AHOSKIE – After five years of holding the line on property taxes, Town of Ahoskie officials have opted to raise the current rate by two pennies.

As of July 1, Ahoskie residents will see their current 77-cent tax rate increase to 79 cents (per $100 of property value). The vote to hike the tax rate – the first increase since 2005 – came following a public hearing on the proposed 2010-11 budget at Tuesday’s regularly scheduled meeting of the Ahoskie Town Council.

No one spoke for or against the proposed increase at the public hearing, prompting a 5-0 vote from the Council to adopt the budget.

Meanwhile, Town Manager Tony Hammond stressed that the two-cent increase has no connection with the ongoing construction of the town’s $17.8 million expansion of its wastewater treatment plant.

“Funding to pay for that comes from our Enterprise Fund; the two pennies of new tax money goes to the General Fund,” Hammond said following the meeting.

The two pennies of new tax will add $42,722 to the town’s coffers.

Unlike last year, there were no increases in the new budget for water and sewer rates.

As far as the reason behind raising the property tax rate to help balance the General Fund expenditures, Hammond linked that hike to increases in professional services used by the town, utilities, employee benefits (health care is up by 13 percent), worker’s compensation, fuel, auto/property insurance, additional staff to cover the newly annexed areas, vehicle purchases for the Police Department and the annual payment for the newly constructed Police Station.

Hammond said that due to an extremely tight budget year, most capital purchases were removed from the 2010-11 budget. There was no cost of living increase for town employees.

The town’s new newly approved budget totals $5,556,391 for the General Fund. Expected to drive the revenues to that fund are property taxes ($1.65 million), garbage fees ($618,152), local option sales tax ($645,000), utilities franchise tax ($140,000) and privilege licenses ($100,000).

Two other key streams of revenue for the General Fund come from a $600,000 transfer from the Water and Sewer Fund and appropriating nearly $500,000 from the town’s fund balance.

The latter transfer drew the attention of veteran Councilman O.S. “Buck” Suiter Jr.

“We can’t keep doing this every year,” Suiter cautioned.

However, Suiter did praise the efforts of the town’s financial officials for keeping Ahoskie’s fund balance far above what the state suggests.

“Even if we used all of the fund balance transfer, we would still have $1,659,000 in the General Fund balance, the equivalent of right at 30 percent of the budget,” Suiter noted. “The state recommends a General Fund balance of eight percent; we’re well above that and the real key is that we may not have to use all of the fund balance transfer that’s being recommended.”

Councilman Malcolm Copeland, who made the motion to adopt the budget, also noted the strength of the town’s fund balance.

Hammond did stress later that moving money from the fund balance to the General Fund is not uncommon.

“We moved $400,000 last year; not only did we wind up the year not using that appropriation, we put $200,000 in additional money back in,” Hammond said.

As far as expenditures in the new financial spreadsheet, the Ahoskie Police Department will receive the lion’s share (a shade over $2 million) of the 2010-11 operating budget. The remainder of those funds will be used by the Fire Department ($821,583), Cultural & Recreational ($678,291), Administration ($503,140), Environmental Protection ($449,785), Streets ($389,259), Public Works ($281,756), Building & Grounds ($141,472), Planning & Zoning ($85,989), Governing Body ($77,393) and Legal ($8,200). Another $109,971 was set aside for special appropriations.