Outgoing interim city manager introduces ‘tight’ budget, projects $52 million in expenditures
Published 12:02 am Wednesday, May 25, 2022
SALISBURY — Outgoing interim City Manager Brian Hiatt on Tuesday night recommended recommended to City Council a “tight” 2022-23 fiscal year budget that adjusts for inflationary costs and projects just over $52 million in general fund expenditures.
Hiatt has been serving as interim city manager since Lane Bailey retired at the end of last year. James “Jim” Greene Jr., a former assistant city manager in Raleigh, started as city manager on Monday. Before Hiatt and Finance Director Wade Furches presented details of the proposed budget to council, Greene delivered opening remarks.
“With increased expectations from the citizens, with issues coming out of COVID, with tight revenues and growth, cities around the country are really facing tight budget years,” Greene said. “City of Salisbury is no exception. This is, I think, a very effective budget at addressing council priorities and moving the city forward, but it is tight.”
Hiatt’s proposed budget does not include a tax increase, keeping the rate at 71.96 cents per $100 property valuation. That’s been the rate since 2019. The proposed budget does, however, recommend raising the city’s municipal vehicle tax from $10 to $20. Municipalities are allowed to charge up to $30. The increase will generate an additional $120,000 for street resurfacing, a cost made higher by a 23% hike in asphalt and other materials necessary for road work.
Due to an 88% increase in water treatment chemical costs and 16% increase in electrical costs, Hiatt’s proposed budget recommends a 4.2% increase to water and sewer rates charged by Salisbury-Rowan Utilities. As a result, an average monthly residential water and sewer utility bill for a customer using 4,000 gallons would be $63.08, a $2.49 per month increase over the current average monthly rate of $60.59. The increased cost will impact all Salisbury-Rowan Utilities customers, not just those within the Salisbury city limits.
The 4.2% increase is less than half of the 8.4% consumer price index increase for urban consumers in the South. Councilman David Post asked city staff to provide a list of what budget items had to be cut as a result of that difference when the council reconvenes to discuss the budget on June 7.
In addition to water and sewer rate increases, the budget calls for increasing tap fees for new SRU customers. SRU Director Jim Behmer said tap fees only help the utility recoup material costs. Hiatt also recommends a 25 cent raise in the stormwater fees, which would bring it to $4.41 per equivalent residential unit.
Another potential tax-related change is the elimination of the animal tax, a fee that Furches described as an “antiquated, obsolete tax” that generates just a few hundred dollars of revenue for the city.
“It appears, to us, that it’s not worth it,” Furches said.
The budget does project a .5% increase in the property tax base, which Furches said is “high percent growth.” Property tax accounts for 44.3% of general fund revenues, the single-largest item.
The proposed budget recommends using $4 million of the remaining $5.6 million in American Rescue Plan Act funding for a number of projects, including $1.2 million for Parks and Recreation Department infrastructure needs, $1 million for Civic Center replacement or improvement, $200,000 for a neighborhood revitalization program to support existing housing program, $650,000 for construction level design for Main Street to position the city to apply for federal grant funding and $243,198 for architectural fees to create construction documents for Fire Station No. 3.
For the Human Resources department, the budget allocates funding to complete and implement a compensation study, funding for firefighters’ social security and for positions to be funded 100% in departments.
Public safety, which includes police and fire, accounts for 38.9% of proposed general fund expenditures. For the police department, the budget includes funding for the purchase of eight new SUVs, including one hybrid, and an electric parking control vehicle, in addition to $49,000 for building upgrades. For the fire department, the budget allocates for a new fire truck to be financed, over $200,000 for turn-out gear and a full-year funding of pay adjustments implemented in January.
The proposed budget allocates funding for Public Works to purchase a new dump truck for $277,506, a new garbage truck for $412,006 and a limb truck for $337,006. There is also funding to repave sections of the Prescott and Memorial Park greenways and money to purchase property for a future fueling site.
Three new positions are funded in the budget. Two full-time recreation aides for Parks and Recreation are designed to address the council’s priority of bolstering targeted programming to support youth safety and crime reduction. The third new position is a professional level job to assist the city’s diversity, equity and inclusion director. A total of $249,716 is budgeted for the new diversity, equity and inclusion department and $45,000 for city-wide training.
About 8.56 cents of the 71.96-cent property tax rate can be attributed to a $2.7 million transfer to the Broadband Fund, which pays for the debt on the city’s fiber network managed by Hotwire. The transfer is $200,000 less than the previous fiscal year. The budget also calls for a $630,000 transfer to the transit fund, $510,000 from property tax, which is equivalent to 1.62 cents of the tax rate.
After receiving the proposed budget, council scheduled a hearing for June 7 at 6 p.m. to receive public feedback. Council will meet an hour before for a budget workshop. Council will approve a budget before the new fiscal year starting on July 1.