UPDATED STORY, ORIGINALLY POSTED MAY 17:
The Mebane City Council approved the City Manager’s 2022 fiscal year budget during the Monday, June 7, meeting. The budget calls for a 10 percent sewer and water rate increase, effective July 1, 2021.
Additionally, plans for adding a sidewalk, which was slated to run through the 500-block of South Fourth Street, was removed from the budget after the city learned residents were strongly opposed to the project.
“We have several projects every year as part of the sidewalk construction projects that we were talking about, it was on [South] Fourth Street,” City Manager Chris Rollins said. “We've heard from staff that we had strong support from the neighborhood for that project – it turns out the exact opposite was true, we had very little support.”
Rollins recommended the council remove the sidewalk project from the budget, and reallocate the funds into some other venture.
Linda Wright spoke on behalf of the residents of 500-block of South Fourth Street, pointing out the neighborhood has an older population with a close-knit community.
“On Saturday, May 29, the residents of this block received a letter from a neighbor, indicating the city was planning to put a sidewalk along the street,” Wright said. “It was to be placed in the street right away, which had been maintained by the homeowners, not the city for as long as I could remember.”
Wright said residents weren’t contact about the sidewalk in person prior to Monday’s meeting, when the sidewalk project was on the agenda. Wright went on to list the negative effects a sidewalk would have on the neighborhood.
“We feel there is no need for the sidewalk, that it will serve no purpose, that it will detract from our neighborhood, and that it will be more difficult for us to maintain our yards all the way to the road,” Wright said.
The Mebane City Council left out the sidewalk project, and approved the recommended budget for the 2022 fiscal year.
During the May 3 meeting, City Manager Chris Rollins presented and discussed the potential 2022 budget, and what it entails, to council members.
Rollins said that 2020 was the busiest year in Mebane history with respect to the number of permits issued for industrial, commercial and residential construction.
“Years ago, we really had a lot of people saying is there really any way that we could grow this fast and it's clearly happening,” Rollins said. “We were expecting a 4.8 percent growth rate and had 5.2 percent.”
In light of this growth, the city will not have to raise taxes this year, as revenues were up 1.7 percent in 2020. However, two of the Mebane’s nine revenue sources are decreasing.
Therefore, property and sales tax revenues are how the city has been able to keep taxes stagnant, along with the tax base growing by 8.6 percent, with a collection rate of 99.7 percent, in the past year to now equal roughly $2.6 billion.
Rollins said that 78 percent of Mebane’s revenues stems from property and sales taxes. $13,092,594 comes from property taxes, while $4,302,700 flows in from sales taxes.
-- THE BUDGET –
The presentation pointed out there are two aspects of the budget: the general fund, “used to account for our general government resources which are not legally required to be accounted for in another fund,” and the utility fund, “an enterprise fund designed to be a self-supporting operation that sells water & sewer services to the public for a fee.”
The City of Mebane’s 2022 fiscal year proposed general fund budget projects $25,445,340 in total funds to be available. This is a $5,446,249 (or 1.7 percent) increase from 2021’s revised budget.
Compared to the 2021 recommended budget, this year’s requests for an additional $752,821 (6.5 percent increase) in funds for personnel expenses and an additional $439,808 (5.4 percent increase) in funds for operating expenses. The 2022 budget requests $698,318 less (18.9 percent decrease) for capital outlay, and also sets aside $79,661 less (4.7 percent decrease) for debt expenses.
The recommended budget estimates 35 percent ($8,896,471) of general fund expenditures will go toward public safety; 20 percent ($5,355,060) to public works; roughly 14 percent to both economic and physical development ($3,455,894) and general government ($3,639,890); 10 percent ($2,478,023) to recreation; and six percent ($1,620,002) to debt service and transfers.
Rollins said some of the investments Mebane will be making in 2022, according to the proposed budget, include: a new firetruck, eight new police vehicles, a side-armed sanitation truck, field lighting for Walker Field, IT hardware, upgraded sidewalks, Council Chamber video upgrades, a Lake Michael connector, and multiple other projects that will total around $3.8 million.
The new fire engine ($582,288), police vehicles ($461,756) and sanitation truck ($320,000) will be debt-financed projects, and will cost, in total, $1,136,044.
Additionally, the proposed budget calls for 10 new city positions and three restructured city positions.
The new positions are as follows: a public information officer, a human resources consultant, an accountant, a police investigator, four additional patrol officers for the police department, a fire inspector, a public works maintenance worker.
The positions set to be restructured are: the accountant supervisor position, the streets supervisor position and the sanitation supervisor position. Main Street coordinator was funding as a part-time and/or consulting position.
The budget requested for creation, and funding, of additional positions. The request was denied. Some of the unfunded requested positions are as follows: accounting manager, accounting technician, additional GIS analysts, six additional firefighters and office administrator for the planning department.
Additionally, the proposed budget calls for city employees to receive a two percent cost of living raise.
Five outside agencies are slated to receive funding, and the amounts allotted to those agencies in this budget are nearly identical to the funding the 2021 revised budget set aside for them, as the city will subsidize only $3,633 more to these agencies this year.
The Mebane Historical Museum is set to receive a subsidy of $39,700 for the 2022 FY, $1,160 more than it received in 2021. The Tommy Long Train Display is set to receive $10,000 for 2022, $27 less than in 2021. Alamance County Arts Council will get $10,000 from Mebane, as well, in 2022, the same as in 2021. Alamance County Transportation Authority (ACTA) will be awarded $6,500 for the 2022 FY, the same amount it received for the 2021 FY. Finally, United Way 211 is slated to get $5,000 this time around, $2,500 more than in 2021.
The 2022 FY utility fund, also known as the water and sewer fun, portion of the budget is projected to have $10,378,152 available, a 12 percent increase ($7,041,095) in funds available for the 2021 FY. 93 percent of utility fund revenues come from utility sales and service.
The utility funds’ expenditures are as follows: $1,866,589 for administration, billing and meters; $4,240,479 for operations and maintenance; $285,000 for engineering; $2,163,048 for water resource recovery; and $1,823,036 in non-departmental expenses.
--- CAPITAL PROJECTS ---
There are funds set aside for Mebane Capital Project Ordinances. The three Rollins highlighted are: a new police station, costing roughly $16.5 million; a Fire Station 4, costing roughly $4.5 million; and the Holt Street Greenway, costing roughly $900,000. The sum of the three is approximately $21.9 million.
Rollins noted these projects would not be completed by 2022, but being included in the 2022 budget would begin the process of pooling funds for planning and construction to commence.
According to the budget, “for the first year of this plan (2021-2022), the capital funding requests over $100,000 submitted by department heads total $8.6 million, including $5.6 million in needs for the General Fund and $3.0 million in Utility Fund requests. Included in the 2021-2022 recommended budget is $3.3 million of these requested needs.”
--- WHAT WILL BE DIFFERENT? ---
City Manager Rollins said that there was a 25.4 percent increase in utility sales revenue from customers in 2020. He said the increase can properly be attributed to folks spending more time at home during the pandemic.
For example, prior to the pandemic, local families typically used, roughly, 4,000 gallons of water per month; since the pandemic began, families have tended to use around 6,000 of water a month.
In 2018, the city performed a Water and Sewer Rate Analysis, and the findings suggested a five-year graduated increase “to offset rising maintenance costs and anticipated infrastructure expansion costs associated with the Long-Range Utility Plan (LRUP).” Mebane has also performed “a system development fee analysis to replace the previous water & sewer connection fees collected by the City.”
System development fees are “up-front fees charged to new developments connecting to the water system for the first time.” The Utility Capital Reserve Fund is used to account system development fees.
The proposed budget estimates system development fees “revenues for FY21-22 are $1,109,500 which is an increase of 70% over the FY21 revised budget.”
In 2019, the city implemented system development fees and a five percent water and sewer rate increase, but did not do so in budget years 2019-2020 and 2020-2021 due to the COVID-19 pandemic, leading to a decrease in revenue over expenses (from $1,264,457 in 2017 to $146,315 in 2020).
However, the driving factor in this increase is the need for renovation and two future expansions of the Water Resource and Recovery Facility (WRRF). The proposed budget asserts that the increase and use of system development fees should reset the fund imbalance and start building necessary fund reserves.
If the council approves the proposed budget, the City of Mebane will be increasing the utility rate by 10 percent starting July 1.
Mayor Pro-Tem Jill Auditori asked if residents will be made explicitly aware of the increase. Rollins said, if the council approves the budget in June, then the city will, although less than a month doesn’t allow much time to do so.
The vote on the increase, and the proposed budget as a whole, will take place at the Mebane City Council’s June 7 meeting.