TO: The Honorable Mayor Kenneth R. Kornegay and Town Council Members
FROM: David B. Bone, Town Manager
DATE: May 19, 2005
I am pleased to submit for your consideration the recommended budget for the
upcoming fiscal year 2005-06. I am honored to provide my first recommended budget
as the Town Manager of Elizabethtown. The budget document detailed herein presents
key information about revenues, expenditures and rate schedules. I hope that
the information provided is in a suitable format and is ample information for
the elected body to consider the budgetary needs of the town.
ORGANIZATION OF THE BUDGET DOCUMENT
The Budget Document is organized as follows:
Budget Message. The Manager's budget message summarizes information about revenues and costs expected for the fiscal year 2005-06 and highlights key issues for Council's consideration.
Summary Budget and Appropriated Ordinance. The Summary Budget provides total revenue and expenditure projections for all funds - the General Fund and Utility Fund. (This information is on page 4.)
General Fund Revenue Projections. The General Fund Revenue projections are provided on page 8.
General Fund Expenditure Projections. General Fund Expenditures are broken-down by department and begin on page 10. The Recreation Department Expenditures begin on page 11. Special Appropriations are detailed on page 11.
Utility Fund Revenue and Expenditure Projections. Projections for the Utility Fund (which encompasses Water and Waste Water) begin on page 12 and are highlighted on blue paper.
Proposed Fee Schedules. Various fee schedules (Garbage, Inspections, Zoning and Water/Sewer) are on page 19.
Budget Glossary. As a public document, a glossary of budgetary terms is provided for reference. The glossary begins on page 59.
BUDGET DEVELOPMENT PROCESS
The budget process was delayed somewhat this year, due to the transition of a new Manager. The Manager and Departmental Directors met on February 11, 2005 to begin the budget process for staff. Council held its retreat February 21-22, 2005, part of the program being the discussion of the capital needs of the town.
Work Sessions between Council and Departmental Directors began on April 25, 2005 and were completed on May 5, 2005.
North Carolina General Statute 159-11(b) requires that the Manager submit a proposed budget and budget message to the governing body by June 1st of each year, which are detailed within this document.
A public hearing must be held on the proposed budget, which has been scheduled for the regularly-scheduled Council Meeting on June 6, 2005 at 7:00 p.m.
On the 2005-06 Budget Calendar, it is suggested that Council adopt the Budget between June 20, 2005 and June 30, 2005. The governing body must adopt the annual budget ordinance by July 1st (North Carolina General Statute 159-13(a)).
STATUATORY REQUIREMENTS
In accordance with the North Carolina Budget and Fiscal Control Act, the Town of Elizabethtown's budget for the fiscal year beginning July 1, 2005 is presented herewith for your review and consideration. N.C. General Statute 159-13(a) directs that the Budget Ordinance and tax rate adoption take place by July 1, 2005. However, NCGS 159-16 directs that if the budget ordinance is not adopted by July 1st, the governing body must adopt "interim appropriations for the purpose of paying salaries, debt service payments, and the usual ordinary expenses" of the Town until the ordinance is adopted.
On the same day that the budget is presented to the governing body, the budget officer shall file a copy of it in the office of the clerk for public inspection and schedule a public hearing. Said hearing is scheduled for the regularly-scheduled Council meeting on Monday, June 6th at 7:00 p.m. in the Municipal Building Council Chamber. NCGS 159-13 specifies that not earlier than 10 days after the budget is presented to the governing body and not later than July 1st, the governing body shall adopt a budget ordinance. Otherwise, the Town Council may adopt an interim budget ordinance to be effective from July 1st to August 1st.
GENERAL COMMENTS
In the following pages, you will find a more detailed explanation of the proposed budget. I encourage you to review such and contact me if a specific explanation is required. Developing a budget for Town services each year is a key responsibility of the Town Council serving as elected representatives of the community.
It has been a pleasure working with Mayor Kornegay, Town Council, the department heads and staff this year. I appreciate and am honored to serve Elizabethtown as Town Manager. The staff and I look forward to continue working with the Mayor and Council on the budget for the upcoming fiscal year and on the goals of the Town of Elizabethtown.
Respectfully submitted,
David B. Bone
Town Manager
BUDGET MESSAGE
SUMMARY OF PROPOSED BUDGET AND KEY ISSUES
TO: The Honorable Mayor Kenneth R. Kornegay and Town Council Members
FROM: David B. Bone, Town Manager
DATE: May 19, 2005
Dear Mayor Kornegay and Council:
In accordance with the General Statutes of North Carolina, I respectfully submit for your review and consideration the proposed budget for the Town of Elizabethtown for Fiscal Year 2005-2006. A copy of this budget is available for public inspection at Town Hall. The budget is composed of several funds, including the General Fund and the Utility Fund. The Town also maintains project funds for individual capital projects. These funds are budgeted on a project basis and may overlap between multiple budget years.
PRIMARY FACTORS AFFECTING THE FY 2005-06 BUDGET
The primary factors impacting the FY 2005-06 budget are as follows:
EXPENSES
· Ad valorem tax revenues are decreasing because of a decreasing tax base.
· There is a large amount of debt service payments in the current year.
· The Pay/Classification Study, if implemented, would cost an estimate of between 4.88% and 8.36% of total current payroll. (The Manager is proposing Option 1 of the Pay/Classification Study, with an estimated cost of payroll of 4.88 %.)
· Health insurance costs continue to rise. (A 10% rise in rates was received; however, this included an increase in the deductible, as well as a slight adjustment to the drug benefit. Otherwise, the town would have received a 27.5 % increase.)
· Gas prices have increased significantly;
· The Town may have had to delay some capital expenditure needs in the past because of budgetary restraints, and these needs are compiling and necessitate addressing.
REVENUE
· The interest rate has rebounded in part, and the Town has realized a slight increase in investment income.
These issues will be discussed at length later in this document.
The following pages include a detailed discussion about the recommended budget and the many issues impacting the budget.
A YEAR OF TRANSITION
Transition can be difficult. The Town of Elizabethtown has experienced quite a few transitions in 2004-05. The Town has gone from one Town Manager to an Interim Manager for about 7 months, to a new Town Manager. Additionally, the Town hired a new Finance Director from within the organization and hired a new Public Utilities Director. 2004-05 has been a year of transition, but the Town of Elizabethtown made progress in the year and looks forward to a positive future.
GENERAL OUTLOOK
The Town of Elizabethtown is continuing a trend of recognizing modest positive changes in its financial condition. The General Fund undesignated fund balance has rose again this year. Revenues from interest rates have increased due to the rising interest rate.
However, not everything has been ideal. Decreasing property tax values have decreased ad valorem tax revenues. (The property tax value decreased $11.73 million from June 30, 2003 Audit to the June 30, 2004 Audit.) This value is represented mainly by the loss of personal property (i.e. equipment) from the Alamac Knits facility. The 2005-06 Budget is based on roughly $195 million in property tax value, with a 92.89 % collection rate, as was shown in the June 30, 2004 Audit.
Gas prices have soared - increasing not only direct costs of gasoline to the Town, but also indirectly increases the price of goods and services the Town purchases.
The Pay/Classification Study has been completed by the MAPS group. The implementation option to bring all Town employees up to the minimum point in the proposed salary range would cost $57,676, or 4.88% of payroll.
Another large water customer has closed its doors. Spectratex II closed in April of this year, which left 114 people out of work and will decrease water revenue by an estimated $44,000 and sewer revenue by $88,000. This continues a trend of the Town losing its manufacturing base, since losing the Alamac Knits facility several years ago.
As you know, the Town is sorely behind in many capital acquisitions due to financial hardship which affects productivity and morale. The delay of capital acquisitions has caught-up with the Town - to the point that the Town must address some of its needs. The challenge before us now is to continue the progressive stance of the Town of Elizabethtown by leaving the organization and the town at-large in a condition that surpasses that with which it was received.
It looks like the Town will likely experience a net gain in the Utility Fund cash reserves in fiscal year 2004-05, but part of this gain is due to capital expenditures that were delayed due to the transition to a new Manager and Public Utilities Director.
ALL FUNDS SUMMARY
The total budget for all funds is $5,423,856. The expenditure budget figures
for the Manager's Proposed Budget are broken down into the following allocations:
2004 -05 Amended Budget 2005-06 Proposed
General Fund $ 3,349,271 $ 3,281,892
Utility Fund $ 1,369,773 $ 2,141,964
Total All Funds $ 4,719,044 $ 5,423,856
NOTES:
(1) The 2004-05 Amended Budget reflects the budget amendments for the year, including those for the roof replacement and HVAC replacement for the town hall.
(2) $864,000 of the Utility Fund in the 2005-06 Proposed Budget represents expenditures for the Industrial Park Water and Sewer Project, which is a one-time project funded 8 % by the town.
GOALS OF TOWN COUNCIL
In this budget, the staff and I have attempted to address the issues the Town Council discussed at its retreat February 20-21, 2005. Some of the top priorities are:
1. Address downtown development / economic development through a NC Rural Center grant to help assess the needs of downtown infrastructure and plan for downtown revitalization.
2. Complete the negotiations for contract services for Bladen County's Tory Hole Fire District.
3. Add 2 full-time firefighters in the Elizabethtown Fire Department.
4. Address the capital needs of the Town, particularly in the Public Utilities Department.
PROPOSED POSITION ADDITIONS / FREEZES
The Manager proposes the addition of two new positions in the draft budget. Both of these positions are for the Fire Department and have been discussed by Council and staff at the 2005 retreat and previously. This addition of the two fire fighters would greatly enhance the fire protection service provided to the Town of Elizabethtown citizens and businesses, as well as residents and businesses of the Tory Hole Fire District, by providing 24/7 coverage with a full-time fire fighter, along with the dedicated Elizabethtown volunteer fire fighters.
The Manager, due to budget restraints, proposes to freeze the Human Resource Officer / Assistant to the Manager position, as well as a Maintenance position in the Streets Division. If Council follows-through with this recommendation, it is hoped that the positions would be funded once more when the funds are available.
GENERAL FUND: $ 3,281,892
REVENUE OUTLOOK - GENERAL FUND
Tax Rate. This draft budget is based on the town tax rate remaining $.68 per $100 valuation. This would be the second consecutive year that the Town of Elizabethtown tax rate has been $.68. Overall, we are estimating that the town's tax base to be $195,000,000, slightly up from $194,760,730 valuation depicted in the June 30, 2004 Audit, but substantially less that the $212,686,640 valuation that was represented in the 2004-05 Budget. The $.68 tax rate is projected to generate $1,231721 in revenues for real, personal and utility property, and for motor vehicles, based on a tax collection ratio of 92.89 percent, which is equal to the tax collection percentage reflected in the June 30, 2004 Audit.
TOWN OF ELIZABETHTOWN
TAX VALUATION AND TAX REVENUE COMPARISON
ACTUALFY 02-03 ACTUAL FY 03-04 BUDGETED FY 04-05 REQUESTEDFY 05-06
Tax Base Valuation $205,851,159 $192,586,131 $212,686,640 $195,000,000
Tax Rate 0.0069 0.00685 0.0068 0.0068
Tax Levy $1,426,098 $1,340,068 $1,446,269 $1,326,000
Collection Rate 90.49% 92.89% 90.50% 92.89%
Amount Collected(after abatements, discoveries, releases) $1,298,170 $1,247,131
$1,307,387 $1,231,721
Loss of Alamac Knits property value. The substantial loss of property tax value
is explained with the closing of Alamac Knits. There was $206,491,884 in property
tax value reflected in the June 30, 2003 Audit. This value was for the property
tax received in the 2002-03 year, which is based on the property value as of
January, 2002. This explains the delay in the decrease of property values from
Alamac Knits, which closed in 2002.
Sales Tax. Sales Tax revenue seems to have been received, as expected. $525,000 in sales tax revenue is budgeted for 2005-06, slightly up from the $522,714 budgeted in 2004-05.
Increase in Interest Revenue. Interest income is up slightly. Interest income is budgeted to rise from the $4,708 budgeted in 2004-05 to $13,000 for 2005-06.
Fund Balance. A $60,000 General Fund - Fund Balance appropriation is in the Manager's Recommended Budget for 2005-06. This $60,000 appropriation was necessary to produce a balanced budget, even after cuts were made and fee increases proposed. A Fund Balance should be undertaken with extreme caution due to the fact that a fund balance should be maintained for emergencies and capital expenditures.
Powell Bill. Due to the modestly improving economy, higher gas prices and the return of another $25 million of the $125 million the Governor borrowed to balance the FY 2002-03 budget, the Powell Bill allocation should increase between 3 % and 4 %. A Powell Bill allocation of $127,500 is budgeted for 2005-06, a modest from the $123,614 budgeted in 2004-05. The projected value of the population-based portion (75%) of the FY 2004-05 Powell Bill distribution is between $24.10 and $24.40 per capita.
Sanitation. As for Solid Waste services, the Town's two-year reprieve in Consumer Price Index (CPI) based increases (as per the Town's contract) is complete. A Waste Management official has stated that Elizabethtown will receive a three and eight-tenths (3.8%) CPI increase in the rates. Additionally, the company will be requesting a fuel surcharge that has been running an average of 4%.
Proposed institution of Yard Waste Collection Fee. In keeping in-line with the goals established at the April 5, 2004 Council meeting to "make the solid waste collection system self-supporting," the Manager recommends that some of the cost of providing yard waste disposal services be recouped by adding a $3.00 per month yard waste charge to the residential solid waste charge that is added to the Town's utility bills. Currently, the Town provides this service in-house and absorbs the cost of providing the yard waste collection service in the General Fund. The cost of providing this service is increasing. Vehicles required in providing this service need upgrading, and the Town is in need of mulching the debris at the yard waste site (at an estimated cost of $20,000).
EXPENDITURES - GENERAL FUND
The largest portion of the total budget is the General Fund. The total 2005-06 General Fund proposed budget is $3,281,892, which represents a 2% decrease from the 2004-05 Amended Budget of $3,349,271. The decrease is made possible by freezing two positions and by controlling costs.
Governing Body. The main difference proposed spending for the Governing Body department is that election expenses were budgeted for the year, and FICA was increased. Several other line items that were not budgeted for last year were included this year.
Administration. The Human Resource Officer / Assistant to the Manager position has been proposed to be frozen until such time that the Town has the resources to fund the position. A decrease of $10,383 in the Operations and Services line item is proposed. Although there are Capital Outlay needs, no Capital Outlay is proposed for the Administration Department.
Finance Department. Proposed salaries have increased due to the possible adoption of the Pay / Classification Study and the proposed COLA. The request for wall panels in the Capital Outlay and the request for $4,000 for possible temporary assistance are not being proposed.
Planning Department. Proposed salaries have increased due to the possible adoption
of the Pay / Classification Study and the proposed COLA. Minor modifications
were made to the other line items in the budget. No Capital Outlay is proposed
for the Planning Department.
Police Department. Salaries in the Police Department have increased due to the
proposed COLA, as well as the Pay Study. The Operations and Services is being
funded $11,507 less in the Proposed Budget than what was requested, but it is
still $3,215 more than budgeted last year. No new Capital Outlay (besides existing
debt) is budgeted in the Manager's Proposed Budget.
Fire Department. Two (2) new fire fighter positions are funded in the proposed Fire Department Budget. This is consistent with what Council has discussed for the last couple of years. $50,000 is being proposed for a reallocation from the current year's budget for building repair needs, but the request for an additional $50,000 for the 2005-06 year is not proposed. In addition to the $62,000 contribution from the Tory Hole Fire District, the District Board has agreed to a one-time appropriation of $57,000 from its reserves for additional work on the Fire Department building. An additional $5,000 in Capital Outlay is proposed for the Fire Department for new hose.
Public Services. There is no significant change in the Public Services Proposed
Budget, besides the fact that nothing is budgeted for in Capital Outlay.
Street Department. The Street Department is showing a decrease in salaries in
the Proposed Budget. One position is proposed to be frozen, and one position
is proposed to be moved to the Water Department and Wastewater Department to
reflect a true allocation of labor between the Utility services and the services
provided under the General Fund. All of the items proposed for Capital Outlay
for the Street Department have been proposed, except for the All - Terrain Vehicle.
Powell Bill Expenditures. Proposed Powell Bill Expenditures are roughly the same for FY 2005-06. This includes funds for the patching, paving and maintenance of town streets. A decrease in the Capital Outlay for the Powell Bill. The higher funding in the current year cam from the Powell Bill Reserves in order for additional resurfacing.
Solid Waste Expenditures. Waste Management has proposed a 3.8 % CPI increase in rates and desires to institute a fuel surcharge, which is currently running an average of 4 %.
Recreation. Minor modifications to the Recreation Proposed Budget are made from the requested amount.
Special Appropriations. Items under Special Appropriations are basically funded at the current amount, except for Performance Incentives, which are decreased to be in line with actual expenses incurred this year.
EXPENDITURES - OVERALL
(GENERAL FUND AND UTILITY FUND)
Health Insurance Rates. The Manager proposes to remain with Blue Cross / Blue Shield this year for health insurance. The town's broker did provide quotes from other providers this year, as well, but Blue Cross / Blue Shield had better rates. "Better" is a relative term. To keep the same coverage, the Town would have incurred a 27.5 % increase in rates. To decrease the burden for the Town and to limit the rate increase to 10 %, the Manager proposes coverage with Blue Cross / Blue Shield with an increased deductible (from $250 to $1000) and a modified drug benefit ($10, $40, $60 in drug co-payments instead of $10, $25, and $40).
Employee raises. The Manager's Proposed Budget includes a cost-of-living adjustment (COLA) of 2 ½% for all regular employees. This is a departure from the former Town policy of not providing a cost-of-living adjustment to probationary employees. This policy change is one recommended by the MAPS group as part of the Pay/Classification Study. No merit increase is budgeted.
The purpose of the COLA is to ensure that salaries are kept at par with changing economic conditions. Without this provision, employees effectively take home less money to cover the increasing costs of food, shelter, and other factors of daily living. Additionally, failure to stay competitive with the private sector and other governments is possible if a sufficient annual COLA is not provided.
Pay / Classification Study. Option #1 from the MAPS Group Pay / Classification Study is included in the proposed budget. This would cost an estimated 4.88 % of payroll ($57,674) but is balanced by the proposed freeze of two positions.
UTILITY FUND: $1,147,334
REVENUE OUTLOOK - UTILITIES FUND
Water Rates. A 10 % increase in water and sewer funds is requested. This rate increase is necessary to address the capital needs of the system, as well as increasing costs, such as health insurance. The Town increased utility rates by a modest two percent (2%) in 2004-05. After this year's proposed increase, the Manager proposes to annually adjust water and sewer rates on an annual basis, with the percentage increase being tied to the Consumer Price Index (CPI) increase, which is also consulted for cost-of-living increases. Including a annual adjustment to the water and sewer rates keeps the cost of providing services in line with market price adjustments and complies with the concept of administering the enterprise fund like a business.
Another large water customer has closed its doors. The closing of Spectratex II in April of this year not only left 114 people out of work, but the loss of water revenue from Spectratex II is an estimated $44,000.
Bladen County expects to bring another well on line in the 2005-06 year, which will mean a loss of water sales for the town. Water sales to the county are expected to be over $44,000 for the 2004-05 year, but only $20,000 is budgeted for 2005-06.
MONTHLY WATER/SEWER RATE COSTS
Monthly Gallon Use PresentW/S Rate Cost ProposedW/S Rate Cost Monthly Differ
3,600 (Citizen) $27.14 $29.31 $ 2.71
6,300 (Citizen) $41.45 $45.60 $ 4.15
64,800 (Commercial) $333.00 $366.30 $ 33.30
EXPENDITURES - UTILITY FUND
Utility Appropriations. The only significant change under Utility Appropriations in the Proposed Budget is the decrease of the Water and Sewer General Obligation Bond payment (from $147216 to 93,333).
Water. Salaries in the Water Budget are significantly increased due to the inclusion of the Public Utility Director's salary and benefits, as well as the salary and benefits of another employee from the Streets Department. The General Fund has been, in effect, subsidizing the Utility Fund by supporting 100% of the salaries of individuals who work substantially with the water and sewer functions. As an Enterprise Fund, all of the costs associated with administering this fund should be coming from Utility revenues. The proposed allocation of labor post in the Public Utilities Department is more of a true representation of the actual man-hours worked in each function. Because of the pressing needs of the department, all of the Capital Outlay requests for the department are in the proposed budget.
Wastewater. As with the Proposed Water Budget, one salary from the Street Department
has been re-allocated to the Wastewater Department. Most of the Capital Outlay
requests are in the Proposed Budget, except for the replacement of one vehicle.
BUDGET / FINANCIAL GOALS
(as established on April 5, 2004)
As you are aware, Council set several financial goals and expressed a desire to implement new planning processes at its annual planning retreat in 2001. These goals were revisited and revised as part of the 2004 retreat session. At the April 5, 2004 regular meeting, Council adopted the following capital planning and financial policies to guide fiscal management decisions:
1. Annually prepare a five-year capital improvement plan to forecast capital infrastructure, facility and equipment needs for the general and utility funds.
2. Build the available and undesignated fund balance to 30 percent of general fund spending.
3. Establish a water-sewer capital reserve account to be funded with money freed up by declining debt service payments on utility fund G.O. and revenue bonds.
4. Establish a general capital reserve account to be funded annually from general fund sources equal to two cents or more of the property tax rate.
5. Strive to make the solid waste collection system self-supporting and establish a separate enterprise fund for its revenues and expenditures.
6. Strive to maintain a healthy and self-sufficient utility fund by charging reasonable fees.
7. Strive to establish the lowest reasonable tax rate for its citizens without compromising the quality of municipal services.
To be fully compliant with these financial goals, this proposed budget should reflect a contribution to fund balance and an appropriation to general fund capital reserve. These capital reserve accounts were to reduce reliance on lease-purchase financing for capital items and provide a savings account for future downtown revitalization efforts. Unfortunately, deferred capital expenditures in the Public Services Departments have finally reached a boiling point and require the purchase of several vehicles and pieces of equipment. Therefore, no capital reserve appropriation is included in this proposed budget.
PERFORMANCE MEASUREMENTS
Participating Departments: Administration, Finance, Fire, Planning, Police, Public Services, Street, Water, Wastewater
The performance measurement budget system is intended to provide incentives for departments to achieve more during a fiscal year and save money in the process. Departments are required to determine a Mission and Objectives for the budget year, which will be measured by predetermined methods. The department's reward is directly related to how they meet their objectives and the amount of savings realized at the end of the year. This budget procedure is designed to allow more flexibility than a traditional line item budget. The participating departments are able to more quickly adapt to changes in service requirements and respond to citizen needs during the fiscal year. The need for budget amendments should be greatly reduced as a result.
The key motive for this system is accountability; accountability of the Department to the Manager, the Manager to the Council, and the Council to the citizens. The annual submission of desired outcomes sets the department's performance agenda for the year. Each of these outcomes must be satisfied in order for the department to receive satisfactory evaluations and realize the performance attainment rewards. By tying a budget to the annual achievements of a department's service delivery program, we've created an incentive to perform at the highest level.
During the budget process, the department is required to create ten to twelve desired outcomes for the fiscal year. The objectives will be monitored throughout the year by both the department heads and the Town Manager's Office. These objectives must adhere to the five principles of effective measures. The objectives must be:
Specific - address a particular desired result (not broad-based)
Measurable - Can you measure the objective?
Attainable - be realistic (Can you succeed?)
Results oriented
Time bound - At what time should you realize success?
If the departments satisfactorily achieve their approved outcome objectives
for the year, they will be rewarded with a percentage of their budget savings.
This is the real incentive for the performance measurement department. For example,
if the Fire Department can achieve over 90% of its objectives for the year and
finish the year $7,500 under budget, it may retain $3,750 (50%) for future use.
The remaining $3,750 (50%) will be returned to the Town's General Fund. However,
if the department does not achieve its stated objectives then no retained savings
will be realized. The achievement/savings scale is illustrated below:
Objectives Satisfied Retained Savings
90% or greater 50%
80%-89% 35%
70%-79% 20%
Below 70% NONE
All retained savings are placed in an account designated for the participating department's use only. They may choose to use the savings in any manner they deem appropriate as long as it furthers the department's ability to perform at a high service level. At this time, savings may not be used for salaries or other benefits not also granted to all Town employees. However, it is anticipated that a formal proposal will be made whereby an incentive is provided to the employee for high-level departmental performance.
The participating departments have budgets with only five line items. By condensing the size of the budget, it becomes a more manageable tool and less of a document that tracks every penny spent. The performance measurement budget allows the department to focus on service quality. It is anticipated that this reduction of line items will also benefit the Finance Department by reducing their expenditure tracking responsibilities.
Averages were taken from previous years' budgets to determine the FY 2003-04 expenditures for participating departments. For example, the operation line item is an average of all traditional line items related to day-to-day departmental administration. This includes office supplies, contracted services, equipment purchases (under $5,000), liability insurance, postage, and the like. The benefits' line item includes health insurance, retirement contributions, unemployment, worker's compensation insurance, and others. These averages make up the budget allocation that is provided to the departments at the initial staff budget meeting.
In order to provide some flexibility to the process, the budget does allow
department heads to request appropriations above that recommended in the allocated
budget. The "expansion request" is submitted to the Manager for expenditures
such as one-time capital projects, merit pay increases, operation enhancements,
etc. The department heads must justify all expansion requests during the initial
Council budget committee review meetings. If any expansion budget expenditures
are approved, they are added with the base allocation to total the department's
actual fiscal year expenditure amount.
DEBT SERVICE AND CAPITAL OUTLAY ALLOCATION: $366,192.19
DEBT SERVICE EXPENDITURE SUMMARY
The annual expenditures on debt retirement are the payment of debt service on past-issued bonds and recently-issued lease/purchase debt for water and sewer service improvements and capital outlay. The Town of Elizabethtown has a significant amount of debt to repay over the next two years. The final payment on the Melvin-Anderson property acquisition for downtown parking lots was paid in 2004-05, but there is still $366,192 in payments owed for debt service and capital outlay payments in 2005-06.
Debts to be retired in 2005-06 include the money owed for the Town's Water and Sewer General Obligation Bond. This final payment will be for $93,333.
Debts to be retired in 2006-07 include the Fire Department ladder truck, as well as payments for the I/I Project and Well #5. The payment for the ladder truck for 2005-06 will be $69,933, while the payment for the I/I project will be $60,445. The payment for Well #5 will be $37,048.
A number of years ago, the Town entered into a federal Rural Development Community Facilities Loan program for financing downtown parking improvements. The principal loan amount was $550,000 at a 20-year fixed interest rate of 4.78%. However, the first payment was delayed until December 1998 and, therefore, the loan amount was increased to $554,530. Funds were included in this budget to account for $43,671 of principal and interest payments to USDA-Rural Development agency.
LOOKING AHEAD
Town Council has had an important contractual discussion with the County of Bladen on the joint funding of items of mutual interest. The Town discussed additional anticipated expenses for the Industrial Park Water/Sewer Project and successfully negotiated with the County an agreement to split the additional $100,000 in project cost due because of an adjustment in the grant funding based on job creation.
Additionally, for years the Town has funded the airport without an equal funding contribution from the County. As that the airport and its supported activities service the whole county and not solely Elizabethtown, it is of opinion that their share of the facility's operational and capital expenses be a minimum of fifty percent (50%). A letter to this effect was sent to the Bladen County Commissioners on May 3, 2005. A follow-up joint meeting on this matter was held between the Bladen County Commissioners, the Elizabethtown Town Council, and the Airport/Economic Development Commission on May 10, 2005. Hopefully, the Bladen County Board of Commissioners will recognize the benefit the entire county receives from the airport and industrial park and agree to equally fund this commission in the near future.
Elizabethtown and Bladen County have come to terms on the funding of the Tory Hole Fire District. In 2000, Town Council entered into a contractual relationship with the District that did not provide the requisite cash contribution to adequately share in the expenses of operating the Elizabethtown Fire Department. With the recently-negotiated contract between Bladen County and the Town of Elizabethtown, the funding inequity of the Tory Hole Fire District was addressed. The Town will receive $62,000 annually from the Tory Hole Fire Protection Tax District, as well as a $57,000 disbursement from the Fire District contingency fund for fire station upgrades for the 2005-06 year. The Town Council, Board of Commissioners, and Fire District Board should be commented for the contract negotiated on this matter.
Bladen County has just begun its revaluation process. The property revaluation will take effect in 2007-08. Coupled with the revaluation in 2007-08 is the fact that the Town will close-out several debts in that year. The next couple of years will be tight fiscally, but there appears to be a light at the end of the tunnel.
CONCLUSION
I would like to express my appreciation to all department heads and other key staff for their help preparing this budget and the budget document. I also would like to thank the Mayor and Town Council for their input in the budget process and for their continuing support for both staff and myself.
The staff of the Town of Elizabethtown and I look forward to review of this document by you and the public and are eager to work with the Mayor, Council, advisory boards and citizens on the needs and goals of the community in the coming year.
FY 2005-06 PROPOSED BUDGET RECOMMENDATIONS
Revenue - In order to achieve a self-sufficient financial goal, the Town Manager proposes the following Town-controlled revenue generating recommendations for Council's consideration:
GENERAL FUND PRESENTFY 04-05 RECOMMENDATIONFY 05-06
Tax Rate: $0.68 cents per $100 valuation $0.68 cents per $100 valuation
Residential Solid Waste:
· Garbage/ Recycling $13.32 per month $14.65 per month
· Limb/Leaves· Additional 90-Gal. Carts (picked-up by G.F.)$8.95
per 90 gal. cart $3.00 per month$9.85 per 90 gal. cart
· Minimum Availability Fee $13.32 per month $13.32 per month
Commercial Solid Waste:
· Minimum Monthly Fee $16.12 per mo. - one 90 gal. cart $17.73 per mo.
- one 90 gal. cart
· 2 Yard Container $38.01 per pick-up $41.81 per pick-up
· 4 Yard Container $76.00 per pick-up $83.60 per pick-up
· 6 Yard Container $114.01 per pick-up $125.41 per pick-up
· 8 Yard Container $152.00 per pick-up $167.20 per pick-up
Permits:
· Zoning Compliance· Text Amendment Application· Rezoning
Application· Special Use Permit Application· Variance Request·
Conditional Use Permit Application· Access. Use/Res. Addition ·
Bus. Identification Sign $ 40.00 $150.00$150.00$150.00$150.00$150.00$ 15.00$
15.00 $ 50.00 $175.00$175.00$175.00$175.00$175.00$ 15.00$ 15.00
· Minor Subdivision Plat $ 75.00 $ 75.00
· Major Subdivision Plat $150.00 $150.00
Miscellaneous:
· Fire District Charge: $17,000 (per contract) $62,000 (per contract)
· All Other Permit/Charges: Remain the same Remain the same
With regard to the Utility Fund revenues, the following rate, charge and deposit
recommendations are proposed:
UTILITY FUND PRESENT RECOMMENDATION
In-Town Water Rates:
· 0 - 2,000 Gallons $7.65 flat charge $8.42 flat charge
· 2,001 - 10,000 Gallons $1.79 per 1,000 gal. $1.97 per 1,000 gal.
· 10,001 - 20,000 Gallons $2.21 per 1,000 gal. $2.43 per 1,000 gal.
· 20,001 - 50,000 Gallons $1.85 per 1,000 gal. $2.04 per 1,000 gal.
· 50,001 - 100,000 Gallons $1.64 per 1,000 gal. $1.80 per 1,000 gal.
· 100,001 - 1,000,000 Gallons $1.47 per 1,000 gal. $1.62 per 1,000 gal.
· 1,000,001 Gallons & Above $1.43 per 1,000 gal. $1.57 per 1,000
gal.
· Administration Fee $1.50 $1.65
In-Town Sewer Rates:
· 0 - 8,000 Gallons $3.51 per 1,000 gal. $3.86 per 1,000 gal.
· 8,001 - 25,000 Gallons $3.37 per 1,000 gal. $3.71 per 1,000 gal.
· 25,001 - 100,000 Gallons $3.01 per 1,000 gal. $3.31 per 1,000 gal.
· 100,001 - 1,000,000Gallons $2.74 per 1,000 gal. $3.01 per 1,000 gal.
· 1,000,001 Gallons & Above $2.66 per 1,000 gal. $2.93 per 1,000
gal.
· Administration Fee $2.50 $2.75
Out-Town Water/Sewer Rates: Charged at 2.5 times inside rate Charged at 2.5
times inside rate
Water & Sewer Extensions: Actual Town construction cost Actual Town construction
cost
Water & Sewer Tap-Ons:
· Standard ¾" Water Tap $600.00 $600.00
· Non-Standard Water Tap· Sprinkler Non-Main Tap ¾"
· Sprinkler Non-Main Tap 1" Actual Town Cost$200$250 Actual Town
Cost$200$250
· Standard 4" Sewer Tap· Non-Standard Sewer Tap $625.00Actual
Town Cost $625.00Actual Town Cost
· Industrial/Commercial Tap Actual Town Cost Actual Town Cost
Deposits:
· Residential Homeowner $100.00 and refundable after 12 continuous months
of prompt payments. These deposits may be reduced 50% if a good independent
credit report can be provided by the customer. $100.00 and refundable after
12 continuous months of prompt payments. These deposits may be reduced 50% if
a good independent credit report can be provided by the customer.
· Residential Renter $150.00 and refundable after 12 continuous months
of prompt payments. These deposits may be reduced 50% if the customer can provide
a good independent credit report. $150.00 and refundable after 12 continuous
months of prompt payments. These deposits may be reduced 50% if the customer
can provide a good independent credit report.
· Commercial/Business $250.00 and be refundable after 12 continuous months
of prompt payments. These deposits may be reduced 50% if the customer can provide
a good independent credit report. $250.00 and be refundable after 12 continuous
months of prompt payments. These deposits may be reduced 50% if the customer
can provide a good independent credit report.
· Industrial $1,200 and be refundable after 18 continuous months of prompt
payments. These deposits may be reduced 50% if the customer can provide a good
independent credit report. $1,200 and be refundable after 18 continuous months
of prompt payments. These deposits may be reduced 50% if the customer can provide
a good independent credit report.
· Delinquent Charges Residential/Commercial accounts are to be charged
$10.00 for late payment. An industrial account shall be 5% of bill owed. Residential/Commercial
accounts are to be charged $10.00 for late payment. An industrial account shall
be 5% of bill owed.
· Disconnect/Reconnect Charge $15.00 charge if disconnected for non-payment.
$15.00 charge if disconnected for non-payment.
· After Business Hr. Reconnect $25.00 additional charge--plus $15.00
late payment. $25.00 additional charge--plus $15.00 late payment.
· Dublin Sewer Service Charge $49,161 $49,161
· Dublin WWTP Project Cost Debt satisfied Debt satisfied
VARIOUS TABLES AND CHARTS
2000 2001 2002 2003 2004
Unit's FBA % 13.37% 16.79% 17.76% 12.59% 24.40%
Group average FBA % 57.88% 59.79% 58.58% 60.00% 61.97%
State average Electric/Non Electric Group FBA % 36.08% 38.26% 36.10% 36.42%
35.92%
State average FBA % 34.79% 37.53% 57.88% 36.06% 35.99%
2004 2004
Category Expenditures Per Capita
General Government $774,077 $209
Water/Sewer 1,685,515 456
Electric 0 0
Other Utilities 0 0
Debt Service 490,963 133
Transportation 489,733 132
Public Safety 1,113,079 301
Other 594,675 161
Total $5,148,042 $1,392