MOREHEAD CITY — Facing upward of $1.4 million in lost revenue due to the novel coronavirus pandemic, the city’s proposed 2020-21 fiscal year budget represents a “conservative” approach for spending in the upcoming year.
That was the word from Morehead City Manager Ryan Eggleston and Finance Director Jewel Lasater, who introduced the preliminary document to the city council and the public this month. The council held a budget workshop Tuesday to discuss the plan and hear from the city’s department heads on their budget requests.
“In my 14 years of doing municipal government budgets, this was by far the most difficult one I’ve ever been a part of,” Mr. Eggleston said Tuesday.
As proposed, the budget holds the tax rate at 38 cents per $100 of assessed property value and does not call for a utility fee increase. It totals $24,127,871 across all funds, a decrease of about $1 million from the current fiscal year, and includes a one-time use of the fund balance.
“Because of COVID-19 and the financial impacts that we anticipate, it is really what I would consider a bare-bones or scaled back budget,” Mr. Eggleston said. “It does maintain a minimum amount of capital improvements, but those would be funded, if the board sees fit, from a one-time use of fund balance toward those capital needs.”
The city expects no less than $1 million and up to about $1.4 million in lost revenues due to the coronavirus pandemic, largely from lost sales tax revenues. The city also expects shortfalls in real estate and personal tax collections, motor vehicle taxes, planning and inspection fees, parks and recreation fees and interest losses, among other categories.
To compensate for the budget shortfall, earlier this month the city laid off 10 full-time and eight part-time workers. The city is also freezing hiring of vacant positions, all training and travel budgets were cut by 20% and each department head was tasked with reducing their budget requests by a minimum of 2.5%.
There is also no cost-of-living increase planned for the upcoming year as in years past. Instead, the city will move toward a merit-based raise system based on employees’ performance.
The single largest budget source is the general fund, which totals $15,246,246 and encompasses most day-to-day operations of the city, including the police and fire departments and administration. The water/sewer fund is $7,815,625 and the solid waste fund is $1,066,000.
Several department heads told the council they understand the need to “tighten the belt” this coming year with the budget cutbacks.
“We’re doing the best that we can do, we will continue doing that,” Police Chief Bernette Morris told the council. “I’m used to working with pennies.”
The budget includes a five-year capital improvement plan outlining major planned purchases for the next several years. Though many large capital expenses will be put on hold for the upcoming year, some are still planned to move forward, including the purchase of three new police patrol vehicles, funding for a stormwater improvement plan, consolidation of three old streets trucks into one new quad cab vehicle, physical exterior improvements to the train depot and recreation center, replacement of three overhead doors at Fire Station No. 1 and funding for transportation improvements.
A copy of the full proposed budget document is available for the public to view online at moreheadcitync.org/DocumentCenter/View/779/Council-Proposed-Budget-FY-2021.
The council plans to hold several additional budget workshops in the coming weeks before a public hearing on the plan scheduled for Tuesday, June 12. The new fiscal year begins Wednesday, July 1. The next scheduled budget workshop begins at 2 p.m. Tuesday.
Contact Elise Clouser at email@example.com; by phone at 252-726-7081 ext. 229; or follow on Twitter @eliseccnt.