Tuesday night City Manager Brian Hiatt presented his Fiscal Year 2010-11 budget recommendation to the Concord City Council at a special meeting. The budget, including all the various municipal funds, totals $195,146,632, a 1.9 percent increase from the current year adopted budget due to increases in purchased power (electric) costs, federally funded firefighter positions to establish an additional ladder company in western Concord, and a change in the way the City accounts for recycling expenses. However the City budget was reduced for FY 2009-10 by 3.2 percent (or $6.42 million), and the decrease in operational items was 17 percent. These cuts all carry over into the new fiscal year.
“The City took preventative measures in the past to avoid going into a crisis mode during the economic downturn” said Hiatt. “While we have had to cut expenditures, be aggressive to find ways to be even more efficient, and eliminate the funding for targeted vacant positions, we have been able to meet the City Council’s goal of continuing the basic municipal services needed to support the community.”
Like in Fiscal Year 2009-10, the budget recommendation projects revenues very conservatively, and estimates sales and property tax revenues to decline. Hiatt noted that while the FY 2009-10 budget revenue projections also anticipated reduced property and sales tax collections, the City has not taken this for granted and has been diligent in examining revenues on a monthly basis to make sure they were going to meet projections.
The proposal calls for no property tax increase, with the rate remaining at $.42, one of the lowest tax rates among North Carolina full-service municipalities above 35,000 in population. The primary focus of the budget is maintaining basic levels of service during the economic downturn and while experiencing the decline of revenues from the closure of Philip Morris, the City’s single largest taxpayer.
The budget recommends the elimination of 6 vacant positions, the “freezing” of 23 full-time and part-time jobs, and a small salary adjustment of $600 per full-time coworker based on performance, but no layoffs. Some coworkers will continue to work in different roles because the weak economy created more needs in areas other than the original function they were hired for.
In the General Fund, over half of the proposed expenditures will go to public safety. Hiatt also noted that the City will continue to supplement the amount of dollars received from the State of North Carolina for street resurfacing and that in FY 2010-11 and future fiscal years, the City will be budgeting funds to match state and federal funds for several NCDOT capital projects in the city. Many capital needs will be met using capital reserve funds set aside in past years for such purposes.
Water rates are not recommended to increase in FY 2010-11, but due to the loss of revenues from Philip Morris, wastewater rates cannot cover the cost of basic needs without an increase. Even with an increase, staff will have to postpone some key capital projects. The recommended increase will raise the average customer’s wastewater bill by 96 cents per month.
The budget also recognizes the economic impact on City-owned facilities, such as Concord Regional Airport. Fuel sales may pick up slightly at the airport and its budget will be in line with the cuts made for FY 2009-10. As the economy rebounds, these facilities will see their business begin to grow again.
The revenues projected in the budget recommendation are based on a number of conservative assumptions. Hiatt remarked, “We hope local governments will begin to see revenues that reflect a stronger economy and we find our projections for FY 2010-11 to be too conservative. However, we feel it is reasonable to assume that revenues will be, at best, flat during the fiscal year. The Philip Morris closure will continue to impact property tax revenues directly and sales tax revenues indirectly. While this budget is designed to focus on basic services delivery, we cannot ignore other infrastructure needs that existed before the decline in the economy. We must prepare for the future, regardless of our financial constraints.”
The City Council will hold at least one budget workshop on June 8, 2010 and a public hearing is scheduled for Thursday, June 10, 2010 during the regular City Council meeting. Interested individuals can view the City Manager’s recommended budget on the City of Concord’s website and also through the City Clerk’s office.
