Hearing set for town budget
The Farmville Town Council will hold a public hearing on its proposed $23.4 million 2020-21 budget Wednesday, June 10.
The proposed budget, which is $5.3 million less than last fiscal year’s budget, includes a real estate tax rate of 12 cents per $100.00 of assessed value, a personal property tax rate (business only) of $1.50 per $100.00 of assessed value and a 27-cent-per-pack cigarette tax rate.
The budget accounts for all the services the town provides to its citizens and includes the general fund, water and sewer fund, transportation fund, street maintenance fund, and airport.
The general fund pays for all the town services except those provided by the water and sewer system.
The current COVID-19 pandemic and the resulting closures of businesses and restaurants that have taken place is expected to cause a revenue shortfall for the town.
During an April 1 council work session, Farmville Town Manager Dr. Scott Davis told the council he was projecting the town will see a more than 30% drop in license fees and meal and lodging taxes.
According to Davis, 48% of the town’s revenue is generated from taxes and licenses. He is predicting those figures will be down substantially, causing a more than $800,000 shortfall before the end of the fiscal year.
Davis said he is projecting the lodging tax to be down $200,000 and the meals tax to be $681,000 less than anticipated.
With those projections, the town is looking at an $881,000 loss in revenue.
Jamie Davis, who represents Ward E and is the chairman of the town’s finance committee, said the council and town staff, like all other localities, have had to approach the preparation of this year’s budget with many unknowns.
“We could not look at revenues as ‘predictable’ as in previous years,” Davis said.
The top four revenue streams for the town most affected by the COVID-19 pandemic are prepared meals tax, lodging tax, business licenses fees, and sales tax.
According to Davis, to account for the anticipated loss of revenue from these four categories, the finance committee is recommending a budget to the council that reduces current expenses and moves capital improvements into the contingency for consideration if the revenues are greater than anticipated.
Davis said that the budget does not include any layoffs of town employees. However, Farmville Mayor David Whitus noted there would be no raises for employees this fiscal year.
“Council directed the committee to work with the town manager and the town treasurer to produce a budget that did not include any layoffs or furloughing of employees,” Davis said, “that doing so would be a ‘last resort’ in the event that the loss in revenue would become greater than anticipated.”