Tarboro FY 2011-2012 Annual Budget (Full Document)
2010-11 Comprehensive Financial Report
Highlights for Fiscal Year 2011/2012 budget are included in the following budget message from the Town Manager:
Budget Message
TO: Mayor and Town Council
FROM: Samuel W. Noble, Jr. Town Manager
DATE: 1 July 2011
SUBJECT: Budget for Fiscal Year 2011-2012
Submitted herein is the budget for Fiscal Year FY 2011-2012. 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 2011-2012 totals $46,158,800. The budget excluding interfund transfers is $42,553,145.
GENERAL FUND
The proposed ad valorem tax rate for FY 2011-2012 is $0.41 per $100 valuation of $891,956,097 with a tax collection rate of 96.78%. This represents a 5 cent property tax rate increase for FY 2011-2012. This is the first property tax rate increase for the Town of Tarboro since 1990. To balance the budget with only a five cent property tax increase, Town contributions to the Town's employee 401K deferred compensation plan will be reduced from (9%) to (6%). This reduction will be painful to our employees but continues to be more than most local governments which is (5%). It should be noted that the (9%) contribution rate resulted from employees receiving a contribution to 401K rather than a cost of living raise in no less than one previous year. This (3%) reduction in 401K deferred compensation contributions to our Town employees represents a savings to the Town of $193,735 and the General Fund of $134,664. (See attached NC 401K Plan Employer Contributions as of January 2011).
In addition to the above budget cut, the police and fire mandatory health maintenance program will be eliminated effective 1 July 2011 representing a savings of approximately $19,291.
The Town of Tarboro continues to have the lowest tax rate of any comparable or larger sized municipality in the area. The property tax rate for Rocky Mount for FY 2010-2011 is 55 cents, the property tax rate for Greenville for FY 2010-2011 is 52 cents and the property tax rate for Wilson for FY 2010-2011 is 51.5 cents. The Edgecombe County property tax rate for FY 2010-2011 is 86 cents. 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. Capital outlay expenditures have been budgeted from reserves for roof repairs for the Braswell Center and Chamber building, heaters in the Ray Center gym, heating and air conditioning for the animal shelter, and painting of Fire Station 11 for FY 2011-2012. A new roof is budgeted for the Ray Center; however, same will be funded from operating funds due to the need to not decrease General Fund Reserves below (8%). 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. It should be noted that at a 96.78% collection rate one (1¢) cent property tax generates $86,324.
The Town of Tarboro has been able to keep property taxes from increasing over the last twenty (20) years by reducing staff. Thirty-one (31) positions have been eliminated since 1987 resulting in a cumulative savings of $1,158,168. Council has been informed over the previous three years that the Town cannot continue to budget reserves to balance the operating funds of the Town. This is further documented by the attached letter from the Local Government Commission to Mayor Morris. Furthermore, the need for a tax increase in FY 2011-2012 was discussed extensively at the February 2011 Council retreat. Overtime was reduced for all departments last fiscal year and reductions remain in place for FY 2011-2012. Should the Town of Tarboro experience a severe emergency such as a flood or hurricane overtime will be paid from reserves, which is why Council should retain adequate reserves.
State collected local revenues have been adjusted as recommended by the League of Municipalities and most revenues have remained stable. Sales taxe for FY 2009-2010 was approximately $300,000 lower than budgeted and is anticipated to be $175,000 lower in FY 2010-2011. Interest on investments was budgeted at one (1) percent for FY 2010-2011, Tarboro is currently receiving less than .02% on investmens.
SOLID WASTE MANAGEMENT FUND
Edgecombe County landfill costs increased from $45.00 per ton to $46.00 in FY 2010-2011. Due to holding the line on operational costs, the solid waste collection fee remained at $19.25 per month for FY 2010-2011. The Town cannot continue to absorb the Edgecombe County Landfill fee increase of $45.00 per ton to $46.00 per ton. Therefore, landfill fees will increase to $20.25 per month for FY 2011-2012.
WATER AND SEWER FUND
Water and sewer rates will not increase for FY 2011-2012. The Town of Tarboro's water and sewer rates will continue to be lower than Greenville, Rocky Mount and Wilson.
STREET IMPROVEMENT FUND
The budget will support the Town’s street improvement plan with funding from Powell Bill funds.
ELECTRIC FUND
There is no anticipated increase in wholesale electric rates for FY 2011-2012.
OPERATIONS
Line items such as department supplies and materials, auto supplies, uniforms and dues and subscriptions have been reviewed individually for each department and reduced if possible. Fuel costs and chemical costs continue to be high for all departments.
No funds have been budgeted for out of state travel.
The $10,000 expense for fireworks for July 4th has been eliminated for 2011 as well as 2012.
Operating funds have been appropriated for participation in the Carolinas Gateway Partnership, the Edgecombe County Memorial Library, the Edgecombe County Arts Council and the Edgecombe Council Tourism Authority.
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. No funds have been budgeted to pay increases for outside agencies.
PERSONNEL
The FICAand salary wage lines reflect no salaary increase. The retirement contribution rate will increase form 6.45% to 6.97% July 1, 2011. There was a 2.5% one-time bonus in the FY 2010-2011 budget. There was no pay increase in the FY 2009-2010 budget.
No merit raise has been budgeted for the Town’s above standard employees for the third consecutive year.
Worker’s compensation insurance costs and general liability insurance costs are not projected to increase. Health insurance costs are projected to increase by 12.5%. Our self-insured 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 expenditures for the General Fund, as discussed previously, are for roof repairs, HVAC for animal shelter, heaters in Ray Center gym and painting of buildings.
Water and Sewer capital outlay expenditures are for sewer line rehabilitation and a water plant pump rebuild. These expenditures have been funded from reserves.
Electric improvements are for overhead and underground distribution line capital outlay and are funded from operating revenues.
Budget Message
TO: Mayor and Town Council
FROM: Samuel W. Noble, Jr. Town Manager
DATE: 1 July 2011
SUBJECT: Budget for Fiscal Year 2011-2012
Submitted herein is the budget for Fiscal Year FY 2011-2012. 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 2011-2012 totals $46,158,800. The budget excluding interfund transfers is $42,553,145.
GENERAL FUND
The proposed ad valorem tax rate for FY 2011-2012 is $0.41 per $100 valuation of $891,956,097 with a tax collection rate of 96.78%. This represents a 5 cent property tax rate increase for FY 2011-2012. This is the first property tax rate increase for the Town of Tarboro since 1990. To balance the budget with only a five cent property tax increase, Town contributions to the Town's employee 401K deferred compensation plan will be reduced from (9%) to (6%). This reduction will be painful to our employees but continues to be more than most local governments which is (5%). It should be noted that the (9%) contribution rate resulted from employees receiving a contribution to 401K rather than a cost of living raise in no less than one previous year. This (3%) reduction in 401K deferred compensation contributions to our Town employees represents a savings to the Town of $193,735 and the General Fund of $134,664. (See attached NC 401K Plan Employer Contributions as of January 2011).
In addition to the above budget cut, the police and fire mandatory health maintenance program will be eliminated effective 1 July 2011 representing a savings of approximately $19,291.
The Town of Tarboro continues to have the lowest tax rate of any comparable or larger sized municipality in the area. The property tax rate for Rocky Mount for FY 2010-2011 is 55 cents, the property tax rate for Greenville for FY 2010-2011 is 52 cents and the property tax rate for Wilson for FY 2010-2011 is 51.5 cents. The Edgecombe County property tax rate for FY 2010-2011 is 86 cents. 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. Capital outlay expenditures have been budgeted from reserves for roof repairs for the Braswell Center and Chamber building, heaters in the Ray Center gym, heating and air conditioning for the animal shelter, and painting of Fire Station 11 for FY 2011-2012. A new roof is budgeted for the Ray Center; however, same will be funded from operating funds due to the need to not decrease General Fund Reserves below (8%). 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. It should be noted that at a 96.78% collection rate one (1¢) cent property tax generates $86,324.
The Town of Tarboro has been able to keep property taxes from increasing over the last twenty (20) years by reducing staff. Thirty-one (31) positions have been eliminated since 1987 resulting in a cumulative savings of $1,158,168. Council has been informed over the previous three years that the Town cannot continue to budget reserves to balance the operating funds of the Town. This is further documented by the attached letter from the Local Government Commission to Mayor Morris. Furthermore, the need for a tax increase in FY 2011-2012 was discussed extensively at the February 2011 Council retreat. Overtime was reduced for all departments last fiscal year and reductions remain in place for FY 2011-2012. Should the Town of Tarboro experience a severe emergency such as a flood or hurricane overtime will be paid from reserves, which is why Council should retain adequate reserves.
State collected local revenues have been adjusted as recommended by the League of Municipalities and most revenues have remained stable. Sales taxe for FY 2009-2010 was approximately $300,000 lower than budgeted and is anticipated to be $175,000 lower in FY 2010-2011. Interest on investments was budgeted at one (1) percent for FY 2010-2011, Tarboro is currently receiving less than .02% on investmens.
SOLID WASTE MANAGEMENT FUND
Edgecombe County landfill costs increased from $45.00 per ton to $46.00 in FY 2010-2011. Due to holding the line on operational costs, the solid waste collection fee remained at $19.25 per month for FY 2010-2011. The Town cannot continue to absorb the Edgecombe County Landfill fee increase of $45.00 per ton to $46.00 per ton. Therefore, landfill fees will increase to $20.25 per month for FY 2011-2012.
WATER AND SEWER FUND
Water and sewer rates will not increase for FY 2011-2012. The Town of Tarboro's water and sewer rates will continue to be lower than Greenville, Rocky Mount and Wilson.
STREET IMPROVEMENT FUND
The budget will support the Town’s street improvement plan with funding from Powell Bill funds.
ELECTRIC FUND
There is no anticipated increase in wholesale electric rates for FY 2011-2012.
OPERATIONS
Line items such as department supplies and materials, auto supplies, uniforms and dues and subscriptions have been reviewed individually for each department and reduced if possible. Fuel costs and chemical costs continue to be high for all departments.
No funds have been budgeted for out of state travel.
The $10,000 expense for fireworks for July 4th has been eliminated for 2011 as well as 2012.
Operating funds have been appropriated for participation in the Carolinas Gateway Partnership, the Edgecombe County Memorial Library, the Edgecombe County Arts Council and the Edgecombe Council Tourism Authority.
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. No funds have been budgeted to pay increases for outside agencies.
PERSONNEL
The FICAand salary wage lines reflect no salaary increase. The retirement contribution rate will increase form 6.45% to 6.97% July 1, 2011. There was a 2.5% one-time bonus in the FY 2010-2011 budget. There was no pay increase in the FY 2009-2010 budget.
No merit raise has been budgeted for the Town’s above standard employees for the third consecutive year.
Worker’s compensation insurance costs and general liability insurance costs are not projected to increase. Health insurance costs are projected to increase by 12.5%. Our self-insured 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 expenditures for the General Fund, as discussed previously, are for roof repairs, HVAC for animal shelter, heaters in Ray Center gym and painting of buildings.
Water and Sewer capital outlay expenditures are for sewer line rehabilitation and a water plant pump rebuild. These expenditures have been funded from reserves.
Electric improvements are for overhead and underground distribution line capital outlay and are funded from operating revenues.
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