- Published on Wednesday, 30 April 2014 21:20
- Written by Super User
By WILLARD KILLOUGH III
CAROLINA BEACH - The Carolina Beach Town Council received an update on the budget planning process at a workshop meeting held Tuesday April 29th.
Town Manager Michael Cramer and Department Heads have been working to prepare a balanced budget for the 2014-2015 fiscal year which begins July 1.
Following the lengthy discussion among Council members regarding the budget process, reserve funds, health insurance, staffing levels and other topics, Cramer indicated he will in the future propose a 20% increase for water and sewer rates and no change in the property tax rate.
Cramer said he reorganized account structures to make the process more efficient and easier to monitor. He explained, "The way that we had our account structure set up, it was all lump sum all underneath a particular department. It wasn't necessarily in neat even categories. For instance, personnel and benefits. All of the personnel and benefits costs weren't categorized underneath one particular heading. Where we had police officers, part-time police officers that come in and help us with Freeman Park from outside. Where we would pay them was actually an expense item" and, "For me that doesn't work because you can't compare apples to apples and there is no real consistency."
He said, "I had to shift some of our accounting structure around. What that did was, it makes it so it's more difficult to say this line item was X last year and this year it is Y and the following year it is going to be Z. But once you get through that transition period you will be able to do that and you'll be able to do it in large chunks of your budget instead of down to the individual line item portion of your budget."
Cramer said the Council previously indicated goals for next years budget. Those include:
- General Fund Reserve Goal is 50% (51%)
- Reduce Operating Budget by 10% ($269,842 or 5%)
- Fund On-Going Capital Improvement Plan Requests including $1,068,775 in the general fund and $847,120 in the utility fund.
- $350,000 for Beach Nourishment and $35,000 towards dredging the Carolina Beach inlet.
- Identify New Revenue Sources including citations, Parks and Recreation, water and sewer rates and other sources.
- Staff Compensation - A 2% Cost of Living (COLA) pay increase and up to a 3% merit pay increase for employees.
While the Council discussed various budget items, there was an obvious sense of tension in the room between Cramer and Mayor Dan Wilcox.
Wilcox explained, "I'm not going to ask you all of the questions I have. You've explained the way you went about the budget. It is a little frustrating because it is hard to take a budget and know how it is performing if you can't gauge it against your previous year. I've gone through and crossed with everything I can find. There are some items that haven't changed a lot and there are some items that have changed substantially."
Cramer said, "I am not comparing year before to this year."
Councilman Shuttleworth said, "The previous number you gave us you've, you've increased the advalorem taxes by $38,000 over the previous number you gave us which was based on a formula that you and Dawn (Finance Director) came up with based on what you think property taxes will be. So that 38 may or may not have any relationship to what we received last year. It's just your summation of what you think the revenue will be."
Cramer said that is correct.
Wilcox said, "It's a function of understanding. The budget is hard enough for some people to understand anyway. You've got citizens that won't understand it. Some of them want us to explain it where we can. We have new Council people on board and some that haven't been on board in a while, so it's important to understand the process and where the numbers start and end."
Cramer said, "You either want the detail or you want the highlights. Because if you want the detail we could pick through every single line item on the budget and be here forever."
Wilcox said, "I'm not trying to give you a hard time. I know this is a new budget cycle. I know you are going in a new direction which is going to be a long-term fit. It's a little frustrating at this point in time trying to look at the last years budget, look at this and try and kind of figure out, get some baselines, and figure out what some of these things mean."
Cramer said, "Yes and in general I feel I prefaced that the last two meetings we had on budget workshops."
Wilcox said, "I wasn’t at the last meeting. I couldn't be there."
Cramer said, "I know and that makes it more difficult to try and reexplain it again."
He said, "All I gave them was the highlight overview stuff. Like I said, depending on how much information you want, I can give you plenty of information. If you want the detail I can print off the detail and give you that."
Shuttleworth said, "You received some goals and what you are saying is here is how you handled it and achieved or didn't achieve those goals. Reduced operating budget goal of 10%, you came up with 5%. You funded the ongoing CIP, dredging, beach nourishment. You identified some new revenue sources and you provide staff compensation. You closed the gap and we don't have a tax increase. What I'm hearing from the Mayor is he would like to see for example, what was last years total budget dollars... and what were the per department dollars..."
Wilcox said, "When I look at advalorem [property taxes] I kind of want to know what the baseline was from last year. I want to know what that number is so when I look at it and I'm talking to citizens I understand it and I know what it is."
He explained, "I'm a fairly simple guy. I deal with budgets in business... unless I'm starting a business for the first year, I'm not going to want to speculate. I kind of want to know what I did last year to know whether I'm over, under, why I made an adjustment, those type things."
Cramer said, "And I would understand that if we didn't have a budget officer who did that for you."
Wilcox said, "We still have to explain things to the citizens Michael."
Cramer said, "You also have a budget officer for that to."
Wilcox said, "Let me answer the question this way. I would like to see more detail."
Cramer said, "I've offered that four times now. This document here is the entire budget detail. It shows past year, past budget, current year, current budget and then future year. If you want all the detail you can have the detail."
Wilcox said, "Please send me an electronic copy."
Cramer said, "PDF or Excel" and, "It is basically the entire budget book that you had from previous years."
The Council discussed other items in the budget including beach nourishment and inlet maintenance funding and health care costs for Town employees.
Cramer said they anticipated an 18% increase in costs to provide healthcare coverage for employees but are considering a change in plans that would raise the deductible and lower co-pay for employees doctor visits while avoiding the 18% increase.
The Council will set a date for another budget meeting in May. State law requires the Council to hold a public hearing prior to adopting a balanced budget before June 30th to begin July 1.
Cramer said it was his understanding they will hold a public hearing at the Council's May 13th, meeting to get input from the public. Then another budget meeting would be held with Council. After that he would bring a budget back to the Council in June and the Council could vote to approve it or hold another special meeting.
For the proposed 20% increase in water and sewer fees, no information was provided in the information supplied to Council at the workshop showing a break down or comparison and the need that necessitated the proposed rate increase.
Currently the average residential meter access fee is $13.18 for water and $23.82 for sewer per month. Variable rates for 3,000 gals or more are $3.70 per thousand gallons for water and $6.30 per thousand gallons for sewer.
After the meeting adjourned Cramer confirmed the 20% increase proposal and said he was unable to get to that portion of his presentation during the meeting and would explain it at a later date. He did confirm no property tax rate increase would be proposed in the budget.
Following the meeting Wilcox said, "I'm shocked we have a town manager that doesn't place any value on his council not being able to understand his budget proposal. I've been through five budget cycles in my time serving the Town. There was no direct input from department heads and staff including details on their budgets."
He said, "That gives the public opportunity to hear detailed reports on each department's needs and gives council, especially after election with new council members... the opportunity to understand what has changed from the previous year."
Wilcox said he plans to meet with Cramer later this week to go over more detailed line items within the proposal. Councilman Gary Doetsch said after the meeting that he wasn't aware of a proposed 20% utility fee increase.