By Ryan Kushner

Staff writer

The Smithfield Town Council is looking at a real estate tax increase to pay off nearly $300,000 in debt service for large town projects undertaken last year. 

At the town’s first budget work session Tuesday, Town Manager Peter Stephenson presented the Council with the need to address impending debt service payments for a $5 million loan taken out by the town last year to fund restorations to Windsor Castle and the Joseph Luter Jr. sports complex. 

“We made commitments to these projects without dedicating revenue to them,” said Stephenson to the Council, three of whom were absent at the meeting. Not present were Denise Tynes, Andrew Gregory and Mike Smith.

The debt service would need to be paid in the fiscal year 2018, in the amount of $277,472.

“It would be hard to find that much expense to cut,” said Town Treasurer Ellen Minga.

Minga added that one cent on the real estate tax rate brings in about $108,000.

Stephenson said that he believed Windsor Castle and the sports complex would begin generating revenue on their own in the future, but can’t bank on any money from the projects in the next fiscal year.

Council member Connie Chapman asked if the town would receive any revenue from the sports complex at all, as it is slated to be managed by the Smithfield Recreation Association, a private nonprofit, when it is completed.

With still no lease agreement between SRA and the town, Council members said it was not clear yet.

According to Stephenson and Smithfield Parks and Recreation Director Amy Musick, no cost analysis has been done as to whether the sports complex will generate revenue to the town.

Council member Randy Pack brought up a possible real estate tax to pay off the debt service, or doubling the town’s business license fee.

“That’s about as unpopular a tax there is,” said Pack of a real estate tax. “We have to talk about it if nothing else.”

Minga presented three budgetary options to the Council, one of which contained no new positions or raises for town staff.

“If we’re falling short in revenue what happens if we go with the unpopular position of no raises, no new positions?” asked Pack, acknowledging that no one would want to do that. “What happens if you tell your staff, ‘Sorry guys, love you all, suck it up for a year, we’re tight?’”

Stephenson said that such an option would mean putting money into facilities and not employees.

“I don’t think the reaction would be very favorable,” said Stephenson.

As the town pays for 100 percent of employee health insurance, and 50 percent of employees’ family coverage, Chapman inquired about no longer covering employee families.

“I’m going to be the one to ask it,” said Chapman.

Minga said that such a move would leave some town employees $6,000-$7,000 in the hole. 

Council member Milton Cook said that the town would able to begin selling lots at Pinewood Heights, which could generate some money.

Council members joked about other ways to find the revenue, including holding bake sales and more ticketing.

The Town Council Finance Committee will meet Monday, April 24 at 4 p.m. at The Smithfield Center.

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