LUMBERTON — The City of Lumberton’s Municipal Capital and Operating Budget is proposed to be less for the 2021-22 fiscal year than it was in the 2020-21 fiscal year.
City Manager Wayne Horne presented the proposed budget to City Council during a workshop meeting Wednesday. The proposes spending plan projects $89,317,740 in expenses, down from the $92,143,005 budgeted for FY 2020-21.
Council passed a motion showing their support for the proposed budget, though it cannot be formally adopted until after a public hearing is held during the June regular meeting.
Revenues from sales tax were ahead of what was projected during FY 2020-21, as sales tax rebounded when businesses reopened over the summer after the COVID-19 lockdowns in the spring, and stimulus checks and additional unemployment benefits created additional income for consumers. Sales tax revenue grew 13.5% during FY 2020-21, which amounts to about a $500,000 difference in revenue, and is projected to increase 2.5% in FY 2021-22.
“The effect of these stimulus payments, combined with federal unemployment assistance and other economic aid, have resulted in increased fluctuation of sales tax,” Horne said. “The current estimates do not take into account the most-recently passed American Rescue Plan, which is a $1.9 trillion federal COVID-19 response bill.”
Other revenues have decreased during the pandemic, as electrical utilities, and water and sewer revenues dropped as some businesses, churches and schools were closed, or operated on a limited basis. The city lost additional electrical revenues as a result of Gov. Roy Cooper’s no-disconnect order.
“Revenues are more difficult to predict as a result of COVID-19 on business and other entities, which has resulted in a reduction in some revenues,” Horne said.
There is no proposed adjustment in the property tax rate, electrical rates or inspection fees. Water and sewer rates are proposed to increase by 7.2% because of the capital and infrastructure needs of Public Works in repairing and maintaining the city’s aging sewer system.
The city expects to get an estimated $5,990,000 from the American Rescue Plan Act, the $1.9 trillion COVID-19 relief package recently passed by the U.S. Congress, according to Horne. The funds are expected to be paid in two cycles, with half delivered no later than 60 days from enactment.
“Once we receive final regulation and the first round of funding, staff will present a disbursement plan for Council consideration,” Horne said.
The city’s total tax levy for 2020 was $10,422,664 in motor vehicles tax, with $9,847,041 of that collected, which is 94.45%, according to the city manager. The city anticipates a 95% collection rate in its budget planning, Horne said.
City staff is currently working with about $32,191,153 in funding for the Hurricane Matthew Hazard Mitigation Grant Project, Tanglewood Drainage Project, the Interstate 95 floodgate, and other projects.
Other capital projects in the works include sewer rehabilitations at Rosewood Mobile Home Park, Godwin Heights, Sunset Heights and the I-95/I-74 Industrial Park, among others. These will be paid for using grant funds.
A budget amendment for Hurricane Matthew relief recently was approved by the Federal Emergency Management Agency, increasing the city’s budget from $12,863,089 to $14,355,131 for property acquisitions, reconstructions and elevations.
Councilman John Cantey asked if, in the event of the city not using all of that amount as it completes Matthew-related projects, whether or not they can use the money elsewhere.
“At the end of the program, if there’s any funds left, I think we could make a request to FEMA to add another home,” Horne said. “We just don’t know; they’re so interesting to deal with. Every time we deal with them it’s a challenge.”
Horne pointed out that, as the five-year anniversary of Hurricane Matthew approaches, some residents who lost their homes have “moved on and made other arrangements,” instead of waiting any longer for assistance.
FEMA has not approved the city’s budgets for projects relating to hurricanes Florence or Dorian, though approval is expected between now and August.
The proposed general fund total will increase from $29,816,630 to $30,338,740, a difference of $522,510.
“That changes with projects and different capital requests,” Horne said.
Notable projects planned that will be paid for from the general fund include a floor replacement at Central Fire Station for $132,000; 15 new vehicles for the Lumberton Police Department, with an anticipated debt service payment of $140,000; and a water trampoline/climbing set at Luther Britt Park for $50,000.
The proposed budget calls for a 2% increase in the cost-of-living-adjustment raise for city employees. After the city initially proposed a 3% raise in the previous fiscal year, but ended up giving a 1.5% raise, Cantey asked about the possibility of “giving them back” the other 1.5%.
“With all those good positive things coming in, could we look at putting that 1.5% back in the budget if we are in a better place, as it seems to be, by January?” Cantey said. “(City employees) are our greatest assets through the pandemic.”
Horne said he considered proposing a 2.5% raise, but settled at 2% as the best option to both give employees a raise and to balance the budget.
“About 60% of general fund is salaries and benefits,” Horne said. “That’s the fund we have the biggest problem creating balance in is the general fund because most of it comes from sales tax and property tax. What I would suggest is in January we can have a little bit of discussion, and that way we’d see if revenues are coming in to support that.”
Councilman Chris Howard asked what emergency contingency funding the city has in the event of another hurricane or other emergency or natural disaster.
Horne said the city’s fund balance has dropped after hurricanes Matthew and Florence, as well as the COVID-19 pandemic, but he hopes the city can add to it during FY 2021-22.
“That’s the problem, and we have to keep our fund balance up; our fund balance has dropped a little bit with two hurricanes,” Horne said. “This year, if we have a good year, we hope to get the fund balance back up.”
The proposed budget for water and sewer drops from $15,845,305 during the current fiscal year to $14,203,550 in FY 2021-22, a $1,641,755 decrease.
This includes $200,000 budgeted for the east filter media replacement at the Wastewater Treatment Plant, and $65,000 for the sandblast and painting of the Lime Tower, both of which are a priority for Public Works. An additional $200,000 is proposed for maintenance and replacement parts at the Wastewater Treatment plant, constructed in 1973-74.
Additionally, a debt service payment of $300,000 is budgeted for a potential Advanced Metering Infrastructure system, brought forward from the previous year’s budget. Horne anticipates the project to be discussed with City Council in more detail during the coming fiscal year. The total project cost would be an estimated $3.5 million.
“(AMI) is in here, so we can bring it back to Council later in a work session and proceed with it,” Horne said. “AMI would’ve really paid off for us during this period we’ve been shut down.”
The light and power budget is proposed to drop from $37,608,245 to $36,218,090, a $1,390,155 difference. The budget includes $900,000 for circuit improvements and $300,000 for the replacement of standard street lights with LED lighting.
The amount budgeted for insurance will go up slightly, from $7,413,680 to $7,436,430, even as the amount the city pays in insurance and benefits for its employees will drop 2%.
The proposed budget in other funds includes:
— $1,837,265 for sanitation, down from $1,882,045.
— $269,175 for law enforcement/separation, down from $260,790.
— $933,035 for fleet maintenance, down from $1,000,000.
— $35,000 for grant loan, no change from FY 2020-21.
— $500,000 for capital reserve, up from $0.
— $18,445 for emergency telephone, down from $206,965. The fund is entirely one line item, E-911 maintenance, which was deemed to need far less funding in the new fiscal year.
The city’s long-term debt is $25,932,288, including $7,891,153 in interest, far below the city’s legal debt limit of $128,728,940. The city plans $444,277.30 in debt service in the new fiscal year.
New debt that will be added includes $269,000 for lift station renovation, a generator for the Wastewater Treatment Plant and trucks.
In other business, Council adopted a resolution staggering terms of Lumberton’s representatives on the ABC Commission. John McArthur, who was appointed earlier this month, will serve through June 2023, along with Erica Whittier. The terms of Alan Avant and John Armstrong will expire in June 2022 and that of Lillian Hardin will expire in June 2024.
The resolution came as two board members’ terms had expired and others were set to expire soon.