Council considers city's annual budget

May 18—LENOIR — Lenoir City Manager Scott Hildebran presented the 2022-2023 fiscal year budget proposal during the Lenoir City Council meeting on Tuesday, May 17 at the current property tax rate. The council was slated to meet again Thursday night to discuss the budget. For more on that meeting, see Saturday's (May 21) edition.

This budget was based on the priorities city council established during the February planning retreat and in the March budget meeting.

The priorities of the council include continuing efforts to offer competitive compensation and benefits for employees; increasing funding and support for minimum housing and code enforcement; and developing strategies to support affordable, workforce, and market-rate housing.

In order to fulfill these goals, the council wants to continue to fund and support the street-paving plan; develop master plans for The Campus, downtown, and Parks and Recreation; and establish a Human Relations Commission to focus on diversity, equity, and inclusion.

Additional priorities include implementing a Wayfinding Plan, including Greenway signage; establish area plans for Whitnel and West End; continue to fund and support technology, cybersecurity, and digital services; share state of the city presentations and re-establish community meetings; and to continue to fund and support Water and Sewer Capital Improvements Plan.

Right now, the general fund balance is $20.3 million and is balanced with the current property tax rate of .57 cents per $100 of assessed property value. The budget maintains the current Rescue Readiness tax rate of .85 cents per $100 for a total tax rate of 57.85 cents per $100. The budget includes a $1 monthly increase in the Solid Waste fee, bringing the total to $11 per month.

Although the recommended budget is 10% above the current adopted budget, the proposed budget closely reflects the actual fiscal year 2020-2021 budget totals.

Nearly 83% of the General Fund's revenue comes from property taxes (45%), sales tax (26%) and franchise tax (12%).

"The remaining 17% comes from state shared revenue, investment earnings, sales, and services," Hildebran said.

The four main general fund expenses are for police ($6.5 million), fire ($4.8 million), recreation ($2.1 million), and public works ($4.6 million).

The city of Lenoir was allocated $3.8 million from the American Rescue Plan (ARP). The proposed budget does not allocate for any of these funds. Staff will present separate capital budget amendments based on the recommended ARP Plan in the new funding year, which will focus on long-term issues such as large capital items and master planning.

The city also received $1.5 million in N.C. State Capital Infrastructure Funds (SCIF), adopted by the N.C. General Assembly. The recommended budget does not include this funding, as it has been allocated under a separate capital project ordinance to improve the greenways and downtown Lenoir.

The proposed Water and Sewer fund budget totals $10.2 million and includes the recently adopted 5% increase in water and sewer rates. The city has traditionally used the annual Consumer Price Index (CPI) — South region for All Urban Consumers as a gauge and guide when considering increases in water and sewer rates. As of February 2022, the CIP was 8.4%. An average monthly water and sewer customer utilizing 5,000 gallons will see an increase of $2.49 per month. Water and sewer tap fees have been adjusted to a rate of cost plus $250 to account for the actual cost of meters or taps and to cover the rising cost of labor and materials.

One major highlight of the proposed budget is employee compensation. City and private sector employers are experiencing workforce challenges in recruitment and retention of employees. City council and management continue to recognize that employees are vital to the delivery of quality municipal services and represent the city's most valuable assets.

"Hopefully, the budget will go back and address those [concerns]," Hildebran said. "As we say every year, our employees are our most valuable asset we have in this city."

Specifically, the budget includes raising minimum annual pay for all full-time positions to $30,000, as well as raising minimum annual pay for a starting police officer to $42,000.

This new pay plan will be effective July 1, 2022.

Street resurfacing is another area of focus. The budget allocates $400,000 to continue implementation of the city's Pavement Study. In addition, the budget includes $100,000 in funding for strategic paving for various council priorities.

The recommended budget appropriates funds for new holiday decorations downtown. The budget allocates funds from the CDBG Capital Project Fund to continue improvements to The Campus at Historic Lenoir High School.

In response to council priorities, the budget increases funding for code enforcement by 66% to $100,000 (excluding personnel costs). This funding will be used for building demolitions, foreclosures, and nuisance enforcement.

In an effort to promote clean energy, the budget funds three hybrid law enforcement patrol vehicles in the coming year to move toward reducing gas emissions, lowering maintenance costs, and improving fuel efficiency. Moreover, the budget funds city-wide building and facilities condition assessments.

The budget funds computer and information technology upgrades throughout the organization to enhance and improve operations and security, and it completes the Advanced Metering Infrastructure Project for the automated meter readers.

"Hopefully, that will be completed in the next several months," said Hildebran.

The city continues to outsource management and oversight of the Federal Phase II Stormwater Program to the Western Piedmont Council of Governments (WPCOG) Stormwater Partnership.

"Our primary goal each and every day is to provide service beyond measure to our citizens," said Hildebran at the conclusion of his presentation. "And finally, come create with us in Lenoir."

City council has a budget work session scheduled this evening, Thursday, May 19 at 6 p.m. on the 3rd floor of City Hall. A public hearing date is set for Tuesday, June 7 at 6 p.m to consider approval of the recommended budget.

View the budget proposal online at www.cityoflenoir.com/budgetproposal.