- Published on Thursday, 10 May 2012 23:11
- Written by Super User
By ROBERT LEWIS
Carolina Beach Town Councilman
The town Budget process uncovered a number of areas in which various council members have questions about as we move forward. One area in question is why our town breaks out three separate funds to manage our town’s revenues and expenses.
These funds and associated expense line items are the general fund, the utilities fund and the tourism fund. Most of our surrounding communities and all the other county beach towns only use two funds as they breakout revenues and expense a General Fund and a Utilities Fund.
The separation of the Utilities Fund is required by law to be kept independent from our General Fund.
The Tourism Fund was created some years ago for reasons I still do not understand, but the revenues streams and associated expenses which are funneled into this fund are not by law governed to be separated from the General Fund. For example revenues (tax dollars or fees) which are funneled into the Tourism Fund include TDA (Tourism Development Authority) or room occupancy tax revenue, parking revenues, freeman park revenues, ABC taxes, Dock Rental, Chamber of Commerce Office Rent, Arts and Activity Fees, Paddle Boat Rental and other related grants.
Only the TDA revenue funds are by law earmarked to be spent on tourism related activities and marketing and our town is required to submit expenses related to these activities for reimbursement.
All the other revenues generated and funneled into the tourism fund are in reality general fund revenues as well as most of the expenses accounted for in this fund.
As a couple examples the town (your tax dollars) paid for all the parking lots and meters placed around town and somehow the revenues generated from parking is earmarked for tourism related expenditures. We all contribute to the tax revenue share we get from the ABC revenues as we buy alcohol from our local ABC store year round and for some reason this revenue stream is earmarked for the Tourism Fund.
The reason I brought this up as it makes it confusing for council when working on the budget and evaluating expenditures levels versus reserve levels as it relates to our General Fund.
Wrightsville Beach for example brings in over $2 Million dollars in parking revenue and their cost of servicing the parking meters and lots is around $500,000.00.
All this revenue and associated expense is in their general fund as they do not have a Tourism Fund. Our neighbors to the south, Kure Beach also does not break out a separate Tourism Fund. A number of us on council have discussed changing this policy and either going back to two funds a General Fund and a Utility Fund or just using the Tourism Fund for revenues generated and associated activity expenses from TDA (occupancy tax) revenue. Based on our published 2010 and 2011 Budget Documents. Our town’s reserves look like this when you break them out as General Fund and Tourism Fund.
2009/2010 – General Fund Reserves $2.7 Million (29%) – Tourism Fund $1,050.000 (66%)
2010/2011 – General Fund Reserves $3 Million (31%) – Tourism Fund $1.8 Million (83%)
In Reality we had a projected $$4.8 Million in General Fund Balance Reserves going into this fiscal year (2011/2012). This would mean we have a pretty healthy amount of money in reserves.
I think it is important to evaluate the budget impact with all the information available included in our equation so we can make the best informed decisions as it relates to property tax rates.
These opinions are my own and are not meant to reflect those of our town council or any of its members.