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County Budget: No Tax Increase, Some Fee Increases, Fund Balance Appropriation

Story by Kathleen McFadden

On Monday, County Manager Rocky Nelson submitted the 2008-09 fiscal year recommended budget to the Watauga County Board of Commissioners. The budget does not propose any increase in the current ad valorem tax rate of $0.313 per $100 of valuation. However, for the first time in many years, the budget includes an appropriation from the fund balance—the equivalent of the county’s savings account.

Fund Balance Appropriation
The 2008-09 budget recommends a fund balance appropriation of $1.4 million. According to Nelson, the fund balance appropriation is tied to one-time capital expenditures and not to ongoing operating expenses, meaning that the county won’t be automatically looking to the fund balance in future years to finance day-to-day operations.

Each year, the Watauga County budget sets aside money for future capital needs, building up funds for anticipated projects that help reduce the debt service on new construction, maintenance and renovation projects. The capital improvement plan allocations are equivalent to saving a down payment for a specific project. Of the $1.4 million fund balance appropriation, approximately $900,000 of it represents these future capital needs, and the remainder is for current capital needs.

Among the county’s future capital projects are debt service on the new high school, maintenance for the existing schools, a community center in the eastern part of the county, community recreation facilities and renovations to county administrative buildings.

Current capital needs include the construction of a new Animal Care and Control facility and the completion of the Anne-Marie Drive Park. Both are scheduled for completion and funded for 2009.

“The fund balance appropriation will maintain the integrity of the capital improvement plan while not raising taxes,” Nelson said. “The healthy state of the fund balance allowed us to do this without having an impact on the county’s financial stability,” he added.

In addition, Nelson pointed out, the county won’t know full impact on the fund balance until after the October audit. The county could receive additional unbudgeted revenues that could offset the drawdown of the fund balance.

“We didn’t do [the fund balance appropriation] lightly,” Nelson said. “I wouldn’t have done it if I didn’t think it was the best option for the county. In this budget we did the best we can with what we’ve got to carry out the services and initiatives the citizens expect and the commissioners direct.”

Fee Increases
The budget proposes the following increases in solid waste fees:
• A $2 increase in the solid waste availability fee

• A $4 increase in the tipping fee (from $45 to $49)

• A $7 increase per ton in the fee (from $35 to $42) for land clearing and inert debris

The budget proposes increases in the following planning and inspections fees:
• A $0.05 increase (from $0.25 to $0.30) per heated square foot for building permits

• A $50 increase (from $250 to $300) for modular home permits

• A $15 increase (from $25 to $40) for zoning/watershed/high impact land use ordinance permits and a $25 increase (from $75 to $100) for the site plans
The budget proposes a $0.02 increase (from $0.02 to $0.04) in the Boone Fire Service District tax rate. All other fire district taxes are proposed at their current rate.

Budget Highlights
• The general fund budget totals $44,598,911.

• Ad valorem tax revenues account for approximately 48 percent of county revenues.

• The proposed budget includes a 7.2 percent increase for Watauga county Schoolsí operating expenses at $11,342,370. Regular capital outlay has been proposed at $650,404 for repairs, equipment purchases, replacements and minor construction projects. An additional $4,979,001 is identified for capital reserve funds for the high school project debt service and a $200,000 set-aside for the 10-year school maintenance plan.

• Current operating expenses for Caldwell Community College are proposed with a 5 percent increase. Capital outlay is proposed at $25,500.

• A 5 percent increase is recommended for the Appalachian District Health Department.

• Four additional positions are recommended for the Sheriffís Office.

• A 10 percent increase is proposed in the libraryís budget that includes a recommended $25,000 for circulation materials.

Work Sessions and Public Hearing
The budget is available online, and hard copies are available at the county manager’s office and at the libraries in Boone, Blowing Rock and the Western Watauga Community Center.

The commissioners have scheduled two budget work sessions: Thursday, May 8, at 4:00 p.m. and Tuesday, May 27, at 4:00 p.m.

A public hearing on the budget is scheduled for Tuesday, May 6, at 6:00 p.m. in the commissioners’ boardroom at the county administration building.
For more info, call the county manager’s office at 828-265-8000.