The Town of Sunset Beach has a balanced budget for its general fund for fiscal year 2023-2024 following multiple budget work sessions last month. The town was able to reach a balanced budget without increasing the property tax rate.
The town council during their May meeting set a public hearing date for June 5, when residents will have the opportunity to express their opinions on the proposed budget. A budget must be adopted by July 1.
The proposed FY 23-24 budget includes a 7% cost of living adjustment (COLA) and 2% merit raises for town employees, new capital purchases for various departments and a property tax rate that remains at 16 cents per $100 value.
Sunset Beach Finance Director Tara Nichols said the town’s tax rate is the lowest among comparable towns in the area.
The town’s general fund revenues for FY 2023-24 are projected to be $10,025,220, down $2,233,167 from the fiscal year 2022-23 amended budget. Overall general fund expenditures have also decreased from $11,262,340 in FY 22-23 to $10,025,220 this coming fiscal year.
Being a property revaluation year in Brunswick County, the town expects to see an increase in property tax revenue due to an increase in property values in Sunset Beach.
The town is projected to collect $4,307,600 in property taxes this fiscal year, compared to $2,737,000 in property tax revenue projected in FY 2022-2023.
However, despite a nearly $2 million projected increase in property tax revenue, the town’s overall revenues are projected to be down by $2,233,167.
Nichols explained the decrease, noting it is largely due to the dredging project and the $1.7 million the town appropriated from the fund balance into the general fund then into the dredging fund after the state increased the project grant amount, requiring the town to up their match.
Additionally, the purchase of the Majestic Oaks property, a decrease in revenue from building inspections, less debt proceeds and grants received this coming fiscal year than in prior years and no sale of surplus equipment are other reasons why the town’s revenue is down, Nichols said.
The largest chunk of the town’s $10,025,220 in expenditures will go towards public safety and infrastructure — fire, police and public infrastructure. The fire department will receive 27% ($2,716,050), the police department will receive 26% ($2,570,100) and public infrastructure projects will receive 12% ($1,215,500) of the budget.
Police and fire will receive a slight increase in funds from FY 22-23, while public infrastructure funds decreased by nearly $2.1 million due to lack of capital purchases this coming fiscal year.
Expenditures for the fire department include a $150,000 down payment on a new fire engine. The police department’s expenditures include the purchase of three new vehicles totalling $218,000 and $52,000 in equipment, which includes 14 cargo vault storage systems for vehicles. A majority of allotted public infrastructure funds, $698,500, will go towards operations, and another $200,000 will go towards department infrastructure.
The COLA raises and merit bonuses were a much discussed topic during the budget work sessions. Last fiscal year, the town gave a 7% COLA and a 3% merit raise across the board; this fiscal year, another 7% COLA and a 3% merit raise was proposed.
The council raised concerns about the yearly raises, and in particular the merit raises being given to all employees.
Councilman Jamie Phillips said, “We went through this last year and I had similar concerns about a [roughly] 10% increase. So, regardless, that’s going to be a relevant point for me again.”
Mayor Pro Tem John Corbett said he was concerned about another 3% merit raise for all employees. “The reality of life is not everybody deserves a maximum merit raise,” he said.
The raises, Nichols said, are largely to keep the town salary rates competitive with other nearby towns, ensuring the town can retain its employees.
“We have to stay competitive with our neighbors,” Town Administrator Lisa Anglin said. “We’re losing to Horry County [South Carolina], we’re losing to Ocean Isle Beach, we’re losing to Holden Beach, to Wilmington — and we’re just not competitive.”
Councilman Charles Nern agreed that the raises are necessary. “We have to stay competitive with the other [nearby municipalities’] salaries,” he noted.
Ultimately, the council agreed on a 7% COLA, along with funding a 2% merit raise for employees, with employees eligible to receive up to a 3% merit raise if department heads determine it is deserved. If enough employees are given a 3% merit raise, the budgeted amount for the raises would need to be adjusted, Nichols noted.
The Sunset Beach Fire Department also needs a new fire engine, which currently has a three-year wait for delivery, and has budgeted $150,000 for a deposit to allow the town to order the fire truck.
Originally, the deposit was set to be $300,000, but the town is instead taking the other $150,000 and placing it in its Capital Reserve Fund, which allows the town to gain interest on its deposit. Nichols explained how the fund works.
“The transfer to a Capital Reserve Fund is a practice that will help with future planning. Once the funds are allotted in a Capital Reserve Fund they must be used for Capital,” Nichols said. “However, the specific projects or items can be changed. Town council is hoping to add to this fund each year going forward to help with future planning.”
Nichols said FY 2023-2024 for the town is “a year of planning, design, engineering and getting ready for projects to come.”
The full budget can be found online at: https://www.sunsetbeachnc.gov/vertical/sites/%7BA2C1D077-15B6-49E5-B8FD-53D65FA0DC5D%7D/uploads/Draft_Budget_Worksheets_FY_23-24.pdf.
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