2009-2010 BUDGET MESSAGE

Snow Hill, North Carolina

June 1, 2009

The Honorable Mayor Lorrine B. Washington and Members of the Town Board of Commissioners:

Enclosed is the recommended budget for the Town of Snow Hill for the fiscal year beginning July 1, 2009 and closing June 30, 2010.  The Fiscal Year 2008-2009 Snow Hill Budget continues to provide sufficient resources for the delivery of Town services. The total revenue budgeted in general government ($873,900) and water and sewer utilities funds ($976,400) are reduced $10,000 from current year to $1,850,300.

The Community Center Enhancement Project Budget Ordinance (2007-2010) is a separate ordinance to cover multi-year activities using local and outside funding sources. In support of this project, the Budget includes $25,000 of programmed and required town matching funds.

The town has been awarded a $500,000 grant from the Rural Economic Development Center for Supplemental Water Transmission System Improvements-Alternative Water Supply Project.  This pass through grant to Greene County is under a separate Project Budget Ordinance to help fund a portion of the water system improvements needed to connect Greene County and its participating water systems, including Snow Hill, to the City of Greenville Alternative water supply.

The town is awaiting State decisions on two applications for capital water system projects filed under the American Recovery and Revitalization Act of 2009 (Federal Economic Stimulus Funds). The 50% grant 50% loan projects include: (1) the water tanks solar mixing project ($91,248) would improve potable water quality in the town’s water tanks, and (2) the replacement of approximately 60% of the town’s older water mains coupled with implementation of the Automatic Meter Reading system ($1,632,600). Should either grant project be awarded the Board of Commissioners may know in June 2009 and initiate financing plans to include adjusting future water rates to cover the potential debt service (approximately $50,000/year) on the USDA loan portion of the projects. Separate project budget ordinances would be needed to appropriate grant/loan revenues and project expenditures with a schedule for Water/Sewer Fund appropriations to the Capital Projects.

In anticipation of the reduced revenues we began Mid-winter looking at ways to postpone or reduce expenditures. Then and now department heads and the town’s volunteer governing bodies identified a number of activities to postpone or eliminate this year in hopes they may be considered in the coming budget.

Following is the anticipated revenues and expenditures by fund and department recommended in the General Fund and Water and Sewer Fund to maintain basic operations while delivering quality services.

The Budget enables continuation of town services in six primary areas, namely: customer service/administration, public safety, economic/community development, recreation, employee/volunteer support and public works.

Customer Service/Administration:
Final expenditure of $24,400 will complete the conversion of utilities and financial technology systems in the Department of Finance & Administration. The hardware and upgrades were implemented in the current fiscal year along with tax, financial, and payroll applications. Rescheduled from this year to the new fiscal year is expenditure of $3,500 in modifications to the employees’ and customer service counter areas of Town Hall.

For the fifth year the planning contract remains at $23,000 with emphasis on code enforcement, updating portions of the Zoning Ordinance, grant writing, providing technical assistance to the Planning Board, Board of Adjustment, Historic Preservation Commission, Recreation Commission, and Neighborhood affairs Committee, updating the 35-year old land use plan—and developing the Comprehensive Transportation Plan with assistance of the NC Department of Transportation and the East Carolina Rural Planning Organization. Another $1,800 is allocated for payment to Greene County as the town’s share of the FEMA mandated update of the multi-hazard mitigation plan.

Public Safety:
No funds are identified from the severely limited State Transportation Funds to allow continuing the sidewalk construction program. However, the budget includes Powell Bill eligible sidewalk maintenance activities while consideration of a comprehensive sidewalk upgrade effort in downtown is deferred for now (currently estimated at $8,500).  This activity will need to be coordinated with other work that will be occurring in the downtown once construction of the new Greene County jail and parking lots is complete.

The Budget appropriates $195,000 for contracted services with the Greene County Sheriff’s Department. A services agreement update is underway for consideration by Town Council and Greene County. The Town continues to provide use of the Snow Hill Fire Station and some equipment in its contracted fire services arrangement with the Contentnea Rural Fire Department.  An annual total of $18,900 is budgeted to continue fire services contract. The Rural Department is pursuing a larger and improved fire station. The Town Council is very supportive of the move if it occurs. Once details are finalized, hopefully by mid-summer, the Town and Rural Department will have the opportunity to evaluate and establish a long-term services arrangement.

A successful revamping of the town’s part-time animal control program continues.  The Town’s animal shelter is heavily used and local sponsors and volunteers are coming forward to support this visible program. The Budget includes funds to continue a proactive program of animal control services in Snow Hill as a supplement and expansion of the services offered through the Greene County Animal Control Program. The Budget maintains the split in the full-time Code Enforcement Officer’s time with roughly half devoted to animal control and the other half devoted to nuisance code administration activities of the Town Clerk’s office (junk vehicles and weeds).  The budget includes $1,000 for Code Enforcement Officer training/certification in animal control and/or zoning depending on scheduling availability. The Public Works and Utilities Department seasonally operates weekly mosquito-spraying program throughout town.

Community/Economic Development:
Community and economic development initiatives are important to supporting development of Snow Hill. The budget allocates $11,000 for economic development activities, a portion of which is available ($3,000) for the Town’s possible entry into the NC Small Town Main Street Program. The Snow Hill Development Commission will have flexibility in directing these funds and the remaining allocation to the on-going small-business start-up technical assistance, marketing efforts, or establishing a pilot downtown building façade improvement program.

The “Bridges to Security” home ownership Capacity Building Grant project is addressed in a separate $75,000 Community Development Block Grant (CDBG) project budget ordinance.  There are no local match requirements to undertake this community enhancement program contracted between the Town and the Rosenwald Center for Cultural Enrichment, Inc.

A total of $2,000 is appropriated to the Neighborhood Affairs Committee in support of civic awareness activities designed at exposing residents to the functions of local government through the Citizens Academy and the purchase of some replacement banners and hardware. A fourth type of banner displaying a patriotic theme is desired but deferred for future consideration should revenues become available.

A total of $9,500 is appropriated for historic preservation activities, including:  (1) Historic street signs for the expanded Snow Hill National Register District, replacement signs, and (2) Participation in the architectural/history survey and nomination underway in the future “Corner” National Register Historic District (a carryover from this year) (3) Workshops, memberships, and marketing.

Recreation:
Recreation priorities for FY 2009-10 include completing the outdoor Community Center enhancements (trails, playground, and fitness equipment).  A separate project budget ordinance includes appropriations and anticipated revenues to cover this park and recreation facility. A capital campaign has been launched to seek $50,000 in additional donations to complete all planned improvements. A Greene County sponsored grant application request to the Active Living by Design program to cover costs of the parks trail system was sought but not funded by the agency. As mentioned above, a total of $25,000 in required town grant matching funds are appropriated from the General Fund to the Community Center project. Once again, the Budget defers purchase of materials for a restroom at Genesis Park.  A total of $5,000 is appropriated for supporting the Greene County Museum.  A total of $7,300, down from $9,000 this year, is appropriated to the Recreation Commission. These funds will help support a variety of recreation related programs and events, including the 2^nd Annual NC Sweet Potato Festival ($1,000), half of the expense for the annual Independence Day fireworks ($2,500), two Tennis tournaments ($800), and programs/maintenance at Genesis Hills Park, the Skateboard Park and South Greene Ball Field.

Employees:
The town has talented hard-working employees. There will be no cost of living (COLA) increase for town employees. Fortunately, some full time employees are eligible for merit raises and increases due to education and state certifications.  Longevity pay and the performance based Core Competencies Bonus pay are budgeted. Employees have benefited from 4% annual COLA’s in recent years and expansion of employee benefits. The employees will not see changes in employee health insurance benefits or increased costs to them or the Town for next year. Funds were included to continue the Employee Health and Wellness program begun last year whereby employees may enroll in a cost share arrangement at local fitness centers. Several employees have begun making 401(k) retirement account contributions that are matched by the town on a sliding scale from 1.25% of salary to 5% maximum. The Budget is reduced by 40% from last year the funds for training and travel ($10,000) related to specialty certification and training programs.

Volunteer Support/Development:

The budget supports volunteer members’ program services in their committee/commission activities as identified in the Community Development Department and Planning/Zoning Department budgets: Tree Board ($1,200); Snow Hill Development commission ($11,000); Recreation Commission ($9,000); Neighborhood Affairs Committee ($2,000); Historic Preservation Commission ($9,500), and Planning Board ($1,000).

Public Works & Utilities:
The Department of Public Works & Utilities Department suggested temporary cost savings for water system maintenance upgrades while waiting to see if the Federal Economic Stimulus grant/loan comes through for major water system improvements. These deferred items include the first set of Automatic Meter Reading (AMR) devises and meters (originally budgeted this year at $20,000).  Additionally, scheduled upgrades to Well #4 upgrades ($15,000) will be postponed a year.

The Department’s other budgetary priorities include: (1) maintaining the current vehicle fleet, (2) purchasing a used transport trailer for the excavator machine ($2,500), (3) converting a storage room in the Public Works building as an office for the director ($3,300), and purchase of a laptop computer and software for the GIS waterline and sewer mapping programs and new cemetery mapping system ($2,000) and (4) Annual water tanks maintenance services (3^rd year) is budgeted at $31,000.

The water and wastewater functions continue to be of focus. With the decision to join other water systems purchasing water from Greenville Utilities Commission as a way to get the least expensive outside water supply, the County of Greene requested all water entities to increase monthly water rates from $8.00 to $9.00 effective July 1, 2009. A dollar a year increase will follow in subsequent years capping at $12.00. The March 2009 Town Council special workshop on water and sewer reminded all of the significant mandated costs for the Alternative Water System. These current and programmed surcharges do not cover the phased in purchase of water from Greenville at a $1.60 per 1,000 gallons beginning in August 2010. Nor do the current water rates afford sufficient revenues to build reserves or handle significant improvements to an aging system of wells and water lines. Funds to do these come from the monthly rate charges based on usage.

The Budget does not propose increasing the base water rates (except for the Alternative Water surcharges) for the next year in order to keep the immediate impact on customers as low as possible.  Unfortunately, it will be necessary to start implementing a phased surcharge to in town water customers for the Alternative Water payments to be made to Greene County without dipping even further into Fund Balance (a concern expressed by the town’s Auditor). Until now the town has been able to absorb the Alternative Water surcharge payments. Based on the NC Water Association examination of our water and sewer rates and the Public Works Committee review, I recommend a $5.00 per customer per month surcharge to inside town users in FY 2009-10 and a second stepped surcharge of $5.00 in 2010-11.  This will phase in town water customers to the same level as others out of town and throughout Greene County.

There are no increases proposed for new customer water or sewer taps and related services. Adjustments to these fees were implemented this year and should be adequate and remain generally in line with surrounding communities.

Cemetery

For the second year there are no increases in the cemetery general rates for purchase of gravesites and grave opening/closing services. Half of the work and appropriation for the detailed cemetery survey and new maps project begun this year will carry over and conclude in the new Budget year ($3,000). Customers have begun purchase of standardized cement vases at $10.00 each. Damaged lane name signs will be replaced using insurance proceeds along with placement of decorative street signs (a current year carry over). The Public Works & Utilities Department has offered to wait another year before replacing a mowing machine for use in grounds keeping at the cemetery and other areas of town.

Sanitation

The contract for solid waste collection and recycling services with Onslow Container Service (OCS) and the town’s weekly yard waste disposal program and fall/spring special clean-up days remains budgeted at $105,000 assuming the landfill tipping fee remains the same in the coming year.

Highlights of the proposed 2009-10 budget:

• Property tax revenue would fall from current year’s $279,000 to $275,000 with the current tax rate of 35 cents. At the current rate the current Budget included $17,700 appropriated from Fund Balance.  We assume an 11% reduction in sales taxes and less investment earnings. Even with reductions in expenditures, deferred capital projects, no cost of living increase for employees, and reduced part-time and overtime hours, this Budget would see a further reduction of $26,000 in Fund Balance without a 3 cents tax increase as proposed. The resultant 38 cents tax rate would return the rate to the same 38 cents level in effect two years ago.   This will enable a $4,000 contingency appropriation in the General Fund and prevent further lowering of the 29% General Fund Balance reported by the FY2007-8 Audit. This rate would remain lower than other communities in this and surrounding counties.

• With lower sales tax receipts and lower sales tax collections, regrettably there will be no cost of living (COLA) increase town employees.

• This year the Town will attempt to retain all functions and limit expansions of services until the National and State Economy stabilizes and there is a clearer level of certainty for state shared revenues.  No full time positions are to be eliminated and the departments will continue to augment services through use of a pool of experienced part-time temporary employees. This said, the number of hours for part-time employees is reduced.

• Funds for out-of-town travel and training have been reduced for the Governing Body and staff.  Largely where travel is budgeted it is for required specialty service area training and retention of certifications.

• Capital expenditures have been reduced in the General Fund unless from grants or needed to maintain critical public safety or services.

• No increase is proposed in the solid waste collection fee.  It will remain at $10.50 per month.

• According to the statewide survey of water systems, the Snow Hill has lower combined water and sewer rates than those in surrounding communities in the Neuse and Tar River basins.

• There are no increases proposed for new customer water or sewer taps and related services

• Following study of the water and sewer rates it will be necessary to pass on a $5 per month portion as the first phase of implementing the Alternative Water fee to in-town customers in order to reverse a continuing trend of reducing fund balance to pay for this mandated cost.  Out of town customers will see a programmed $1.00 monthly increase from $8 per meter to $9 per meter toward the Alternative water charge.

• No increase is proposed in the sewer rates

• Postponed is the $100,000 estimated cost to upgrade Sewer Pump Station #1 on Kingold Blvd. However, it has cost approximately$30,000 to do emergency repairs to this facility this year and another $30,000 in maintenance funds is budgeted next year. The department head is concerned this facility will continue having costly repairs without moving soon to make the necessary complete upgrade.

• Appropriation to Sewer Department contingency is $26,900 and a like amount to the Water Department.

• There is no appropriation to Water and Sewer Fund Balance.

• The Town proposes to continue contracting law enforcement services with the Greene County Sheriff’s department.  Negotiations are beginning with the county to work out the details ($195,000 budgeted).

• The Town had been working with the Snow Hill Rural Fire Department to aid the department with its plans to relocate from the town’s fire station to a larger and more modern facility.  Plans are not finalized at the time of this budget submission as the Rural Department has applied for USDA federal stimulus funds.  The Town is very supportive of the Fire Department and anticipates a long term contractual relationship.  The budget includes $18,900 for this service.

• The town will continue its support of the Snow Hill Rescue Squad with a $4000 contribution.

• Most outside agencies and non-profit agencies will receive a reduced allocation or the same amount as this year.

• The Town will pay its $1,800 share of the costs of updating the mandated Hazard Mitigation Plan

Concluding remarks

The current recession has reduced projected revenues for this year and the trend will continue into the new fiscal year. This leaves little room to do business without dipping into fund balances, raising taxes, making significant cuts in services contracts, employees, or employees’ benefits. This Budget is conservative and the recommended with a 38 cent tax rate and proposed Alternative Water Surcharges.  These are minimum increases offered for consideration by the Town Council to prevent any further appropriation from savings. From our Audit we know our funds have much lower savings than comparably sized communities.

The drop in revenues this year and those expected next fiscal year provides limited or no capital investments, no new positions, no cost of living increase for employees, limits on part-time employees hours, and postponed replacement of equipment or significant new initiatives that cannot be handled by current resources. However, there are sufficient revenues to maintain basic services and offer modest improvements where necessary and offer some support for initiatives overseen by voluntary Governing Bodies and the Department Heads.

This is unusual time for a Town that has seen a significant level of progressive development and multiple new initiatives over the recent past under Town Council adopted Vision, Goals and Objectives. Although the town faces challenges we recognize there are severe pressures on families and businesses here and across the Nation during these recessionary times.  This Budget has been difficult knowing that many people are having difficulties paying their bills.  The town’s basic functions need to continue.  We are holding off and reduce some activities while others have less flexibility.  I wish to thank the Department Heads, Finance Officer, staff, and Volunteer Governing Bodies for their assistance with this Budget. We stand ready to assist the Town Council and make adjustments as you enter the public hearing and budget work sessions.

Respectfully submitted,
Robert E. Clark, AICP

Town Administrator