COMMUNITY NEWS

City Manager Brian Hiatt presents FY 2016 budget recommendation
Wednesday, May 27, 2015

CONCORD – Concord City Manager Brian Hiatt presented his fiscal year 2015-16 budget recommendation to the Mayor and City Council at a special meeting on Tuesday, May 26. The City-wide budget totals $227,644,710 for all funds, including utilities and various special revenue funds. The recommended General Fund budget, where the historical funding sources are property and sales tax receipts, is $72,765,445.

The budget was developed in a particularly unclear revenue environment for Concord and other local governments. The North Carolina General Assembly is considering several bills that could negatively affect local government revenues in addition to the unknown outcome of the state budget process. These impacts would be on top of the anticipated loss of over $1 million in Privilege License revenues beginning July 1.

Hiatt recommended the City's property tax rate remain at 48 cents per 100 dollars of valuation. As in past years, the proposed budget restricts the equivalent of two cents on the tax rate to supplement State funding for transportation projects, as mandated by City Council. However, Hiatt recommended a changed philosophy for the use of these funds for FY16 due to the current revenue challenges.

The City Manager expressed concerns over developing a budget with so many unknown factors, as well as the irony of proposed revenue cuts from the State that could impact the ability to keep up with infrastructure and service needs stemming from Concord's strong growth in many economic sectors.

While neither a worst-case nor a best-case scenario, the City Manager's budget recommendation is based on ten specific assumptions. The first three assume relative stability in General Assembly-controlled tax revenues, which Concord City Council Members are unable to decide or influence. If any of these three assumptions turn out to be inaccurate, and the General Assembly’s tax reform package does not generate revenues to replace the Privilege License revenues, the City Council could be faced with some tough decisions later in the year when expenditures will need to be cut further and/or non-tax revenues will have to be increased.

The recommended Concord property tax rate continues to be among the lowest third of full-service North Carolina municipalities with populations greater than 40,000—and the lowest of those that do not charge solid waste and/or recycling fees. Most of the cities whose property tax rates are lower than Concord's charge additional user fees for solid waste collection and/or disposal, and a few make extensive use of impact fees authorized by the State just for their municipalities.

In the General Fund, 54 percent of proposed expenditures will go to public safety. $3 million of major expenditures will be budgeted but delayed until the General Assembly adjourns in case City Council needs flexibility in the event of a worst-case revenue scenario; these range from a replacement fire truck and facility improvements, to new fire and police positions, to an update to the City’s land use plan, to planning, design, and engineering work for infrastructure projects.

Concord, Kannapolis, and Albemarle have funded a line to bring treated Yadkin River water from the Albemarle system to Cabarrus County, expected to be complete by late summer. Hiatt's recommendation included the second of two phased water and wastewater rate increases to support purchasing needed water made available from this project, as well as a wastewater treatment cost increase from WSACC. According to the proposal, the average residential customer using 4,500 gallons per month would pay 63 cents more for water and 76 cents more for wastewater each month. Stormwater rates are recommended to stay the same.

For the City's Electric System, monitoring Duke Energy wholesale cost changes will continue to determine the need for Purchased Power Adjustments (up or down) during the year. The Electric Department will be focused on beginning implementation of a smart grid/meter project that will greatly enhance customer service.

"The deadlines for the City Manager’s budget presentation and the City Council’s budget adoption are ironically established by State statute,said Hiatt. "There are many decisions yet to be made that could severely impact local government budgets. Per Council’s direction, this budget recommendation focuses on maintaining essential services provided to our residents and businesses."

The City Council will hold at least one budget workshop on June 9, 2015 and a public hearing is scheduled for Thursday, June 11, 2015 during the regular City Council meeting. Interested individuals can view the City Manager's recommended budget on
concordnc.gov and also in print at the City Clerk's office.