Kenbridge adopts budget, raises sewer rate
Published 10:19 am Thursday, June 30, 2016
Kenbridge Town Council adopted the town’s budget during the board’s Tuesday, June 21 meeting.
The budget estimates $997,674.33 in general fund revenues and expenditures, and includes money for a rainy day fund, a modest salary increase for the town’s employees and money to teardown blighted properties.
The budget does not call for a tax increase, but council did vote to increase the town’s sewer rate by $1.93 to cover funds borrowed to improve the sewer system. The increase was a condition of the taking the money. The town has to raise the rate by the same amount next year.
“We don’t have a choice,” Mayor Emory Hodges said.
Kenbridge decided to issue up to $511,000 in general obligation bonds to fund, in part, improvements to the town’s sewer system.
Money raised through the issuance of the bonds is paying for rehabilitation and replacement of the sewer systems sanitary sewer collection operation, paying for some previous improvements to the plant, and covering the cost of issuing the bonds.
“This project consists of repairing and/or replacing all the pump stations located throughout the town,” Town Manager Robyn Fowler explained in October. “The town applied for grants but unfortunately the bids came in higher than grant awarded, so the town had to apply for additional funding to cover the difference.”
General obligation bonds are commonly used by governments to fund projects that generally do not generate money, but benefit the entire community.
The use of general obligation bonds are secured by a localities pledge to repay the debt, usually through taxes. Beyond its tax revenues, the town could promise to use any net revenues it derives from the sewer system to repay the debt.