THE CITY OF Reidsville NORTH CAROLINA  1873  230W.Morehead! Street . Reidsville, North Carolina 27320 . (336)349-1030 . Fax (336)342-3649  Oficeofthe City Manager  BUDGET MESSAGE  TO: DATE: RE:  The Honorable Mayor Gorham and Reidsville City Council Proposed Budget for Fiscal Year 2022-2023  May 10, 2022  Dear Mayor and Members of City Council:  Herein submitted for your consideration, pursuant toi my responsibility: as City Manager and Budget Officer, is the City of Reidsville Fiscal Year (FY) 2022-2023 Annual Budget scheduled to begin on July 1,2 2022 and end on. June 30, 2023. City Staffist tol bec commended for all their efforts and hard work to ensure this proposed budget serves the needs of the The budget has been prepared in accordance with the North Carolina Local Government Budget and Fiscal Control Act as required by North Carolina General Statute 150-7. As required, all funds within the budget are balanced, along with all anticipated revenue and expenditure estimates being identified for FY2022-2023. Notice ofthis submission will be given to the news media and the public, and a public hearing will be scheduled at the City Council'smeeting onJ June 14th at 6:00p.m. A copy ofthis] proposed budget willl bep placed on file with the City Clerk and will be available for public inspection during normal business hours 10 days prior to the June 14th public hearing. As is traditional, a copy will also be placed in the Reidsville Branch of the Rockingham County Public Library to facilitate its  public while meeting the governing board's] priorities and policies.  examination by our citizens and stakeholders.  Introduction  The objectiveofthe proposed budget ist toh hold operating and capital expenses to ai minimum while continuing to serve the citizens ofReidsville. The City of] Reidsville, like all County and municipal governments, is being faced with uncertain economic times. As of March 2022, the Consumer Price Index reported inflation at 8.5%. Thisi ist the highest inflation has been since 1981. Our residents and employees are feeling the effects ofinflation. All departments were directed tol hold alll budgetary line items with the exception offuel.All budgets with fuel line items were increased an appropriate amount due to rising costs. In the past, fuel has been accounted for in a line item designated as Auto Supplies. This budget presents a better reflection of fuel costs and separates fuel from Auto Supplies by  creating a Fuel budget line item.  "Live Simply. Think Big." >)    CityofReidsville. Fiscal Year 2022-2023 Budget  D-dy.dRahnleram2ams Annual Budget is composed lofseven permanent funds: General; Parks & Recreation; Reidsville Downtown Corporation; Combined Enterprise; Police Separation Trust; Garage; and Insurance Funds. All seven (7) funds are balanced in The proposed Citywide budget is $31,759,750 versus FY21-22's amount of $31,116,450 Thisi is ani increaseofS643,000, which isi related toj personnel costs with thei remainderbeing spread across departmental operations due toi inflation. Aftera accounting for payments and transfers between funds, the true total for FY2022-2023 is $26,730,850.  regards to revenues and expenditures.  Personnel Benefits  The City's greatest asset is our employees. All departments were directed not toi request any new positions for this budget year. It is imperative that the City of Reidsville focus on retaining and: recruiting existing positions. Therefore, this budgeti includesa Cost-of-Living Adjustment (COLA) of 3% for all full-time employees. The total cost for the COLA is $348,000, whichincludes' benefits. This budget alsoi includes the $15.001 minimum wage for all full-time positions and the $12.00 minimum wage for all part-time positions. The City Council voted at their March 8, 2022 meeting on1 the newi minimum wage for full-time and  part-time employees. Retirement  The City participates in the Local Government Employees Retirement System (LGERS), whichi is administered by thel NC State' Treasurer'sOftice. WhiletheNCretirement systemis one of the strongest in the Country, planned increases to contribution rates have been scheduled to maintain the integrity of the plan. FY2022-2023 is the fourth of five annual increases added tot the contribution rate. Therate for General employees will increase from 11.44% to 12.17%, and the rate: forL Law Enforcement will increase from 12.04%1 to 13.04%. This change in rates represents a $100,000 approximate increase for the FY2022-2023  budget. Health Insurance  The City is insured through the Municipal Insurance Trust of the NC League of Municipalities. The City is fully insured in that a set premium is paid per employee, and there is no assessment madei if claims exceed thej premiums. Thei increase for the City was only 3%. The FY2022-2023 budget has absorbed this increase, allowing employees to continue coverage at no cost. Rates to electively cover spouses and/or dependents did The 3% increase resulted in a $350 increase in cost per employee and eligible retiree, bringing the annual cost per participant to $11,350. This increase represents a $75,000  increase by 3% for employees.  approximate increase for the FY2022-2023 budget.  A-7    CityofReidsville. Fiscal Year 2022-2023 Budget  Pay Plan  As aj point ofreference, the three groups for the pay plan study are as follows:  Year 1: Police Category Year 2: Public Works Category Year 3: Remaining Category (All Others)  Theimplementation ofYear" Two (2) ofthe' Three (3) Years studyofthemarket: payplan was proposed for this FY2021-2022 at thel May 10, 2022 City Council meeting. Thet total cost for the Public Works pay plan implementation: is $175,000, which includes benefits. The City Council also voted ati its March 8, 20221 meeting toi move: forward with theimplementationof thei market pay plan fort the Firel Department tol help with recruitment and retention. Thetotal cost for the Fire Department pay plan implementation is $133,500, which does include Funds arei included: int thel FY2022-2023 budget to complete the study for YearThree (3)All Other Group, withaJuly1,2023: plannedi implementation date. Also, funds haves also been allocated in the amount of $5,000 to start a compression study for all positions in the  benefits.  FY2022-2023 budget year,  Capital Outlay  All Capital Outlay requests were eliminated from the proposed FY2022-2023 budget. This wasi necessary in order tol balance the proposed budget. Capital requests were cuti in orderto account for a 3% COLA, pay plan implementation, minimum wage increase for both full- and part-time employees, benefit increases and fuel inflation. However, the current fiscal yearl has expected expenditure surpluses due to conservative: spending, vacant positions and reduced part-time hours. These funds can be utilized to fund some of the capital requests.  General Fund  Capital outlay of$2,333,900 was requested for FY2022-2023. expenditure surplus from the FY2021-2022 budget:  The following Capital Outlayre requests for $547,800arer moalutaghepa  Public Works Administration Streets Division Cemetery Division Solid Waste Solid Waste IT  Radios Pick-Up' Truck Zero Turn Mower Road Tractor Transfer Station Scales Equipment & Computers Plotter Police Vehicle A-8  $132,000 $51,000 $12,500 $134,300 $51,000 $100,400 $11,500 $55,100  Community Development Police Department    CityofReisville. Fiscal Year 2022-2023 Budget  The additional requested capital of $1,786,100 will be considered in carryover funding in Fall, 2022. Carryover funding is from revenue surplus. Revenue surplus is projected for current FY2021-2022 budget based on an unexpected increase in Sales' Tax revenue.  Parks & Recreation Fund  Capital outlay of $42,500 was requested for FY2022-2023. expenditure surplus from the FY2021-2022 budget:  The: following Capital Outlay I requests for $26,500 arei recommended utilizing the expected  Facilities Teen Center Combined Enterprise Fund  Zero' Turn Mower HVAC  $12,500 $14,000  Capital outlay of $443,600 was requested for FY2022-2023. expenditure surplus from the FY2021-2022 budget: Plants Maintenance Wastewater Plants Maintenance Wastewater  The: following Capital Outlay requests for $143,600 urerecommendadutizing the expected  Tertiary Filter Trough Pump Rebuild  $100,000 $43,600  The additional requested capital of$300,000 will bec considered in carryover fundinginl Fall,  2022.  Revenues  Revenues will be discussed via the respective funds for easier understanding. Asapoint of reference, please see Section B, Citywide Revenues, for a breakdown of requests and  recommendations. General Fund  The FY2022-2023 proposed budget recommends the General Fund's tax rate remain the same at $0.739/$100 of valuation. The FY2022-2023 budget year will bei the first budget prepared withi no tax dollars generated from the Cigarette Factory. The Cigarette Factorywas historically the CityofReidsville'sl largest tax contributor. The Municipal Servicel District tax rate is recommended to remain the same at $0.25/$100 of valuation. There is no appropriation of Fund Balance in the proposed FY2022-2023 General Fund budget. Section B, Appendix D - Historical Summary of Property Tax Information provides  traditional tax data.  A-9    CitvyofReidsville Fiscal Year 2022-2023 Budget  Rising inflation costs are a contributing economic factor for the City of Reidsville's revenues. Revenues in the FY2022-2023 budget were kept flat with the exception ofSales Tax. Sales Taxi is projected tol be $900,000(22.6790) moreint thel FY2022-2023 budget than in the current fiscal year budget. Most of this increase has been realized in current year collections, but this rate ofincrease will most likely vary with the current rate ofinflation. The North Carolina League ofMunicipalities is projecting Sales' Tax toi increase 3.00% for the 2022-2023 fiscal year. Property tax collection: rates are as expected andt tracking witht the  previous year.  Parks & Recreation Fund  This fund has an overall increase in revenues of $180,950 (10.46%) generated from an increasei in the fundingprovidedi by the General Fund in ordert to offset personnel increasesi in part-time salaries. Thisi is due toi raising thei minimum payt to $12.00 perhour for all part-time employees. Noi ratei increases arej proposed int this fundi in thel FY2022-2023 proposed budget. The Combined Enterprise Fund contains a slight overall decrease of $25,000 (,26%). This decrease was driven by a reduction in the Interest Income revenue line items; all other revenue line items are the same as the previous year, No rate increase is proposed for the Although there arei no Capital Outlay items included in the proposed FY2022-2023 budget, the City remains committed to provide not only for operations but also fori inflationary and Capital Outlaycosts. Thisi is something that hast tol bei reviewed on an annual basisi in ordert to properlymaintain our utilitys system. While the industry suggested standard operatingmargin is1 1.2, the City strives to keep an operating margin between 1.05 and 1.10 due to affordability. This is combined with City Council's desire to keep rate increases at a minimum when ai ratei increase becomes necessary. Section B, Appendix E- Utility Rate  Combined Enterprise Fund  FY2022-2023 budget.  Information Comparison, provides additional data.  Other Funds  The other remaining funds are either internal or special funds that serve a specific purpose within the organization (Police Separation. Allowance' Trust, Garage, and Insurance: Reserve Funds) or mmayalwleDammiown Corporation). Allre remainedrelatively thes same,  with slight increases, for the upcoming fiscal year.  Expenditures  Expenditures willl be discussed via thei respective funds for easier understanding. Asapoint ofreference, please see Section B, Citywide Expenditures, for al breakdown ofrequests and  recommendations.  A-10    CiyofReidsville. Fiscal Year 2022-2023 Budget  General Fund  The General Fund's expenditures are proposed to increase by $436,000 (2.36% overall). Thisi increase: isi from a 6.73% increase: in operations, a3.25%i increase in debt service and a 100% decrease in Capital Outlay. Theincrease in debt service is $11,700.  Parks & Recreation Fund  Thel Parks and Recreation Fund expenditures saw an overall increaseofs180,950(10.4690). Thisi increase was driven by personnel-relatedi items. Theinereaseofs199,050inoperations Section D: includes Parks and Recreation departmental overviews, objectives, and lineitem  was offset inj part bya ($10,800) reduction in Capital Outlay.  details.  Combined Enterprise Fund  The Combined Enterprise Fund did see an overall decrease in expenditures in the proposed budget of ($25,000) or .26%. While expenditures decreased overall, operating costs increased by $576,550 or 7.92%. This increase wasi more than offset by ar reduction in debt service of( ($1,200) and ai reduction in Capital Outayof(600,350,. City Staffwill look to Section Fincludes Combined Enterprise Fund departmental overviews, objectives and line  use surplus funds if available for Capital needs,  item details. Other Funds  The Reidsville. Downtown Corporation' budget remains the same asi thej prior fiscal year. The RDCi is a partnership between thej private sector and the City sO staff will be assisting as in past years. The: remaining internal funds see the anticipated expenditures fort thei upcoming Sections E, G,H, andIinclude edepartmental overviews, objectives, and line item details for  fiscal year met. each fund.  Debt Service  The City of Reidsville Debt Service Summary is located in Section B, Appendix C. The General Fund. and! Parks & Recreation. Fund have at totall FY2022-2023 beginningl balanceof $7,236,772. Debt Servicepayments for FY2022-2023 total $618,759 withi no: new debt being The Combined Enterprise Fund has ai total FY2022-2023 beginningbalance of$17,468,151 with debt service of$1,799,896 scheduled to be paid. The greatest amount oft the debti is  proposed ini the upcoming FY2022-2023 budget.  A-11    CityofReidsville Fiscal Kear 2022-2023 Budget  involved with upgrades fori the Water & Wastewater Treatment Plants and thel Dam/Spillway repairs. A0%interest: State Revolving Fund loan totaling $3,963,0891 has been approved for the BNR WWTP Project, but no funds have been drawn down to date while the project remains in thej planning phase. Twoadditional capital projects, the WWTPI Headworks and thel Redundant WaterLine, havel been awarded grants and lowi interest loans as well, but this funding has not been officially accepted by the City at this point. The 2012 and 2013 Revenue Bond issues ofthe Cityl have debt covenants that must be considered wheni issuing any new debt financing, along with the ability toj pay thei related debt service. At any point, debt financing remains a viable method toi improve the City's existing infrastructure.  Summary  This budget for FY2022-2023 is balanced as required by law and continues to provide existing services while meeting the governing board's priorities and polices. The FY2022-2023 budget proposal involved a lot oft teamwork by the Management Team and many others. Assistant City Manager/Finance Director Chris Phillips is to be commended for his and his department'sl hard work and financial fortitude in assisting with preparation ofthe proposed FY2022-2023 budget.. Assistant City Manager Haywood Cloud isa also tol be commended: for his assistancei in this] proposed budget. Iwould alsol liketot thank City Clerk Angela Stadler and Deputy City Clerk Latasha Wade for their hard work and Ilook forward to working with the City Council, Citys staff and our citizens toi implement this  commitment inj preparing thel budget notebooks.  budget over the FY2022-2023.  Summer Woodard City Manager  Soumul  A-12    THE CITY OF Reidsville NORTH CAROLINA  1873  230W.Morehead: Street . Reidsville, North Carolina 27320 . (336)349-1030 . Fax (336)342-3649  BUDGET HEARING ADVERTISEMENT  PUBLIC HEARINGS  The proposed 2022-2023 budget for the City of Reidsville has been presented to the City Council and is available for public inspection in the City Clerk's Office, City Hall, from 8:30 A.M. to 5:00 P.M., weekdays. A copy has also been placed in the Reidsville Branch oft the The proposed 2022-2023 budget for the Reidsville ABC Board has also been presented to its Board and is available for public inspection in the ABC Office, 102 Durwood Court, Reidsville, from 10:00. A.M. to 4:00 P.M., weekdays. A copy is also available for public inspection in the Reidsville Branch oft thel Rockingham County Public Library, Morehead Street, There will bej public hearings during the regular monthly meeting ofReidsville City Council on' Tuesday, June 14, 2022, at 6:00 P.M. at City Hall, 230 West Morehead Street, for the purpose of discussing both proposed budgets. Citizens arei invited to make written or oral  Rockingham County Public Library, Morehead Street, Reidsville.  Reidsville, during regular business hours.  comments.  Summer Woodard Budget Officer CityofReidsville  Jodi Langel General Manager ABC Board  The City of Reidsville shares the goals of the. Americans with Disabilities Act, which protects qualified individuals from discrimination on the basis of disabilities and provides for equality of opportunity ini the services, programs, activities and employment oft the City. Any individual with a disability who needs an interpreter or other auxiliary aids or services for this meeting may contact the City of] Reidsville at 336-349-1030 (Voice). The toll-free number  for Relay North Carolina is 1-800-735-2962 (TT).  PUBLISH DATE IN ROCKINGHAMNOA Sunday, May 29,2022  "Live Simply. Think Big."