Budgets are a balancing act, and the Fiscal Year 2014 budget proposed by County Manager Wayne Vest during the Tuesday, May 7 meeting of the Moore County Board of Commissioners meeting is no exception.
Vest's budget, assembled by a team that included Chairman Nick Picerno and Commissioner Randy Saunders, has no increase in taxes, continues to pay down debt without depleting reserves, covers the rising cost of employee benefits, and adds seven new paramedics, including three dedicated to a new EMS & Fire substation to serve the northeast corner of the County.
On the other hand, it fails to fully fund Moore County Schools' and Sandhills Community College's requests for local funding, and offers no cost of living or merit increase for county employees.
Vest and the budget team were praised by all four Commissioners for their work on the draft document. The public will have an opportunity to weigh in on the budget at the Tuesday, May 21 Commissioners meeting; final approval of the budget is scheduled for the Tuesday, June 4 meeting. A copy of the full budget is available on the County's website.
No tax increase
The first of four goals that Vest said guided the budget process was to "maintain current tax rates," and the centrality of that goal was emphasized when Chairman Picerno called the wording of the objective his only quibble with the budget.
"I would have said 'maintain or reduce,'" Picerno said.
Vest's budget does indeed maintain the county property tax rate at 46.5 cents per hundred, where it has been since FY 2010, and the Advanced Life Support tax, which funds EMS operations, at 2 cents per hundred.
The fire tax rate in each of the County's sixteen fire districts remain at their current levels, including 4 cents for Seven Lakes, 5.9 cents for West End, and Eagle Springs at 7.5 cents.
More skin in the game for MCS
The Moore County Board of Education asked the Commissioners for $25.5 million in local operational funding -- a request that has not changed since FY2010 -- but also asked for $750,000 in new funding to pay for the 1:1 Initiative to place laptop or tablet computers in the hands of every student and teacher in the County.
Vest's proposed budget provides that $750,000, but does so by reducing the County's funding of school operations by $375,000. The remaining $375,000 will be drawn from the County's capital reserves.
MCS plans to roll out the 1:1 Initiative over the next three-to-four years, and will look to the County for increased funding for digital learning in each of those years. Once all students and teachers are equipped with digital devices, the annual cost of replacing the computers is expected to total $3 million, and MCS is asking the County to fund $2 million of that total.
With that in mind, Commissioner Saunders comments: "We are looking at numbers that we are going to have to pay for every year. Four years from now, we are looking at paying a significant amount. We hope that the schools will show that we are going to get a lot of bang for our buck. It's the future, but we have to find a way to pay for it."
MCS was already planning to put $1.5 million into the effort in FY2014, primarily using cash the school system has accumulated over the past several years.
It's that accumulated fund balance that caught Chairman Picerno's eye. He told The Times after Tuesday night's meeting that MCS ended FY2012 with a $3 million surplus in their locally funded accounts -- and had similar surpluses in the two prior years.
"We're just asking them to use the accumulated overfunding of the last four years," Picerno said.
Meanwhile, the $375,000 at stake represents roughly one third of one percent of both the County and MCS budgets for FY2014.
College funding flat
The same concern about "overfunding" came into play with the Sandhills Community College budget request.
Sandhills Community College had asked the County for a $200,000 increase (just under five percent) in operational funding and a one-time contribution of $400,000 to replenish a dwindling capital maintenance fund.
Vest's budget does offer $120,000 in capital funding, but comes up with that money by cutting the County's contribution to operational funding by $121,819.
"We essentially kept them flat," Picerno told The Times. "Like the schools, they are running a surplus. We shouldn't be funding surpluses."
Additional EMS staffing
The County Manager's budget includes funding for seven new EMS paramedics, three of which will man a quick response vehicle stationed at a new fire and EMS substation to be built on Carthage-Glendon Road. The remaining four paramedics will be assigned to Southern Pines, allowing the EMS unit there to operate twenty-four hours a day, seven days a week.
Picerno told The Times that these new positions -- and the new substation -- will be funded from the ALS tax instead of from the general fund "taking some of the burden off the general fund taxpayer."
The general fund employee complement will be reduced by 1.5 full time equivalents, Vest said during his presentation. He did not elaborate on which positions are being eliminated.
Rising benefits costs = no raises
The County's employee benefits costs are expected to rise markedly in the coming year, squeezing any room for cost of living or merit increases out of the budget.
The state-mandated contribution to employee pension plans jumped 7.5 percent for law enforcement and nearly 5 percent for every one else. The per-employee cost of health insurance will increase by $634, and a new state-mandated contribution to an unemployment insurance fund will cost the County $209 per employee, or $157,152 in total.
In the current year's budget, County employees were awarded a half-year two percent cost of living increase that took effect in January.
A change that will have little effect on this year's budget but could cut costs -- and employee compensation -- in the future is a cap on total county retirement contributions for non-law-enforcement employees.
The County contributes three percent of each employee's salary into a 401K plan, whether or not the employee contributes to their 401K. In addition, the County, in 2013, will contribute 7.07 percent of salary to the employee's state retirement plan account. For existing employees, the County will continue to make both these contributions.
But for new employees hired after July 1, a new policy will cap the combined contribution at ten percent of salary. In addition, the County will match employee contributions to their 401K plans, but will not contribute when the employee does not contribute.
The pension and 401K contributions for law enforcement employees are mandated by the state.
Paying off debt
The County expects to pay $10.6 million to service debt in FY2014 -- $5.5 million for school bonds, $1.8 million for Sandhills Community College, and $3.3 million for County capital projects.
Another $3.4 million in debt service will go toward paying down loans for Public Utilities projects, including the East Moore Water District and the Wastewater Treatment Plant upgrade. But the revenue to handle these payments is taken not from general fund taxpayers, but from the rates paid by public utilities customers.
Water rates to rise
Though taxes will not rise, if the County Manager's budget is approved, water and sewer rates will.
The budget proposes a $1.40 increase in the base water rate for both three-quarter and one inch meters. That will increase the three-quarter inch rate from $6.10 to $7.50 and the one-inch rate from $7.70 to $9.10.
The sewer rates charged municipalities will increase by thirteen cents, from $2.61 per thousand gallons to $2.74 per thousand gallons.
Making do with less
After Vest's presentation of the proposed budget, Chairman Picerno noted that, five years ago, before 2008 recession, the County was receiving $18 million in sales taxes. That number is now $14 million.
The County general fund budget at the time had reached $99 million; it is now $88 million.
