Recommended Hickory City Budget 2012-13 online
*I will come back and add highlights to the Powerpoint story boards below.
Budget total is $94.79 million. General Fund takes General Sources of revenue to fund the basic operations of the city to fund the Police Department, Fire Department, Parks and Rec, Planning, etc. State statutes require utilities to be budgeted and maintained separately. The Water and Sewer fund is completely self sustaining. The lion share of the Transportation is the airport; it also includes the Greenway bus system. Internal Service fund is funded by other funds, but must be maintained separately.
Manager berry states that what we see is a goodnews-badnews budget. Revenues are no longer falling, but they aren't growing either. Tax Revenues are increasing slightly, because we are collecting some back taxes. Sales Tax is expected to grow slightly. The Water and Sewer rates will rise in accordance with the COI. Manager Berry cited data that shows a $4.22 increase over the last 5 years. He cited where rates in Hickory's sewer system ranks 28 out of 33 in the State and this compares to current rates without accounting for the rise they will likely experience. The water system ranks 22 out of the 33. The City manager is also recommending a $1 increase in the solid waste fee that residents pay ($13 to $14)
Strategy is to recognize where there may be spikes in costs. This is why the fuel fund of $1 million was created. Some of those monies have had to be used. $2.5 million is being set aside to fund Capital Improvements over the next 5 years. This is not for new infrastructure. It is for maintenance. This will maintain the current service level.
Manager Berry talked about workforce strategies. He called the hiring freeze a soft freeze. When people leave the position is unfilled. A conversation is held with department heads to see whether the position needs to be filled, consolidate jobs, or contracted out... what will save money. Manager Berry stated that 30 jobs are currently frozen along with the elimination of 37 jobs that means a 67 job reduction in the city's workforce which is more than a 10% cost savings. 4 full time positions at the airport are reflected in this budget.
Manager Berry stated that our debt structure looks very good for a city our size and puts us in a position where we can borrow some money at a very good time to borrow.
Assistant City Manager Warren Wood next came to the podium and stated that they started looking at this budget last August and looked at a 5 year plan to see where the headwinds would be coming from during that time period to get ahead of what was coming. Worried about building permitting - half of what it was a few years ago and 1/3 of what it should be. Cities like a 3% annual growth in tax base. Building permitting will have to triple to accomplish this. Expect continued slow growth in Property Tax revenue. Limited sales tax revenue. Depends on Income growth. Property tax creates half of all revenue. Investment earnings continue slow growth. Other issues include ladder company paid for with stimulus dollars that are winding down. Issues/Uncertainties with monies coming from Raleigh. Loss of privilege license revenues will equate to 2.5 cents on the property rate.
The city has saved $700,000 over the life of the debt of water and sewer fund debt. The city is at or exceeding savings associated with accelerated retirement of City Workers.City pays 100% of workers health insurance. Employees will be expected to take ownership of their health or they will pay a premium towards their health insurance, if they don't meet certain benchmarks. City has done well with controlling health costs. There will be a safety assessment in relation to safety issues. Blip in Capital Improvement is a bridge replacement and replacing lights at L.P. Frans stadium. Assessment of fuel costs was done on the high end. Airport is a self-funding endeavor. Employee from planning Department has been moved to Code Enforcement. Conscious of delivery of services. S&P bond rating will be looked at it the upcoming year -- AA currently
Tale of two cities. Where can we save money. We must make some investments. Economic Opportunities out there include a Multi-Jurisdictional Business Park. County Manager believes Tipping Fees/Landfill will be waved. Along with vacant building fund and Brownfield Grants will help vacant buildings be redeveloped or torn down.Hr talked about the competitive environment and amazing amenities for a city our size and the need to be able to "tell the story."
Alderman Lail asked about $1.5 million to be budgeted over the next 5 years to replace the water tank at the Water department. Warren Wood stated it is for additional storage and will be 5 new tanks.