The City of Clinton’s proposed budget calls for small water and sewer fee increases but no property tax hike, and is a slimmer fiscal plan overall when compared to the current year’s amended budget figures.
The 2017-18 recommended budget totals $14,230,400 for all city operations, capital improvements and debt service requirements. That is $147,100, or just a shade over 1 percent, less than the 2016-17 amended budget as of April 1.
“The budget is balanced with no increase in the city’s tax rate, no increase in the monthly garbage collection rate, a 2 percent increase in water and sewer fees and no use of reserves,” City manager Shawn Purvis stated during his final budget workshop earlier this week.
Of that $14.2 million, the proposed 2017-18 General Fund totals $9.2 million, which is 2.74 percent less than the current 2016-17 amended budget of $9.46 million as of April 1. The proposed 2017-18 Water and Sewer Fund totals $4.9 million, a 2.6 percent increase from the current amended budget of roughly $4.8 million. There are also proposed non-major fund expenditures of $119,200.
The property tax rate is proposed to remain at 40 cents per $100 valuation and 18 cents in the Downtown Special District.
Water and sewer rates are recommended to rise by 2 percent in 2017-18 to adjust for inflation and ensure adequate funding for future capital projects. Water base rates would rise from $12.62 to $12.87 and sewer base rates from $13.15 to $13.41. The water consumption rate would increase from $1.89 to $1.93 per 100 cubic feet, and the sewer consumption rate would increase from $1.84 to $1.88 per 100 cubic feet for 2017-18, under the proposal. Water and sewer rates are double for customers outside the city limits.
Garbage collection rates will remain $15.50 per month for residential customers, $4.75 per cubic yard for commercial customers, as currently proposed.
“It is important to note that the rate increases for water and sewer are nominal and should have a minimal effect on the average user,” Purvis stated. “For example, an average family of four or five that uses 6,000 gallons (800 cubic feet) a month will see an increase of $1.03 on their monthly water and sewer bill.”
Property taxes represent the largest portion of city revenues at 32 percent and sales and use tax revenues represent 24 percent.
“Because property taxes are the largest revenue source for the city, slow growth within the corporate limits can create a relatively static tax base that poses challenges if expenditure growth outpaces new revenues,” Purvis stated. “Fortunately, the N.C. 24 widening project is contributing to the local economy through sales tax, and it should spur other growth once complete.”
Sales tax revenues, which rose in the current year, are anticipated to grow further in 2017-18 to the tune of an additional 3.6 percent, according to projections.
Since the early 1980s, the city has also levied a municipal vehicle tax of $5 as authorized by N.C. General Statute. This year, the City Council increased the vehicle tax from $5 to $10. The initial $5 is for general purpose, but the law allows for towns without public transit to increase the tax up to $25 for street resurfacing, repairs and maintenance. The tax is scheduled to remain at $10 in 2017-18. It generates $62,000.
There was some discussion by the Council about possibly increasing that another $5, but no action was taken.
The city’s estimated non-restricted fund balance as of June 30, 2017 is $4.57 million or 49.01 percent of expenditures, and its retained earnings total $3.05 million, or 62.56 percent of expenditures. The recommended budget does not include use of fund balance or retained earnings for 2017-18.
In closing, Purvis thanked staff and department heads, notably Finance Director Kristin Stafford, for assisting in preparing the budget.
He noted that economic growth is “occurring modestly” in Clinton, with residential and commercial growth and an increasing number of industrial prospects being considered for the city. There has also been more than three times as many housing units added in the past couple years than the 10-year span between the 2000 and 2010 Censuses, Purvis noted.
“The construction associated with the N.C. 24 widening project is driving increases in retail, dining and lodging activity. Once complete, N.C. DOT projects 30,000 vehicles a day on the road, and it should reduce the travel time to the Fayetteville Metro Area (380,000 population) by half, to 30 minutes. Businesses are already planning new commercial development to coincide with N.C. 24 completion in late 2018,” Purvis noted in his budget message.
Purvis called the growth and expansion of several local industries a “promising sign of economic recovery and future prosperity.” The continued growth will be paramount for Clinton, which had experienced little to none of that in recent years, including a downward trend until revaluation in 2011. City officials must jump at the right opportunities, he said.
“As we begin to experience increases in our tax base and sales tax revenues due to an improving economy and growth, opportunities will exist that we cannot take advantage of if we sit idly by,” he said. “We must be willing to make investments in infrastructure and quality of life projects if we expect to achieve our ultimate vision for Clinton.”
A final budget workshop is tentatively scheduled for May 16. A public presentation of the budget and a public hearing are slated for June 6, with adoption of the 2017-18 budget expected on June 20.
Reach Managing Editor Chris Berendt at 910-249-4616. Follow the paper on twitter @SampsonInd and like us on Facebook.