HARRISBURG – Harrisburg Town Manager Haynes Brigman presented the $74,419,452 2021 fiscal year budget to the town council at last week’s meeting.
The budget encompasses revenue needed for the general fund, water and sewer fund, storm water fund, capital reserve funds and capital project. The budget is based on a $0.3550 per $100 valuation tax rate, which is the same as the town’s current rate.
About 53.4% of the general fund revenue will come from the ad valorem taxes. Cabarrus County conducted a revaluation this year for real property values. The revaluation showed an increase in those values.
The results of the Cabarrus County Tax Revaluation showed a 19.61% increase in the town’s tax base. Of that growth, 5.05% of it is due to actual growth within the town over the past year.
As for the total proposed general fund expenditures for the 2021 fiscal year, there was about a $2 million dollar increase from the last fiscal year. The expenditures are projected at $17,627,900, which is an 11.61% increase from the previous budget.
The largest portion of the expenditures comes from personal services. These expenditures include all compensation and the corresponding staff benefits. An estimated 4% merit increase across the entire employee base was included, which amounts to about $225,000 for total salaries and benefits.
This budget also includes a state-mandated increase in employer pension contributions from 8.95% to 10.15% of salaries. This results in an increase $60,000. A 10% increase in health insurance premiums accounts for approximately $72,000 in increased expense to the town.
This budget also allowed for some personnel additions, including a help desk technician, three fire fighters or EMT workers and seasonal field monitors.
The budget also includes two new positions within the law enforcement division through the town’s contract with the Cabarrus County Sheriff’s Department.
For the proprietary funds, the total proposed water and sewer fund budget is $10,541,550, a 15.8% decrease from the previous budget.
The town will see a 4% increase in water purchase rates from the City of Concord and a 2.4% increase in wastewater treatment costs with the Water and Sewer Authority of Cabarrus County. These two increases amount to an average increase of $124,000 annually that has been absorbed by the town and will not be passed along to customers.
The proposed budget was also adjusted for the financial impacts of the COVID-19 crisis.
The revenue losses due to COVID-19 are estimated at more than $637,000 and represent almost 4% of the total revenue in the general fund.
The losses are predicted to be seen in the ad valorem tax collection, motor vehicle tax collection, sales tax collection, interest income on investments, and other revenue sources.
Because of these financial impacts, Brigman said, town staff did not recommend to lower the tax rate to the revenue neutral rate of $0.3120 per $100 valuation.
Without the COVID-19 impact, the town could have lowered the tax rate. But due to the predicted losses, Brigman said, the impacts of that decision would be catastrophic to the town’s short-term and long-term financial health.
If the town considered the revenue neutral tax rate, any new budget requests for the next ten years and beyond would have to be postponed. Plus there would be a $250,000-$300,000 in annual operating cuts to the current budget year after year for the next ten years.
These cuts would likely mean reduced service delivery, significant personnel cuts in large departments and weakened financial stability for the town, Brigman said.