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Posted on: May 4, 2022

Town Manager Releases Recommended Budget

May 4, 2022

FOR IMMEDIATE RELEASE

TOWN MANAGER RELEASES RECOMMENDED BUDGET

[NORTH WILKESBORO, NC, MAY 4, 2022] – Yesterday evening, Town Manager Wilson Hooper presented to the North Wilkesboro Board of Commissioners his recommended budget for fiscal year 2022-2023. The budget contains a number of new investments designed to enhance the town’s service levels, and accomplish Board of Commissioners priorities. 

The town’s typical budget is essentially two budgets: General Fund and Water/Sewer Fund. The General Fund (GF) budget funds traditional public services like police, fire, sanitation, and parks. It is funded by a number of revenues including property tax collections, sales tax collections, and fees paid for government services. The Water/Sewer Fund (W/S) budget is funded with the rates paid by North Wilkesboro’s in-town and wholesale water customers.  

New General Fund investments include:

  • A 5% cost-of-living-adjustment (COLA) for all employees, and an additional $5,000 compensation increase for all full-time, non-police employees. This increase shall bring the town’s salaries up to competitive levels, and thereby enhance the town’s ability to recruit and retain employees. In terms of raw dollars, this increase will cost approximately $301,000. The North Wilkesboro Board of Commissioners named employee compensation a priority at their planning retreat in February. North Wilkesboro Police Department employees received a $5,000 compensation increase earlier in 2022. 
  • Funding for an additional position in the Planning & Inspections (P&I) Department. The newly created “Planning Technician” position will perform technical planning and inspections work including permit application and site reviews. The new position will create capacity in P&I to more swiftly turn over customer matters and improve the development environment in North Wilkesboro. It will also free up the Planning Director to work on strategic policy initiatives, such as updating certain sections of the town’s Zoning Ordinance. Updating the town’s Zoning Ordinance to be more development friendly was identified as a priority by the Board of Commissioners at their February planning retreat.
  • The purchase of several pieces of new capital equipment including a new residential garbage collection truck ($220,000), two new police cruisers ($81,000), and self-contained breathing apparatus for firefighters ($45,000).

The town was able to afford these investments through the judicious use of one-time, limited-duration, or reserve dollars. The budget proposes using surplus fund balance, also referred to as the town’s savings account, to pay off debt thus freeing up operating dollars to fund the compensation adjustments and new position.

“Each fiscal year, we must budget several hundred thousand dollars to pay the principal and interest on money we borrowed for capital purchases in the past,” said Town Manager Wilson Hooper. “For this coming year I propose using the cash in our savings account to pay off that debt and free up those operating dollars for compensation adjustments and new positions. If you’ve got the cash, why not pay off the credit card bill?”

The fund balance dollars were freed up by an action of the Board of Commissioners earlier this year. The Board adopted the town’s first Comprehensive Financial Policy, which set a minimum fund balance level and freed up dollars above and beyond that level for use. At the conclusion of the FY21-22 fiscal year, this amount was approximately $1.8M. The cost of paying off the town’s existing general fund debt is approximately $584,000. 

The town has already committed $181,000 of the fund balance surplus to pay its settlement in the Catherine H. Barber Memorial Shelter vs. Town of North Wilkesboro lawsuit, and $280,300 to fund the local match for a nearly $1M FEMA grant for a new aerial fire truck. The FY22-23 budget proposes using the remainder for the following purposes:

  • $500,000 for Rural Transformation Grant match or other “Project River District” expenses.
  • $200,000 for Smoot Park Phase I expenses, likely as matching dollars for outside grants and charitable contributions.
  • $55,714 for Americans with Disabilities Act (ADA) improvements fund.

Money for capital purchases came from dollars freed up by receipt of the town’s American Rescue Plan (ARP) allocation. “The Federal Government released much more permissive guidelines for the use of ARP dollars earlier this year, which gave us much more flexibility on how to spend them,” said Hooper. “I propose we use them to pay cash for our capital needs rather than taking on new debt.” 

“We’re using one-time funds to fund one-time expenses, but some of the additions to the budget will recur year after year, so we must find additional revenue sources to help offset the costs,” Hooper continued.

To that end, the proposed General Fund budget contains new or increased fees for services:

  • A $2/mo. increase in garbage fees for customers who use cans (residential and small commercial). A 13% increase in commercial dumpster collection fees. A $5 per item commercial bulky item collection fee. And a “tipping fee plus $10 fuel surcharge” for flatbed garbage truck service that was previously free. The new fees are estimated to bring in about $60,000 in additional revenue. Despite the increase, the fees remain lower than comparable private sector services.
  • Various planning and inspection fee increases. The most notable increase here is the change in the minimum permit fee from $45 to $65. Other per sq. ft. fees will increase $.05 per sq. ft. The new rates match those charged by Wilkesboro and Wilkes County, and are lower than those in surrounding counties. 

The proposal contains no change to the town’s property tax rate, currently set at $.52 per $100 of valuation. 

New Water/Sewer Fund investments include:

  • Compensation adjustments like those for General Fund employees. In raw dollars this equates to about $120,000 for the W/S fund. 
  • The purchase of a new water/sewer vacuum truck ($300,000) to aide in the maintenance and repair of the town’s underground utility infrastructure.

The town was able to afford these investments through the judicious use of one-time, limited-duration, or reserve dollars. The budget proposes using $185,000 in surplus retained earnings, also referred to as the Water/Sewer fund’s savings account, to pay off debt thus freeing up operating dollars to fund the compensation adjustments and capital investments. $184,000 in ARP dollars was also budgeted, giving the fund some extra capacity to make capital purchases. 

“Per the Board of Commissioners’ identified priorities, the town is set to embark on some notable capital improvements in the year to come including updates to our water treatment plant and possibly a new raw water intake,” said Hooper. “This is our last opportunity to shore up our finances in preparation for the expenses to come.”

To that end, the proposed budget contains new or increased fees for services:

  • In-town and direct purchase out-of-town customers will see the third of five 2% increases to base and per gallon water/sewer rates. A home that uses 3,700 gallons a month will see about a $.89/mo. increase
  • Wholesale customers (i.e. rural water associations) per 1000 gal. rate will increase $.09 from $2.28 to $2.37. Despite the increase this remains a significant bargain. Wilkesboro’s rate for similar customers is $2.61, Elkin’s is around $3.50. 
  • Direct purchase out-of-town customers will see their base and per gallon water/sewer rates increase from 1.5x the in-town rate to 2x the in-town rate (or more, pending outcome of Board of Commissioners’ water/sewer policy discussion)
  • Increase in the dumping fee charged to commercial septic haulers at the town’s wastewater treatment plant from $30 per 1000 gals. to $50 per 1000 gals. 
  • Increase in the fee charged for home water testing at the town’s water treatment plant from $25 to $30 per test. 

“The extra revenue generated by these new fees has not been factored into our operating budget for this year,” Hooper said. “Instead, it will be banked and used to help pay for capital expenses in the years to come.” 

“This is a once-in-a-lifetime budget,” says Hooper. “It’s the result of the confluence of many factors -federal and state aid, years of saving by the town, improving revenues- that we probably won’t ever see again. I believe my proposal takes advantage of these special circumstances and presents a spending plan that advances the vision of the Mayor and Commissioners and does so in a way that won’t jeopardize our long-term financial health.” 

The recommendation budget can be viewed at the following link: https://north-wilkesboro.com/Admin/DocumentCenter/Document/View/1026/2022-to-2023-Managers-Proposed-Budget 

The proposed budget is also available for inspection at the North Wilkesboro Town Clerk’s Office, 832 Main St. North Wilkesboro, NC.

A public hearing will be held on Tuesday, June 7, 2022 at 5:30 PM at North Wilkesboro Town Hall, 210 9th St. North Wilkesboro, NC. The hearing will also be available virtually at https://us02web.zoom.us/j/89394044973 

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