Hamlet budget ‘a hot mess’

City’s FY 2015 budget balanced by $821,720 from fund balance
Mayor questions $55,500 to library

By Kevin Spradlin
PeeDeePost.com

HAMLET — On June 10, Mayor Bill Bayless and the City Council will present to the public a balanced budget for Fiscal Year 2015, which begins July 1. Balanced means that expenditures equal anticipated revenue — and the two columns will match up to the penny.

Kevin Spradlin | PeeDeePost.com The proposed Fiscal Year 2015 budget includes more than $820,000 from the city of Hamlet's fund balance.

Kevin Spradlin | PeeDeePost.com
The proposed Fiscal Year 2015 budget includes more than $820,000 from the city of Hamlet’s fund balance.

Anticipated expenses between July 1 and June 30, 2015 are to be $5,350,220. The General Fund Expenditure Summary mirrors that figure. But upon closer inspection, the city’s budget is “a hot mess,” as described by one Hamlet taxpayer. It’s be a difficult position to argue against.

The only reason the budget is balanced is because City Council members are expected to approve a plan that includes borrowing $821,720 from the city’s fund balance, which in layman’s terms is the city’s rainy day fund. While much of the city’s three budget work sessions have focused on identifying the needs of city employees and, where possible as deemed by council members, cutting away items not needed by simply desired — or at least, not needed as badly as some other items — the focus of discussion wasn’t on the budget deficit until council members voted 4-0 to move forward with presenting the budget, as is, to the public on June 10.

In the proposed FY 2015 budget, 28 percent of the city’s $5.35 million will be earmarked for the police department and 22 percent for the fire department. In addition, 10 percent will go towards sanitation services, 8 percent towards administration and 5 percent towards recreation.

Councilman Pat Preslar noted that for the past two years, the city has budgeted taking up to $300,000 from the fund balance and has avoided using it in each of the past two years. Worst-case scenario, Preslar said, the city would be looking at using roughly $500,000 from the fund balance if city workers can save money where ever possible.

That’s still, however, half a million dollars in the hole.

Jill Dickens, city finance officer, said that would drop the city’s fund balance to approximately 34 percent from 39 percent — or to about $1.4 million, down from the current $1.9 million.

“But that could vary,” Dickens said. “We don’t know what kind of revenues are coming in. There are a lot of variables that could play into that.”

Photo courtesy city of  Hamlet Mayor Bill Bayless, front center, and City Council members Tony Clewis, Pat Preslar, Johnathan Buie, Eddie Martin and Jesse McQueen are charged with balancing a budget by either using more than $820,000 from the fund balance, cutting at least $500,000 from the proposed budget or raising taxes.

Photo courtesy city of Hamlet
Mayor Bill Bayless, front center, and City Council members Tony Clewis, Pat Preslar, Johnathan Buie, Eddie Martin and Jesse McQueen are charged with balancing a budget by either using more than $820,000 from the fund balance, cutting at least $500,000 from the proposed budget or raising taxes.

Preslar stated the obvious, but was the first to do so: either trim $500,000 from the proposed budget, take from the fund balance or raise taxes.

“And we’re not going to raise taxes,” Preslar said.

Preslar then rattled off a few items that could be cut — not items he’d be in favor of cutting or eliminating, but starting points for discussion. Those points included eliminating the across-the-board 2 percent raise for city staff ($70,000 savings) and eliminating a new hire for the fire department ($40,000 savings) — but the latter would be a wash, Bayless said, when figuring in overtime of existing firefighters. Fire Chief David Knight nodded in agreement.

“As much as I’d like to save for a rainy day,” Preslar said, “we might have to look at this (fund balance approach) … with caution, and let’s try not to do it again next year.”

Bayless questioned the $55,500 earmarked for the Hamlet Public Library.

“Is that reasonable,” he asked.

Preslar responded, noting that similar-sized towns as Hamlet such as Troy offer only $10,000 to its local library — and that doesn’t include the care and upkeep of a building, as Hamlet provides for its library. It used to be $75,000, Preslar said.

Bayless said he wondered “whether or not we were actually getting the benefits we should be getting for that amount of money.”

Preslar said the agreement with the library has not likely been modified since it was built.

“It’s not that they don’t provide a good service,” Preslar said. “I think it’s current. They keep a lot of traffic in there. It’s an issue of what we give vs. what all these other towns give.”

The figures, he said, don’t “seem to be on par.”

Bayless suggested cutting some during the year whenever cost savings are realized, but Preslar noted the city will be in the same position next year as there were things pushed back from earlier drafts of this year’s proposed budget.

Bayless and council members lamented that city workers would only receive a 2 percent raise — directly countered by a cost in health insurance premiums for family members. It continues the trend, Bayless said, of losing workers to other jurisdictions, including Rockingham. Hamlet currently pays 100 percent of city workers’ healthcare premiums. Bayless said Hamlet was one of the few municipalities within the Lumber Region Council of Governments to pay 100 percent of city workers’ healthcare premiums.

It all leads to some “big decisions” that will have to be made over the next couple of years, Councilman Jesse McQueen said.

“We can sit here and sugarcoat it all day long,” he said. “Fact is, we cut a lot of stuff off this budget. We had to have a fire truck. We are going to have to have things we cut off this budget next year” such as new patrol cars for the police department.

“At some point,” McQueen said, “we’re just going to have to step up. At some point, we’re going to have to bite the bullet. There’s all kinds of things we’re going to have to look at and do.”

After the budget session, McQueen said all options need to be on the table — including the possibility of raising taxes “at some point in the future, or we’re going to have to get out of some of the services that we’re doing. Something’s got to happen. We’re in the hard decision times in the next couple years.”

He encouraged council members to “do what’s right, and not what looks good printed in the paper.”

Council members 4-0, with Councilman Tony Clewis absent, to move the proposed budget forward to the June 10 public meeting. At that meeting, the council will conduct a public hearing to receive feedback from the public. State law requires a balanced budget be adopted by June 30.

 

 

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