PITTSBORO — Interim Pittsboro Town Manager Bob Morgan is recommending a town budget that reflects a 10 percent drop in revenue and expenditures for fiscal 2020-21, owing to adverse impact from the COVID-19 pandemic.
Last year, the town’s total budget was approximately $10.3 million while this year’s proposed spending plan projects around $9.4 million. The reason for the drop, according to the town manager’s budget message within the document, is an anticipated reduction in revenue related to the COIVD-19 pandemic. Morgan notes an expected decline in both sales and property tax revenue and the accompanying documents note expected losses in fees associated with planning, alcohol sales and recreation fees.
“Sales tax revenue makes up a significant portion of the town’s revenues,” Morgan wrote in his budget message. “Our projections are more conservative than those shared by the North Carolina League of Municipalities back in March. No one really knows what the economy holds for us in the next fiscal year. The town will have to monitor revenues monthly next year. After we receive March’s sales tax revenues we will make necessary adjustment to our projections.”
Municipal governments often have a variety of accounts fueled by different revenue streams. Each account is governed differently by state law. For Pittsboro’s general fund, revenues come of property and sales use taxes, revenue from alcohol and beverage sales and fees from both planning and parks and recreation. The town uses that fund for a majority of what is thought of as business of the town such as salaries, equipment and supplies for a majority of town departments. For the town’s enterprise fund, which is used for the town utilities, revenue generally comes from water and wastewater fees. According to state law, this fund should operate similar to a business fund where the fees support the utility system.
Each year, state law mandates that town’s must create a balanced budget by June 30 for the following fiscal year which begins on July 1.
Morgan did not suggest an increase in the current tax rate of $0.4333 per $100 of assessed value of real property to make up for expected losses. But he did note that fees associated with solid waste and recycling collection will be increased by 5 percent due to fee increases from the disposal provider Waste Industries. In addition, the proposed budget includes an increase for water and sewer rates of 2.5 percent, which would likely add about $73,000 in revenue. That increase will still not cover the costs for the system which means the town will also have to transfer additional funds to the utility account to cover expenses for water and wastewater treatment services.
At this time, there are no salary or wage adjustments under consideration for town employees, but the budget does include requests for increased spending for equipment for the Pittsboro Fire and Pittsboro Police Departments.
Morgan closed his budget message by saying that the town government would have to review projections prior to budget approval.
“As the FY 2019-2020 winds down, it is apparent that the local economy has been impacted by COVID19 and that this impact will have a long-lasting effect,” Morgan wrote. “We are still trying to determine the severity of the impact that COVID-19 is going to have to our revenue streams and we may be adjusting our budgeted revenue prior to adopting the final budget.”
The Pittsboro town board held a work session to discuss the proposed budget in depth as this edition of the News + Record was going to press. Updates from that meeting will be included in next week’s issue.
Reporter Casey Mann can be reached at CaseyMann@Chathamnr.com.