Newberry City Council discusses general fund budget

NEWBERRY – Due to the rising cost of inflation and of providing public services, the City of Newberry’s budget was difficult to balance this year, City Manager Matt DeWitt told council.

DeWitt presented the city’s budget on May 4-5 and said the proposed general fund budget for the fiscal year 2022-2023 was balanced without any proposed increase in taxes or business license fees.

The proposed general fund budget discussed by council was balanced at $10,876,625, a decrease of $3,522,912 or 24.5%, compared to last year. DeWitt said noted there has been no city millage increase in over 11 years.

“As costs to deliver services continue to increase, the city must do what it can to grow the base, to further spread the costs out,” he said.

Given this information, he said that council has decided to explore possible outstanding annexation agreements that may be both viable and beneficial. Many of the agreements to annex are linked to utility service agreements, he said.

City staff will present findings on annexation opportunities in the coming months, DeWitt said to council’s consideration in growing the base.

The general fund revenues, DeWitt said are projected to be $10,876,625 which represents a decrease of $3,522,912 over the current year’s projections.

“Largely the change is due to the fact that we received a large Federal American Recovery Plan infusion in fiscal year 2022 and won’t be receiving one in 2023,” he said.

DeWitt said it was important to note that any County Transportation Committee funds not secured by staff will not be spent by the city. This is currently projected at $325,000 in the current budget.

A proposal of a $2 increase on residential garbage services, from $13 to $15 per month and the elimination of the last “free pick-up” on commercial garbage containers is in this year’s general fund. This will increase the average commercial refuse bill by $21 per month.

DeWitt said the cost of delivering services continues to increase and unfortunately, the county must cover their costs at the transfer station, and this causes the city to have to raise rates to keep up.

The Utility Fund transfer, DeWitt said, would remain flat again this year at $1,865,909 and remained at that level for the tenth straight year.

General Fund Expenditures:

The total expenditures in the general fund next year are projected to be $11,265,491 as compared to $10,670,526 in fiscal year 2022.

Under the line item of city manager, the budget is proposed to increase by $73,985, attributable to the promotion of current clerk to council, Jeff Wicker, to assistant city manager, as well as the hiring of a new clerk to council and scheduled cost of living increases within the department.

The planning and development services budget is planned to increase by $49,029 next year. DeWitt said the increase can be attributed to the addition of a code enforcement officer to assist in inspections and landscape compliance. Another round of Community Development Block Grant (CDBG) demolitions has also been proposed for the Wise Street area of the city.

The police department budget, totaling $2,203,561, is proposed to increase by $361,229 over the prior year, as the city has continued to budget local residency stipends and their sign on bonus program to help attract already certified officers to the city’s department.

“We’ve made a strong commitment in the proposed budget on increasing our police officers’ pay,” DeWitt said. “This is a dangerous profession, and the city must remain competitive in its offerings in order to retain good police officers.

Under the fire department line item, the budget is projected to be $1,517,730, which is an increase of $230,756 over the current year’s budget. This increase is due to the ongoing capital needs of the department which include new cement pads around Station 20, a pick-up truck to pull fire equipment to scenes and the replacement of a SCBA air tank filler.

City staff that oversees fire recruitment county-wide is half budgeted under this line item as the county has agreed to continue to pay the other half of the position’s salary and benefits and provide the position’s transportation.

The line item of public works administration is proposed to increase by $87,694, when compared to the current year. This increase is mainly attributable to the need of a replacement shed that covers all large trucks and heavy equipment. DeWitt said the current shed covering was in need of replacement.

Keeping the city’s equipment covered and well-protected, he said, was what allowed it to last for so many years.

The public works sanitation department’s overall request has decreased by $215,760, due to the department not needing to fund a new garbage truck in the upcoming fiscal year.

DeWitt said that council will need to keep an eye on the county’s tipping fees. The county is increasing their city commercial tipping fees close to the amount of $93,000, DeWitt said as its project depends on weight at scales each year. They plan to do the same in the 2024 fiscal year.

“Staff has managed to keep commercial garbage going as a viable service in fiscal year 2023, but this may be a difficult proposition in fiscal year 2024, if the county continues with their planned increases,” he said.

Under the line item of public works garage, the budget is projected to increase by $7,922 in the upcoming year due to the need of installing access control within public works facilities, similar to what has previously been done across other city facilities.

Expenditures for the Parks, Recreation and Tourism Department are projected to decrease by $483,896, due largely to not anticipating receiving a Land and Water Conservation Fund grant, as well as the retirement of staff in July of the upcoming fiscal year.

Under the line item of employee fringe benefits, the proposed budget is anticipated to increase by $161,496 from the current year, stemming from the city’s share of employee insurance rising and retirement system increases.

The Special Funds line item of the State Accommodations Tax Fund is projected to experience an increase in revenue of $15,000 as compared to the prior year, for a total of $140,000. Of that amount, $30,750 will be transferred to the general fund revenue; in accordance with state statutes, $34,500 will be transferred to the tourism fund and the remaining $74,750 will be awarded to local groups to promote tourism through the local accommodations tax application in fiscal year 2023. This distribution formula is set for municipalities by the state of South Carolina.

In the special funds line item of the local hospitality and accommodations fund, the source of funding is the 2% tax levied on the sale of food and beverage and the 3% tax levied on lodging and accommodations in the city.

DeWitt said for the upcoming fiscal year, staff anticipated receiving approximately $1,065,575 or an increase of $215,731 from prior year.

The revenue received through the local hospitality and accommodations fund is transferred to other funds for promoting tourism. The proposed budget anticipates the following monies to be transferred to the following funds: the Newberry Opera House ($326,344), Japanese Gardens ($5,000), Parks Recreation and Tourism special events ($100,000) and the Firehouse Conference Center ($105,000) will receive the majority of these funds.

Under the line item of streetscape fund, which historically funds downtown Main Street improvements, are expenditures proposed to increase by $9,000. DeWitt said the budget proposed five façade grants, with a maximum match of $9,000 each to be awarded in fiscal year 2023 for downtown Newberry.

The city’s tourism fund represents the budget for all City of Newberry marketing and promotion initiatives as well as the Firehouse Conference Center operations. Council discussed a proposed lease of the conference center in the upcoming budget as they felt a professional hospitality group could market and help maximize the use of the facility to the benefit of the city.

Parks Recreation and Tourism Director Scott Sawyer said the plan was to have a part time staff member for the conference center to assist in the day-to-day in the meantime.

Under the line item of the community housing development fund, which allocates funding for special projects, the budget is projected to decrease $230,000 from prior year, directly attributed to the Land and Water Conservation Fund (LWCF) Grant the city received for Wise Street Park in fiscal year 2022, but will not be receiving in the upcoming fiscal year.

The Oakland Tennis Center budget contains revenue projections of $104,785 in the upcoming fiscal year. Under this fund is the hiring of a position for a full-time coordinator for the center, as the former coordinator stepped down.

The Recreation Complex budget is proposed to total $316,057, or a reduction of $213,572 from the previous year. This reduction is a reflection of wrapping up many park improvements in the current year. There is one additional staff member requested in this budget.

“Staff is sorely needed to be sure the park’s grounds are being maintained and run effectively, ensuring a good experience is had by all visitors,” DeWitt said.

Proposed for the upcoming fiscal year is a 5% Cost of Living Adjustment for all employees making $50,000 or less and a 3% adjustment for those making over that threshold.

DeWitt thanked council for their consideration when reviewing the upcoming budget and said staff looked forward to the upcoming year being another exceptional year for the City of Newberry.