FRANKLIN—Franklin could join the ever-growing list of Virginia communities that no longer issue vehicle decals in 2011.

“We cannot eliminate the decal that is scheduled to be purchased in February of next year,” said City Manager June Fleming. The city is working on a plan to possibly eliminate decals the following year.

The decals, which cost the city less than $2,000 to purchase, bring in a significant, albeit declining, amount of revenue for the city. Revenues from decals have declined by about $7,000 in each of the past three fiscal years to $140,324.22 last year.

Brenda Rickman, the city’s commissioner of the revenue, presented the City Council with three options for eliminating vehicle decals during a work session Monday night.

The first option Rickman presented was the elimination of decals with no new fees, which could mean up to $150,000 in lost revenue for the city.

The second option would eliminate decals and use the “clean retail” value in the National Automobile Dealers Association guide. Currently, the city uses the “clean trade-in” value, which is less than the clean retail value. Rickman said it might require an adjustment to the personal property tax rate to ensure that it brings in about the same amount of revenue as the decals.

Councilman Benny Burgess suggested a different version of the second option that doesn’t take into account the vehicle’s value and would require a slight increase in the personal property tax rate.

“Then it’s real simple … we don’t have any fees, just bump up the personal property tax rate by the pennies that we need to get to $150,000,” he said.

Rickman’s third option changes the decal fee to a vehicle license fee that would be added to personal property tax bills, and would bring in the same amount of revenue. Rickman said that it could upset some taxpayers to be required to buy a decal in February 2010 and then pay a license fee in December 2010, but it would be two different fiscal years.

“Taxpayers are going to say that you’re taxing them twice,” she said.

Rickman said that a vehicle license fee would not be transferable to a new vehicle, but council could decide if they want to prorate the fee depending upon when the vehicle is purchased.

“It depends on how your ordinance is going to be written, and that’s up to your discretion,” she said.

Asked how a vehicle license fee would be policed, Rickman said the city’s payments office can issue a stop through the Department of Motor Vehicles, which allows localities to place a stop, or block, on the property tax bill account of residents who have not paid vehicle decal fees or personal property tax bills in full. It prevents a vehicle owner from renewing license tags, driver’s licenses and other actions.

“The only objection I ever had to the elimination of decals was the fear of lost revenue,” said Mayor Jim Councill. “But if it’s going to be helped by the DMV with the stop, then that’s actually more effective.”

Rickman said that the DMV stop program is essential if the council decides to issue a vehicle license fee.

“Going from a decal to a vehicle license fee is not going to work unless we put DMV stops on,” she said.

Rickman will appear before council again in November with more detailed information about the impact of eliminating decals.