tax collection

Another big topic we discussed at our annual retreat is our budget strategy for the upcoming fiscal year. Revenue for the current fiscal year continues to be strong. As of the end of January, ad valorem property tax receipts are just over 100% of budget. Sales tax receipts through the end of December (half the fiscal year, which does not include the full impact of Christmas) are at 56.5% of budget. On the expense side, most line items are on track with our budget.

As a result of this, we are looking at a pretty healthy surplus when we close out the fiscal year at the end of June. Part of our strategy for the current fiscal year was to take a fairly conservative approach to the budget, and if the economy bounced back faster than anticipated, we would use some of the resulting surplus on outstanding capital projects.

So, staff presented four options for prioritization for the current year. Those were the Splash Pad, Skate Park, Dog Park, and the next phase of improvements to Rocky Branch Park. After some discussion, we decided to prioritize the Skate Park and the Rocky Branch Park improvements, which together will consume roughly $220k of this year’s surplus.

Looking ahead to next year, capital projects will likely continue to be a focus. Given how strong our revenues have been and continue to be, I suggested that we, as a Council, take a look at our property taxes to determine if we need to make any adjustments to the tax rate. The City has seen very positive growth in both our tax base and our sales tax collections over the last few years, so I think this may create an opportunity for us to implement a small cut to the tax rate while still accomplishing the goals that we have for the City. Prudence would suggest that whatever we do on that front should be measured, and the rest of the Council agreed to take a look at this at an upcoming workshop. So, we will take a look at this over the next few weeks as we get into building the budget for next year.

An update from our meeting on Monday:

We ended up just meeting with the Main Street Board. The Environmental Sustainability Board requested that we postpone our meeting with them, but we did have a very productive conversation with the Main Street Board. They gave a presentation on several of the initiatives they have been working on this year, including the Keep the Lights On campaign, the utility box wrap art, and Trains on Main.

We also talked about the Façade Enhancement Grant program (which provides grants from the City to restore/upgrade building facades in the downtown district). Council discussed the possibility of making changes to this program in the future to ensure that the criteria for the program align with downtown’s current needs. For my own part, I suggested that grant applications that seek funding for things like wall art (on the side of a building) or more permanent façade improvements (such as upfitting or repairing a brick façade) would be a better use of funds versus grants for more temporary improvements (for things like building canopies, etc.).

The dog park initiative was also a key discussion point, and we encouraged the Main Street Board to continue collaborating with the Parks and Recreation Advisory Board on that project.

We also had a good conversation around public art and a general desire to see more of it. Given the expense involved with these sorts of projects, the Main Street Board indicated that they would look into the availability of non-public funds (grants, etc.) for public art projects.

All around a good conversation. I think check-ins like this with the advisory boards are a good way to keep everyone rowing in the same direction, so I look forward to doing more of these in the future.

A few highlights from our CIP workshop at the end of last week:

Most of our discussion focused on non-Utility capital improvements. We decided to do a separate workshop later in the fall (with the appropriate staff) to focus on that program given that most of those improvements are very technical. A list of some of the bigger items we talked about are below. Note that we didn’t “approve” any of these projects, but simply gave the go-ahead to staff to begin planning for these projects. These will still come back to Council for approval before they are funded :
-The Phase I Rocky Branch Park improvements that will construct a multi-use trail through Rocky Branch Park. The Tarheel Trailblazers have already done some significant fundraising for this project, so we’re looking at providing a match (of about $46k) to what they’ve raised.

-The new Recreation Center. We are looking into the feasibility of also including funding for a skate park and splash pad in the loan that funds the Rec Center. The final loan for the Rec Center will likely be about $11MM, and the costs of those two projects are small enough that they are unlikely to significantly impact our annual debt service (i.e. the difference in payments on a $11MM loan and a $11.5MM loan is relatively small, especially since interest rates are so low). We asked staff to develop some cost estimates for the annual maintenance involved with a skate park and a splash pad to get a better idea of what the total cost of ownership for those two projects would look like.

-We also talked about purchasing a new bus. The good news on this item is that the cost of a new bus is a little bit lower than what we thought it was going to be (about $90k for a 25-passenger, handicap accessible bus). We’re still looking at a couple options regarding financing it (including using proceeds from a $75k land sale to offset the cost), but the lower cost makes that effort significantly easier.

-We also briefly talked about the Dog Park that the DBDA is fundraising for. This was another project where we want to make sure we understand the ongoing maintenance needs for the park (especially figuring out the best way to keep it clean, etc.).

If you have any questions (or thoughts) about these projects, let me know!