City Manager Brian Alligood acknowledges his recommended budget for the upcoming 2015-2016 fiscal year does not meet all the budget-related goals set by the City Council.

“This recommended budget clearly does not meet all the expectations expressed by the City Council,” Alligood said during his budget presentation earlier this week.

Alligood’s proposed budget continues current city services and operations in accordance with the council’s directive at its budget-planning session earlier this year. It does not maintain the existing property-tax rate. It calls for increasing the current 50 cents per $100 valuation to 51.5 cents per $100 valuation. It also increases fees for water, sewer, wastewater and other city services.

Beginning July 1, local governments in North Carolina lose the authority to issue business privilege licenses to generate revenue. The N.C. General Assembly took that authority away with legislation last year.

“When this revenue source was eliminated, the governor and members of the General Assembly said that they would work to provide a solution for municipalities, but that promise has yet to come about,” Alligood said.

In recent years, that revenue source generated between $200,000 and $120,000 (more recently) in previous fiscal years.

“By eliminating a revenue stream, the Legislature has forced municipalities to raise local property taxes or cur the current levels of services it provides to its residents. To put this in perspective, the local impact of the amount of the business privilege licenses revenue eliminated by the General Assembly is roughly 2.5 police officer or firefighter positions,” he noted.

Alligood said it’s possible to avoid a tax increase this year and maintain the current levels of services the city provides, but doing so would not be fiscally responsible. Doing so, especially delaying pressing maintenance work, would cost the city more in the long run, he said.

The proposed tax rate retains the nearly two cents ($0.0198) of that rate designated for the publics-safety capital reserve fund and to retired debt associated with building the city’s No. 2 fire station. Property taxes are projected to be 3 percent higher in the coming fiscal year because of the recommended tax increase.

Revenues the city derives from permits and fees are projected to decrease in the coming fiscal year by 25 percent because of the ongoing slow recovery of the residential and commercial building industries in the city, according to Alligood’s budget message.

Alligood’s recommended budget calls for using $300,996 of the city’s general-fund balance (rainy-day fund) to cover general-fund expenses in the upcoming fiscal year, a 65-percent ($551,435) decrease from the current fiscal year. It also calls for using part of the unassigned fund balance to establish a vehicle-replacement fund and facility-maintenance fund. That proposal will be discussed during upcoming budget work sessions.

In 2010, the council set the property-tax rate for the 2010-2011 fiscal year at 50 cents per $100 valuation. The tax rate for fiscal year 2009-2010 was 60 cents per $100 valuation. The tax rate dropped the next fiscal year because of the revaluation of properties in Beaufort County and its municipalities. That adjustment, for the most part, was a revenue-neutral move, meaning the new tax rate generated about the same amount of revenue as the previous tax rate. Generally, some people paid a little more in taxes, while others paid a little less in taxes.

The council raised the tax rate from 55 cents per $100 valuation to 60 cents per $100 valuation in June 2006. That increase took effect July 1, 2006.

The council plans a series of budget workshops beginning April 27 (6 p.m.) and April 28-30 (5:30 p.m.), according to the city’s website.