WINFALL — Winfall Town Council approved a roughly $1 million budget last week that doesn't include a property tax increase.
The spending plan, which the council approved by a 4-1 vote, spends more than $789,000 in the general fund and $278,817 in the sewer fund.
Voting for the budget were Mayor Preston White and councilors Arnetta Ormond, Cynthia Cunningham and Debera B. Long. Councilwoman Valery McDonald cast the lone no vote.
The approved budget reflects a 33.4% increase in the town's tax base following this year's countywide revaluation in Perquimans. According to the town, the total tax valuation of property in Winfall grew from $32,313,680 in 2023 to $48,573,269 this year.
Because of the increase in property values, the town's property tax rate was reduced from 62 cents per $100 valuation to 56 cents. According to the town, 56 cents is a revenue-neutral rate, meaning it raises the same amount of revenue as the previous tax rate because it uses the current property valuation, which is higher.
McDonald said she couldn't vote for the budget because she questioned how the town had arrived at some of its numbers.
“There’s multiple reasons I couldn’t vote for it but the numbers don’t jive," McDonald said. "Mr. Smirlock came Monday with accurate numbers. He’s worked in the past and managed a town budget in the past. He knows where the numbers are."
McDonald was referring to a local citizen, Ronald Smirlock, who questioned in May how the town had arrived at its revenue-neutral tax rate. Smirlock asked similar questions of County Manager Frank Heath about how the county had calculated its revenue-neutral rate for the county's 2024-25 budget. He said the revenue-neutral rate should be lower than what the county had set.
In response, Heath said calculating the county’s revenue-neutral rate requires more than simple math. It requires factoring in the value of all property in the county — real, personal, business personal and that of public service companies — plus utilizing a growth formula required by state law, he said.
“Revenue neutral capacity is based on the statutory formula dictated by the General Assembly,” he said prior to Perquimans commissioners' approval of the county's 2024-25 budget. “Part of the formula is a growth factor that (lawmakers) added to that legislation, regardless of revaluation, and we have to follow the statute.”
Long said after the meeting that she, too, would have been confused by how the town arrived at its 56-cent revenue-neutral rate if she had not recently completed a finance course offered by the NC League of Municipalities.
“People who work in the finance offices take these municipal league finance classes, which are comprehensive fiscal training for local governments,” Long said. "We are taking the steps to better understand the (budgeting) process. ... We are taking progressive steps under Mayor White’s leadership to understand what the state requires."
White said the town had followed the formula the state requires in calculating its revenue-neutral rate.
“The formula you have to use to generate the tax rate is what we are looking for," he said. "We are using neutral revenue to calculate the tax rate. We wanted Winfall’s tax rate to remain the same as last year. It’s almost the same, up a tiny bit.
“Our plan is to get each of the councilors to take the Municipal League’s classes, which explain how to use the formulas that are recommended by the state," he continued. "We are listening to our citizens but you’ve got to keep in mind the state laws which say we have to use their formula to balance the budget."
Winfall Town Council was scheduled to approve the town's 2024-25 budget on Monday, June 24, following a public hearing. Because of some questions councilors had about several projected expenses, however, council delayed voting on the spending plan until Thursday, June 27.
According to town officials, the questions were about the town's public safety budget. The original estimate for fire department expenses was $90,000. However, the figure should have been $100,000 based on the previous year's budget. Because the town's police budget is $9,200, the public safety budget should have been $109,200.
"There was an error in calculations," the town said in an email.
According to a copy of the proposed 2024-25 budget on Winfall’s website, the spending plan includes a general fund of $789,170 and sewer fund of $278,817.
Of the general fund’s expenditures, $254,317 is for general government, $109,200 for public safety, $167,050 for roads and grounds, $46,000 for sanitation and $36,711 for debt service. The budget also includes $194,892 from the town’s fund balance.
The budget includes revenues of $289,000 from current-year and prior year real property taxes; $225,000 from sales taxes; $100,000 from Perquimans County for the Winfall Fire Department; $46,000 in solid waste fees; $36,000 in prior year Powell Bill funds and $20,000 in current year Powell Bill monies; $26,000 in franchise taxes; and $31,760 in other revenue.
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