The Holly Springs City Council mulled the possibility of raising its millage rate from 5.148 to 5.469 to help offset an $18 million reduction in its tax digest.
Chief Financial Officer Rob Logan informed the council the increase would be “revenue neutral,” as most property owners saw their assessed property value decrease by the same percentage as the rate increase.
Logan is expected to formally place the consideration to raise the rate during the council’s rescheduled Sept. 8 work session.
A public hearing will be scheduled for Sept. 19 before the council’s meeting. The council could adopt it during that meeting.
Last September, the City Council raised its rate to 5.148 mills, up from 4.865 mills.
The owner of a $200,000 house with the standard $5,000 exemption paid $386 last year in city property taxes. Under the new rate, if the owner’s assessed value stayed the same, the bill would increase by $25.68.
If the new rate is not implemented, Logan said the city would be facing a $400,000 shortfall.
Mayor Tim Downing, who said the council has always been “extremely responsible” about implementing millage rate rollbacks when growth and revenue was on the increase, said the revenue neutral increase may be necessary.
“As distasteful as it is, it needs to work the opposite way as well,” he said, adding the city’s overall revenue sources saw a $400,000 hit over the last four years.
Councilwoman Dee Phillips agreed, adding the $18 million shortfall is a lot to swallow.
“That’s a lot for a small city like ours,” she said.
The council also held a public hearing on calendar year 2011 budget amendments totaling $87,501.
The Holly Springs City Council also:
* Approved awarding an HVAC maintenance agreement to Premier Indoor Comfort Systems LLC for $1,870;
* Approved authorizing staff to start the bidding process to repair or replace stormwater structure at 3743 Holly Springs Parkway;
* Considered approval of establishing a fund balance reserves; and
* Approved a conditional use permit request from Downtown Hickory Flat, LLC, at 6115 Hickory Flat Highway to operate a package sales store.
The council met in closed session to discuss personnel, but took no action upon returning.