City of Henderson Recommended Budget for 2018-2019

In accordance with the Henderson City Charter and the Statutes of the State of North Carolina, the FY 2018-19 Recommended Budget is herewith submitted to the City Council for its review, deliberation, amendments and adjustments as deemed appropriate, and adoption prior to July I st. The City Administration looks forward to working with the Mayor and members of City Council on the budget during the next several weeks, and helping it achieve a spending plan which addresses the needs and aspirations of both the community and municipal organization.

Download the full proposed budget here:  FY-18-19-Recommended-Budget-final-version-2-May-18.pdf


State law requires localities adopt and operate within abalanced budget at all times. To that end, revenues have shown some growth, but continue to be projected in a conservativemanner and expenditures have been limited to capital needs. Revenues in the Enterprise Funds continue to remain stable and property values basically remain flat, but there is a small decline in personal property values. There was improvement in the collection rate which positively affected the General Fund projected tax revenue.
Many projects that werein the construction phase arenearing completion and other initiatives suchasthe outdoor pavilion are in the process of conceptual design, which will further our goals for downtown development.
During this fiscal year the city faced a number of homicides which took place within a period of a few weeks. These werehorrific events, which reinforces our need to provideapositive economic outlook to help lift up our community as well as continuing to provide adequate salaries to help retain our Police force to insure that we continue to work on reducing crime and bettering ourcommunity. In addition, our Youth Services Administrator, in conjunction with our Recreation and Parks Director and Police Chief, has been holding “shop talks” events, reviewing various programs for funding needs and reaching out to the community.

The General Fund recommended budget for FY 2018-19 is $16,892,390, an increase of 4.25% over the current FY 20 I 7-18 budget.

There was a decrease in the personal property tax; however, with the real property remaining basically flat, the tax rate is recommended to remain at . 712 per $100 of property value.

2017 City Value (real property, utilities and personal) -$806,389,439

2018 City Value (real property, utilities and personal) -$800,369,643 This equates to less than I% lower than 2017 values

The tax collection rate increased to 96.38% from the previous year of 94.72% which has helped to offset the lower personal property value.

Revenues from sales tax and other hold harmless taxes have risen this year and are projected to show a slight increase of 2.0% for the upcoming year. The League projected an increase of approximately 4% growth in sales tax, but we used a more conservative number due to local growth and concerns.

Appropriation of $550,000 of Fund Balance. This is more than what was originally recommended last fiscal year. Council ultimately approved the use of $503,000 in fund balance for the FY 18 budget for the additional raises. Per the city’s 2017 audit, the fund balance remained sound and well above the minimum requirements as set by the Local Government Commission (LGC).

As part of the budget process, Council approved recommended changes in the schedule of fees for fire inspection fees, which positively impacted revenues for the General Fund.

Council has approved a contract with a consultant to help the city move forward with development of a storm water utility fee. This will help fund much needed stormwater infrastructure projects for future budgets. No funds were projected as revenue for the fiscal year, but it is hopeful that funds can be generated for approximately six to eight months of the upcoming fiscal year.

Highlights on the expenditure side of the General Fund are as follows:

Development Services -$50,000 for continued demolition of dilapidated, abandoned structures and code compliance violations. Much progress has been made in this area as there are approximately four properties jointly owned to be demolished. The costs are shared equally with the County. Funding for a part-time code enforcement officer is included in the upcoming budget.

Staff is recommending a smaller area be identified as our starting project for redevelopment. The proposed FY 19 budget includes $142,340 for Capital

The Sewer Fund budget is proposed at $4,923,450, which is a 5.74% increase from the past year. No use of Rate Stabilization funds is proposed to be used this year.
Some highlights of the expense side include funding for the following:

Purchase of equipment including a dump truck and three service trucks. ( I for HWRF-1 Sewer Collection & I for Sewer Collection I & I)

Repair and maintenance of the UV system at the plant.

Funds placed in reserve in the amount of $41,770 to fund Phase V of the Pay and Classification Study.

Personnel -There were many requests for additional personnel this year; however, due to budgetary restraints, only one of these positions is proposed to be funded. This is a maintenance position in the Recreation department. Other positions requested were two in recreation and positions for a third fire company. Salaries and wages continue to be a major concern for the City in many departments as we must find ways to increase our competitiveness to hire and retain the best staff. The recommended budget includes a 5% increase for all employees.

Health insurance -After ongoing negotiations with Aetna a proposed 7.00% increase was established for this recommended budget. Aetna has provided several alternatives that can be considered to further reduce premium cost and these have been reviewed by the HR Committee. The considerations were: I) Apply a $1,500 deductible and; 2) limit prescriptions in accordance with plan which does not contain Walgreens or Rite-Aid. The consensus of the committee was to leave the deductible at $1,250 and use the second choice regarding the purchase of medications.

Current Monthly Premium per Employee with $1,250 deductible $491.81
Proposed Monthly Premium per Employee with $1,250 deductible $526.20

Worker’s Compensation -The City has received an estimated premium for Worker’s Compensation insurance rates from the League of Municipalities and as anticipated, is much lower than our current rate and correlates with the efforts of our staff in promoting a safer work environment. Based on our current rate, it represents a decrease of 24.14%, which signifies that the city has shown improvements in working to reduce our costs in this area.

Debt -Several large projects involving the Police Station and Operations Center will be retired in FY 20; however, debt service for the fire station/former municipal building begins and other larger projects in the Enterprise Funds such as the KLRW plant upgrade, which will increase the debt service in those funds in the future.
The Capital Improvement Plan is submitted as a part of FY 19 budget to properly plan for upcoming capital projects for the next ten ( I 0) years.

Combining all funds, this represents a combined budget of $44,212,905. Whereas not all needs are met, as in most budgets, I believe this budget represents further positive steps in areas not funded previously, which will help the City continue to grow and reach its full potential again. We must continue to work in reducing the City’s crime rate which has a negative effect on economic development efforts aswell as stretching the resources and personnel of our police department.

Again,I appreciate the opportunity to work for the City of Henderson in providing a high level of servicethat our citizens deserve and look forward to working with the staff in carrying out the necessary work toinsure that our goals are realized as outlined in the Strategic Plan.

I want to take this opportunity to especially thank Patricia (Pat) Pearson,Executive Assistant for all of her work in helping to prepare this year’s budget along with the rest of the budget team which includes, JoeyFuqua, Finance Director, Lisa Boyd, Assistant Finance Director, and Paylor Spruill, Assistant to the CityManager. Iamextremely grateful in the team’s efforts in putting this budget together aswellasthe cooperation of the Department Directors.

I welcome your suggestions and comments aswe prepare for our Budget Hearing aswellas upcoming meetings, as needed, to discuss this proposed budget.

Frank Frazier, Cit. City of Henderson


Image Information: City of Henderson, NC Council Chamber (Photo: Phil Hart)