Macon County Manager's Office • Budget Message
(828) 349-2025

May 24th, 2010

Macon County Board of Commissioners
Chairman Ronnie Beale
Vice-Chair Jim Davis
Commissioner Bobby Kuppers
Commissioner Brian McClellan
Commissioner Bob Simpson

In accordance with the North Carolina Local Government Budget and Fiscal Control Act, I am pleased to present to you the proposed budget for Macon County for fiscal year 20010/2011. To a degree Macon County finds itself in an enviable financial position compared to many other counties in North Carolina. The county is in sound financial condition, and continues to have one of the lowest property tax rates in the state. Our fund balance is stable and allows the county a degree of confidence in terms of being
prepared for unexpected emergencies. This along with a solid and consistent tax collection rate contributes to the excellent Bond Rating the county enjoys. When capital project financing is considered these facts result in lower interest rates and savings for the taxpayers of Macon County.

There are many positive accomplishments the county can be proud of while at the same time being vigilant in its approach to realistic budgeting and financial planning. This is what being a good steward of public funds all is about. I will take time in this budget message to emphasize both the highlights and challenges in the proposed spending plan for the county for next year.

On the revenue side of the budget, growth in the tax base is minimal (less than 1%) and although sales taxes have somewhat stabilized they continue to fall short of previous years collections. We hope for a rebound in the economy next year but realistically at this point we don’t anticipate much change in the situation for a while.

Expenditures

Faced with our obligation to fund essential county services and debt on capital projects we have made decisions and recommendations that prioritize and in most cases reduce departmental and agency budget requests this year. There are many worthwhile and commendable projects, programs and services that have merit but have not been included in this proposal due to lack of sufficient revenue.

This year’s proposed budget is $42,772,146. Beginning July 1st, 2009 the approved budget was $41,990,275 and because of carryovers from the previous year and additional grant funds the revised budget for this fiscal year to date is $44,161,123.

The proposed budget for 2010/11 is $1,388,977 or a little over 3% less than the revised current year budget, and 1.8% higher than the original approved 2009/10 budget. The proposed budget reflects an adjustment to the property tax rate increase of 1.5 cents. This is dedicated exclusively and entirely to pay the debt service on the new Iotla Valley Elementary school and the renovations to the Nantahala School. The Board votedunanimously last November to make this commitment. It should be noted that construction costs are very low now and some of the financing is part of low interest loans approved in the America Recovery and Reinvestment Act (QZAB and QCSB) along with a USDA Rural Development loan. We expect to have financing rates for the (QZAB and QCSB) portion between 1% and 1.97%, and for the USDA Rural Development (formerly Farmers Home) portion we are looking at 4.25%.

The balance of the operating budget is planned within existing revenues. We have eliminated virtually all requested capital outlay for our departments, and reduced other expenses where we were able. We have recommended for the second consecutive year no adjustments to the current salary or fringe benefits for county employees. Our goal was to maintain the current level of service and avoid lay offs, if possible, of current county staff. In order to do this we have made adjustments in other areas of the budget and continue to fill only essential positions when they become vacant. We are not recommending any new positions in this year’s budget. There is a mandated increase in our contribution to the retirement system for employees. In this we have no choice. Our health insurance rates are at this point holding steady.

Like every year, Macon County as well as our educational institutions struggle to improve services, recruit and retain quality employees and move forward. We strive to maintain our leadership position in Western North Carolina. Macon County has enjoyed a reputation of being a forward thinking progressive county that seeks to preserve the quality of life while carefully balancing the needs of our citizens and the tax burden they are asked to bear.

There are several key issues we have addressed as we prepared this proposed spending
plan for next year. Here are a few highlights of that plan. A full and complete line item
detail has been prepared that gives a thorough breakdown of each line item expenditure,
appropriation and revenue source.

With the General Assembly still in session we are concerned that the state will shift
additional responsibilities and/or reduce county funding to correct their budget crisis. The
state is now facing another revenue shortfall for next year. We can only wait to see what
effect this has on the county. We must continue in our efforts to recognize and oppose
legislation that adversely effects the county’s financial position.

Vehicle replacement delayed

Normally the county replaces six (6) sheriffs patrol vehicles each year. We are not recommending the purchase of any new vehicles this year.

Airport Improvement Grants
The county has previously committed to matching FAA and State DOT Airport Improvement grants and this years budget includes $300,000 as a 10% match on the current airport project.

Education remains a priority for the County.

In addition to the new Iotla Valley School and the Nantahala School renovation, the county is also committing $1,300,000 for improvements to Franklin High School. These funds are from previous unused dedicated school funds and lottery proceeds. No financing is involved with the High School project. The School Current Expense budget remains at current year level ($6,911,000) but the Capital Outlay as proposed is reduced from $500,000 to $200,000. The budget includes full funding for the current teacher supplement.

Solid Waste Management

In order to maintain the same level of service to our citizens and visitors the proposed budget recommends an adjustment in solid waste fees. It is recommended that the household fee currently at $60.00 per year be increased by $1 dollar per month or $12 dollars a year making it $72.00. It is also recommended that we increase the tipping fee from $60.00 per ton to $72.00 per ton, and eliminate the availability fee for business which already pay 100% of the tipping fee for all waste generated by them. This helps maintain the fees necessary to continue the level of solid waste service we now have.

Special Appropriations budget will remain at current year levels.

The proposed budget for Macon County for 2010/ 2011 is balanced with revenues and expenditures of $42,772,146 and is hereby submitted for your review and consideration.

Respectfully,

C. Jack Horton County Manager/ Budget Officer