PITTSBORO — Work on Pittsboro’s proposed $9.4 million budget continued last week as the town board questioned revenue estimates that show a 10 percent decrease — about $1 million, owing to economic damage from COVID-19 — from the previous year, far below those suggested by the League of Municipalities.
As a result, the proposed spending plan eliminates numerous items the board had previously deemed priorities during earlier budget discussions.
The League of Municipalities is a North Carolina non-profit which for more than 100 years has represented towns’ and cities’ interests and provides guidance to municipalities for best practices. Pittsboro’s Finance Director, Heather Meacham, said her projections were more “conservative” than the guidance provided by the League of Municipalities, leading her to calculate the more significant drop in expected sales tax revenue. The League of Municipalities’ guidance suggested a 9 percent drop in revenue for the first quarter of FY 2020-2021 while Meacham estimated 15 percent. For the second quarter, the League estimated a 3 percent decrease where Meacham estimated 10 percent. And the League suggested the rate would be essentially flat for the last two quarters with Meacham estimating a 5 percent decrease. Asked by board members about how she made her estimates, she said she didn’t “really have a reason for why” she chose the additional loss, but noted she would rather “err on the side of being more cautious.”
She was also asked by Commissioner Michael Fiocco why the budget reflected a 30 percent decrease in revenue in alcohol and beer sales when the most recent report shows those revenues up about 15 percent. She noted she “wasn’t sure” how COVID-19 would impact those sales. Meachan said she would be updating the alcohol sales revenue and that she would be receiving the March sales tax revenue numbers in mid-June and would update the estimates based on that as well, though it would be received after the town’s public hearing on the budget scheduled for June 8.
Fiocco reiterated to the board the proposed budget’s expected revenues showed a “pretty substantial divergence from what the League suggested” and “in some almost three times” the amount.
“I appreciate your difficulty here,” Fiocco said. “I want the board to see that the budget is projecting a much smaller amount than what the League is projecting.”
Mayor Jim Nass said that he had hoped “the budget would reflect the retreat,” with the understanding that “these are unique and different times.” The board discussed items that had been removed from the proposed budget that were considered “priorities” by the board.
Board members collectively agreed that 2.5 percent pay raises for all staff members which are estimated to be at about $50,000 be added to the proposed FY 2020-2021 budget.
The board also wanted to include a pay study at a cost of about $12,000. Commissioner Kyle Shipp said that he was “worried about losing” staff if the town does not pay competitive wages. Commissioner Jay Farrell also brought up the issue of merit-based pay, where employees receive compensation based on reviews of their work product. He said the merit-based pay would also provide incentives for employees to get additional training, education and certifications. Fiocco agreed, saying that this was something that “Jay [Farrell] has been saying for years,” and noting the board had previously asked the staff to investigate the idea.
“We are changing the employment character of the town,” Fiocco said. “And the benefits can flow to the staff, because without staff, what are you?”
Shipp stated that he believed the budget should include a 2.5 percent raise for staff, a pay study and an update to the website to “keep the public informed” saying, “I think that’s money we really need to invest.” Commissioner John Bonitz seconded Shipp’s point, adding he believed an investment in software to log the town’s social media accounts in case of public records requests was also an important item to include.
The board also discussed at length whether to approve an increase of $8,000 for a total outlay of $85,000 to Main Street Pittsboro. Main Street Pittsboro is a non-profit entity, partially supported by state funds, to help invigorate small downtowns throughout the state. Main Street Pittsboro is renovating the former Capital Bank building located on the town’s circle to house a Chatham County Welcome Center which the organization would operate.
Fiocco, the town board member also on the Main Street Pittsboro board, noted that the organization “did enter into a long-term commitment in downtown with the welcome center.” He also said that the organization is not solely dependent on public funds, but as major fundraising events for the organization, such as Local on Main, were canceled due to COVID-19 social distancing restrictions, the organization’s financial investment in downtown is in peril.
“Coming out of COVID, I think we’re going to have a difficult time trying to regain what we lost,” Nass said. “I think its maybe as important for downtown to be a really high priority project. If we start to decline and that decline starts to accelerate with what’s going on to the north [Chatham Park], I think we could spiral.”
The board made no decision on whether to approve the appropriation to Main Street Pittsboro, opting instead to hold its public hearing on June 8, during which no one from the public nor any commissioners made comments on the budget, and wait for updated revenue projections. With those projections anticipated to arrive on June 14, the budget will likely see changes following.
The board will meet again on June 22 to review the budget once it’s revised by Meacham and Interim Town Manager Bob Morgan. If amenable, they may approve it on that day or request changes and hold a special meeting to pass the actual budget ordinance.
State law requires the FY 2020-2021 budget — with the fiscal year starting on July 1 — to be passed by June 30.
Casey Mann can be reached at CaseyMann@Chathamnr.com.