Crofton Civic Association board members are returning surplus budget funds to residents, with the approval of a 1-cent tax cut in fiscal 2001 that will save homeowners about $9 a year, and cost the tax district about $20,000.
The move comes a month after a tumultuous special meeting in which residents demanded tax relief and rejected two budget proposals, forcing the board to run the community this year and next on $600,849 each year -- the amount last approved in 1998.
The tax cut, which will go into effect in July, will bring the rate down to 26 cents per $100 of assessed property value -- the lowest rate in Crofton's history, said Town Manager Barbara Swann. It also reverses a decision last year by board members to raise the tax rate by a cent to 27 cents. It will affect about 2,700 homes, she said.
"I believe, based on the numbers, given the rise in our assessments, we should be OK with 26 cents" as a tax rate, Richard Trunnell, a board member from District 5, said yesterday. "The issue really comes down to how much do you want to leave in for long-term planning?"
Board members were able to negotiate the tax cut at the Monday night meeting by trimming the current year's budget and rearranging money in reserve accounts.
They used about $30,000 from reserves to pay for a maintenance truck purchased this year, and a police cruiser that is to be bought within a few months. Both had to be purchased within the $600,849 cap.
Then they took money from other reserve accounts -- including the long-range planning fund, which typically is used to supplement the next year's budget -- to beef up the police vehicle reserve fund. Board members expect that the community will have to purchase another cruiser in fiscal 2002.
After the rearranging, enough money was left in the long-range planning fund -- about $64,000 -- to show that a tax cut would not be harmful.
Gayle Sears, board president, proposed a 2-cent cut, but board members were reluctant to cut that deeply. They said the next board will need up to $40,000 of the money left in the long-range planning fund to supplement the 2002 budget.
Community income is reduced by about $20,000 for each penny cut in the tax rate.
"Twenty-five cents may have put us in the red in 2002," Trunnell said. "The thing you have to understand is, it [will be] a brand-new board, the first year of a two-term group. I would not want to hamstring them with a budget that is clearly in the red."
County officials had indicated that moving money from reserve accounts was an action that required community notification, but special tax district coordinator Carolyn Kirby said she would not require it now.
Although the board should notify the community of any future purchases, Kirby said, the police cruiser -- which has not been purchased -- won't be challenged.
"Should they still purchase the police car?" she said. "Should they go back with notification? Maybe in the best of all possible worlds. They're on the right track, and the community knows. What the council cares about is they're not spending more than was appropriated. I don't think we want them to go back and do it over and over."
The budget goes to the county for approval.
Also in Monday night's meeting, the board approved a 12-member group to the elections board, which decides on election policies and counts ballots in community elections.
A nine-member panel appointed by Sears was at first unanimously rejected Monday night by the board because Sears would not add other community members who had volunteered to serve.
Community bylaws require a five-member panel for the committee, but do not set a limit on the number of people who can participate.
The board refused to hear the list a second time, and did not approve the appointment until Sears added three volunteers who were at the meeting. Two others, who had expressed interest but were not present, were not included.