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Kure Beach Council Hears Budget Presentation For 2014-2015

Managing Editor

KURE BEACH - Good news in Kure Beach, the proposed budget for the 2014-2015 fiscal year includes no property tax or utility fee increases, pay raises for employees and no reduction in services. The Council will hold a public hearing on June 5th at 6:30PM at Town Hall to hear public comment on the proposed budget.
The Town Council heard a presentation from finance officer Arlen Copenhaver at their May 20th, meeting.
Copenhaver explained the proposed fiscal year 2015 Town of Kure Beach Budget is balanced and totals $5,927,598 for all operations.
The budget is spread over the following seven funds: General Fund $3,795,402; Water and Sewer Fund $1,600,156; Storm Water Fund $287,370; Beach Protection Fund $110,000; Powell Bill Fund $62,030; Federal Asset Forfeiture Fund $50,000; and Sewer Expansion Reserve Fund (SERF) $22,640.
Copenhaver said the budget addresses goals set by the Council at a retreat held in January. Those goals include:
1. Complete the existing litigation on the Ocean Front Park.
2. Develop a long-term plan for funding beach nourishment, including three new funding streams independent of property taxes.
3. Review opportunities for dune infiltration systems.
4. Maintain the current tax rate, if possible.
5. Determine the storage and office space needs for the next five years for each Town department.
6. Investigate the “Live-In Program” for the Fire Department.
In his budget message to Council Copenhaver explained, "The tax rate being proposed for fiscal year 2015 is 26.15 cents ($0.2615) per $100 of valuation, which is unchanged from fiscal years 2013 and 2014. Property taxes are the Town’s largest single source of revenue. Fiscal year 2015 property tax revenue is estimated at $2,100,250. This includes both current tax year and prior tax year’s collections and represents 55.3% of the General Fund revenue. The estimated Kure Beach tax base, as provided by the New Hanover County Tax Department, is $812,666,000. This is an increase of $7,266,000 (0.9%) over the prior year estimated tax base. Based on historical data, the property tax collection rate is estimated at 98.75%."
There are no general fund or water and sewer fund fee increases in the proposed budget.
No additional personnel are proposed. Currently the Town employs 40 full time employees.
Copenhaver explained, "This budget includes a proposed merit increase of 3.5% to reward those employees who are performing above expectations. Also, a 1.5% cost of living adjustment (COLA) for all full time employees is included in the fiscal year 2015 budget. The COLA is consistent with the increase implemented by the Social Security Administration in January 2014. The employee benefits are consistent with prior years."
The budget for Town Council related expenses includes compensation for Council members (Mayor - $3,600 annually, Mayor Pro Tem - $2,700 annually, and Commissioners - $2,400 annually), internet service reimbursement of $2,400 (will be at Council members discretion), travel/training of $5,000 and dues/subscriptions of $6,000.
Copenhaver explained, "The aforementioned expenses will be divided equally amongst the General Fund and Water and Sewer Fund. Also, the General Fund Governing Body budget includes funding for the Pleasure Island Chamber of Commerce concert series ($8,800), Kure Beach Christmas Show ($3,300), Katie B. Hines Senior Center ($2,000), Friends of Fort Fisher ($2,000), the Island of Lights ($1,100), The Help Center of Federal Point ($1,000) and the Federal Point Historic Preservation Society ($1,000). Additionally, the General Fund budget includes $4,950 for funding the portion of the Carolina Beach Inlet maintenance dredging requested from the Town."
He explained, "The Town’s total outstanding debt (all funds) is estimated to be $2,815,700 at July 1, 2014. The Local Government Commission (LGC) uses 8% of the assessed value of property subject to taxation as the maximum debt level. The Town’s outstanding debt at July 1 will be approximately 0.35% of the assessed value of property, well within LGC guidelines."
Copenhaver explained one of Council's goals was a live in firefighter program.
He explained, "One of Town Council’s goals for fiscal year 2015 is to investigate the “Live-In Program” for the Fire Department. Basically, this program consists of the Town paying the housing costs for several volunteer firefighters and, in return, they would perform station duty. The housing costs would include the rental of a house and the related utilities. The firefighters living in the home would be required to adhere to the policies established by the Town. This type of program has been successfully implemented throughout the country. The fiscal year 2015 General Fund budget for the Fire Department includes $15,000 for the potential implementation of a “Live-In Program”. Further Town Council and Fire Department investigation and discussion is required prior to actual implementation of such a program."
The General Fund capital outlay totals $79,000, which includes the following:
• $15,000 – Fire Department equipment.
• $64,000 – Replacement of two Police vehicles (will be purchased using installment financing).
Copenhaver explained the fiscal year 2015 budgeted capital outlay is $263,000 (76.9%) less than fiscal year 2014.
The Water and Sewer Fund capital outlay includes potential infrastructure improvement projects totaling $92,206 and the purchase of sewer/storm water equipment totaling $70,000. This equipment will be split between the Water and Sewer Fund and the Storm Water Fund and will be purchased using installment financing. The Storm Water Fund capital outlay also includes $50,827 for potential storm water infrastructure projects.
A contingency of $180,725 (5% of the budget) is included in the General Fund budget for fiscal year 2015. This contingency appropriation is to provide for unanticipated increases in budgetary needs during the course of the year and to be an additional source of funds in the event that the Town must pay all, or a portion, of future beach nourishment costs.
No actual expenditures can be made from the contingency appropriation. Funds must first be moved from the contingency appropriation to a department or function and then expended. This movement of funds shall be authorized by resolution of the governing body and will be deemed an amendment to the budget ordinance.
Funding for future beach nourishment projects has long been a concern as it becomes more difficult to rely upon federal funding.
Copenhaver explained, "The Beach Protection Fund was established as part of the fiscal year 2014 Kure Beach Budget Ordinance. It was established as a reserve fund for future beach nourishment expenses, as well as other beach related expenditures including, but not limited to, beach access improvements/repairs, dune maintenance, dune plantings, beach protection signage, dune infiltration systems, etc. The uncertainties surrounding state and federal funding of future beach nourishment projects was the driving force behind the establishment of this fund. For fiscal year 2015, the revenue source for the Beach Protection Fund will be a transfer of $110,000 from the General Fund. In fiscal year 2014, $96,000 was transferred from the General Fund."
Copenhaver explained, "The fiscal year 2015 Town of Kure Beach Budget reflects a thorough review of Town expenditures and conservative, but reasonable, estimation of revenues. As discussed during the annual retreats in 2012, 2013 and 2014, during this budget process and as reported in the news media, the need to increase reserves in anticipation of future beach nourishment costs remains a very significant concern for Kure Beach, as well as other North Carolina beach towns. The availability of future federal and state funds for beach projects continues to be uncertain."
He explained, "As a result, Kure Beach’s share of future tri-annual beach nourishment projects could be in excess of $1.2 million. This budget includes a process to continue to build reserves for future beach nourishment needs. The Beach Protection Fund serves as a reserve fund to accumulate funds for future beach related needs, the most significant being beach nourishment. A transfer of $110,000 from the General Fund to the Beach Protection Fund is included in this budget, while fiscal year 2014 included a transfer of $96,000. Also, all or a portion of the General Fund contingency, totaling $180,725, may be available to further strengthen the Beach Protection Fund depending on the extent of contingency usage during the fiscal year. Additionally, in order to build the Beach Protection Fund to the level estimated for future projects, additional funding sources will need to be identified. In regard to the Water and Sewer Fund and Storm Water Fund, they continue to address the day-to-day operations of these activities and are providing a reasonable level of reserve strengthening for future infrastructure projects. However, if usage within the Water and Sewer Fund remains at the forecasted lower levels, rates will need to be evaluated in future budget cycles."
He explained, "In conclusion, I believe the proposed fiscal year 2015 Kure Beach Budget supports the goals established by Town Council, reflects the Council’s service priorities and is responsive to the Town’s needs. I would like to express my appreciation to all Department Heads, as well as all Town employees, who participated in the development of the fiscal year 2015 budget."
The budget must be adopted by June 30th and begins July 1st.