CAPE CARTERET — Town commissioners began 2019-20 budget deliberations Wednesday morning, eyeing a $1.69 million tax-and-spending plan laid on the table by Town Manager Zach Steffey.
The proposal amounts to an increase of about $140,000 over the 2018-19 total of $1.55 million, and two things quickly became clear during the special meeting in town hall off Dolphin Street.
First, the board isn’t going to approve the 4.5-cent property tax increase, from 21.25 cents to 25.75 cents per $100 of assessed value, which it would take to balance revenues and expenditures in the first draft of the budget.
Second, the board is going to give a boost to the public works department, most likely through financing of equipment purchases. The new equipment, if the board ultimately approves it when the budget is finalized, would be a new tractor, a backhoe and a pickup truck.
That would eliminate some lump-sum capital outlays, and could help the board reduce or eliminate the tax hike.
Mr. Steffey’s budget was not really a proposal, more of a compendium of what department heads said they need for the fiscal year that begins Monday, July 1.
Wednesday, the board quickly addressed the tax hike and signaled a desire to start cutting expenditures, line item by line item.
“I don’t want to see, in a little town like this, people have to leave because of taxes,” Commissioner Mike King said.
The proposed 4.5-cent increase would hike an average resident’s annual tax bill from $468 to $567.
Commissioner Charlie Evans agreed there won’t be a 4.5-cent tax increase when the budget is adopted, likely in June.
“We’re going to be awfully busy in the next couple of weeks,” he said, referring to efforts in additional work sessions to cut or eliminate the increase.
“My main goal is to get this town back to where it was” before Hurricane Florence in September, added Commissioner Don Miller, agreeing with Mayor Dave Fowler’s assessment of how the town needs to proceed.
Those needed efforts, all commissioners agreed, are topped by street repairs. Any new expenditures, Mr. Miller said, that don’t move the town toward recovery won’t get his vote.
Commissioner Steve Martin pitched the idea of using financing instead of laying away capital for the public works department equipment, which officials said barely works at times and is in need of costly repairs.
The needs, he said, have been “kicked down the road for too long” and the employees need better equipment to do their jobs.
Getting better equipment, he added, requires some “creative thinking,” and financing purchases instead of saving up for it is the only way to go because the equipment is needed now.
Mr. Martin said financing the purchases over a long period of time will actually save money in next year’s budget by eliminating some capital outlays.
He said he’d “done the math” and found that the town could finance all three purchases at a total cost of $2,352 per month – $28,224 for the year – compared to capital outlays of $18,000 and $21,000 for the tractor and the backhoe, respectively, which would not be purchased for several more years. The same, he said, holds true for financing the Ford F-150 truck.
“We need to bite the bullet,” he said. The other commissioners agreed.
“We get the equipment we need now, rather than putting the money away (to buy it later),” Mr. Miller said. He added that the town could also recoup some money by selling the old equipment. Mr. Steffey agreed.
Mr. Evans said he was OK with financing, but “I want to see a formally written proposal.”
Commissioner Minnie Truax was a strong proponent of the change in spending policy.
“Debt service is a necessity (for buying) big items,” she said.
Mr. King agreed, but like Mr. Evans, said he wanted to see proposals in writing.
The board also discussed financing the purchase of new police cars. In the budget presented Monday, Chief Bill McKinney requested a $31,000 capital outlay to save up for two new replacement vehicles, but several commissioners said they thought that could at least be put off for one year, since the highest mileage car is at about 61,000 miles.
Chief McKinney said that would be OK, and that he made the request to let commissioners know the need for new vehicles is coming soon.
The board also talked about eliminating a capital outlay of $18,200 to save up for eventual upgrading of the police department’s radio equipment.
The county is talking about the issue, but Chief McKinney agreed the item could be cut this year because changes aren’t likely anytime soon.
The chief also noted his department’s proposed budget for the next fiscal year, excluding those capital outlays, is actually $650 lower than in 2018-19’s budget, chiefly because he’s proposing to eliminate a vacant lieutenant position and instead have two sergeants, which are lower on the pay scale.
The budget so far includes a 2 percent cost-of-living increase for all employees, plus a pool of money for merit raises for some.
Expenditures listed in the draft budget are as follows: governing board, $84,182; general administration, $328,245; parks and recreation, $59,661; planning and inspections, $17,788; public works, $252,836; Powell Bill/street maintenance, $75,515; public grounds, utilities and buildings, $77,365; environmental (garbage service), $224,265; and police department, $525,795.
The town expects to get a $500,000 state grant to help pay operating expenses post-hurricane, enabling them to use existing funds for street work, augmenting Powell Bill money.
Major revenue sources are expected to be the property tax, $814,172; the local option sales tax, $245,000; and the utilities franchise tax, $125,000.
That, Mayor Fowler said, is one of the major problems in the town – not enough revenue to provide the services residents want.
“We don’t have enough (revenue) to keep taxes low and pay the bills, and we’re going to have this problem every year until we solve it,” he said.
One short-term answer, the mayor said, is to sell things the town doesn’t use or doesn’t need, such as a vacant lot it owns in the Star Hill North subdivision.
He also re-emphasized his desire for the town to rebuild its reserves in the wake of hurricane-related expenses. He’s proposed that the town find a way to sock away $1 million in the next five years.
All of the commissioners said they support that goal.
Contact Brad Rich at 252-864-1532; email Brad@thenewstimes.com; or follow on Twitter @brichccnt.