Millville officials divided on rental tax


After several previous discussions of levying a tax on gross rental receipts collected in the town, Millville Town Council members on Tuesday, June 26, failed to come to a consensus as to whether the town should collect a tax that is already on its fee schedule and which is collected by many of its neighboring municipalities.

Town Manager Linda Collins said she had obtained figures between 3 and 8 percent as what those other local towns collect of rental income from properties in their limits. And the initial aim may have been to consider what end of that spectrum to use to generate badly needed general-fund income for the town.

However, council members had considered the idea at length since their most recent discussion, and several had reconsidered whether assessing the tax at all was wise.

“I realize we’re seeking new revenue streams,” Councilwoman Joan Bennett began, but the additional expense to business owners or property owners renting their properties would likely be passed on to the renter, whether business or resident.

“This would have a trickle-down effect on the entire town,” Bennett suggested, wherein it would limit profits for businesses, who could in turn cut employee numbers or wages, or raise prices to consumers, which could itself reduce the attractiveness of Millville businesses to consumers.

“This is a pretty hard pill to swallow,” added Councilwoman Kami Banks, who noted that finite paychecks would have to stretch the taxes, license fees and other requirements the town already has for businesses to operate, as well as for those who lease property.

Council Treasurer Richard Thomas also had concerns about the impact on local businesses.

“Businesses are not making as much profit as people think,” he said. “We need to encourage businesses in this town, not push them away.”

Bennett, while concerned about the overall effect on the town’s economy, emphasized that she was not considering opposition to the tax purely out of sympathy for the business owners.

“I want to do what’s good for the town. … My concerns are for the big picture of this town for this fee,” she said.

Mayor Donald Minyon, who said the town’s scanty general fund revenues keep him up at night despite booming transfer taxes, appeared to still favor instituting the tax, which has been on the town’s fee schedule for years — along with a rental license fee — but was never formally instituted and would require a council vote to do so.

“Somewhere down the line, we need to have some real income,” he said. “Whether it comes from increasing property taxes or through this rental fee, to sustain this budget we need to look for a way to raise dollars here on a day-to-day basis.”

Minyon said the concept of formally implementing the rental tax and license fees had been to start a new revenue stream that the town could use for general operations — one that wouldn’t be one-time income or bear the kinds of restrictions on spending that come with its bountiful transfer tax revenue.

A close eye on expenditures

Indeed, the council gave the thumbs-down to Collins’ request Tuesday night to buy a new computer that the town’s new receptionist — and soon-to-be Webmaster — could use to assist with town business and to maintain its new Web site.

The estimated $2,300 expenditure for the new system and its installation was too big a bite for the council members to swallow amid the concerns about their town’s operating budget, despite the fact that they had budgeted $5,000 for computer equipment and maintenance in the current year’s budget.

A continued slow building season has limited the town’s revenues from building and subdivision fees, and while transfer taxes continue to come in, tightness in the general fund has limited the town’s cash flow for operating expenses amid a flurry of new hires designed to help it deal with the very growth that fuels the transfer tax revenues.

Deputy Mayor Gerry Hocker said he was prepared to consider the computer request later in the year, once the financial picture had become clearer, and the rest of the council agreed, but they were unwilling to approve the purchase when the $5,000 budgeted in that area might be needed to cover other escalating expenses.

Council members did, however, agree to the purchase of a $7,000 truck for the town’s code enforcement official, which will be reimbursed from transfer tax funds through a grant from the U.S. Department of Agriculture. Council members said they also believed the insurance, maintenance and gas costs for use of the truck can be paid from transfer tax revenues, but Collins planned to make a final check on that.

The town received disappointing fiscal news this week when it was discovered that fees not paid on the Creekside and Cedar Cove communities — totaling some $12,000 under current fee schedules — were not able to be assessed, as the applications for approval had been made prior to new fees being adopted. However, Ryan Homes has recently applied to the town for 28 additional units, promising more revenues to come.

Meanwhile, Minyon said he would keep the rental tax proposal off the council’s July agenda, seeing as there was no consensus about it being ready for a vote.

Subdivision, zoning ordinances ready for vote

Ready for votes in July are two long-awaited ordinances: the town’s revised subdivision and zoning ordinances. The former, council members said on Tuesday, was in good shape as currently drafted and ready to go for a vote. The zoning ordinance, however, could see some tweaks before it goes to a vote or could be amended afterward to address concerns about off-street parking requirements.

Banks said she was particularly concerned with those requirements, as only two spaces per unit are required under the current draft. She noted parking headaches at her own Millville residence, which provides more parking than the requirement, wherein a driveway is considered a single parking space and garages are also included.

“People park on the green spaces because there is nowhere else,” she said.

On that note, Bennett said she was concerned that increasing the required number of spaces would only serve to result in green space being paved over to meet the requirement.

The Millville Group’s Al Ruble, who sat in on the discussion for his interest in its impact on Millville By the Sea, recommended another option that could be the best of both worlds. Referring to a previous project in Northern Virginia, Ruble said a grass paver system might be the answer.

“We don’t want more asphalt,” he said, recommending that green space could be used as “overflow” parking if a grass paver system that would protect grass from occasional, or even daily, traffic was used. It had been successful in the Virginia project, he said.

Council members took that under advisement, requesting that Town Engineer Kyle Gulbronson of URS be asked to draft such a suggestion, or his preferred alternative, into the zoning ordinance.

While they anticipated that could come in time for a vote at their July meeting, they also agreed that the zoning ordinance was otherwise ready to adopt and the parking provision could be amended into it in August, if needed.

In clearing the issue for a vote, council members also reviewed density caps for residential planned communities (RPCs) and master planned communities (MPCs), which sit at 6.2 units per acre and 8 units per acre, respectively.

Ruble said the difference between the two was part of the design.

“They’re different animals,” he explained, noting that the MPC design was based on the concept of “new urbanism,” in which homes are placed closer together to enhance walk-ability, a sense of community, a work-play atmosphere and the ability to meet one’s neighbor. With a typical density of 7 to 9 units per acre, he said, MPCs contrast more traditional RPCs, with their larger lots.

Council members were satisfied with the explanation and opted to keep the two types of communities with different density caps.

The likely adoption of the two updated ordinances in July will also clear the way for the town to work on the next iteration of its comprehensive plan, which could produce a major overhaul as the new wave of growth takes hold. The update is a five-year update required by the state.

The council plans to appoint the town’s first planning and zoning board in July, with training of the board members to take place in August and with plans to hand the new commissioners the task of updating the comprehensive plan beginning in August. The finished plan is due in 2008.

Town hall use policy, construction hours reconsidered

Council members on June 26 also resolved all remaining concerns about a new public use policy for town hall. Collins said concerns over the town’s insurance and liability had been resolved with a reassuring phone call to the insurance provider.

The council also decided to amend the policy to limit hours of availability to between 9 a.m. and 9 p.m., to avoid staff having to stay too late to monitor the building. They also agreed that while refreshments would be prohibited from the main meeting room, they could be set up in the lobby, to minimize damage to the meeting room. Those using the room will still be liable for any damage, and smoking will be prohibited on town hall property.

The room currently does not have a formal capacity limit, but council members agreed that the 80 chairs used on a regular basis would be a suitable number, barring a lower limit set by the fire marshal, whom Thomas said he would approach for a more formal figure in the coming weeks.

Council members also agreed on June 26 to pay the estimated $250 it will take to formally set the metes and bounds of the portion of Lord Baltimore Elementary School that is still within town limits. The move is part of the plan to de-annex the segment of school property still within Millville limits, so that the property can be fully annexed by neighboring Ocean View.

Officials in that town had asked Millville whether it intended to pay for the metes-and-bounds work, as part of the formal de-annexation process. The Millville council on Tuesday agreed that with the de-annexation voted successfully in referendum this March but not yet certified by the state legislature — and not likely to be so until January of 2008 — Millville should pay the cost.

Finally, the council agreed to reconsider the recently passed noise ordinance, specifically in regards to prohibitions on weekend construction.

Banks, who voted against the ordinance for that very reason, said she felt the prohibition on Saturday construction was burdensome on contractors who might have poor weather during the week and that she felt it was unfair for property owners to be able to do work on their own property on a day when contractors could not work.

Bennett adamantly disagreed, saying that the notion of the ordinance had been to protect residents from disruptions. She pointed to the area’s many weekend-only visitors as prime for difficulties if Saturday construction was allowed.

Thomas and Hocker both said they’d been opposed to the restriction as well and felt it would help shorten construction periods for everyone’s benefits. The council agreed on consensus to look at adopting an amendment that would allow Saturday construction.