CHINA GROVE — The China Grove Town Council passed its fiscal year 2021-22 budget on Tuesday night after electing to avoid a property tax increase in favor of an additional service fee.

The council approved a $4.08 million budget, which is a 4.8% increase from the $3.89 million budget for the current fiscal year.

The increase in the town’s budget accounts for the purchase of two police cars for $84,000, police body cameras for $7,500, another part-time firefighter position for $10,000 in addition to money to cover an increase in the Local Government Retirement System employer contribution, a 1.5% cost of living increase and an up to 2.5% merit increase.

The council was forced to decide between raising property taxes by five cents or implementing a service fee because the monthly container prices charged to the town by GFL Environmental for sanitation services is set to rise on July 1.

The town currently pays $8.50 per container, but that price will increase to $9.95 per month including a 4.76% consumer price index increase. That will total $3,000 in extra expenses per month for the town and $36,000 annually. The added cost of the service is already included in the now-adopted budget.

“You guys are in a tough situation because no one wants to have a tax increase,” Town Manager Ken Deal said. “I’m right there with you. However, the cost of everything has increased significantly and for us to continue to provide the level of services to citizens we can’t do it any longer without something.”

To cover the additional cost, the council was considering raising the property tax rate from 54 cents to 59 cents per $100 valuation. For a homeowner with an appraised value of $150,000, that would have equalled a $75 annual increase.

Councilman Steve Stroud made a motion to adopt the tax increase, which was seconded by Councilman Arthur Heggins. Stroud was in favor of the property tax increase because he believed it would result in the “least pain on the most people” since residents with homes valued less than $225,000 would pay less with a tax increase than they would with the added service fee. Deal concurred with Stroud that the tax payer would “come out ahead” with the tax increase opposed to the fee, up to a certain home evaluation.

Stroud’s motion was opposed by Councilmen Don Bringle, Rodney Phillips and Brandon Linn, who said they were favor of a service fee instead. Bringle said he preferred the fee to the tax increase because the fee is levied on whoever is living in a residence, as opposed to the property’s owner. For example, a person who is renting will incur the fee as opposed to the landlord.

After the motion to adopt a tax increase was shot down, council members approved adopting a fee schedule. In a separate motion, the council approved directing Deal to work toward implementing the fee. The fee will appear on a customer’s monthly utility bill.

How much the fee will be exactly, Deal said, has yet to be determined. It will likely be about $10.50 per month, but could change depending on what percentage Salisbury-Rowan Utilities charges the town for collecting the fee. The fee will be the same for every resident.

Bringle said the town shouldn’t “make a dime” on the fee and should only charge enough to cover the bare minimum cost.

There’s also a question of how quickly the fee can be implemented. Deal said SRU is currently undergoing an internal software re-structuring, which would prevent the utility from implementing China Grove’s additional fee for several months. Deal said it might not be until October before SRU can work with the town the institute the fee.

In the meantime, the town will forgo purchasing items or dip into its surplus fund of several million dollars to pay for the increased cost of trash pickup. The town, Deal said, will also have to work with SRU to determine how to charge the fee to people who do not use the utility’s water or sewer services, but still live in the town’s limits.

China Grove is expecting to receive $1.2 million from the federal government through the American Rescue Plan. The town isn’t including the funding in its upcoming budget, but will be prepared to make budget amendments once there is more clarity on how and when the money can be used.

The funding could potentially be used to meet the $514,100 requested from various departments that was not included in the fiscal year budget. Among those currently unmet requests is over $400,000 from Public Works for a new employee salary, a dump truck, a knuckle boom truck and a bucket truck. Planning has requested $35,000 for a pickup, the China Grove Fire Department has requested almost $36,300 for equipment and Recreation has asked for $15,000 for improvement to Hanna Park.

In other meeting business:

• The town council canceled its regular meeting for July and moved its August meeting from August 3 at 6 p.m. to Aug. 10 at 6 p.m.

• The council adopted text amendments that will modify the town’s land use plan and Unified Development Ordinance to ensure compliance with the new Chapter 160D of the state’s general statutes. The amendments don’t make any significant changes, but update language.