Interim City Manager Richard Hicks told City Council Monday night that budget discussions for the next fiscal year will start from scratch on June 6.
Hicks also said the discussions will involve both the current City Council as well as members of the newly elected council who are expected to be sworn in around June 15. If the swearing-in occurs then, the new councilors — and not those currently on council — will likely adopt the city’s 2022-23 budget. That must be done by June 30.
There will be six new councilors and a new mayor following last week’s election.
Hicks said it is unique to have the current council and the incoming council work on a fiscal budget. City municipal elections are usually held in October in odd-numbered years with the new council taking their seats in the December following the election.
But last year’s election was delayed to this spring because census data needed to redraw ward boundaries was not available. The incoming council will serve until December 2023.
“We’ve never done this before,” Hicks said. “We kind of have a quandary. We start our budget with this board and in all likelihood it will be adopted by the new board.”
Hicks presented his proposed $22.7 million general fund budget on May 16 to the current council. The plan proposes spending more than $1 million less than the city’s current $23.8 million general fund budget.
City Council agreed to invite the eight councilors-elect to the June 6 budget work session and Hicks said he would start the budget discussion process all over. But Hicks said the budget numbers will stay the same for the most part.
A budget work session on the enterprise fund was scheduled for Monday but was canceled. The June 6 work session was slated to be a wrap-up of the enterprise fund and include time for questions on the budget.
“I’m probably going to start again from scratch,” Hicks said. “I will make the same presentation, but we will have a few updated numbers. I think they (new council) need to see the entire process.”
One number that will change is the cut in the city’s property tax rate: It will be 15 cents and not the 16 cents Hicks first projected on May 16.
The current city property tax rate is 74 cents per $100 of valuation. Hicks said final numbers from Pasquotank County’s revaluation of property revealed that a revenue-neutral rate would likely be 59 cents per $100 of valuation and not 58 cents as earlier projected.
A revenue-neutral tax rate raises the same amount of revenue that is currently collected from property taxes — even though property values would be higher.
“To bring in exactly what we had budgeted in the current budget year, the tax rate is probably going to be at 59 cents,” Hicks said.
Hicks also said there are no new positions in his budget proposal. Water and sewer rates will also stay the same, he said.
Council discussed allowing the newly elected City Council to ask questions during the June 6 work session but eventually opted against the idea.
Instead, Hicks said he would conduct a work session with the new elected city leaders following the June 6 meeting and answer any questions they may have.
No councilor expressed any objections to letting the new council adopt the city’s next budget. Councilor Billy Caudle said it was a moot point to have the current council adopt the budget since there will be six new City Council members and a new mayor. Caudle did not seek re-election.
“The new council, they are going to be more concerned, I think, with adjusting the general fund because the enterprise funds pretty much take care of themselves,” Caudle said. “When they get up to speed on the general fund and when they are seated, they could bump the tax rate up a little and add back some of those things that they are going to learn about that we have already seen.’’
Councilor Darius Horton, who also did not seek re-election, asked Hicks about the city passing an interim budget.
“State law allows for the adoption of an interim budget if one is not passed prior to June 30,” Hicks said. “I don’t anticipate us needing that. My goal is to have it approved before July 1.”