The Rogersville Board of Mayor and Aldermen approved the second and final reading of the 2024-25 budget last week with a 35-cent property tax increase as well as a 4% water rate increase and a 1.5% sewer rate increase.
No one spoke during the required public hearing on the budget, which was held during a special called meeting Friday at 1 p.m.
Following the public hearing, the BMA voted 5-0 in favor of the budget, which includes the new $1.8365 tax rate, and water/sewer rate increases.
This is Rogersville’s first property tax increase since 2010 and is projected to generate $436,000 in new revenue for the city.
For a residential property valued at $200,000, the 35-cent tax hike would increase the annual property tax bill by $175.
Vice Mayor Brian Hartness, who made the motion to increase taxes during the June 11 BMA meeting, explained at the time that additional revenue is needed to cover the cost of matching grant funds for two major projects at the City Park.
Hartness noted the additional revenue is also needed to cover the cost of the city’s impending $16.5 million Community Center project at the former United Food shopping complex on Main Street. That project was revived earlier this year after progress was halted in 2020 because of the COVID-19 pandemic.
PARK PROJECTS
The biggest new expenditures in the 2024-25 budget are matching funds for two City Park grants.
Rogersville was awarded a $500,000 Local Parks and Recreation Fund grant, which must be matched with another $500,000 in local funds, to build two new restroom facilities and a concession stand and install new playground equipment at the City Park.
Rogersville was also awarded a $713,268 Community Development Block Grant, which must be matched with $85,909 in local funds, for sidewalks and paving the City Park, including creating new pickleball courts.
Overall those matching grants total $585,909 in 2024-25, which would more than eliminate the new revenue generated by the property tax increase.
GENERAL FUND BY THE NUMBERS
One penny on the Rogersville property tax rate generates approximately $12,476.
Budgeted expenditures for 2024-25 are proposed at $8,742,424, up from $6,927,181 in the prior fiscal year.
Part of the increase in expenditures can be attributed to the $585,909 in matching funds required for both park grants combined.
Another major cost bump is employee health insurance, which will increase by about $244,000 in 2024-25.
The city is also participating in a historical preservation grant with the county for the Clay-Kenner House, which will cost the city about $64,000 in matching funds.
City employees received a 3% pay increase across the board, which will increase expenses by approximately $75,000.
The city’s four department heads, City Recorder Glenn Hutchens, Public Safety Director Travis Fields, Public Works Director Mark Worley and Parks Director Matthew Elkins, also received raises in addition to the 3% employee raises. The overall cost of those department head raises combined is $28,000.
Aside from the park projects, the only other major capital outlay project budgeted is street paving at $300,000. The BMA has not yet determined the streets to be paved.
As far as general fund revenue, $8,049,105 was budgeted for 2024-25 that didn’t include the extra $436,000 from the 35-cent property tax increase. That was well above the $6,376,289 in revenue budgeted for the 2023-24 fiscal year.
As with expenditures, much of that revenue bump can be attributed to the two parks grants. Sales tax is also projected to increase by about $400,000.
The Rogersville general fund currently has an undesignated fund balance of $2.7 million. Following the property tax increase approval, the reserve fund is projected to grow to approximately $3 million by the end of the 2024-25 fiscal year.
WATER DEPARTMENT BUDGET
The Rogersville Water Department operates on a separate budget from the city’s general fund.
The 2024-25 Rogersville Water Commission budget incorporates the next of the small incremental water and sewer rate increases that were approved in 2022 to continue annually until 2027. The rate increases amount to approximately 4% more on the water part of the bill and 1.5% more on the sewer part of the bill.
The Rogersville Water Department’s 2023-24 fiscal year budget and 2024-25 budget are both in good shape.
For the 2023-24 fiscal year, as of the end of May water department revenue was at $3.68 million, well ahead of expenditures that were $3.48 million at of the end of May.
Excluding grant funding, the city is projecting $3.8 million in revenue for the 2024-25 fiscal year, with expenditures projected at $3.76 million.
The Water Department is projected to end the 2024-25 fiscal year with $400,000 in the reserve fund.
The Water Commission has also received a $1.864 million grant from the Tennessee Department of Environment and Conservation to make improvements to the main sewer line. That grant will require $274,000 in local matching funds.
After allocating the grant matching fund, the 2024-25 Water Commission budget was shown $82,000 in red, but Hutchens said there are funds in the reserve account to cover that expense.
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