By DAVID BORAKS
Davidson officials are proposing a three-point approach to raising the budget-busting $2 million needed in the coming fiscal year to subsidize the town-owned MI-Connection Communications System: cost-cutting from a previously announced Town Hall restructuring, spending from town reserves, and imposing a new fee for household trash collection.
The proposed 2010-11 budget leaves the tax rate unchanged, at 36.5 cents per $100 of assessed value. But it adds the new trash collection fee, of $206 per year for a single-family home and $104 per year for apartments and condos.
Meanwhile, a 14-cent tax surcharge on commercial property downtown and on South Main Street would be eliminated as part of a drive to make Davidson more friendly to commercial development.
Those are the headlines on the $8.4 million budget that Town Manager Leamon Brice and Finance Director Eric Hardy presented to the Town Board Tuesday night. The budget is not final. The Town Board will review the manager’s plan, then hold a public hearing at its work session next Tuesday, May 25. A budget vote would come either June 8 or 15.
The budget is actually about 4 percent lower than what the town will spend this fiscal year. That’s largely because of the major street resurfacing campaign last summer, expenses that won’t be in the coming year’s budget.
By far the biggest factor in next year’s budget is MI-Connection, the local cable and communications system that Davidson owns with the town of Mooresville. As Mr. Hardy reviewed for the board, MI-Connection two weeks ago sent the towns an outline of its 2010-11 budget that requested a $6.4 million subsidy for the coming year. That would be split according to the towns’ relative ownership – 31.25 percent for Davidson ($2 million) and 68.75 for Mooresville ($4.4 million). (See May 7, 2010, “Towns get their 2010-11 cable bill: $6.4 million”)
To come up with its $2 million, Davidson would withdraw $804,179 from its reserves, known as its fund balance. It would raise $749,490 from the new solid waste fee. And it would generate additional savings from the Town Hall restructuring and by outsourcing a variety of services in Public Works and Parks & Recreation.
By dipping into its reserves, the town would reduce its fund balance from a current $3.47 million, or 41.3 percent of operating expenses, to $2.67 million or 31.7 percent of expenses. And he said reserves likely would be needed again next year, when MI-Connection would need an additional, though likely smaller, subsidy.
Mr. Brice said the state requires a minimum 8 percent in reserves. The Local Government Commission in Raleigh, which reviews local government finances and borrowing, expects the town to “stay in line with communities our size,” which would be about 40 percent. He said the town hopes to reduce reserves in the next couple of years to no more than 25 percent. “We are told by LGC if we get down to 20 percent, they’re not going to look too fondly on us. It would be a little bit more difficult for us to borrow money for some of the projects we need to do, such as our new fire station.”
[The 2010-11 budget is also hitting Mooresville. That town is proposing to spend about $3.4 million of its reserves to help fund its portion of the cable system's cash needs, Mooresville finance director Maia Setzer said Tuesday.]
A FEW SURPRISES
Board members only received the budget proposal on Monday, and there were a few surprises and points of discussion.
MSD TAX REMOVED – The budget would reduce to zero the Municipal Services District tax surcharge, currently paid by owners of commercial property downtown and on South Main Street, but not in the Exit 30 area. The rate is currently 13 cents per $100 of assessed value. Eliminating the tax would cost the town about $59,000 a year in lost revenue. But Mr. Brice said removing it would help economic development and business recruiting efforts.
FEWER POSITIONS CUT – Meanwhile, new details emerged about the Town Hall reorganization announced May 4 that will trim the town staff. The most notable was that the net reduction in full-time equivalent positions will be only about 2, rather than the previously announced 6 or 7. That’s mainly because of a recently discovered need to add several part-time paid firefighters to make up for a decline in volunteers due to the graduation of several Davidson College student firefighters.
SOLID WASTE FEE, LEAF PICKUP CHANGES – The proposed annual solid waste fee of about $206 per single family home and $104 per multi-family unit would shift the cost of trash and recycling services away from property tax revenue and onto users. (The fee would be collected by Mecklenburg County along with property taxes and motor vehicle fees.) Mr. Brice referred to it as a “user fee,” and said in the future the fees would exactly match the cost of the service. Board member Connie Wessner worried Tuesday night that it might be a hardship for some low-income residents. Mr. Brice said the town would look into ways of reducing the fee, possibly by using existing tax discount programs. The budget does propose ending curbside pickup of loose leaves. As the board discussed last month, that service would shift to an outside contractor, which would collect bagged leaves only. Any bags could be used – paper or plastic – and all leaves would still be composted, Mr. Brice said.
ELIMINATE ARTS & SCIENCE COUNCIL DONATION? – The proposed budget would cut in half the town’s contributions to local non-profits, including Davidson Housing Coalition and Davidson Lands Conservancy, and eliminate the town’s annual $15,000 donation to the Charlotte Arts & Science Council. The latter drew criticism from the board. Commissioner Margo Williams and Ms. Wessner argued that skipping the ASC donation this year might send the wrong signal about the town’s support for the arts. After a lengthy discussion, Mr. Brice said it might be possible to reduce the contribution by only 50 percent, to $7,500, (in line with cuts to other nonprofits) and make up for it elsewhere, possibly from the town’s “needs list” of items it wants to fund this year. Board member Laurie Venzon said she would rather see the town use savings (fund balance) to reduce the cut rather than lop items off the needs list.
NEEDS LIST – As he has in previous years, Mr. Brice delivered the board a list of funded (and unfunded) single-year projects that town staff and commissioners have discussed in recent months. This year’s list includes one major expense – $129,000 for additional part-time firefighters to make up for a decline in volunteers. It also includes 2 new police cruisers and money to implement a new town marketing program. (The board on Tuesday deferred a decision on whether to adopt the marketing plan, which was developed by consultants Arnett-Muldrow.)
These needs would be funded in the preliminary budget presented Tuesday:
- Debt service for 2 patrol cars, $22,507
- Additional part time firefighters, $129,000
- Debt service on new dump truck, $11,254
- Air conditioning unit for town hall computer server room, $4,000
- Concrete repairs at fire department entrance, $9,000
- Adding heating at Roosevelt Wilson Park restrooms, $2,000
- Renovate O Henry Street off-leash dog park, $3,000
- Marketing plan implementation, $20,000
- Study downtown parking needs, $15,000
REFORMATTED AND RESTRUCTURED
With the arrival of Mr. Hardy as the town’s first finance director last year, the coming year’s 64-page budget document has a new look: It has been reformatted and reorganized from past years to make it easier to understand. Mr. Hardy also has re-classified a variety of expenses so they make more sense. Among other things, this budget breaks out the town’s spending on social service agencies into a separate category and it lists storm water fees and the new trash pickup fee as separate accounts.
But in outlining the budget Tuesday night, Mr. Brice made it clear that recent and proposed changes in Town Hall are more substantial than just a document reformatting.
He said this year’s budget – and the Town Hall restructuring – reflect both the financial pressures of the weak economy and the troubles at MI-Connection, as well as a desire to re-make town government for different times. For example, he said, the town has shifted staff from planning to economic development in hopes of broadening its tax base.
“Our organization will look different. It started out as a way to just reduce the budget, in response to MI-Connection. It resulted in a new organization that responds to the new world that we’re facing today,” Mr. Brice told the board.
The budget also aims to fulfill the Town Board’s goals for becoming a healthy and fit community, and responds to the new Comprehensive Plan, a sort of town vision for the future that was the result of two years of meetings by citizen subcommittees.
“What we’ve tried to do is respond to the MI-Connection piece and the economy using these two documents (the board goals and Comprehensive Plan) as guideposts,” Mr. Brice said.
“So our response is first of all a reorganization. We went through all of our organization, looked at how the economy had changed the work were were doing, and we … will restructure effective July 1 an organization that responds to the change in work and in compliance with the livability themes and the goals. This budget reflects those reductions in staff and changes in duties,” Mr. Brice said.
Download a copy of the 2010-11 draft budget (PDF), CLICK HERE>
Download pages 59-60 of the budget, which are in larger format, and include current and future organization charts of Town Hall personnel (PDF), CLICK HERE>
TOWN IS HIRING
The Town of Davidson has begun posting new jobs created as part of the reorganization of Town Hall. So far, jobs in accounting and public works have been posted. See the town website for details, www.ci.davidson.nc.us/employment.