SALISBURY, NC (WBTV) - City Manager Doug Paris made his 2014-15 budget proposal to the Salisbury City Council Friday morning, and it includes rate increases for key city services based on revenue losses from the General Assembly and upcoming projects.
The council will conduct a public hearing on June 17 at 4p at the City Hall. Workshops on the budget are set for June 23 and June 24 at 10a.
Paris provided WBTV with the summary that was presented to council:
In accordance with §159-11 of the North Carolina General Statutes, the proposed budget for
the City of Salisbury is hereby submitted for the fiscal year beginning July 1, 2014 and ending
June 30, 2015.
This year's budget will be a challenging one. We are facing two contradictory pressures: the
City's revenues from the State of North Carolina will significantly decrease this year due to the
General Assembly not continuing sales tax hold harmless funding, while at the same time our
community is requesting additional projects and services for the upcoming year.
SALES TAX HOLD HARMLESS FUNDING:
Last session at the General Assembly there was a concerted effort in the House of
Representatives to extend the sales tax hold harmless funding for a group of cities that included
Salisbury. Representative Harry Warren, Representative Julia Howard (Mocksville), and
Representative Carl Ford assisted in this effort. The House passed a bill to extend the funding;
however the bill did not have support in the Senate. The Senate decided to end the funding,
and use the funding historically distributed to those cities to help balance the state budget. The
distributions end effective FY 2014-2015.
Our city depended on this revenue stream to provide for General Fund services. The tax rate
proposed for next year includes a 2.45 cent increase to replace this revenue. Without this
replacement revenue we would be required to cut services and reduce staffing in a year that
citizens have requested more services from city government.
This budget includes requested community improvements comprised of new projects and
service expansions for the City of Salisbury:
1. Newsome Road widening and bicycle lane installation (new project)
2. Bringle Ferry Road sidewalk project (new project)
3. Transit expansion presented at the City Council retreat (service expansion)
4. Enhanced street lighting in the West End (service expansion)
These are new projects and service expansions that citizens have communicated interest in at
meetings you have attended. They are ultimately projects that improve the quality of life in
Salisbury. This budget includes a proposed .45 cent property tax increase to fund these new
projects and service expansions.
This budget includes a total property tax increase of 2.9 cents. If the Senate had passed the
House version of the sales tax hold harmless bill - we would only be proposing a .45 cent
property tax increase this year for the new quality of life projects. The bottom line is that the
Senate's action to not take up the House version of the bill will hurt us financially. This is no
fault of our staff or our citizens.
While we understand there are additional citizen requests for funding and projects, as well as
additional departmental requests for expanded budgets – we did not feel it was appropriate in
this economic climate to propose a property tax increase above 2.9 cents. For a benchmarking
reference, Kannapolis is proposing a 4 cent increase, Rowan County is proposing 3.75 cent
increase, Granite Quarry is proposing a 2 to 2.5 cent increase, and China Grove is proposing a 2
SOLID WASTE EFFICIENCY:
Two years ago we discussed full cost recovery for our Solid Waste operation. At the time, full
cost recovery would have required a $14 per month fee. City Council took the action to set the
fee at half cost recovery ($7 per month) and asked staff to improve the efficiency of the
operation. This budget includes continuing this service in-house and recommends an $8 per
month fee, an increase of $1 per month. Over the last two years the staff in Public Services
have become more efficient. The $1 increase will go to cover the annualized cost of an
automated single-arm trash truck and new trash bins for this truck to use. Our old trash bins
are dated and lack the lip on them that the newer bins have. When the automated truck raises
the bin to dump it the entire bin falls into the trash truck. This causes work stoppages, counter
to the goal of improving efficiency, and results in safety issues when removing the bin from the
truck. With the direction we are headed, we expect full cost recovery to stabilize around $8 per
month. This is a great value. As a comparison, Granite Quarry charges $11 per month and
Spencer charges $15 per month.
This is the third year that we have proposed salary increases for employees. Two years ago, the
budget included the first proposed salary adjustment in many years, a flat $1,000 salary
increase, added to the base salary, for each employee who has exceeded satisfactory
performance during their last performance review. Last year the budget included a proposed
2.25% salary increase, added to the base salary, for each employee who has exceeded
satisfactory performance during the last performance review. This year we are proposing a
2.5% merit pool for employees. The 2.5% merit pool is funded through the elimination of
vacant positions, not the property tax increase.
The City of Salisbury continues to operate a broadband utility in challenging market conditions.
Over the last several years we have worked to find our sweet spot. During FY 2013-2014 we
expect the fund to break even without any interfund loans. This is the result of much hard work
by our dedicated staff.
Through the continued hard work of our City team - there are no budgeted interfund loans to
the broadband fund this coming fiscal year.
We have been working with programmers to comply with continually changing requirements.
As a result of our content providers' requirements, the existing video tiers will be changing,
along with their names, and will debut during June. Since we began this utility we have not
recommended a rate increase. As the video tiers change, a small rate increase for video
programming will become effective to offset the increased cost of programming. We are also
now required to pay all local broadcasters to retransmit their programming. The current
monthly cost to local broadcasters is $2.84. We are recommending that we transfer the
retransmission fee to our customers, like our competitors. If customers have a concern about
the impact on their video bill, customer service representatives will be on standby to help
customers switch to a lower priced video tier. More information on the new tiers and prices
will be available in a separate handout.
In addition, effective July 1, we will upgrade all residential internet customers to 50mbps up
and down, free of charge. We can offer this benefit to our customer base with a de minimis
cost impact. With this upgrade in internet service, we will offer the highest base residential
internet speed in North Carolina.
Like last year, let me be clear. It is not time to celebrate. We must continue our hard work in
this area. With the new tiers, pricing recommendations, and cost control by our staff – there
are no budgeted interfund loans during FY 2014-2015.
WATER & SEWER FUND:
Management within Salisbury-Rowan Utilities (SRU) has worked just as hard as our General
Fund department heads to manage costs. Over the last 20 years the annual rate increase has
averaged 7%. The last two years there was no rate increase for our customers. For FY 2014-
2015 we are proposing a 2.9% rate increase to cover ongoing operational cost increases that
include: increased operational maintenance to replace broken/leaking sewer infrastructure, the
operational cost increase of SRU employee healthcare, and the operational cost of a 2.5% merit
pool for SRU employees.
The goal of this budget is to strike a balance between the cost of new projects and service
expansions our citizens desire, while not burdening our citizens with an excessive property tax
increase. The largest impact to this budget is the loss of sales tax hold harmless revenue, which
necessitates the majority of the proposed property tax increase.
We have been alarmed by the actions of the NC General Assembly to place cities in difficult
financial positions. Earlier this week the Senate passed a bill to eliminate privilege license taxes
(PLT) beginning in FY 2015-2016. It is my understanding the House will concur with the Senate
version of this bill. If the General Assembly does not assist cities with replacement revenue for
PLT, we will be required to raise property taxes or cut services in the amount of 1.5 cents during