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Haymarket mill rate expected to increase, actual payments to hold steady
While the Town of Haymarket has not been exempt from the worldwide economic hardship during the last year, its government has not been forced to put employees on furlough or lay them off just to make ends meet, unlike Prince William County.And with that in mind, town officials are now beginning to plot for the next budget year.
What can be expected to change, according to the chief financial officer of Haymarket James Naradzay, is a likely increase in the mill rate. Otherwise known as the real estate tax, the town's mill rate is currently at .128 percent. Naradzay said on Monday night at town hall that any increase would be so homeowners pay the same amount of taxes they do now.
The percentage of taxes Haymarket homeowners pay against their home value is expected to increase because their homes are worth less now than they were during the last budgetary cycle.
The actual amount of money they send into the town government, however, should not change.
“There are constraints to hold those down as much as we can, and at the same time, be as frugal as we can with our regular operating expenses,” said Naradzay, referring to taxes in general.
Beginning Feb. 23, the town will hold budgetary meetings that are open to the public. Along with figuring out what the new mill rate will be, Haymarket officials will have to grapple with how they should spend the $2.3 million from developer Gerry Kennedy after he and the town settle on the Town Center property deal, which the town council approved 5-1 last week.
Already, $1.1 million has been set aside for a new town hall to be built on the Harrover property at the east end of town.
There has been talk about paying down or paying three bond payments owed by the town, including a $232,000 sum related to the Streetscape project.
However, that particular bond has a low interest rate and a two percent pre-payment penalty. It would cost the town an additional $4,000 to pay off early.
Naradzay said he favors spending $890 per month to service the bond rather than make a lump-sum payment of $232,000 this year.
He expects that paying off the debt will not be an issue because the meals tax has performed better than anticipated. All the money from that tax is specifically earmarked for Streetscape projects.
That means the bond has a dedicated funding stream that is not expected to dry up any time soon.
By not paying off the bond immediately, the town will have money that could be used for improvements around Haymarket, like sprucing up municipal parking, new computer systems, advertising for local businesses, renovating the museum, acquiring a trolley car or $120,000 “rainy-day” fund wanted by both Naradzay and Town Manager Gene Swearingen.
“There’s a lot of things we can do with an extra $232,000,” Naradzay said.
That means there is a lack of incentive to pay off the one bond, especially since money coming in from the meals tax is already earmarked separately from the budget for the Streetscape.
“So it doesn’t necessarily make sense to pay that particular bond off when we sell the property,” said council member Ozzie Vazquez, the Streetscape manager. “And since it’s tied to the Streetscape, then it makes sense to go ahead and continue making payments with the money for Streetscape. Then that would allow us a little extra cushion….”
An unexpected twist in the Streetscape came last month when the federal government wanted to place fiber-optic cables through the town by using existing utility rights of way.
According to Swearingen, the town found out about this through the contractor, as opposed to getting a call from either the feds or Virginia Department of Transportation.
Construction has been temporarily halted as Swearingen negotiates over the cables running through Haymarket on their way to Culpeper. He said the town has three demands:
• The cables should be at least seven feet deep so the current utility wires there can be moved later during the Streetscape renovations
• “Don’t mess up our sidewalk.”
• A returnable cash bond for the town to hold in case something goes wrong.
Particular details, such as how much the cash bond should be, are part of the negotiations.
The town is not expected to have to pay for any of the construction, Swearingen said, but is not challenging the federal government’s eminent domain rights, which allow construction to begin in the first place.
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