Feb. 11. By Dave Vieser. The town’s operating budget is probably the Town Board’s most important work product. It’s a legal document that provides an outline of expenses vs. income, namely the revenue received from your property assessments. The budget sets spending for all departments, ranging from police and fire to parks, art exhibits and leaf collection.
Budget talks get under way in earnest this month. It will take five months—including an intense two-day budget retreat at the Graylyn Conference Center in Winston-Salem in March—to put together a dollar-by-dollar accounting of how upward of $24 million in tax monies will be spent.
MAYOR WASHAM
The flip side is whether there is enough revenue from taxes to cover expenses, which includes “the Cornelius way” of doing things, not to mention the debt service on tens of millions of dollars in local road improvements not fully funded by the NCDOT.
Whether the tax rate remains the same or must increase is anyone’s guess.. Some officials are saying a small tax increase is necessary to keep debt under control and maintain the town’s excellent bond ratings. At last year’s budget retreat, the town manager said municipal finances would become precarious in coming years based on rising debt and without an increase in revenue.
“I’m pretty sure the rate won’t go down,” one elected official said.
This year is an off year for local elections which means it could be easier to raise taxes without having to win over voters come November. Meanwhile budget hawk Dave Gilroy lost his bid for re-election and Kurt Naas, who voted against a mid-budget police pay raise last year, chose not to seek re-election.
The raise was a sticking point at the budget retreat last year. It became the prelude to a new tax rate of $.222 per $100 of assessed valuation, up 2 cents from revenue neutral. The additional 2.0 cents above revenue neutral was necessary to fund debt service.
The first step in the upcoming budget planning was a special session Feb. 6 at Town Hall. Department heads presented wish lists representing millions of dollars in new spending, including urgent technology upgrades and repairs and replacement lighting at Bailey Road Park.
The technology fix—in the hundreds of thousands of dollars—is apparently serious enough that a budget amendment will be proposed for the current fiscal year, which ends June 30.
All told, there was roughly $8 million worth of budget requests, much of which likely will not be funded.
On March 25 and 26, the annual budget retreat will be held at the Graylyn Conference Center in Winston/Salem. By that time, more should be known regarding specific costs for the next fiscal year.
The biggest budget challenge will be the local dollars the town must spend on new roads and the debt service related to road improvements. Then, too, how long Cornelius can get by with funding a virtually full-time fire department with a part-timer’s budget is an open question.
GRANT
The town manager traditionally unveils his proposed budget in early May and by state law, it must be adopted by the Town Board no later than June 30.
“There is much work ahead for staff and elected officials,” said Mayor Woody Washam. The process will include evaluating the financial impact of delays on some of the road projects.
The delay in two major projects—the widening of West Catawba Avenue and Hwy. 21—may actually work to the town’s fiscal advantage, at least for the short term. The latest projections from the NCDOT delay the start of the West Catawba and Hwy. 21 widening projects to 2024.
“With those projects delayed, our fund balance is $2.2 million to the good,” said Town Manager Andrew Grant. “We are busy reviewing our financial forecasts but the short-term picture has improved.” Grant said the NCDOT’s timing could change. The customary downside to projects being delayed is that they will be more expensive when they are finally done.
With all these factors in play, local officials are hoping conversations at the budget retreat will go smoother than last year. At that time, a pay raise for some employees was approved 3-2, with Gilroy and Naas dissenting.
Both expressed concerns that raises were approved before the budget talks even began. At the same time, Grant said Cornelius was “at a crossroads” around finances and the tax rate.
Regardless, taxpayers here are in an enviable position. The Cornelius tax rate has long been among the lowest in the state among towns of comparable size. Indeed, we have the lowest tax rate in the entire county. Meanwhile, total tax ratables are in excess of $7.1 billion and growing, providing a greater tax base on into the future.
