Town leaders got a first look last week at a draft budget for what they know would be another tight financial year ahead.
Town staff indicated to commissioners the goal for the coming year is simply to maintain existing services and personnel.
“We don’t have a whole lot of capital (projects) in there,” Finance Director Bobby Fitts said. “We’re trying to do some of the desperate-need projects. Some of the (town) vehicles really need replacing, but we’re just going to try to get by another year.”
While the spending plan faces four significant setbacks, town staff is not recommending a tax increase for the 2015 fiscal year at this time.
At the current tax rate of 52.5 cents per $100 of property value, a resident with property valued at $150,000 pays $787.50 in town taxes.
Residents will see no changes to garbage or stormwater fees in the new fiscal year. Water and sewer rates, however, will increase 5.5 percent in accordance with the amended utilities merger with Raleigh. That amount equals $5.56 per month or $66.72 per year for a customer using 5,000 gallons of water per month.
The main challenge on the radar for years has been the impending loss of “hold-harmless” funds – a compensation for towns left in the red after the state’s decision in 1988 to repeal the inventory tax.
The reimbursement was originally scheduled to end in the 2013 fiscal year but lobbying by Mayor Bob Matheny and leaders of other affected towns resulted in a one-time, and last-time, $5 million payout of the funding last July. That was about half the amount the total allocation would have been.
At that rate, Zebulon received $222,150 this fiscal year. The town had been receiving about $420,000, or about 5 1/2 cents on the tax rate.
The other challenges named in the budget presentation are a neutral property tax base, updated population figures that are 20 percent less than prior estimates and the lack of significant growth.
The draft projects a 2 percent decrease in revenues from the current fiscal year, bringing total revenues to $7,160,175. Town revenues have remained on the decline since 2009.
The town plans to use about $763,000 of its fund balance and nearly $80,000 in capital reserve funds to help balance the $8,640,125 in expenditures.
The projected decrease of $10 million to the total property tax base would represent a loss of more than $52,000 for the town, equivalent to three-quarters of a cent on the tax rate.
Where the money goes
Capital projects included for 2015 and new debt services total nearly $1.2 million.
They are financing of street paving and repair, stormwater improvements along Yates Place (using installment financing and transportation impact fees), town hall basement improvements (using capital reserve funds) and mowing equipment. Also, Shepard School Road and Whitley Street-Stronach Avenue sidewalk projects (using grant funding), North Arendell Avenue improvements (using transportation impact fees) and the replacement of two dump trucks.
Eight projects totaling $188,000 have been delayed or removed from the upcoming year, including the replacement of the HVAC system at the fire department and the replacement of four town vehicles.
The budget proposes a 1.5 percent cap on merit raises for employees, the same as in the current fiscal year.
Current town policy requires Zebulon to keep at least 50 percent of a year’s operating expenses in savings. Fitts said if all fund balance slated for fiscal year 2015 is used as proposed, the total fund balance would decrease to 63 percent.
Fitts in March projected without significant growth in the next few years, the town would hit the 50 percent mark by the end of fiscal year 2017.
The town board is expected to offer feedback on the draft at its May 5 meeting.