Ayden budget passes in split vote
By Lucas Simonds
Monday, June 19, 2017
AYDEN — The Ayden Board of Commissioners last week gave final approval to $19.75 million budget in a 3-2 vote with Commissioners Ivory Mewborn and Phyllis Ross opposed. Both Mewborn and Ross claimed they could not support an increase to the sewer rate.
The final budget approved June 12 includes a 9.72 percent increase to the sewer rate. This is projected to add $2.36 to the monthly bill for the average family of four within town limits and $4.36 outside of town limits, according to Ayden Manager Steve Harrell.
The budget and the rate increase will take effect with the start of the 2017-18 fiscal year July 1.
Without the rate increase, the town would default on a $2.6 million loan from the U.S. Department of Agriculture that was used to fund sewer expansion, according to Finance Director Robert Taylor.
Revenue in the water and sewer fund has not been high enough compared to expenses to meet a bond covenant for that loan, Taylor said.
On top of that, the Contentnea Metropolitan Sewerage District or CMSD, which operates the sewage treatment plant serving Ayden, Grifton and Winterville, is raising its charge to Ayden for sewer treatment by 11.4 percent or $100,819 this year, according to Harrell.
The 9.72 percent rate increase is the absolute lowest sewer rate increase that will cover this increased charge from CMSD and meet the USDA bond covenant, according to Taylor.
The only other way to meet the bond covenant would be to cut expenses in the water and sewer fund, but expenses have already been cut as much as possible, Taylor said. Because the USDA bond covenant is based only on revenues versus expenses in the fund, it would not be possible to meet the covenant by taking money from the fund balance, Taylor added.
“This is not something we go home and high five about, this is something we’re all really deeply sad at heart about. But, the numbers are the numbers,” said Ayden Mayor Steve Tripp of the rate increase.
Others on the board agreed that the decision to increase the rate was tough but necessary.
“We don’t need to close our eyes or turn our heads. We just need to look forward and work as hard as we can,” said Commissioner Mary Alice Davenport.
Apart from the sewer rate increase, the budget approved Monday does not include any other rate or tax increases. The property tax rate will remain at 54 cents per $100 valuation.
The budget is tight with “no fluff,” according to Taylor.
The final budget was the result of months of work by Taylor, Harrell and other town staff, who have struggled to find money to simply pay for regular town operations without taking too much money from the town’s fund balances or savings accounts.
The final budget includes fund balance transfers totaling $469,265 between the town’s three main funds. This is down significantly from the nearly $1.8 million in fund balance transfers in the first proposed budget from early May.
In creating the budget, staff discovered many items in past years’ budgets, such as utilities and telephone costs were “in virtually all cases, across departments, underbudgeted,” according to Harrell.
Including the actual costs for these items drove up the cost of operations in the budget this year, and the final budget for the town’s three main funds — the general fund, electric fund and water and sewer fund.
The general fund, which covers the cost of most town operations, is budgeted at $4.45 million. Expenses in the fund are generally the same as the current fiscal year, except for those items that were previously underbudgeted, according to Harrell.
The general fund includes a $97,489 transfer from its fund balance.
The fund includes $11,000 to install a new ADA compliant ramp and replace the HVAC unit at the Dixon Building, which is set to house the future museum for the Ayden Historical society.
In a last minute change approved Monday, the board approved to add $8,000 in funding for the Ayden Chamber of Commerce. This money will be taken from $30,000 allocated for marketing across all three funds. The extra funding will pay for five additional hours per week for Chamber Director Laura Todd and help fund expanded marketing efforts by the chamber intended to help bring new businesses and residents to the town. It is intended that the chamber will coordinate with the town planning department, so that they can work together to promote the town rather than doing the same work twice.
The board also approved to make the $150 deposit to rent the auditorium at the arts and recreation center refundable.
The electric fund is budgeted at $11.93 million. Operational costs in the fund are generally the same as the current fiscal year, except for those items that were previously underbudgeted, according to Harrell.
The electric fund includes a $232,136 transfer from its fund balance.
The fund includes capital expenses of $290,000 to replace overloaded feeder lines at the Weyerhauser substation and $240,000 to replace the four worst transmission poles, along N.C. 11.
Water and Sewer Fund
The water and sewer fund is budgeted at $3.22 million. Operational costs in the fund are generally the same as the current fiscal year, except for those items that were previously underbudgeted, according to Harrell.
The water and sewer fund includes a $139,640 transfer from its fund balance. This is down from the fund balance transfer initially proposed Monday.
In the motion to approve the budget, the board also approved to borrow $240,000 for a project to extend sewer along N.C. 102 to meet the future intersection with the Southwest Bypass. That money was previously slated to come from the fund balance, meaning borrowing the money instead reduces the transfer from the fund balance.
The Times-Leader sever southern Pitt County including the towns of Ayden, Grifton and Winterville.