AHOSKIE – In an effort to recover from a three-year drought in state funding and rising costs of operation, the Ahoskie Town Council is grappling over ways to balance the impending 2004-05 budget.

During a special called meeting here Tuesday afternoon, Council members agreed to a three-cent increase in the ad valorium tax rate, as proposed by Town Manager Russell Overman. But despite the additional revenue generated by the tax hike (an increase to 70 cents per $100 of property value, up from 67 cents), Ahoskie is still faced with taking $464,000 from its fund balance to pay for the skyrocketing costs of operating the town. That idea wasn’t popular among Council members, especially considering that another $200,000 may be needed from the fund balance to close out the books on the current fiscal year.

&uot;I’ve cut where I can cut, short of cutting services and personnel,&uot; said Overman when questioned over the new proposed budget. &uot;Hopefully we will not have to use all of the current year fund balance appropriation. We’ve seen in the past budget years where revenues come in better than expected while expenditures are not as high as anticipated.&uot;

Overman went over what cuts he had made from his original rough draft of the budget. They included:

Employee gift cards ($6,000).

One vehicle from Public Works ($5,000).

Funding for the Roanoke-Chowan Narcotics Task Force, which is disbanding as of June 30 ($5,400).

A new equipment truck for the Fire Department ($45,000).

Ahoskie Library funding ($7,000).

Eliminating a $10,000 transfer from the General Fund to the Drainage Fund.

Overman pointed to a projected salary increase for town employees as another item that could be eliminated from the new budget.

As far as new revenue avenues were concerned, other than the tax hike, Overman suggested a $1 increase, per household, for garbage pick-up.

However, despite Overman’s best efforts to lower the amount taken from the fund balance, Councilman O.S. &uot;Buck&uot; Suiter wasn’t pleased.

&uot;I don’t like seeing us getting around the 20 percent mark (of the fund balance),&uot; noted Suiter. &uot;Where are we at right now?&uot;

Overman explained that as of this time last year, the fund balance was $1.25 million, or roughly 39 percent of the town’s General Fund. He went on to say that by subtracting the $200,000 needed to balance the current year budget in addition to taking another $464,000 to perform the identical feat for the upcoming fiscal year, that would put the fund balance at, &uot;somewhere between 20-to-25 percent.&uot;

&uot;I’m looking at the future,&uot; said Suiter. &uot;If we have to take $400,000-plus from the fund balance this year and repeat that next year, then we’re getting down in the low teens, perhaps in the single digits, as far as our fund balance. I don’t want to see us at that point.&uot;

&uot;It’s this way every year,&uot; replied Overman. &uot;We wind up with tremendous needs, but the revenues are not there. We still haven’t fully recovered from the Governor withholding our local funds several years ago.&uot;

&uot;I don’t see this pattern changing, not this year or the next,&uot; observed Mayor Linda Blackburn. &uot;In the meantime, the price of doing business as a town is going up.&uot;

In exploring ways to slice another $100,000 from the proposed budget, thus reducing the strain on the fund balance, Council members discussed, at length, an idea to eliminate two full-time positions within the Police Department, a move that would save $72,000, not including benefits. The proposed budget funds 18 full-time police positions. Currently, the department has 12 full-time employees with two others scheduled to soon come aboard.

&uot;We need to make sure that cutting these positions will not jeopardize the safety and security of our residents and business owners,&uot; stressed Suiter.

Overman explained that Ahoskie Police Chief Troy Fitzhugh was waiting to hear from a grant application that would help pay for two full-time traffic officers in town. Therefore, in essence, if Council members agreed to cut the Police Department’s full-time personnel roster from 18 to 16, the grant, if approved, would pay for 75 percent of two additional officers.

&uot;We still have to be very tight on our spending,&uot; noted Overman. &uot;Even with this cut, this is a budget without any padding, meaning there’s very little margin for error. If one of our expenditures unexpectedly spiked, like the price of gasoline did this year, then we would really be put in a pinch.&uot;

Another suggestion was made to increase the garbage pick-up by $2 rather than the budgeted $1 hike. That would roughly generate another $30,000 in much-needed revenue.

Council members instructed Overman to cut two full-time positions in the Police Department and increase the garbage pick-up rate by $2 per month. They also okayed the budget cuts mentioned earlier by Overman as well as advising him to be very frugal with the amount of fund balance dollars needed to operate the proposed new budget.

Meanwhile, Council members informed Overman to leave the town employees’ pay raise in the new budget. That comes at a cost of $31,000 and is designated for employees with three or more years of service.

Overman will make his formal 2004-05 budget presentation – estimated to be at $5.2 million – during next week’s regularly scheduled Town Council meeting. A public hearing will be scheduled no less than 10 days following that meeting at which time the Town Council can approve the new budget or call for further modifications. The new budget must be in place by July 1.