City of Mebane considering $31 million budget for 2020-21

During May's virtual City Council meeting, City Manager David Cheek presented to the elected officials the town's proposed 2020-21 fiscal year budget. Due to the COVID-19 pandemic, Mebane is calling for a conservative budget of approximately $31 million that would not include any utility or sales tax increases, but would dip a little into the town's fund balance. The City's 2020-21 fiscal year budget will be adopted following a June 1 public hearing

With stay-at-home orders still in place through much of the early part of May, Mebane’s City Council held a virtual meeting this month. In the virtual session, Mebane City Manager David Cheek presented Mebane’s proposed 2020-21 fiscal year budget. The proposed budget called for $22.36 million in General Fund spending and $8.7 million in Utility Fund spending for a total of just over $31 million. 

“The thing this year is “Staying Positively Charming - a Coronavirus Challenge,”” Cheek said to the elected officials, members of the media and general public who watched in on the meeting.  

The City’s proposed 2020-21 budget projects approximately $18.25 million in total revenues - a slight decrease from the $18.54 million in revenues as part of Mebane’s 2019-20 adopted budget. The town is anticipating having to dip into its General Fund balance approximately $1.5 million to meet its various fiscal needs, as the City anticipates approximately $1.17 million in additional spending year-over-year. 

Mebane is factoring the budget shortfall of approximately $259,950 into this year’s planning, which projects a 9.2 percent cut from the 2020 City budget. The proposed budget would take Mebane’s General Fund’s balance from $13 million to $10.8 million - a drop of approximately $2.174 million year over year. Although that marks an approximate 15 percent reduction of the town’s General Fund reserves, the city’s strong fiscal planning over the years has prepared them well for this rainy day situation. 

“This has been a very unusual year,” City Manager Cheek explained. “And one of the things we did as a staff, and I did as City Manager, is try to think about how to go about budgeting during a crisis that you don’t know when it is going to end. You don’t know when you will be coming out of it - how you’ll be coming out of it. How swiftly you may be coming out of it. And what the economy may be when you get out of it.” 

Cheek indicated that the proposed budget was based on five core principles - Conservative Budget, Continue Projects, Care for Employees, Citizens in Mind, and Concern for Safety. He went into more detail about all five core principles. 

“We decided this should be a very conservative budget. I think the reasons are obvious,” he said. “We wanted to be flexible later in the year, when we have more information related to the coronavirus, and coming out of the stay-at-home ordinances, and when we can get out of the social distancing.” 

The design of the MACC-Holt Street Greenway is complete, and Mebane is currently in the process of obtaining permits and easements. The City expects to bid this project before the end of the fiscal year, and the $1.22 million project, which has thus far been funded by the City’s cash, will require a bank loan of approximately $784,070 to complete. Impact Alamance is donating another $250,000 to the project. The budget is proposing to allocate an additional $375,000 for the Cates Farm Park, which would allow for an accessible gravel road, as well as a paved parking lot at the playground and shelter. 

“We felt we needed to try to continue projects that we’ve had in process,” Cheek continued. “One is the Greenway project, as well as Cates Farm. We wanted to continue that budgeting, and those projects are in there. Both projects are at points that they can be delayed if necessary. But both are also ready to go.” 

Mebane’s employees are being taken care of, as none of the town’s full-time staff will lose their health insurance benefits during the ongoing pandemic. 

“We wanted to think about our employees during this budget,” the City Manager added. “Mebane has got a history of thinking about and caring for its employees. We kept our health insurance at the same levels. And just their safety, too. We’re trying to keep plenty of personal protective equipment on board, and when we do start operating again, we’re thinking with COVID-19 hygiene in mind.”

“We want to keep the citizens in mind,” Cheek continued. “A lot of our citizens are going through really difficult times. Small businesses are closed, or they’re struggling, or revenues are down. People are unemployed. So we wanted to keep them in mind as we put together this budget There’s a big concern for safety. A couple of the bigger projects are safety issues that we really wanted to take care of this year, because we’ve been putting them off for some time.” 

On the Utility Fund side, Mebane anticipates a 2.3 reduction in sales and services revenues year-over-year, but significant decreases in system development and intergovernmental fees means that the City is projected to see a 3.2 percent increase to approximately $7.22 million in Utility Fund revenues. The City Manager indicated the need for Mebane to increase its utility fees, but to delay such an increase until January 2021 due to the current crisis. Mebane's projected budgeted Utility Fund spending of $8.751 million marks a 6.2 percent reduction year-over-year. 

According to Cheek, Mebane was tabbed as the sixth-fastest growing city in North Carolina percentage-wise this past year. This has aided considerably in Mebane’s fiscal strength, as additional homes and businesses translate to additional property tax and sales tax revenues. 

“We’re still growing rapidly. The population is growing. Right now we think we’re at close to 18,000 people in 2020,” Cheek said. “The current census says we’re at about 15,000, but we think they’re low. We’re eager to see the census numbers later this year. We’re still growing at about 1,000 residents per year - approximately 5 percent per year. That’s very healthy population growth. And at this rate, we’ll be at 30,000 in 2030. It will be a very different town in ten years than we are right now - just like we’re a very different city than we were back in 2010.”