TO: Mayor and Town Council
FROM: Samuel W. Noble, Jr. Town Manager
DATE: 1 July 2007
SUBJECT: Budget for Fiscal Year 2007-2008
Submitted herein is the budget for Fiscal Year (FY) 2007-2008. The budget is balanced in its entirety, as required by the North Carolina Local Government Budget and Fiscal Control Act.
The Town’s overall budget for FY 2007-2008 totals $40,523,757. The budget excluding interfund transfers is $37,429,657.
GENERAL FUND
The proposed ad valorem tax rate for FY 2007-2008 is $0.42 per $100 valuation of $730,240,900 with a tax collection rate of 97%. This represents no tax rate increase for FY 2007-2008. The Town of Tarboro has not increased property taxes in seventeen (17) years. The Town of Tarboro continues to have the lowest tax rate of any comparable or larger sized municipality in the area. Furthermore, the general fund continues to be debt free. The Town of Tarboro strives to pay for capital outlay from reserves rather than issuing bonds and paying interest on debt. In addition, the Town of Tarboro does not budget capital outlay expenditures unless they are needed and costs for such expenditures are kept to a reasonable level.
The primary reason the Town of Tarboro has been able to keep the tax rate low is due to the elimination of twenty-six (26) positions since 1987. The annual savings from the elimination of the twenty-six (26) positions has resulted in an annual savings of $1,032,835. This is obviously the driver in keeping the Town of Tarboro’s tax rate from increasing in seventeen (17) years. Furthermore, we have accomplished this feat without reducing services to our citizens. In that it is standard procedure for the Town of Tarboro to operate with a lean staff, I would strongly recommend that Council hold outside agencies to the same standard.
In order to keep tax rates from increasing, the proposed budget has included a fund balance appropriation for operating costs in the amount of $398,560. Should expenditures, particularly overtime due to emergencies, actually be lower than budgeted and revenues, particularly sales taxes and property taxes, are higher than budgeted, the fund balance appropriation will not be needed. It appears that such will be the case for FY 2006-2007. It should be noted that the property tax valuation has remained flat for the past six (6) years.
It is recommended that cemetery fees for non Tarboro residents increase from $750.00 to $1,000.00.
State collected local revenues have been adjusted as recommended by the League of Municipalities.
SOLID WASTE MANAGEMENT FUND
Edgecombe County landfill costs will increase from $40.00 per ton to $42.00 per ton effective 1 July 2007. The Town will be forced to pass on the additional landfill costs implemented by Edgecombe County. Therefore, the solid waste collection fee will increase from $15.00 per month to $16.75 per month.
WATER AND SEWER FUND
Water and sewer rates will not increase for FY 2007-2008. The fact that the Town of Tarboro has no debt on its water and sewer system has allowed the Town to hold the line on water and sewer rates and to have only one increase in rates for residential customers in seventeen (17) years. The Town of Tarboro diligently adds funds to water and sewer reserves in order to pay for capital outlay needs on a pay as you go basis.
STREET IMPROVEMENT FUND
The budget will support the Town’s street improvement plan primarily with funding from Powell Bill funds and some remaining street assessments.
ELECTRIC FUND
There is no anticipated increase in wholesale electric rates for FY 2007-2008. It should be noted however that should coal prices continue to escalate that there could possibly be an increase in the fuel adjustment charge to recover those costs. Current projections are that coal prices will level out. In addition, an extended outage at one of the nuclear plants could result in an increase in wholesale rates.
OPERATIONS
Line items such as department supplies and materials, auto supplies, uniforms and dues and subscriptions have been reviewed individually for each department and set accordingly.
In an effort to decrease costs for travel and save Tarboro taxpayers money, it is recommended that the Town’s travel policy be amended to delete the payment of expenses for the spouse of the Mayor and Council as well as the town manager for Town travel. The Town has previously paid for one (1) trip for the spouse of the Mayor and Council and two (2) trips for the town manager. Furthermore, it is recommended that all out of state travel be eliminated for FY 2007-2008. This represents a savings to the taxpayers of Tarboro of approximately $20,000.
Operating funds have been appropriated for participation in the Carolinas Gateway Partnership, the Edgecombe County Memorial Library, and the Edgecombe County Arts Council at the levels requested by each agency. Funds were requested by the Phoenix Society for African American Research, Inc. but have not been included in this budget. Tarboro has not funded this agency in previous years.
The Town of Tarboro funds fifty percent (50%) of the Edgecombe Cultural Arts Council’s operating budget. The Town owns and provides maintenance and upkeep of the Blount-Bridgers House, Pender Museum, and the surrounding grounds.
The Town of Tarboro funds twenty-nine percent (29%) of the budget for the main library of the Edgecombe County Memorial Library. The County funds the remaining seventy-one percent (71%). The funding is based on a per capita basis.
As Council is aware, the Town of Tarboro adjusts the Town’s level of funding to outside agencies that are jointly funded by the County and Town in order to compensate for any increases or decreases the County makes to these agencies. This is done in order to keep funding levels for the outside agencies at the percentages agreed upon in previous years.
PERSONNEL
The FICA, retirement, and salary wage lines reflect a 2.5% pay plan adjustment.
A 2.5% merit raise has been budgeted for the Town’s above standard employees. The merit raise program will continue to be administered based upon written performance evaluation on each employee’s anniversary date.
In the on-going effort to give all employees the same 401K contribution as sworn police officers, the 401K contribution shall increase from 6% to 7% for all employees who are not sworn police officers. Sworn police officers receive a 9% 401K contribution from the Town.
Worker’s compensation insurance costs have decreased by approximately sixteen (16%). General liability insurance costs have increased by approximately twenty (20%) some of this increase is due to flood insurance coverage on Town owned buildings located in the one hundred (100) year flood plain. Health insurance costs have increased somewhat for employee coverage as well as for family and parent-child coverage in order to pay these particular classes of coverage. Our self-funded health insurance program, which is administered through Blue Cross and Blue Shield continues to be much less expensive than package plans from the League or elsewhere.
CAPITAL OUTLAY
Capital outlay requests have been monitored closely and have been funded from capital reserves.