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West Point leaders plan one-time use of $800,000 from $6 million reserve to close budget gap; school board seeks $321,000 increase
Summary
Town staff outlined steps to close the FY26 budget gap, including using roughly $800,000 of the $6 million fund balance for one-time capital and software costs while opposing a tax increase; the School Board has filed a March 3 request for an additional $321,000 in operating funds and $20,000 in capital.
Assistant Town Manager Steve Hudgins told the council at a Feb. 24 work session that the Town is taking a mix of expense reductions, revised revenue projections and limited use of fund balance to close a remaining budget gap.
Hudgins said the School Board had submitted a notice for its March 3 meeting seeking a $321,000 increase in operating appropriation and an additional $20,000 in capital funding above last year. He also reported corrected personnel calculations of $10,000 and a corporate assessment adjustment requiring the Town to refund about $297,000 to Smurfit Westrock for an amended 2022 Machinery and Tools tax filing.
Hudgins said the Town was awarded a $1.2 million flood-study grant that is reimbursement-based and will be budgeted as an expense so staff can pay invoices and request reimbursement, which the Town expects will prevent use of recurring taxpayer dollars for the project. He listed planned one-time uses of fund balance including the NeoGov administration software installation, a compensatory and pay-class study, a new firewall system, payment on an IBM Power System, and the contract for an outside organization to administer the flood grant.
Town Manager John B. Edwards Jr. described the budgeting process as iterative: staff first reduce expenditures, then address the remaining shortfall by using fund balance or raising taxes. "I am opposed to any tax increase this cycle," Edwards said, adding that barring unforeseen circumstances staff do not anticipate raising taxes when the budget is presented at the end of March. He noted the fund balance grew by $188,000 in the previous year.
Councilmember Johnny Nein voiced caution about drawing down reserves, saying the amounts being withdrawn raised concern about longer-term sustainability. Hudgins and other staff reiterated that the planned $800,000 draw is intended for one-time items and that the Town will avoid using fund balance for ongoing personnel costs.
The council also heard that projected non-property tax and fee revenues have been revised upward and that updated assessed values for newly constructed homes were provided by the Commissioner of Revenue, both of which narrowed the gap between revenues and expenses. The council will consider the full proposed budget and the audit details at the regular council meeting later that evening.
