The Town Council adopted the budget Tuesday for the next fiscal year two weeks ahead of schedule, including some significant changes from the initial proposed spending plan to pay for road improvements.
The budget includes a $2.3 million increase in spending relative to the draft budget first proposed last month. The town will spend just shy of $32 million next year, up from the budget’s initial figure of $29.65 million.
That proposal sought to balance the budget without raising the effective tax rate, but the council elected to round the revenue-neutral rate of 38.5 cents up to 39 cents per $100 of appraised property value.
Last year’s tax rate was 41 cents, meaning the tax rate will decrease in absolute terms but might still lead to a higher tax bill for those whose properties increased in value at a rate equal to or above the Wake County average with which towns calculate revenue-neutral rates.
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The $220,000 raised by that half-cent increase will be placed in a capital reserve fund to be spent on road improvements, including the widening of Morrisville-Carpenter Road.
It will be joined by a similar sum cobbled together from various sources, including the town manager’s contingency fund and money previously set aside for wireless access in Morrisville parks. That money would represent close to a quarter of the $2 million for which Morrisville would be responsible if it succeeds in securing $6 million in grant money next February for the Morrisville-Carpenter Road project.
The council indicated it wants to dedicate a similar amount each year – a net value of around 1 cent of the property tax rate – to transportation improvements.
“That doesn’t bind future councils, because at any point, any council can modify the scope or specificity of a capital reserve fund,” Budget Director Jeanne Hooks said. “But it is an expressed commitment on this council’s part.”
Councilman TJ Cawley said moving away from the revenue-neutral budget represents an “ocean change” in town politics, away from simply balancing the budget and toward proactive spending. But Cawley said he would prefer a full 1-cent increase, which he said would have allowed the town to make the same investment in transportation without taking money from elsewhere in town government.
“I would be comfortable dedicating an additional amount, which would fully fund our share without delaying other important community projects,” Cawley said. “But I fully understand my colleagues’ desire to provide our residents a smaller tax bill next year.”
That included Mayor Mark Stohlman, who said he would have preferred that the rate remain revenue-neutral, but decided to compromise.
In a second departure from the draft budget, the adopted budget ordinance includes a $2.05 million appropriation from the town’s unassigned fund balance, which will help pay for $1 million in right-of-way acquisition costs needed to proceed with the widening of Morrisville-Carpenter Road. That amount also includes $600,000 to buy property owned by GoTriangle, formerly known as the Triangle Transit Authority, through which the town plans to connect Franklin Upchurch Sr. Street to Town Hall Drive and Morrisville-Carpenter Road.
The remainder of the fund balance appropriation, $455,000, will pay for the addition of 35 to 40 parking spaces in the town-owned Historic Christian Church parking lot.
Stohlman had touted the town’s ability to balance the budget without dipping into its unassigned fund balance, but Hooks said discussions since then revealed the council’s desire to use that money for ongoing transportation projects. She said the town prefers to keep that fund at around 45 percent of its operating budget, and it had grown to exceed that threshold by about $3 million.
Stohlman said it is still significant that the fund balance won’t be used to cover operating costs and that the apparent 8 percent difference between the proposed and adopted budgets reflected capital spending that likely would have been approved in three to six months. In the future, he said, the town is likely to make it a standard practice to approve that spending concurrently with the budget rather than wait.
As for the budget’s early passage, Town Manager Martha Paige said she hadn’t expected the council to act so quickly but was grateful that they had. She said the extra two weeks will allow her and her staff more time to craft job descriptions for the eight new full-time staff positions included in the budget and earlier start dates for those ultimately hired.
“I had no expectation that they would approve it last night,” she said. “I felt really good about where we were after (the June 7 budget workshop), and they did as well. We issued another press release to let people know the budget had been modified, and I think it was a good-feeling, spur-of-the-moment kind of thing.”
Gargan: 919-460-2604; @hgargan