TOWN OF LILLINGTON June 13, 2017 Mayor Glenn McFadden Mayor Pro Tempore Judy Breeden Commissioner Rupert Langdon Commissioner Dianne Johnson Commissioner Marshall Page Commissioner Paul Phillips FISCAL YEAR (FY) 2017-2018 BUDGET MESSAGE Honorable Mayor and Board of Commissioners: Submitted for your consideration is the proposed budget for the fiscal year beginning July 1, 2017. This budget has been prepared in accordance with the North Carolina Local Government Budget and Fiscal Control Act (G.S. 159-8(a)). The budget is balanced and identifies all revenue and expenditure estimates for Fiscal Year (FY) 2017-2018 per G.S. 159-8(b). ORGANIZATIONAL GOALS The FY2015-16 Audit reported an unassigned, general fund balance of $2,725,150 or 82.7% of total general fund expenditures for the fiscal year. The Enterprise (Water & Sewer) Fund had a negative ending balance of $70,316 for FY2015-16. The total, financial reserve balance for the Enterprise Fund was $1,033,807 which represents approximately 55.7% of total enterprise fund expenditures for the fiscal year. The Town of Lillington continues to demonstrate strong fiscal management and oversight. The current year s fiscal statements indicate strong positive equity for the General, Enterprise and Powell Bill Funds. Staff is confident that the FY2016-17 Audit will demonstrate the town s historical adherence to fiscal responsibility. Staff continues to work through the budget development process with a focus on providing high quality services in an efficient manner, while working within the limits of our existing revenue sources. Staff was able to effectively meet the organizational goals identified by the Town Board during their 2016 Planning Retreat. Ninety-seven (97%) percent of the elected official s goals were completed or are in the process of completion. The annual retreat serves as the Phone: (910) 893-2654 Fax (910) 893-3693 www.lillingtonnc.com
Town of Lillington 2 primary tool for establishing organizational priorities for the upcoming year. Staff utilizes the annual budget to effectively ensure that these goals are met. In FY2017, the Town Board remained consistent from previous years in their priorities for General Fund services. These general fund priorities include: 1. Increased recreational & leisure opportunities, 2. strengthening downtown for commercial growth, 3. commitment to facility development to ensure quality town services and 4. improving development-related regulations to meet anticipated growth. The Town of Lillington approved the new Unified Development Ordinance (UDO) in February 2017, comprising the first comprehensive update and amendment of the Lillington Zoning & Subdivision Ordinance in nearly fifteen years. The UDO implements the Town s Land Use Plan and Comprehensive Parks Master Plan; makes the regulations easier to understand, administer and enforce; addresses the Town s current and future needs; promotes best development practices; brings the ordinance into conformance with the most current North Carolina General Statues; updates and revises zoning districts and land uses and provides opportunities to accommodate mixed-use developments. Lillington approved the design of Phase I of the River Park Project and is currently selecting a contractor. Construction is anticipated to begin during the first quarter of FY2017-2018. The River Park was made possible with the award of a N.C. Parks & Recreation Trust Fund Grant (PARTF) in FY2015-16 of $250,000 with matching funds provided by the Town. The park is located along the Cape Fear River on East Duncan Street, and Phase I is approximately four acres and includes parking area, picnic shelter with restrooms and walking trails. The Board of Commissioners approved the purchase of property located at 420 McKinney Parkway. The property includes two buildings to include office space for Administration, warehouse space for the Public Works Department, and an additional fire station for the Lillington Fire Department. The property purchase was $1,512,500. The additional fire station is crucial for the Town and will provide a fire presence on the north side of the river. Lillington, along with Harnett County Economic Development and the other county municipalities, entered into an agreement with the Development Finance Initiative (DFI) with the UNC-School of Government on October 22, 2015. The DFI provided a comprehensive assessment of each town s downtown district. Lillington s DFI was presented by the Harnett County Economic Development Director at a monthly meeting of the Board of Commissioners. The Town specific DFI indicates expected household growth in Lillington and cites the expectation of growing market segments being drawn to downtown amenities. As in previous years, the major emphasis of this budget is to maintain current service levels and explore any options for reducing current expenditures. Town staff will maintain our
Town of Lillington 3 commitment to being conservative in our revenue projections and prudent in use of town funds. It is extremely important that Lillington does everything possible to develop and maintain a strong financial position in the management of daily operations and in capital improvements that the Town Board chooses to implement. REVENUE SUMMARY Town staff is not recommending an increase to the ad valorem (property) tax rate for FY2017-18. The property tax levy, based on a tax rate of $0.52 per $100 dollars assessed, generates approximately $1,571,500 based on a total property valuation of $304,188,994. It is important to note that our property tax levy includes fire protection services in Lillington, which is in contrast to all other Harnett County municipalities. All other municipal jurisdictions in our county have a separate fire district tax in addition to the property tax. According to NCGS 159-11(e) each year in which a general reappraisal of real property has been conducted, the proposed budget message is required to include, for comparison purposes, a statement of the revenue-neutral property tax rate. The revenue-neutral property tax rate uses the formula set out in the General Statutes that calculates a rate of growth factor equal to the average annual percentage increase in tax base due to improvements since the last general reappraisal. The revenue-neutral tax rate for the Town of Lillington is 53.19 cents. Lillington will continue to provide contracted fire protection and first responder services to the Flatwoods Rural Fire District in FY2017-2018. The property tax levy, based on a tax rate of $0.12 per $100 dollars assessed, generates approximately $72,000 based on a total property valuation of $61,236,695. This tax rate remains unchanged from the three, previous fiscal years. Other revenue resources from the contract will yield an estimated $43,400. Staff is recommending a 2.1% increase to the solid waste collection rate. The rate recommendation is based on an increase in the cost of the contract provided by Waste Industries, Inc. The current rate is $14.68 per customer, per month for curbside garbage and recycling collection. The new rate will be $14.99. Lillington will continue to provide weekly, curbside garbage and recycling collection. This rate also includes the town s bulk and yard collection service. Staff is recommending an increase of 26 cents of the base rate and 13 cents of the variable rate for all water services in FY2017-18. Staff is also recommending an increase of 30 cents of the base rate and 15 cents of the variable rate for all sewer services for FY2017-18. The rate recommendation is based upon an increase cost from Harnett County Department of Public Utilities of bulk water and bulk sewer.
Town of Lillington 4 The FY2017-18 utility rates will generate approximately $810,000 in water revenues and $820,000 in sewer revenues. The total estimated revenues, including all other revenue sources, are $1,705,500 for the upcoming fiscal year. Staff will continue to utilize a comprehensive fee schedule for all town services in FY2017-18. A comprehensive fee schedule was introduced in FY2012-13 and has been an effective tool for customers to centrally access all town-related fees. No major changes to the fee schedule are recommended for the upcoming fiscal year. EXPENDITURE SUMMARY PERSONNEL The FY2017-18 Budget creates a Police Officer I position through the N.C. Governor s Highway Safety Program. This position will assist in meeting the growing needs of the Lillington Police Department. $23,012 is recommended for a 2% Cost of Living Adjustments (COLA) for all employees. The budget recommends an additional $8,223 for the reclassification of four (4) officers for the Lillington Police Department. The employer contribution retirement rates were 7.25% for general employees and 8% for police officers in FY2016-17. These rates will be 7.55% and 8.25% for police officers in the upcoming fiscal year. Employee healthcare costs were $506.49 per month, per employee in FY2016-17. The new rate is $524.42 in FY2017-18, an increase of 3.42%. Each employee will also receive a monthly dental and vision coverage at a rate of $36.46. This year s health plan includes the continuation of a Health Reimbursement Account (HRA) in which the employee deductible is $750. The Town of Lillington covers the remaining balance of $1,250 on the $2,000 deductible. Lillington will continue to offer medical flexible spending and dependent care services in FY2017-18. NEW PROJECTS The FY2017-18 General Fund Budget creates $50,500 for completion of a Police Department Firing Range. It also allocates $29,000 for a new patrol car. $36,000 is dedicated to the restoration of an antique fire truck. $16,000 is budgeted for water rescue boats for the Lillington Fire Department. The FY2017-18 Enterprise Fund Budget creates $25,000 for Capital Improvements. $28,000 will fund the short-lived assets program. $16,000 is budgeted for system maintenance to address I&I problems in the sewer system.
Town of Lillington 5 The FY2016-17 Powell Bill Budget allocates $120,000 for the repaving of South 1 st and South 8 th Streets. $35,000 is allocated for sidewalks repairs on South 8 th Street and $70,000 is allocated for storm drainage and parking on South 1 st Street. DEBT SERVICE Lillington has the following annual principal and interest requirements for debt service per the Local Government Commission for the upcoming fiscal year: General Fund Debt Service Loan Name FY2017-18 Payment Due Date Completion Year Community Center $72,917.00 02/10/2018 2042 Air Packs $30,588.20 05/13/2018 2026 Patrol Car $6,222.41 03/14/2018 2018 420 McKinney Property TBD TBD Estimated 2057 Poles/Lighting/Wiring TBD TBD Estimated 2020 Water/Sewer Fund Debt Service Loan Name FY2017-18 Payment Due Date Completion Year Bruce Johnson - Waste Water Line $12,855.72 11/21/2017 2017 Mini-Exc. & Dump Truck McKinney Lift Station Rehabilitation $18,366.52 03/14/2018 2023 $27,108.42 09/01/2017 2026 SUMMARY The Town of Lillington was productive and made significant accomplishments toward several projects while maintaining fiscal responsibility during FY2016-17. As in previous years, the town s current needs are similar to those of other small, rural North Carolina jurisdictions. Lillington is fortunate to enjoy a rapidly developing medical corridor along US 401 between Lillington and Buies Creek. The corridor, in conjunction with Campbell University, continues to
Town of Lillington 6 be strong and unique assets to the residents of Lillington and central Harnett County. The rapid development of southern Wake County will greatly impact our region in the future as well. The Town Board and staff continue to dedicate significant resources to strengthening Lillington s regulatory environment. Our governing regulations are proactively reviewed and revised in order to ensure that all future stakeholders will increase the quality of life in Harnett County. Land use and development activity has expanded during the third and fourth quarters of FY2016-2017, in both residential and commercial projects. The Vandercroft Farms Subdivision continues to develop rapidly and is nearly complete, and building has begun in three subdivisions that had been dormant for several years. These include Emilie s Crossing, Spring Hill and Falls of the Cape Phase I. The Universal Healthcare Nursing Home expansion project was completed in FY2016-2017, Kidzcare Pediatrics has begun construction on a new building on South Main Street, and overall interest in developing land in Lillington is on the rise. New development is crucial to strengthen the availability of housing and amenities for Lillington, as well as generate property tax revenues in future years. The FY2017-18 Town of Lillington Budget provides the financial resources to continue to facilitate positive change in greater Lillington. It maintains current service levels while providing the funding necessary to invest in recreational amenities, downtown and our enterprise operations. This budget attempts to hold down expenditures wherever possible but at the same time recognizes the needs of our community. Respectfully submitted, Lisa B. Young, Interim Town Manager