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Midland budget

Fiscal Year 2010-2011
Budget Document

DATE: June 8, 2010
TO: The Honorable Madam Mayor Kathy Kitts,
Members of the Midland Town Council
FROM: Don McSheehan, Budget Officer
RE: FY 2010-2011 Annual Budget
Pursuant to the North Carolina Local Budget and Fiscal Control Act §159-11 of the North
Carolina General Statues, I respectfully present the Fiscal Year (FY) 2010-2011 Budget for your
review and consideration. The following message summarizes and highlights the significant
elements of the budget, particularly in those areas where there are notable changes from the FY
2009-2010 budget.
The Town’s revenue forecasting philosophy has always been conservative and will continue for
this fiscal year, especially due to the uncertainty of local, state, and economic trends. The Town
identifies many factors (population, property values, development, and the economy) when
calculating revenues and expenditures that contribute to changes.
General Fund
The FY 2010-2011 budget is presented with a tax rate of $0.15 per $100 of assessed valuation.
This is an increase of $0.01 from the past two fiscal years. When Town of Midland incorporated
in 2000, the initial property tax rate was $.15. This rate was maintained through FY 2007-2008,
at which time the Town decreased the property tax rate $.01 as a result of Cabarrus County’s
property revaluation. At $0.15, Midland continues to have the lowest combined property and
fire tax rate in Cabarrus County.
The FY 2010-2011 General Fund revenues are estimated at $1,155,767 compared to the 2009-
2010 budget of $903,460. (The FY 2009-2010 figure excludes pass-through revenue from City
of Monroe to obtain gas line rights-of way.) The town’s largest sources of revenue are ad
valorem property taxes, sales taxes, utility franchise tax, and City of Monroe gas pipeline
revenue.
As provided to us by Cabarrus County, the total assessed value of property located in the Town
of Midland is $361,936,000. The ad valorem tax rate of $0.15 per $100 of assessed valuation, at
a collection rate of 97%, is projected to be $526,617.
Overall, the statewide local sales tax revenue is expected to grow 1.0-2.0% in FY 2010-2011.
However, due to an estimated 5.0-7.0% decrease in FY 2009-2010 revenues, the 2010-2011
projected sales tax revenue of $128,000 is 3-4% less than 2009-2010 estimated revenues.
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The State levies a franchise tax on total gross receipts of various utilities. Each Town’s share of
utility franchise tax is based on actual receipts from electric and telephone services within their
municipal boundaries during the fiscal year. The amount is also affected by the weather
conditions (colder winters or hotter summers). Due to conservative prior year franchise tax
estimates, we project a 6% increase to $128,000 for FY 2010-2011.
On March 1, 2010, Town of Midland began offering planning services at Town Hall. I am
pleased to say this move will be financially beneficial to the Town. Through various planning
fees (permits, review, and administration), we project $33,000 in new planning revenues for FY
2010-2011. This will assist in implementing basic planning services and the Planning and
Zoning Program of work, as explained in the “Fund Balance” section below.
Expenditures
General Fund expenditures consist primarily of salaries, contracted services, and other operating
expenses. Other operating expenditures consist primarily of rent, advertising, dues, and traffic
control at Bethel Elementary School by Cabarrus County Sheriff’s Deputies during student dropoff
and pick-up times. Descriptions of employee salaries and provided services are described
below:
Administration & Personnel: The FY 2010-2011 budget includes funding for one additional full
time position (Town Administrator) and one additional part-time position (Planning Clerk).
Salaries, taxes and benefits are $128,881.
Planning & Zoning: On March 1, 2010, Town of Midland took over Planning and Zoning.
Planning services include Planning, Zoning, and Subdivision Administration; Code
Administration; and Public Works Administration. These services are budgeted at $70,000 for
FY 2010-2011.
Sanitation Services: Midland continues to contract with Republic Services, Inc. (formally Allied
Waste Services, Inc.) for roadside garbage and recycling pick-up. Estimated cost for these
services is $226,753 – a decrease of approximately 1% from FY 2009-2010.
Fire Protection: Midland’s Town Limits are primarily serviced by Midland Volunteer Fire &
Rescue, Inc. with Flowes Store Volunteer Fire Department covering the remaining area. Fire
protection is budgeted at $198,645.
Other Professional Fees: The Town of Midland is budgeting $25,000 for basic legal services and
$5,000 for basic engineering services.
Fund Balance
On June 30, 2009, the Town’s General Fund Balance was $1,967,929 of which $1,773,800 is
unreserved and available for Town Council to appropriate as needed.
A Town’s General Fund Balance is the equivalent to a “savings account”. Typically, especially
in a recession, municipalities will use their Fund Balance to balance the budget when estimated
expenditures are greater than projected revenues. The North Carolina Local Government
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Commission (LGC) recommends, as a “best practice”, using Fund Balance for “special” or “onetime”
items. As a result of the anticipated legal expenditures and planning and zoning
expenditures described below, Town of Midland has appropriated $185,000 from fund balance
for FY 2010-2011.
Legal: Over the past year, Town of Midland has taken steps toward future growth with a
Resolution for Consideration of Annexation and a request to Cabarrus County for an Extra
Territorial Jurisdiction (ETJ). To ensure proper annexation practices, the Town will require
strong legal expertise. As a result, Midland is preparing for any legal challenges ahead. For
these reasons, $75,000 was budgeted for “one-time” legal services under professional fees.
Planning & Zoning: In addition to daily Planning Services, Town of Midland is initiating a
progressive FY 2010-2011 Planning & Zoning Program of Work and has budgeted $150,000 for
this “one-time” project. The program is based on the approved Land Use Plan and will direct the
Planning & Zoning staff to administer a development plan for the Southeastern Quadrant, work
with the Planning & Zoning Board toward a Midland Development Ordinance (MDO), and begin
a master planning process that includes transportation, utilities, recreation, and land
conservation.
Powell Bill Funds & Expenditures
The FY 2010-2011 budget reflects an anticipated 5% increase in Powell Bill revenue compared
to FY 2009-2010 estimates. Powell Bill distribution is based largely on the volume of motor fuel
taxed by the State and on the value of vehicles purchased and titled in North Carolina. Due to
the recession, however, anticipated Powell Bill Funds are still budgeted conservatively in FY
2010-2011 at $63,000.
Pursuant to G.S. 136-41.1 through 136-41.4, Powell Bill funds shall be expended only for the
purposes of maintaining, repairing, constructing, reconstructing or widening of local streets that
are the responsibility of the municipality or for planning, construction, and maintenance of
bikeways or sidewalks along public streets and highways. Town of Midland has budgeted
$60,000 of Powell Bill funds for street resurfacing in FY 2010-2011. The remaining $8,287 is
for supplies, storm damage, and maintenance.
Utility Capital Reserve Fund
Estimated revenue from City of Monroe gas pipeline is projected at $125,000. This revenue is
earmarked for utility capital improvement projects for the Town of Midland. In addition, in May
2010 Midland Town Council appropriated $500,000 for the Utility Capital Reserve Fund.
The Utility Capital Reserve Fund will be used for utility like-costs including engineering, grantwriting,
and infrastructure.
Summary
The Public Hearing for the FY 2010-2011 budget has been set for Tuesday, June 8, 2010 at
7:00pm at Midland Town Hall.
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I thank the Budget Committee, Finance Director, and Town Administrator for assisting me in
preparing this budget and am pleased to present the FY 2010-2011 budget to the Mayor and
Council of the Town of Midland.
Respectfully submitted,
Don McSheehan
Don McSheehan
Budget Officer
Town of Midland
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FY 2010-2011 General Fund
Revenue Summary
General Government
Real Property Taxes ($0.15) $ 486,979
Vehicle Property Taxes ($0.15) 39,638
Sales Taxes 128,000
Gas Pipeline Revenue 125,000
Alcohol Beverage Tax 12,000
Solid Waste Disposal Tax 2,300
Refunds/Other 350
Franchise Taxes 128,000
Permit/Zoning Fees 33,000
Fund Balance Appropriation 185,000
Investment Income 5,500
Total $ 1,155,767
Real Property Taxes
($0.15)
42%
Vehicle Property
Taxes ($0.15)
4%
Sales Taxes
11%
Gas Pipeline Revenue
11%
Alcohol
Beverage
Tax
1%
Solid Waste
Disposal Tax
0%
Refunds/Other
0%
Franchise Taxes
11%
Permit/Zoning Fees
3%
Fund Balance
Appropriation
16% Investment
Income
1%
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FY 2010-2011 General Fund
Expenditure Summary
General Fund Expenditures
General Government Expenditures $ 522,869
Public Safety Expenditures 211,145
Sanitation Expenditures 226,753
P&Z Expenditures 70,000
Utility CIP 125,000
Total $ 1,155,767
General Gov’t
Expenditures
45%
Public Safety
Expenditures
18%
Sanitation
Expenditures
20%
P&Z
Expenditures
6%
Utility CIP
11%
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FY 2010-2011 General Fund
Expenditure Summary Line Items
General Government Budget Notes
Salaries $ 100,770
Payroll Taxes 7,709 $100,770 x 7.65%
Employee Benefits 20,402
Insurance 6,713
Tax Collection Fees 7,899 $526,617 x 1.5%
Professional Fees
Engineering 5,000
Legal 100,000
Other 150,000
Audit Fees 8,000 Per Potter & Co.
Dues 11,876 a)
Supplies/Office 10,000
Advertising/Public Relations 11,000 b)
Training 5,000
Lease Expense-Copier 3,200
Telephone/Internet 3,700
Misc. Operating Expenses 15,168 Includes $10,000 earmarked for 10 year
anniversary
Janitorial Services 2,160 $180/month
Rent Expense 39,972 c)
Grants/Contributions 5,000 d)
Travel/Mileage Expense 3,000
Street Sign Replacement 1,300
Capital Outlay 5,000
Total General Government 522,869
Public Safety
Fire Protection 198,645
Traffic Control-Bethel School 12,500
Total Public Safety 211,145
Sanitation
Total Sanitation 226,753
Planning and Zoning
Total P&Z 70,000
Reserves
Utility CIP 125,000 From gas pipeline revenue
Total Capital Reserve 125,000
Total Expenses-General Fund $ 1,155,767
“One-time” Expenditures
Projected legal expenses $ 75,000 75,00075,000
Additional P&Z projects 150,000
Total “One-time”
Expenditures $ 225,000
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FY 2010-2011 General Fund
Notes for Expenditure Line Items
a) Dues
Institute of Government
330
NCLeagues of Municipalities
3,099
Chamber of Commerce
1,500
MPO
575
EDC
5,000
Int’l Institute of Municipal Clerks
100
NC Assn of Municipal Clerks
50
Centralina Council of Government
780
COG RPA Contingency Fund
100
International City/County Management Assn.
280
NC City/County Manager’s Assn.
62
$11,876
b) Advertising/Public Relations
Website fee
2,694
Gen advertising/newsletter
7,000
Land use plan advertising
1,000
Legal notices
1,000
$10,694
c) Rent
Town Hall ($3,256/mo)
39,072
Storage unit for radar speed sign
900
$39,972
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d) Grants/Contributions
Cabarrus County Arts Council
1,500
Uncommitted
3,500
$5,000
e) Capital Outlay
Uncommitted
5,000
$5,000
f) Fire Protection
Contract w/ Midland VFD
196,078
Contract w/ Flowes Store VFD
2,313
Flowes Store VFD Assumption of Debt
254
$198,645
g) Sanitation
Garbage Collection
171,564
Recycling Service
55,189
$226,753
h) Planning/Zoning
Contracted Services @ $935.24/every 2 wks
24,316
Inspections, etc.
9,184
Public Works Administration
20,000
Code Administration @ 6 hours per week
16,500
$70,000
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FY 2010-2011 General Fund
Fund Balance
***Note: For written explanation, please see “Fund Balance” Section (page 4-5) under Budget Message.
General Fund Balance
Utility Capital Reserve Fund (est. May 11, 2010) $ 500,000
FY 2010-2011 “One-time” Expenditures 185,000
Unappropriated 1,282,929
Total $ 1 ,967,929
Utility Captial
Reserve Fund (est.
May 11, 2010)
26%
FY 2010-2011 “Onetime”
Expenditures
9%
Unappropriated
65%
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FY 2010-2011 Powell Bill
Revenue Summary
Powell Bill Revenues
Powell Bill
$
63,000
Powell Bill Sales Tax Refund 987
Powell Bill Investment Income 4,300
Total
$
68,287
Powell Bill
92%
Powell Bill Sales
Tax Refund
2%
Powell Bill
Investment
Income
6%
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FY 2010-2011 Powell Bill
Expenditure Summary
Powell Bill Expenditures
Maintenance
$
2,500
Storm Damage 2,000
Supplies 1,000
Street Paving/Repair 60,000
Undesignated 2,787
Total $ $68,287
Maintenance
4%
Storm Damage
3%
Supplies
1%
Street
Paving/Repair
88%
Undesignated
4%
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FY 2010-2011 Budget Ordinance
BE IT ORDAINED by the Governing Board of the Town of Midland, North Carolina:
Section 1
The following amounts are hereby appropriated in the General Fund for the operation of the
Town Government and its activities for the fiscal year beginning July 1, 2010 and ending June
30, 2011.
General Government $ 522,869
Public Safety 211,145
Sanitation 226,753
Planning & Zoning 70,000
Capital Reserve 125,000
Streets 68,287
$ 1,224,054
Section 2
It is estimated that the following revenues will be available in the General Fund for the fiscal
year beginning July 1, 2010 and ending June 30, 2011:
Real Property Taxes $ 486,979
Vehicle Property Taxes 39,638
Sales Taxes 128,000
Franchise Taxes 128,000
Alcohol Beverage Tax 12,000
Solid Waste Disposal Tax 2,300
Permit & Zoning Fees 33,000
Miscellaneous 350
Gas Pipeline Revenue 125,000
Fund Balance Appropriation 185,000
Investment Earnings 15,500
Powell Bill 68,287
$ 1,224,054
Section 3
There is hereby levied a tax at the rate of fifteen cents ($.15) per one hundred dollars ($100)
valuation of property as listed for taxes as of January 1, 2010, for the purpose of raising the
revenue listed “Property Taxes” in the General Fund in Section 2 of the ordinance.
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This rate is based on a total valuation of property for the purposes of taxation of $361,936,000
and an estimated collection rate of 97%.
Section 4
The Budget Officer is hereby authorized to transfer appropriations as contained herein under the
following conditions:
a. He/she may transfer amounts between line item expenditures within a department without
limitation and without a report being required. These changes should not result in
increases in recurring obligations such as salaries.
b. He/she may not transfer any amounts between funds, except as approved by the
Governing Board in the Budget Ordinance as amended.
Section 5
Copies of this Budget Ordinance shall be furnished to the Clerk to the Governing Board and the
Budget Officer and Finance Director to be kept on file by them for their direction in the
disbursement of funds.