By WILLARD KILLOUGH III
CAROLINA BEACH – The Carolina Beach Town Council will hold two public hearings to hear citizen input on the proposed 2019-2020 budget which begins July 1st.
The proposal includes a two-cent property tax increase bringing the rate to 24.5 cent per $100 dollars of property valuation, a 10% increase in water and sewer rates and a $1 increase for storm water fees.
The Council met Monday June 3rd, to continue discussion of the budget proposal presented by Town Manager Lucky Narain.
Narain explained, “To have a 24.5 cent property tax rate is not unheard of for Carolina Beach. It’s just not. We need the money in my opinion in order to sustain operations. It’s not frivolous money to uh, do frivolous things. It’s to account for the increased cost of services of labor and everything else. Bottom line. The other bottom line is we live in a coastal community and we need fund reserves in order to do a couple of things. One. The stronger our financial position is the more cost effective it is for us to secure loans. We get better rates.”
He explained, “A lot of our financial operations is based on debt” and, “I do think it’s in our best interest at this current time. And again, to everyone listening at home and here, this is just a proposal. It’s ultimately for Council to decide and we are all here for dialogue.”
In a message to the Council Narain explained, “The Town is projected to receive a total revenue of $25M. This amount is comprised of $15.5M into the General Fund and $9.5M into the Enterprise Fund. The aforementioned revenue projection is supported by a proposed property tax rate for FY 2020 of 24.5¢ per $100 of assessed valuation, which represents a 2¢ increase from FY 2019. The FY 2020 operating budget ensures residents will continue to receive good value for the level and quality of all services provided through moderate increases in fees and the property tax rate.”
He explained, “Numerous infrastructure improvements are planned for the upcoming year, including, but not limited to remedying recurring and problematic flooding with — an extension of the lake pump lines, extending and/or re-rerouting drainage lines, strategically located catch basin installations, a pump station generator, a new (JetVac) vactor truck to clean storm-water lines, and the installation of new storm-water infrastructure. With a modest ad valorem and rate increase – the Town will be positioned to cover the costs of these additional services.”
The Town has two primary funds in the budget. The General Fund, which covers police, fire, administration, parks and recreation and other expenses. The other fund is called the “Enterprise Fund” which is isolated from the General Fund and includes utilities like water and sewer.
The funds are separate with the Enterprise Fund – by law – relying entirely upon revenues from water and sewer rates. Those funds cannot be used to fund the General Fund. However, funds can be taken from the General Fund – if needed – to help fund the Enterprise Fund in terms of auxiliary administrative costs.
Narain explained, “The General Fund provides most of the traditional municipal services such as; Police, Fire and Ocean Rescue, Parks and Recreation, Public Works and Environmental Protection, Planning and Development, and General Government Services. Compared to last year, the Town projects to operate in FY 2020 with 5 less positions. These changes will result in a return of approximately $347,428 to the General Fund.”
Those staff reductions include:
Administrative Support Specialist II at $70,976
Police Officer – Beach Patrol (x2) $138,226
Police School Resource Officer $69,113
Police Intel Detective $69,113
Total (including benefits) $ 347,428
Narain explained, “Fund balance (also called reserves) is a measure of the government’s ability to respond to an emergency. Reserves for the general fund are trending upward, but there is considerable room for growth. Fund balance for the prior audited year (FY 2018) indicated a total amount of $6.1 million, of which $3.1 million was unassigned. Stated another way, this represented an unrestricted position of 21% of annual expenditures. Projections for FY 2020 support an increase in the fund balance toward the intermediate goal of 30% General Fund reserves with the long-term goal of 50% reserves.”
Narain explained, “The Enterprise Fund also relies upon indirect services from the General Fund. A transfer for these services of $725,000 is included as an expense to this budget and corresponding revenue to the General Fund. The Enterprise Fund provides services for water, sewer, storm-water, wastewater treatment, and the billing associated with these services. This Enterprise Fund is supported by fees (not taxes), and has a balanced budget of $9,407,641. Compared to last year, the Town projects to operate in FY 2020 with a net decrease of 2 staff positions. These changes will result in a return of approximately $141,891 to the Enterprise Fund.”
Those position reductions include:
Utility Billing Supervisor $69,137
Utilities System Superintendent $72,754
Total (including benefits) $ 141,891
He explained, “In the last fiscal year, the Enterprise Fund supported a balanced budget of $8,230,512, which is a $1,225,595 increase between last fiscal year and this fiscal year. The Town Council previously initiated a water and sewer study to serve as a plan for future infrastructure improvements. In order to fund the identified infrastructure improvements, the Town sold $31,443,643 worth of Revenue Bond Debt in June 2016. The Revenue Bonds were to be paid for through an increase in the water and sewer rates. The proposed increase in FY 2020 is 10% for water and sewer fees and a $1.00 per Equivalent Residential Units (ERU) increase in the storm-water utility fee.”
Narain explained, “The Enterprise Fund enjoys a moderately strong fund balance. Total reserves are $1.2 million unrestricted. With this balance and the additional rate revenue, the Town will be able continue infrastructure improvements in our water, sewer, and storm-water services.”
On the topic of debt service, Narain explained, “The Town has a modest amount of debt. The total fund debt is $31.4 million. When compared to the debt limit of $157 million, our current debt represents approximately 20% of the Town’s legal debt limit. The Town cannot issue more debt than 8% of its taxable appraised property. We do not anticipate significant increases in additional debt in the Enterprise Fund this year, but anticipate that future infrastructure improvements may require additional debt issuance.”
Narain addressed the level of personnel funded in the budget explaining, “Although the Town has reduced its workforce count this year, many vacancies exist – especially within the Police Department. The Town is committed to ensuring residents have public safety coverage. Staff is actively recruiting to fill vacant positions. The Town is projected to have a total of 114 full-time equivalent positions in FY 2020.”
He explained, “Carolina Beach continues in the pursuit of investing in employees to meet the Town Manager’s goal of fostering a transparent, nimble organization of employees challenged to provide high quality, responsive, and innovative services efficiently and effectively. Data supports that the Carolina Beach overall pay structure is on average 10.83% below the compared market, which places us at a market disadvantage in employee recruitment and retention. As a result, I am recommending a General Fund allocation of $502,266, and an Enterprise Fund allocation of $164,743 be programmed into the budget to ensure we reward performance and stay competitive in the market. Of this this amount, 45% (or approximately $300,000) is already programmed into the budget to provide a 3% Cost of Living Adjustment (COLA) based on the employees base pay, a 1% 401K match, and a potential 1% merit increase. COLA is intended to increase the overall base pay of all positions, establishing a competitive salary when compared to other regional local governments.”
Narain explained, “This recommended budget returns $100,000 to the General Fund. It appropriates taxpayer dollars to the Council’s priorities and increases the property tax rate to 24.5 cents per $100 of value. It is my opinion that this plan and the associated rates ensure a sustainable approach to governance and provide for future Town budget needs, assuming similar trends in revenues and expenses.”
He concluded, “While the responsibility falls upon me as town manager to recommend a balanced budget, as a governing board – you would not be in a position to consider a strategic and balanced budget for FY 2020 without the dedicated work from the Town’s Leadership Team and all of the Town employees.”
The Council will hold two public hearings on the proposed budget. The first will be June 11th at 6:30pm at Town Hall.
The second will be held Tuesday, June 25th, 2019 at 6:00 pm in the Town Council Chambers. For more info, call 910-458-2999. To view the budget proposal, you can visit Town Hall at 1121 North Lake Park Blvd or online at www.carolinabeach.org