The Mount Airy Board of Commissioners basically killed two birds with one stone Thursday afternoon in charting a course for two pesky budget matters which have been flapping their wings in recent months.
One involves the city’s fund balance — also known as surplus funds, or savings, which have accumulated over the years and are available for any purpose.
It totaled about $7.3 million at last report, which might sound hefty, but has been dipped into for several major expenditures, including for the redevelopment of former Spencer’s industrial property now owned by the municipality — prompting concern among officials.
The other issue surrounds capital outlay needs — building- and equipment-related items such as vehicles, roof replacements and heating, ventilating and air-conditioning (HVAC) upgrades that stand apart from day-to-day expenses. Capital improvements with a price tag of $42 million have been identified for the next 10 years.
During a work session Thursday, all five commissioners— with a formal vote expected during their next regular meeting — agreed to never take the fund balance below $6 million, or 45% of Mount Airy’s general fund budget, whichever is higher.
That level was decided upon through a suggestion by Commissioner Jon Cawley.
The recently adopted budget for the 2020-21 fiscal year totals $13.9 million, of which the $7.3 million in fund balance revenues represents about 53%, close to the 55% average for similarly sized municipalities in the state.
Board members further decided Thursday that the policy, when fully developed, will include mechanisms for returning the surplus to the $6 million cutoff point if it ever dips below that due to some catastrophic occurrence.
Based on the discussion, this now leaves an extra $1.3 million in the fund balance, above the $6 million cutoff level, to allocate, which is where the capital improvements part of the equation entered the picture.
The commissioners said they wanted to use this money to pay for some of the most-pressing capital needs, incorporating a further suggestion by Cawley to finance new trucks or other purchases where possible with favorable loan costs now available.
“Interest rates are so low — I’d rather keep the cash.”
Commissioner Marie Wood also said she like to see a capital improvements fund designated, to which proceeds from any sale of city-owned land or other assets would be injected to help pay for those needs.
Capital list questioned
Some skepticism was expressed Thursday afternoon about the credibility of a massive document prepared during the winter showing the capital needs of $42 million over the next decade.
While Commissioner Ron Niland voiced a belief that this figure contains a breakdown of true priorities, fellow board member Tom Koch was skeptical.
“The $42 million is a wish list; it’s a fantasy,” Koch commented.
“I think a lot of this is pie-in-the-sky,” he added. “We need to come down to Earth.”
There was support Thursday for revisiting the list of long-range needs with the idea of paring it down.
Cawley said one barometer he relies on is the fact that city departments such as fire and police have been able to respond to all emergencies in town even though their vehicles might be older.
“The people of Mount Airy, from what I can tell, have not suffered,” he said. “The question is, is it (the equipment on hand) enough to get the job done?”
Another thing that was decided Thursday is that money from the surplus fund will not be used in the future to balance the municipal budget. For 2020-21, for example, $1.2 million was allocated from that source to do this.
That was punctuated by board members Thursday in pointing out that big decisions loom down the road about establishing priorities for the various services provided to citizens so the budget can fully funded through regular revenue sources such as property taxes.
“I think we need to look at every expenditure,” Niland said.
“We’ve got a cliff we’re going to fall over.”
Cawley repeated a pet peeve of his over the years which has inflated the city’s budget: raises for municipal workers he called “unsustainable.”
“And I’ve used that word for about four years.”
Source: https://www.mtairynews.com