Council faces pay cuts

The Dumfries Town Council has decided on its new tax rate and how much it will borrow through a short-term loan — both of which are lower than previously thought necessary.

On Tuesday it will reveal how much of a salary pay cut each of the members is willing to take. As of early Friday afternoon, four of the seven members of the council had contacted Town Treasurer Retta Ladd about the amount they are willing to forgo.

For the past month, town staff and the council have been wrestling with a budget crisis that threatened to leave the town bankrupt before the end of the year if drastic measures were not taken.

The council, on the advice of Town Manager Kimberly Alexander, decided to hire a financial advisor to pursue a short-term loan of $675,000 to keep the town afloat until it collected its real estate taxes in December.

In order to pay back the loan and keep the government viable, the council voted to raise the town tax rate to 41.7 cents of $100 assessed value, up from 28.7 cents for this fiscal year.

Since the town does not adopt its budget and set its tax rate for the coming fiscal year until July, the June tax bills reflected the rate of the previous year — 18 cents.

The 41.7 cent rate would mean residents would be hit with a 131 percent increase in December from what they paid in June.

That didn’t go over well at all during a public hearing held Oct. 6. All residents who addressed the council spoke out against the tax hike.

The council met again Oct. 9 and lowered the rate to 35.3 cents. For Dumfries property owners, this means a 96 percent increase in the December bill over what they paid in June.

“We calculated how much the tax rate would need to be in order to pay back the money we are borrowing and have sufficient operating funds remaining,” Alexander said.

This was accomplished by agreeing to borrow less — $450,000 instead of $650,000 — and putting less money back into the town’s reserve fund — about $450,000 instead of about $600,000.

The financial advisor told town officials that they would be able to get by with $450,000, Alexander said.

Also during the Oct. 9 meeting, Mayor Fred Yohey asked each council member to tell the town treasurer before the Tuesday work session the amount they are willing to forgo.

“I think it’s important that we the council as a whole come together and support the cause,” Yohey said. “I think this will be the third leg of the stool — the citizens, the town council and the employees.”

All 31 town employees are required to take furlough days for a savings of about $72,000. The number of days required is based on salary ranges.

As of 1 p.m. Friday, Yohey, along with council members Cliff Brewer, Nancy West and Vice Mayor Clyde Washington, had contacted Ladd. Sue Cornell, Dorothea Barr and Willie Toney had not.

Brewer and West are forgoing their council pay for the rest of the fiscal year, $3,846.89 each, for a total savings of $7,693.78.

Washington is giving up 22 percent of his salary for a savings of $846.31.

Yohey is giving up $300 a month for a total savings of $2,583.60.

The total savings to the town from these four members is $11,123.69, according to figures provided by Ladd.

Also during the work session, the amended fiscal 2010 budget, with cuts made, will be discussed and could be voted on.

“I know there are council members who would like to see further cuts,” Alexander said. “At this point, as staff, we have done what we can. If they want to make further cuts than we will have to ask them to decide what those cuts are going to be and we will just have to live with it.”

Staff writer Aileen Streng can be reached at 703-878-8010.