Council plans another budget work session today
A long day for Union City Council began with a very short special meeting. Council unanimously approved second readings of two ordinances. The first was to appropriate $170,800 from the general fund to pay for three Chevy Tahoes that have come available for the Union Public Safety Department. Due to potential supply chain issues down the road, the department wanted to go ahead and buy the vehicles while they are available. The second ordinance transferred $15,260 from the Solid Waste Fund to the Street Department to purchase 200 garbage carts that have become available. That is another item that has been in short supply due to supply chain issues, and the Street Department wanted to go ahead and purchase them now while they are available. Both ordinances passed unanimously, and the special meeting adjourned.
City Council stuck around for nearly 5-1/2 hours after that as the budget process began. Finance Director Laura Hembree presented an overview of all the funds that comprise the city budget and what can and cannot be funded from them. The total budget for the city at the beginning of the meeting stood at $48,734,390, an increase of more than $7 million, with most of the increase coming from the utility fund due to the higher cost of purchasing natural gas and electricity. No cost of living increase for city employees was factored into the budget, though Hembree stated that a 1% increase would cost the city $126,850. Health insurance premiums are going up by 14.2% in the coming year, and retirement costs have increased, as well. The budget figures include two part-time animal control officers and a facility director for Main Street Junction. Those positions will be discussed during today’s budget work session and may or may not be included in the final budget. Union Public Safety requested three firefighters. That cost was not factored into the budget, but the positions will be discussed today, as well.
Planned equipment improvements for the coming year include work on the HVAC system at City Hall for $35,000, painting and floor repair at Main Street Junction for $55,000, an overhead door at Union Public Safety replaced for $65,000, fuel tanks for $20,000, new in-car laptops for Public Safety for $23,000, a portable air compressor for the water system at $24,000, a pickup truck for the warehouse at $34,000, and a few other items, as well.
The bottom line for the budget as the process started shows a general fund deficit of $672,820 that will need to be closed. General fund revenue is expected to be around $6.26 million, while expenses are projected at $6.93 million. Tax millage can only be increased by 1.15 mills, which would only capture about $14,080 in additional revenue. Hembree advised not raising millage this year since the city can go back up to three years to capture millage. She suggested waiting another year or two to capture the increase. Outside of a tax increase, the only other ways to close the deficit is to reduce expenditures or to tap into the general fund balance. If the full amount of the deficit comes from the general fund, it would take around 14% of the fund balance.
In other fund highlights, Hembree said the Solid Waste Fund was in the black for the first time in a long time. A position had been shifted from that fund to the Street Department budget for animal control, and that helped.
The second half of the American Rescue Plan Act funds are due in the coming fiscal year. In the first round of funding, the city received $1.9 million, of which all but $399,293 has been spent. Utility bill credits cost $686,400, essential employee bonuses cost $123,736, and recouping money for water, wastewater, and stormwater projects and improvements ran $692,335. The water and sewer match for the MycoWorks project is expected to total $395,000, so that will be how the rest of the first part of the ARP money will be spent. Of the next $1.9 million installment, $1 million is expected to be needed for the sewer project for a new housing development being planned, leaving just over $905,000 in ARP funds to be spent for other purposes once the city receives the second installment.
The utility department is facing a projected deficit of $3,273,550 in the coming year, mostly due to the higher cost of buying natural gas and electricity. The recommendation is to bring back the purchase power adjustment to true up the cost of electricity each month. The main ways to reduce the utility fund deficit is to reduce expenditures or raise rates.
Council members heard budget requests from a host of outside agencies yesterday, including the Chamber of Commerce, Development Board, C4 Services, YMCA, Union County Library System, United Way, Union County 4-H, Union County Livestock Show, Old English District, Piedmont Physic Garden, Antique Farm & Equipment Show, Union County Tourism, Union County Historical Society, Union County Arts Council, Union County Coon Hunters, Union County Fair, and the Union County Farm and Craft Market and FoodShare Union County. We’ll have some highlights from those presentations in future newscasts.
Today, city council will meet again at 3 p.m. at Main Street Junction, where they will hear budget requests from city departments. Maintenance, legislative/personnel/city clerk, planning, Main Street Junction, public service, public safety, and finance will all present before the dinner break, and the utility department will present after dinner. Council will then go through a time of priority setting, capital setting, and overall budget review before adjourning.