Finances, annexation discussed at council’s planning session

Published 6:05 am Friday, February 2, 2007

By Staff
City looking for ways to cut costs, increase revenues
By MIKE VOSS, Contributing Editor
Improving the city’s financial health was discussed during the first day of the Washington City Council’s annual planning session Thursday. Annexation also was a topic of conversation.
Officials say the city’s revenues aren’t keeping up with its expenses and they want to fix that situation.
Information from Carol Williams, the city’s finance director, indicates that revenues to pay for general governmental services — day-to-day operations such as police, parks/recreation and economic development — this fiscal year likely will not be enough to meet expenses. But a transfer from the electric fund, dipping into the fund balance and other revenue sources will enable the city to balance its general-government fund budget, Williams said.
Councilman Mickey Gahagan said city officials need to “have options we don’t have now” to put the city in a position so it has the money it needs to provide services and programs to its residents and taxpayers.
Councilman Archie Jennings said the city and its officials must find “alternative strategies to the way we do business.” Last year, council members and city officials said they want to improve the ways the city conducts its business.
Gibson was referring to expectations that the completion of several economic-development projects in the city will expand the city’s tax base and generate a significant increase in revenues.
Councilman Darwin Woolard concurred with his colleagues, saying the city has no choice but to “focus on finances.”
A more detailed plan to improve the city’s finances will be developed during the council’s budget-preparation process later this year.
Although council members and Mayor Judy Meier Jennette acknowledge there are several ways to improve the city’s financial health, including cutting costs and increasing revenues, they also talked about another approach that could generate more revenue for the city — annexation.
Asked by session facilitator Lee Padrick, a chief planner with the N.C. Division of Community Assistance’s Washington office, what the city would hope to gain by annexation, Gibson replied, “We want to grow a bigger tax base.”
Jennette said the reasoning behind annexation would be “revenue oriented.”
Jennings said he understands that many people view annexation as a “land grab.”
Woolard said annexation helps spread the costs of city-fund services to more people, including people who live outside the city but use services and programs it provides with money from city taxpayers.
During an annexation discussion during a council meeting in October, Jennings said he considers annexation a way to increase the city’s tax base and enable the city to grow. Forced annexation should happen only if benefits the city would receive from annexation outweigh expenses — such as providing fire and police protection, water and sewer service — associated with annexation, he said then.
Woolard believes annexation is a way to equitably spread costs associated with city services among those who use those services. At that October meeting, Woolard said that city residents “should be tired of paying for services” used mostly by people who live outside the city, referring to use of the city’s Brown Library and parks-and-recreation facilities by non-city residents.
During Thursday’s segment of the planning session, which resumes at 8:30 a.m. today, Jennings revisited a topic he brought up several times last year. Jennings believes it’s an unfair burden on city taxpayers to pay for services used by non-city residents who don’t pay for those services or who don’t pay their fair share of the costs associated with providing those services.
Jennings indicated he’s ready for the city to “start something in motion” in regard to annexation.
Before it begins considering initiating the forced-annexation process, the council wants the city to update its 2005 annexation study, evaluate possible areas for annexation to see if they meet the goals the city wants to accomplish with annexation and determine if it’s economically feasible for the city to annex specific areas.
Today’s segment of the planning session includes a discussion of services the city provides, presentation of the city’s recreation plan and setting priorities for the upcoming fiscal year.
Coverage of the council’s discussion about smart growth will be included in future editions of the Daily News.