Signal Mountain Facing 30-Cent Property Tax Increase; Residents May Get Another Tax Hike Next Year

Tuesday, May 16, 2017 - by Gail Perry

The Signal Mountain Town Council on Monday voted to give Town Manager Boyd Veal the directive to raise property taxes when planning the fiscal year 2017-2018 budget. After the last meeting when a 33-cent increase per $100 of assessed value was approved, Mr. Veal went back to the drawing board to find the minimum increase that would still cover the costs. He told the council that he had combed the proposed budget looking for any reductions that would be reasonable and was able to reduce it to 30 cents per $100.

This amount will account for reduced revenue in 2018 from the Hall tax, but not beyond that. Next year another decrease in revenue will occur that will cause another tax increase, said Vice Mayor Dick Gee.


The tax increase is needed because of all the new major projects the town will be dealing with in the next several years and the reduction of income because the Hall tax is being phased out, officials said. Signal Mountain is building a new fire hall to accommodate growth, renovating the MACC building and considering the creation of a school system. The town will be losing about $750,000 per year without the Hall Tax, said Mayor Chris Howley. This is a source of justification, he said, for the tax increase which will generate about the same amount “to fill the hole.” The only cushion in this new budget, said the city manager, is if actual amounts of the new assessments come in above the average of five percent, which is the number he projected.


When the value of property increases, the certified tax rate that is established by the county is lowered so that rate will keep revenue neutral, but each penny will be worth more, said Mr. Veal. If the assessments come in at five percent, then a penny will generate $2,700 for the town - up from the current $2,500. An increase will also come from newly built homes.


The new budget will include a two percent pay raise for city employees, a new administrative position and costs related to a possible school system referendum and consulting fees if needed. The added position will be a technical job that can help all departments, said Mr. Veal. Responsibilities would include technical writing and research, reviewing contracts and developing RFPs. The person filling the job would also search for grants. The job could pay for itself if enough grants are received, said Mayor Howley.


When the certified tax rate is given to the town, changes can be made to the proposed budget if needed, said Mr. Veal. Until it is received, the town will continue operating under the current budget.


Discussion also took place regarding the completion of the new public works building at 714 Mississippi, which is replacing an old building at the same location. Construction of the building has been “a bit of a challenge,” said the city manager, with numerous change orders and additional costs. The original estimate for the building was $1,677,800. An additional $140,000 has already been authorized for changes. Another $90,000 was requested at the meeting on Monday, which would cover using compressed concrete instead of asphalt for paving, along with other items. Public Works Director Loretta Hopper said the concrete is more durable and would require no maintenance.


The council voted to approve the additional $90,000 expense. Mayor Howley expressed concern that much money was being authorized at a council work session, not the regularly scheduled meeting. The contractor is available to begin the work this week if it is authorized, and waiting two weeks would increase the cost, he was told. The resolution passed, which approved additional spending not to exceed $90,000 to complete the building. The money will be taken from a $3 million loan that Signal Mountain has taken out for construction projects.


In other business, Ms. Hopper updated the council on rebuilding the Shoal Creek bridge. A meeting was held recently where more residents were in agreement and not angry like they were at a previous informative meeting, she said. The residents did not like the layout originally proposed by engineers. The problem has been solved with one resident granting a temporary easement so there will be access into the subdivision while the old bridge is removed. Then the new bridge can be built at the same place. One resident has not signed the easement papers, she said, but City Manager Veal said the town is proceeding and can use eminent domain so the project can proceed. The town would like to begin work on it this summer.




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