Davidson Commissioners are set to pass a budget for FY2019 on Tuesday. They pretty much have to.
Per NC law, municipalities are required to have a balanced budget in place by the start of the fiscal year on July 1st - meaning this Tuesday is the last regularly scheduled meeting prior to that date since there is no 4th Tuesday Work Session in June. In order to not pass a budget on Tuesday, the Board would have to call a Special Meeting, and nobody expects that to happen.
However, that doesn't mean the budget set to pass is all good. It just means the Town will have one. Changes always get made once a budget is passed. In fact, on the same agenda on Tuesday, immediately after the Board likely passes its FY2019 budget, they have another agenda item to amend it to give away subsidies up to $50,000 to local "service agencies". That additional money will come out of the Town savings account called the "fund balance".
So, changes can be made once the budget is passed, and here at a aShortChronicle the strong hope is that the Town make it less conservative, much less conservative, as the fiscal year goes forward.
What? "Less conservative"?!?! Did aShortChronicle really say that? Yes, yes he did.
So, before some readers have a knee-jerk reaction to the use of the word conservative (it has been known to happen), let me explain.
You see the word "conservative" all depends on your perspective. In this case, the Town is spending other people's money - aka taxpayer money, aka your money. So when you hear Town Staff say things like they
take a conservative approach to budgeting to cover worst case scenarios, so they don't have to go back to ask the Board for more later, they call that being
conservative.
In practice, what that staff perspective of
conservative means is that they budget way more than actually needed to cover standard operations, so they don't have to be inconvenienced by going back to the Board as often to ask for more money.
Their view of the word conservative and the view of that word here at aShortChronicle are vastly different. In light of that, yes, the budget set to be approved on Tuesday is
too conservative - using the Town's upside down definition of the word.
aShortChronicle did some analysis on the budget data made available by the Town. Here is what was found, but first, a bit about how these budgets are put together.
First, they must balance. The Town can't spend more than it is projected to take in via its various revenue (aka tax dollar) streams or from debt or from draws on fund balance. Second, the Town funds operations on an ongoing basis from its regular revenue streams and also has various one time capital expenses. Capital expenses are typically pulled from the fund balance. Third, there are several sections to the budget, the general fund is the largest portion and also where the Town has the most discretion. There are other portions like solid waste and road funding that have dedicated funding where by law the money has to be spent on those items. For this discussion, aShortChronicle is focusing on the general fund. Finally, a budget is just an initial plan. As the year goes forward, actual expenses go against that budget, and if these actual expenses are less than the budget, then there is a surplus. What happens with any surplus? It gets reallocated to other areas, or it goes into fund balance. People need to remember, that surplus is taxpayer money loaned to the Town interest free.
So, how did the Town do in the current FY2018 when it comes to this "surplus" from an operations perspective? Well, they had a lot of it.
***All numbers are in thousands. ('000)
Look at the 3rd column of numbers labeled "Unspent % FY2018 Budget. You'll see all departments had a surplus except for Fire and Grounds. These departments also had big capital expenditure additions to their budget during the year. If you take those out, these departments also had surpluses. That's what is shown in the 4th and 5th columns of numbers. The 4th column is effectively the actual operations spend by department. The 5th column compares this to the budget as a percentage.
The last column is a proposed budget for FY2019 that does 2 things.
First, it fully funds Police and Fire at their FY2019 request. Police and Fire are the Town's number one responsibility. Both departments are in a growth phase and need the additional resources. The main improvement needed in budgeting here is a more accurate estimates for when personnel will start. As of now, the understanding is that new Town personnel are included in the budget for the entire year regardless of when they actually start. This apparently is true for all departments, not just public safety. That means you guarantee an underburn of dollars right from the start if someone doesn't start o July 1st. Again, the understanding is that this accounted for a significant portion of the underburn in the police department in the current fiscal year.
Second, the proposed budget from aShortChronicle gives all other departments 3% more than they spent in actuals in FY2018. To get the Ops budget for Grounds subtract out the $925k capital expense added to that budget in FY2018. Under the proposed budget from aShortChronicle, no department would take a cut
from what they actually spent in FY2018.
Here is what that would result in when compared to the Town Staff's proposed budget for the upcoming year.
Start with the Town "Proposed Budget". Subtract out the $1 million for Continuum and the $400k staff "carved" into the budget for capital expenses. That leaves an "Ops Budget". Compare that to the budget from aShortChronicle using the methodology described above.
That means there is likely over $1 million of "excess" in the Town Staff budget. That is almost exactly 10% of fat in the budget when compared to last year's actuals and after fully funding police and fire and giving all other departments a 3% increase in spending.
So, is the Town budget too "conservative"? What do you think?
