Town prioritizes budget

Monday night Orange Town Council members got their first glimpse of the tough decisions they’ll be making this budget season.

Town manager Greg Woods presented the council with a three-year outlook of the town’s unreserved cash flow.  As currently expected, the town will have a cash deficit of approximately $1.9 million in 2015. This assumes the capital improvement projects list, which amounts to $3.7 million over the next three years, is implemented as presented and adjusted only for cost change impacts. Also calculated in are increases for retirement, life insurance, health care and the line of duty act. However, the town isn’t exactly in a cash crunch. The town is expected to have approximately $3.3 million in cash at the end of this fiscal year and, according to a recent financial report, should keep a reserve of at least $1.8 million. Still, Woods said town council members need to be mindful of where the town is heading and take necessary actions now to prevent large rate or tax increases or the elimination of services.

“We don’t have money to do everything,” he said. “We have to make some tough decisions.”

Council members looked at a vast array of options, ranging from changes affecting revenue, capital improvements and costs. They were asked to decide if each option should be implemented, with each changing the overall outlook.

Optional changes that would affect revenue including charging for trash pickup and increasing administrative fees. Also included were the projected impacts of Round Hill Meadows and the county’s proposed Route 20 residential sewer line project, should they materialize. The impact of tax increases was also included in the options.

According to Woods, each penny added to the town’s real estate rate is worth approximately $36,000. Each penny on the cigarette tax would yield approximately $9,000. On the flip side, council members also discussed lowering the meals and transient occupany taxes. A 0.5 percent decrease in the meals tax would eliminate approximately $60,000 from the town budget.

“The complaints I hear is when the [owner] has to explain the whole bill, the waiter or waitress ultimately gets nailed,” council member Kent Higginbotham said.

Mayor Chuck Mason said he’s heard of people going to Culpeper over Orange because of the difference in the tax rate. He said that doesn’t actually yield any savings.

“Once you drive to Culpeper, there’s no savings,” he said.

Woods cautioned that the decreased tax’s effect on the budget would need to be mitigated. However, he said, there may not be a loss if the lower tax generates more sales.

But it’s not just about possible revenue changes. Town council members also looked at options for reducing costs. Possible cost reductions included switching from a $250 deductible for employee health insurance to a $500 deductible, or moving from having the town cover 88.4 percent of an individual’s plan to only 85 percent with the employee picking up the remainder. The town could also end its trash pickup, which Woods said loses approximately $100,000 a year. Other options include eliminating positions and already intended reductions to several budget items.

Some changes may also be possible to government-mandated increases in the Virginia Retirement Service and life insurance. Woods said it is not yet known if the town can pass the increases on to the employees. Currently, for individuals, the town covers the entire costs of both retirement and life insurance.

Also adding into the overall three-year forecast are approximately $3.7 million in capital improvement projects. These include purchasing public works equipment, police equipment, local matches for streetscape improvements and constructing May-Fray Avenue, replacing the Byrd Street force main and extending Radney Road and its sewer and water lines.

“We have to choose what we want to do,” Woods said. “If we don’t want to do [something], that will take it out of the next three years.”

Council members were asked to evaluate the options and send in their choices next week. Woods was expected to summarize those choices and present them at the council's meeting Tuesday night (after press deadline.)