Newberry tax revenues slashed by $312K

NEWBERRY – A reduction in property tax revenues has forced City of Newberry commissioners to place a freeze on discretionary spending.

The move is not expected to affect the completion of projects such as the construction of the Martin Luther King Community Center, said City Manager Keith Ashby.

“I made the announcement on Monday night that all discretionary items on the budget were frozen. However, because the community center is funded by construction through grant money, the freeze doesn’t affect the completion of the center,” Ashby said.

The decision to cut discretionary spending came after the Florida Rock property, Newberry’s major industrial property taxpayer, was devalued from nearly $173.4 million to $88.3 million. The loss of almost half of Florida Rock’s taxable value is hitting Newberry hard. The city had budgeted ad valorem taxes from the company at $1.3 million, but that tax revenue is now being reduced by some $312,297.

“So that’s a big chunk. That’s like 21 percent of our ad valorem revenues,” Ashby said.

Not only must the city grapple with the loss of revenues, but the matter is compounded as the property value adjustment process is occurring as the city is three-quarters of the way through the fiscal year, Ashby said.

“The only way to recover is to freeze the budget totally, which is not going to raise a lot of savings. Obviously if we are three-quarters through the year, there’s no way to save money because it’s already been spent,” he said.

Mayor Bill Conrad believes the loss in revenue will directly affect the availability of a travel budget for the commission and that it may result in a hiring freeze and a larger transfer from the utility fund to the general fund.

Meanwhile as the city juggles funds with fewer than four months left in the 2013 budget year, there is still no known completion date for the MLK building, which further complicates the planning of its programs and staffing considering both these elements would likely fall under discretionary spending.

“It seems like the building may not be finished up until the end of this month, maybe even July,” said Commissioner Alena Lawson.

Ashby said a lack of information about programming and staffing the community center stems from the uncertainty of the completion date with respect to the end of the city’s fiscal year, which is Sept. 30.

“If there’s only a month left in the year, then the expenditures of funds on programs is going to be pretty negligible,” he said.

If the decision is made that paid staff is needed to run the community center, the majority of those expenses would likely come from next year’s budget, regardless of a freeze on discretionary spending.

The focus on the community center’s function currently “is a moot point,” Conrad said.

The more pressing issue for the city appears to be dealing with the $312,297 loss of revenues that had been included in this year’s budget.

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