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Council approves Kalahari package; no tax rate set
Council approves Kalahari measures, delays budget decisions


Date published: 5/14/2008

BY EMILY BATTLE

With nothing left to say after more than four months of deliberations, Fredericksburg City Council members last night took the last vote required to approve an incentives package to bring Kalahari Resorts to Celebrate Virginia.

The vote to approve the performance agreement that will govern those incentives, which amount to a 20-year, 47.5 percent rebate on all of Kalahari's local taxes, along with more than $3 million in upfront fee waivers, was the same as every other Kalahari vote: 6-1, with Councilwoman Debby Girvan opposed.

Kalahari's proponents--and particularly Mayor Tom Tomzak, who recently won a re-election campaign based largely on his support for the project--have billed it as crucial to propping up the city's future tax base.

Kalahari projects it will pay around $3 million a year in taxes to the city after the rebate. On top of that, city officials project the resort will generate other spending that will feed tax money to city coffers, and will spark additional development that will add to that.

But Kalahari won't open until 2010, and until then, council members are going to face a challenge balancing rising fuel and other costs and added capital needs with declining sales tax revenues.

Council members are having a hard time coming to agreement on how to spend city taxpayers' money in the fiscal year that begins July 1.

Last night they unanimously approved the portion of the city budget that goes to the schools--roughly one-third of the proposed $78 million budget for next year--as the city manager proposed it.

That means the schools will get $1 million more in local tax money than they got this year. The School Board had asked for $2.8 million more.

But the council held off on voting on Fredericksburg's overall budget and real estate tax rate for next year.

The city manager proposed a 5-cent increase in the current 53-cent rate.

Council members last night asked the city staff to look for savings in the budget to get city employees a 2 percent pay increase for all of next year.

They'll meet again before their May 27 meeting to talk about how that might happen, and whether there's any possibility of lowering the proposed real estate tax rate.

But the council did approve the following tax and fee increases last night:

A 4 percent raise in water rates, and 8 percent raise in sewer rates. Combined, these increases would cost the average residential customer $4.21 per bimonthly bill.

An increase in the bimonthly solid waste fees from $30 to $31.50 for single-family homes and from $24 to $25.20 for high-density housing.

Raising the lodging tax from 5.5 percent to 6 percent.

The council also approved a measure to raise the admissions tax from 5 percent to 6 percent, effective July 1, 2010.

This tax hike was a provision required in the Kalahari performance agreement.

Emily Battle: 540/374-5413
Email: ebattle@freelancestar.com