to the fund balance. “If we do that very thing, what kind of increase on top of that will it take for us to get the 8% minimum with the LGC?” Councilman Daughtridge asked. Finance staff responded that the delta between the estimated $5.5 million and the $8 million 8% target is about $2.5 million; the proposed budget’s $1.5 million contribution leaves about $1 million to find.
Employee pay
Daniels said his proposed budget included a 2% cost-of-living adjustment (COLA) implemented on Jan. 1 at an estimated cost of $600,000 and that restoring the full merit pool would cost about $1.8 million. Council members expressed a range of views but several said they wanted to preserve at least the COLA and prioritize replenishing reserves. “If you took those cuts … the COLA is taken care of,” one council member said during the meeting.
Next steps and caveats
Council members stopped short of a formal vote. The manager described the council direction as a majority informal consensus to plan for a 4¢ increase and to return with a refined plan once the city’s audit is complete. Daniels emphasized the city must adopt a tax rate by July 1 by law but suggested the council could delay committing to project spending until after the audit. He said the city will bring back options showing how revenue could be allocated among fund balance, employee compensation and capital projects.
Ending
The council’s preference to pursue a 4¢ increase is an informal direction for staff planning rather than a final decision. Staff will present a budget reflecting that revenue scenario and return with final figures after the audit is complete and prior to any formal rate adoption.
