Page | 1

RECOMMENDED ANNUAL BUDGET

Fiscal Year 2017-2018

May 8, 2017

I hereby submit the following recommended budget for Fiscal Year 2017-2018 in the amount of $28,848,595.00. The budget is balanced in accordance with the requirements of the Local Government Budget and Fiscal Control Act. The recommended tax rate for the 17-18 fiscal year is .5294. The budget includes a tax rate decrease (revenue neutral calculation) from .5375 to .5294. This year’s budget uses fund balance appropriation for one time capital expenses to balance the budget.

Revenue Neutral

The proposed tax rate of .5294 is considered the revenue neutral tax rate as calculated by the North Carolina Department of Revenue worksheet (see attached). Based on our calculations and the NC DOR worksheet, our revenue neutral tax rate adjusted for growth would be .5336. Revenue neutral means that we receive the same overall amount of tax revenue after the revaluation (see attached property tax calculation form from the NC Department of Revenue).

General Fund Revenues:

Polk County (like all NC Counties) receives revenue from several different areas throughout the budget year. Property tax, fees and permits, sales and service, and sales tax to name a few. Below you will see a graph that shows what percentage of the general fund each source of revenue represents.

Some revenue projections have been adjusted to budget closer to current year and prior year actuals.For the state-managed funding, we have estimated conservativelyto compensate for a fluctuating economy. We will monitor these sources of revenue and may hold major capital expenses (vehicles etc. that aren’t reimbursement funded) and Capital Reserve Fundtransfers until January 1st, 2018.This will ensure that the sales tax projections provided by the state are received as anticipated.

This year we have budgeteda conservative increase in sales tax revenue, due to projected growth in the economy identified by state sources and local trends. Specifically, Article 44*524 sales tax funding has been allocated among the three areas that are required by the state (Economic Development, Isothermal Community College, Polk County Schools), and is placed in their operational budgets.

Expenditures:

As you can see below, this year’s budget meets many capital and personnel needs of Polk County Local Government.

Capital

This year’s major (exceeding $10,000) capital items are listed below:

  • $201,740 for new vehicles and additional capital needs for the Sheriff’s Office to ensure the safety of the Sheriff’s fleet and equipment.
  • $134,000 for two new vans for Transportation (local cost $13,702).
  • $89,000for Recreation to light Searcy Field.
  • $50,600 for Solid Waste (enterprise fund) to purchase recycling bins and an overhead building. Also grading work at the old landfill site on Little Mountain Road.
  • $90,446 for the Jail to purchase a Van, handheld radios, and Tasers for the new jail facility.
  • $36,000 for Animal Control to purchase a truck cab and chassis to replace their existing truck (box will be re-used).
  • $34,924 for DSS to purchase a vehicle, computers, printers, tablets, and scanners (local cost $15,716)
  • $30,736 for Building Inspections to purchase a new vehicle for the new inspector. This will be only be purchased when necessary to offset an increase in permits and if another inspector is hired. (See Personnel)
  • $25,984 for EMS that includes purchase of a quick response vehicle.
  • $18,290 for MIS to upgrade servers and equipment.
  • $10,000 for a replacement utility cart at the Recreation Complex.
  • There are many other replacement of computers by departments in this year’s budget, to comply withthe computer replacement policy.

Personnel

There are several personnelchanges to the operating budget of Polk County Local Government during the FY2017-2018.

  • Polk County Sheriff’s Office will employ 12new jail positions to staff the new law enforcement facility. Eleven of these positions will not be hired until the completion of the law enforcement facility. One position will be hired to help train and prepare for the transition from the old facility to the new facility.
  • An additional EMS position that gives 24/7 coverage of two EMT’s per truck. This will give us two fully staffed trucks at all times with full time staff. All of the expense was taken out of the existing EMS budget.
  • Created a new Building Code Enforcement Officer position for projected increase in volume. Position will only be hired if necessary to offset an expected increase in permits.
  • Change PT position in Tourism to FT, to be funded by the general fund as mandated by law for collection of occupancy tax.
  • Merit based, one-time paymentincentive for all eligible employees effective January 1,2018.
  • Included a state mandated employer contribution rate increase of approximately .25 percent o be paid to the retirement system for County Employees.
  • Included an anticipated 3% increase in health insurance costs to be funded from a portion of the remaining fund balance of our self-funded health insurance fund.

The general fund has several classifications of expenditures as you can see by the graph below.

General Government

General Government consists of several departments including Governing Body, Administration, Finance, Tax Office, Revaluation, Legal, Courts (County Portion), Elections, Register of Deeds, Public Buildings, Information Systems, and Personnel. This section had a30%decrease from last year (because of a one-time purchase of land)and is 13% of our total budget.

Public Safety

Public Safety includes the Sheriff’s Office, Jail, Animal Control, 911 Communications, Emergency Management, Community Development, Emergency Medical Services, and the Rescue Squad. This section had an increase of 6.67% for the year, and represents25% of our overall budget.

Human Services

Human Services consists of Transportation Operations and Administration, Health Department, Mental Health, Alcohol and Rehab, Juvenile Crime Prevention,Veterans Administration, and the Department of Social Services. This section has a decrease of 1.51% and makes up 20% of our overall budget.

Economic Development

Economic Development includes Forestry, the Economic Development and Tourism Department, Planning, Cooperative Extension, Soil and Water Conservation, and Agricultural Economic Development. This section has a combineddecrease of 2.75% for the year and makes up 3% of our overall budget.

Culture and Recreation

Culture and Recreation includes the Meeting Place, the Saluda Senior Center, the Library, the Recreation Department, and the Recreation Complex. This section has a combined decrease of 2.15% for the year and makes up 7% of our overall budget.

Polk County Schools

Polk County Schools is by far the biggest department in our budget. The Superintendent is requesting no increase in this fiscal year’s budget. This item makes up 22% of our overall budget.

Debt Service

Currently the debt service is paying for the Middle School, the Library, the Recreation Complex, Law Enforcement Center,the Transfer Station and the new Polk County Virtual Early College. The DSS building is being paid for out of DSS’sdepartmental budget to take advantage of reimbursement from the State. Debt Service expense is up 27% from the prior year due toa full year of debt service on the financing of the Law Enforcement Facility.

Transfers

In the 2017-2018budget we are transferring $150,000to Capital Reservefor dam repair (bringing our total to approximately $925,000),and$95,706to school debt service (QZAB). We are also including $95,000 for water line extensions (this funding includes our County Engineer fee, leaving $50,000 towards future water line extension projects).

Volunteer Fire Departments

Similar to the Polk County tax rate being revenue neutral, I am recommending a revenue neutral tax rate for all taxing districts.

Current Rate / Recommended Rate
Tryon FD / .068 / .0635
Columbus FD / .070 / .0746
Green Creek FD / .056 / .0446
Mill Spring FD / .070 / .0663
Saluda FD / .095 / .0940
Sunny View FD / .060 / .0759
*Edneyville FD / .1050 / .1050
*Blue Ridge FD / .1200 / .1200
*Dana FD / .1300 / .1300

*Indicates a fire department rate, not located in Polk County. These fire departments serve areas in the Northern part of Polk County that can’t be served by in County Departments. By contracting with these departments to provide services, we are able to reduce the rates of insurance for property owners.

Future Considerations

The upcoming fiscal year will be challenging for Polk County Government. It was important that we keep the tax rate revenue-neutral (without the revenue neutral growth factor), ensuring that we minimize the burden on the taxpayer. The ability to keep the revenue-neutral rate, while taking on more debt and operating costs was difficult. There were several factors that allowed us to absorb the expenses, including fund balance appropriation for capital purchases, natural debt reduction, projected increase in revenues, and department manager’s working to keep a flat budget.

This revenue-neutral tax rate requires that we are very precise in our revenue projections for the year. While all of our official indicators point to a growing economy, there are no guarantees. We have ensured that our revenue projections are fiscally conservative.

Summary

This general fund budget is balancedand is decreased overall from our current year amended budget by 3.10%, primarily due to fund balance appropriation.The overall budget, including General Fund, Special Revenue Funds, Capital Project Funds, and Enterprise Fund is decreased by 34%, primarily because of jail construction in the current year. This budget will allow us to maintain and improve upon services to our citizens. I appreciate all of the hard work, effort and sacrifice that was put into this process by our department heads. I also appreciate all of your input during the budgeting process and look forward to the coming fiscal year.

Respectfully submitted,

D. Marche Pittman

Polk County Manager