Avery Offers Proposed 2018-19 Fiscal Year Budget

Published Monday, June 18, 2018 at 9:14 am

By Tim Gardner

     The Avery County Commissioners have a proposed 2018-19 Fiscal Year Budget that they are considering for adoption.

     And as authorized by North Carolina General Statue. 159-12(b), the commissioners will conduct a Public Hearing on the proposed Fiscal Year Budget.   This Hearing will be held on Monday, June 18, 2018 at 4:30 p.m. in their Board Room in the Avery County Administrative Complex, 175 Linville Street, Newland. The public is invited to attend and comment.

     The June bi-monthly commission meeting will begin (3:30 p.m.) before the public hearing in the Board Room. The commissioners will vote to adopt or reject the proposed budget following the public hearing. If they reject adopting the proposed budget, they would have to revise the current proposed budget or compile a new budget. By state law, a 2018-19 fiscal year budget must be adopted by July 1, 2018.

     Avery County Manager Phillip Barrier, Jr. and Finance Officer Nancy Johnson offered the following letter to the Board of Commissioners and the Citizens of Avery County concerning the budget:

     In accordance with North Carolina General Statute 159-11, the Avery County Fiscal Year 2018-2019 proposed budget is respectfully submitted for your consideration. It provides the financial framework for the programs and services which Avery County government will be undertaking in the next fiscal year. The budget provides the resources needed to ensure the delivery of governmental services in a fiscally responsible manner.

     The proposed budget is a continuation of the financially sound and conservative practices Avery County government has established and embraced. The Board held budget workshops in order to make changes to the proposed budget. North Carolina General Statute 159-11 stipulates that a public hearing be held in order to inform the public and allow any interested citizens the opportunity to express their opinions on the budget after the budget message is presented.

     This budget message represents an explanation of the budgetary decisions derived as a result of in depth dialogue between the County Manager, Finance Officer and Department Heads and changes made during budget workshops. The cumulative total of necessary operational and capital expenses considered in light of revenues generated by the departments, combined with State and Federal funding, determines the amount of funding which will be necessary from the citizens of Avery County.

     The general reappraisal of real property for Avery County occurred for 2018. State law requires that units of government publish a revenue-neutral tax rate in the budget documents. The revenue-neutral tax rate, as defined by G.S.159-11e. is the rate that is estimated to produce revenue for the next fiscal year by the current tax rate if no reappraisal had occurred.

     Growth and the 2018 reappraisal increased the tax base $209 million or 7% from $3,734,071,572 to $3,943,241,340. The revenue-neutral tax rate for the General Fund is proposed to be $0.4545. The revenue-neutral tax rate for the Fire Tax Fund is proposed to be $0.0663. Combining the two tax rates results in an overall tax rate of $0.5208. This is a $0.0292 difference from the 2017/18 Tax Rate. This rate reflects a very conservative estimate and was not adjusted by any growth factor due to the current economic conditions of the county, based on the fact that the 2014 reappraisal decreased the tax base by $1 billion dollars from $4.6 billion to $3.6 billion.

     The 2018/19 budget as presented is balanced based on a total property valuation of $3.943 billion. This represents an increase of $209 million or 7.9% over last year’s valuation of $3.734 billion. The general fund tax rate will remain at 48 cents ($0.48) per $100 valuation which will generate an estimated $18.5 million dollars in revenues. The county wide fire tax rate will remain at 7.0 cents ($0.07). The Fire Commission and volunteer fire departments will receive an estimated $2.67 million dollars in revenue.

     The combination of these two rates results in an overall tax rate of 55 cents ($0.5500) for the 2018/19 fiscal year. This rate is the same as the last fiscal year (no increase).

     The County Manager and Finance Officer released this further detailed breakdown of the proposed budget:

GENERAL FUND

Expenses-

*The total General Fund Budget is set at $29.6 million. This is a $1-million-dollar increase from the 2017/18 fiscal year. The increases include $450 thousand dollars employee classification pay plan.

*General Government is increasing $168 thousand dollars. The increase is primarily attributed to capital expenditures, repairs and maintenance, and various projects in administration, and buildings and grounds departments.

*Public Safety is increasing $577 thousand dollars. The increase is primarily for two additional school resource officers, sheriff, jail, inspections, emergency management, EMS and central dispatch departments. Capital expenditures include a much needed re-mounted ambulance, and new CPR mechanical vests for EMS.

*Transportation is increasing $521 thousand dollars due to increase in fleet for our department. Ninety percent of the fleet expenditures are reimbursed by the state.

*Environmental Protection is increasing $223 thousand dollars due primarily to the closure of phase 3 cell 1 at the Solid Waste Department.

*Economic and Physical Development is increasing $39 thousand dollars. The increase is primarily due to the new certified position with the agricultural department.

*Funding for Human Services is decreasing $392 thousand dollars. The decrease is primarily due to a new method of state funding for daycare and Medicaid.

*Cultural and Recreation is decreasing $72 thousand dollars. The primary reason is reduced funding of non-profits.

*Education is decreasing $342 thousand dollars from the previous year’s budget. The primary reason is an overall decrease in funding for capital expenses. However, two additional school resource officers have been added to the public safety budget and the commitment to renovate Avery High School is reflected in this budget.

*Public Safety is the largest expenditure for the County consuming 30% of the total budget. Education and the associated debt service is the next largest expenditure at 19%. Human Services is third largest at 17% while all other County functions total 34%.

Revenue-

*Property tax revenue is projected to increase $963 thousand dollars or 7% from last fiscal year. The increase is due to the reappraisal and a $209 million-dollar increase in the ad valorem tax base.

*Local Option Sales Taxes are projected to increase $250 thousand dollars.

*Other Taxes and Licenses are projected to increase $100 thousand dollars.

*Intergovernmental revenues are projected to decrease $716 thousand dollars primarily due to reduced federal payments.

*Licenses and Permits are projected to increase $7 thousand dollars from last fiscal year.

*Sales and Services are projected to increase $353 thousand dollars primarily due to increased revenue collections in jail and transportation fees.

*Investment Earnings and Other Income are projected to increase $75 thousand dollars due to higher forecasted investment income.

*Property tax revenue will generate 63% of the County’s revenue, followed by sales taxes at 17%, intergovernmental transfers at 7%, sales and services at 8%, fund balance appropriation at 0% and all others at 5%.

OTHER FUNDS

Fire Tax Fund-

*The Fire Tax Fund budget for the 2018/19 fiscal year is $2.6 million dollars or $148 thousand dollars more than last fiscal year.

*E911 Fund

The E911 Fund budget for fiscal year 2018/19 is $318 thousand dollars. This is a decrease of $11 thousand dollars from the prior fiscal year.

*Revaluation Fund

The Revaluation Fund budget is $125 thousand dollars for the fiscal year 2018/19. Avery County budgets annually for the mandatory revaluation. It should be noted that the County performs an in-house revaluation using existing staff as opposed to contracting this service out.

FINANCIAL STABILITY

     Barrier, Jr. and Johnson noted that Avery County is proud to report that the county fund balance exceeds the state requirements. This amount provides great financial stability and coverage in the event a catastrophic event was to strike the county. The County must have the financial resources available to address unknown and unexpected situations that could cripple its community, if it is found unprepared. This budget for 2018/19, as presented, does not include any fund balance appropriation.

     This proposed budget also continues the capital philosophy to pay as you go and establishes an allocation of $1,011,900 to a capital reserve “project” fund.

CAPITAL PROJECTS

     Over the past several years, Avery County has developed and adhered to a financial plan designed to promote a “pay-as-you-go” capital philosophy. As a result of this philosophy, the county has funded the EMS, Senior Center, and County Museum renovations in cash. The County has also been able to fund the new agricultural office complex and plans to move forward with the recreation pool project without any debt incurred.

     The current major capital projects are:

Swimming Pool-

Start Summer 2018

Finish Summer 2019

Estimated Cost – $2,973,052

     The Swimming Pool project will involve the construction of a new pool to be located on the recreation property. This will allow the county to fulfill the conditions of the 2008 grant.

     Future capital projects are the commitment to Avery County High School and additional development for the recreation property.

 

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