Town Managers Budget Message
Fiscal Year 2018-2019
The Town of Franklin is committed to providing quality services in a cost effective manner to all citizens. The Town of Franklin continues to operate in sound financial condition with a stable fund balance. At the close of fiscal year 2016-2017 available fund balance as a percent of expenditures of general fund was at fifty-one (51) percent. This budget addresses equipment and infrastructural needs for the Town of Franklin. General government revenue sources are estimated to remain the same, with the exception of fran chise tax. Franchise tax is projected to decrease $10,000.00. The biggest contributor to the decrease in franchise tax revenue is that more people are eliminating landlines from their homes and relying solely on cell phones. The Town should continue to plan for unexpected revenue loss at the state and federal level. This budget allots $50,000.00 in contingency in anticipation of unexpected revenue loss or unexpected expenditures.
The current ad-valorem tax rate of twenty eight ($0.2800) cents per one hundred dollars ($100) of valuation is used to balance the fiscal year 2018-2019 budget. The Town of Franklin will need to use $239,211.00 in general fund balance for fisca l year 2018-2019 to balance. The Town should be cautious when using fund balance. The Town also continues to experience slow growth in water and sewer revenues. It is paramount that the Town of Franklin ensures water and sewer revenues can sustain expenditures in order to maintain existing infrastructure and planning needs for future water and sewer infrastructure. The Town should always carefully prepare for unanticipated loss of revenues. Therefore, diligently maintaining a stable fund balance is key to long term financial success.
• This budget calls for a two (2) percent cost of living adjustment and a one (1) percent one-time payment based on salary for all positions. The one (1) percent one-time payment is suggested for December 2018. The Town's health insurance, dental, property and workers compensation premiums are expected to remain at current budgeted rates. The Town of Franklin will continue with Med Cost health insurance and dental insurance for Fiscal Year 2018-2019.
• Effective July 1, 2018 the Streets Department will report directly to Town Administration since this budget is funded with ad-valorem taxes. A position from the Water and Sewer Department has been transferred to the Streets Department. This is not a new position in the Streets Department and there will be no need to replace the position in the Water and Sewer Department. This position is and has been operating in the Streets Department for several years but has been paid from the Water and Sewer fund. This will allow the Streets Department to focus on more projects regarding repairs to Town Streets and Sidewalks.
• The Town will continue working on phase one (1) of the Water Treatment Plant Upgrade and Expansion project. Phase one (1) of the Water Treatment Plant Upgrade and Expansion is estimated to be completed by December 2018. The first debt service payment on this project will be due fiscal year 2018-2019.
Capital Outlay Equipment:
• Funds have been budgeted in the Facilities budget for a portable restroom trailer in the amount of $23,000.00. The Town has utilized the restrooms located in the Macon County Courthouse for several years and due to security concerns the restrooms located in the Macon County Courthouse will no longer be open to the public on the weekends. Therefore, the Town must look at alternative restroom options for Pickin on the Square that is held every weekend from May to October along with numerous other Town sponsored festivals.
• Funds have been budgeted in the Streets budget for a snow and ice pretreatment brine sprayer in the amount of $11,000.00. The Town has also secured a contract with NCDOT to purchase brine.
Capital Outlay Improvements:
• Funds have been budgeted to replace the roof at the Gazebo area. There are a few options to look at when replacing the roof. Currently, cedar shakes are on the Gazebo. Options to replace the roof include metal, shingles or cedar shakes. This budget allots $10,000.00 to look at roof replacement for the Gazebo.
• Funds have also been budgeted at $9,000.00 to replace the Town of Franklin banners. This will be phase two. The Town is currently working to replace some of the banners in fiscal year 2017- 2018.
• Funds have been budgeted at $9,000.00 to remove debris from the Whitmire property.
• The Town will need to look at replacing the large Christmas tree that is used during the annual tree lighting ceremony. The current Christmas tree is over ten (10) years old and is starting to fade and shed. The average life for this type of tree is between five (5) and eight (8) years. The current tree has exceed this. Administration has been seeking quotes for a replacement tree just like the tree that is currently owned by the Town and the lowest bid is $10,000.00.
• Improvements to Memorial Park continue in Fiscal Year 2018-2019. This budget allots $7,500.00 to pour a new concrete slab in the Pavilion area of Memorial Park. Water run-off and water stagnation have become an issue with the current concrete slab.
• Funds have been budgeted in Powell Bill for the Town Bridge improvements. The Town of Franklin approved a betterment contract with NCDOT December 7, 2015 in the amount of $36,000.00.
Capital Outlay Vehicles:
• The Police Department will be replacing one (1) detective vehicle with over 100,000 miles. The Streets Department will be replacing one (1) pickup truck with over 100,000 miles.
• Non-Profit funding for community organizations are left at the current budgeted total of $40,000.00.
• Economic Development funds have been reduced to $5,000.00.
• Picking on the Square is left at current budgeted total of $28,500.00.
• The first Friday night movie series is budgeted at $3,000.00.
• The Franklin Area Chamber of Commerce fireworks contribution is left a current budgeted total of $4,000.00.
• All debt payments are budgeted as required by law. General debt service principal is budgeted at $170,931.00 and interest at $22,051.00. Fire debt service principal is budgeted at $72,292.00 and interest at $2,276.00. Water and Sewer debt service principal is budgeted at $833,828.00 and interest at $202,829.00. The Town secured a $3,297,128.00 loan through the North Carolina State Revolving Loan Fund for Upgrades and Expansion to the Water Plant. The first debt service payment is due fiscal year 2018-2019. The debt service payment for the Water Plant is $164,857.00.
• SunTrust loan for General, Water and Sewer projects was entered into in 2012 and will be paid in 2024. The current total loan amount for SunTrust is $2,379,760.90.
• Bank of American for Water and Sewer projects was entered into in 2010 and will be paid in 2025. The current total loan amount for Bank of America is $1,782,864.14.
• State Revolving loan for Waste Water Treatment Plant was entered into in 2013 and will be paid in 2033. The current total loan amount for this project is $4,654,307.00.
• Diversified lenders loan for new software was entered into in 2017 and will be paid in 2020. The current total loan amount for Diversified lenders is $90,764.28.
• PNC and Entegra Bank Fire Trucks loan was entered into in 2011 and will be paid in 2020. The current total loan amount for the Fire trucks will be $149,133.05.
• Water Treatment Plant State Revolving loan was entered into 2018 and will be paid in 2038. The current total loan amount for this project is $3,297,128.
• Fire Department: The current fire tax rate of $0.0545 cents per one hundred dollars ($100) of valuation is recommended for fiscal year 2018-2019. Based on the current fire tax rate no fund balance is needed to balance fiscal year 2018-2019. Franklin Fire Department needs to replace existing fleet that is approaching service life. Funds have been budgeted in the amount of $38,000.00 to rep lace a 2004 Tahoe with 165,000 miles. Also, fire call pay for volunteers is expected to remain at current rates. Current rates are $5.00 for medical calls and $12.00 for fire calls.
• Water and Sewer Department: Funds are budgeted to replace the water line at Grandview Court and the water line creek crossing for NCDOT project R-5734. The costs anticipated to replace the above referenced water lines is $90,000.00. Funds are also budgeted to rebuild a sewer pump station at Prentiss. The cost anticipated to replace the above referenced sewer pump station is $85,000.00. All of the above referenced projects are part of the Town's Capital Improvements Plan (CIP). The basin at the water plant only needs to be cleaned every five (5) years. However, this budget allots funding of $30,000 this fiscal year. The reason for this is to continue a reserve account for this project in preparation for cleaning the drainage basin for this fiscal year 2018- 2019. The total estimated cost to clean the drainage basin is $150,000. Funds have also been budgeted in the amount of $66,600.00 in the Public Works Department to replace two (2) pickup trucks with over 100,000 each.
Water and Sewer Rates:
• Based on current estimates water and sewer revenue combined are projected at $3,970,170.00. A modest appropriation from water and sewer retained earnings of $438,289.00 is recommended. Martin and McGill completed a detailed water and sewer study in January 2015. In order to maintain the existing infrastructure, to upgrad e/expand the water plant and to continue funding the Town's Comprehensive Improvements Plan, a modest water and sewer rate increase is recommended. A four (4) percent rate increase is recommended for water and sewer. The proposed rate increases only affect base and volume charges but not tap, connection, or other miscellaneous charges.
This budget for Local Fiscal Year 2018-2019 is balanced as required by law and continues to provide existing services while meeting the governing board's priorities and polices. This budget includes an appropriation in general fund of $450,000.00 for Powell Bill. This budget recommends a one (1) time appropriation from general fund balance of $239,211.00 to address the Town's capital outlay equipment, capital outlay improvements and infrastructure needs. This budget addresses the Town's immediate needs while maintaining a stable fund balance and providing quality services in a cost effective manner.