Beginning in July, Lovettsville residents won’t have to reach so deeply into their pockets when they pay their bills to the town.
The Town Council on Thursday adopted a fiscal year 2019 budget that reduces the real estate tax rate, holds the water and sewer rates unchanged and eliminates the trash collection fee. Mayor Bob Zoldos said the council was able to make such beneficial changes for residents because the town has recently seen an influx of businesses moving in, which has ultimately generated more revenue for the town.
When residents pay their real estate taxes this November, they’ll be paying at a rate that is 1.5 cents less than they did last year, down from 21 cents to 19.5 cents per $100 of assessed value. Although Town Manager Sam Finz recommended only a 1-cent decrease in the tax rate, the council decided to lower it even more. This is the first time the tax rate has been reduced since 2005.
Given the 2018 average value of a single-family home in town, $360,456, the reduction will save each household about $54 annually on their real estate tax bills, while the town will still pull in about $556,000 in revenue.
The council also voted to leave residents’ water and sewer rates unchanged from last year, even though it resolved in 2015 to raise the rates by 3 percent in fiscal year 2019. The current water rate is $8.96 per 1,000 gallons, while the sewer rate is $14.23 per 1,000 gallons.
In stabilizing the rates, the town expects to generate $1,046,000 in revenue, $33,000 less than Finz had budgeted with the proposed 3 percent rates increase.
When the Municipal Financial Services Group conducted a rate analysis of the town’s water and sewer user fees three years ago, it recommended a utility rate increase of 8 percent in fiscal year 2016, 6 percent in fiscal years 2017-19 and 5 percent in fiscal year 2020.
The Town Council then revised the group’s recommendation to a 16 percent increase in fiscal year 2016, 12 percent in fiscal year 2017, 3 percent in fiscal years 2018-19 and 1.5 percent in fiscal year 2020. The group in February confirmed that these changes were “adequate and accurately reflect the costs associated with the water and sewer systems,” according to Finz’s proposed budget.
While holding user rates, the Town Council did approve a 25 percent increase in water and sewer availability fees and a $1,000 increase in water and sewer connection fees. These changes should increase revenues by $7,000 over Finz’s proposed budget, which had proposed no increases in those charges.
Between these rate hikes and the $33,000 decrease associated with stabilized water and sewer rates, the town’s utility fund would have fallen short $26,000 in fiscal year 2019. To balance this out, Finz budgeted for a $26,000 reduction in surplus transfers from the utility fund to reserve funds.
The council also voted to eliminate the annual trash and recycling collection fee, which currently requires residents to pay $19.80 annually. To account for this loss of revenue to the town, Finz said he has negotiated a deal with American Disposal Servicesthat would lower the town’s trash service costs from $151,000 to $140,000 annually. He said all that’s left to do is sit down with the trash company and finalize the deal, which the Town Council last month gave him authorization to do.
“I found a way to absorb the loss of that additional revenue,” he said. “When I came on board I was looking at ways of reducing the burden on residents.”
The quarterly trash and recycling collection fee was created last year at the suggestion of former town manager Laszlo Palko to provide the town with an additional source of revenue, requiring residents to pay $4.95 each quarter and providing the town with an additional $15,000.
The council also voted to eliminate all funding for a future town office during fiscal year 2019. This halts a four-year planning process that recently saw the town hiring an architectural firm to draw up a $9,000 conceptual design for a new town office.
“This is disappointing to all of us since we all believe that we’re overcrowded right now,” Finz said. “We do need to have [a larger town office].”