Newberry City Council discusses new general fund budget

NEWBERRY – The City of Newberry’s general fund budget for fiscal year 2023-24 was presented by city staff on Tuesday, May 2 with a proposed two mil increase in taxes and no increases in business license fees or garbage fees.

City Manager Matt DeWitt said the proposed budget was extremely difficult to balance this year.

“Due to increasing costs for items needing to be purchased, along with the city’s need to remain competitive on pay to recruit qualified candidates for open positions and keep the great employees the city already has,” he said.

The proposed general fund budget discussed by council was balanced at $11,854,574, an increase of $977,949 or 8.99%, compared to last year. DeWitt said he felt it was worth noting that there has been no city millage increase in over 12 years.

“The proposed increase will amount to only $16 per year in taxes for a $200,000 homeowner,” he said.

Council asked city staff to review other options prior to first reading of the budget to see if it might be possible to delay the millage increase in the upcoming fiscal year.

DeWitt said that council would see in the budget proposal that city staff has implemented longevity pay for employees in the proposed budget. As opposed to the former “mid-point adjustment,” he said longevity pay increases upward mobility for employees to be promoted, instead of the stagnation created by the former system.

“It really caused an employee to have to stay in the exact same position in order to get the mid-point adjustment,” DeWitt said.

The city implemented longevity pay in the last fiscal year within the utility fund in order to remain competitive with neighboring cities. This year’s budget brings longevity pay to the rest of the workforce.

While the first year of implementing this longevity system will be the most expensive for the city because lots of employees will get the pay, after the first year of implementation, there will only be a few employees each year that reach the milestones that will allow them to achieve the additional pay, DeWitt said.

These milestones are for total years of service beginning at three years, then five years and then increments of five years until 35 years of service.

The general fund revenues are projected to be $11,854,574, which represents an increase of $977,949 over the current year’s projections.

A major contributor in revenues increasing within the proposed budget, DeWitt said, was under the line item of “other state receipts.” This increase was due to the SCDOT grant and CTC funds that have been budgeted for the sidewalks on Johnstone Street. DeWitt said this line item alone comprises 82.8% of the increase in revenues for the upcoming fiscal year.

The utility fund transfer, DeWitt said, would remain flat again this year at $1,865,909 and has remained at this level for the eleventh straight year.

The total expenditures in the general fund next year are projected to be $12,054,574, as compared to $11,265,491 in fiscal year 2023.

The line item of Public Works Sanitation is proposed to decrease by $90,946 this year, as DeWitt said city staff is proposing the city discontinue hauling commercial garbage.

Due to an increase in costs, DeWitt said staying in the commercial sanitation business has become unsustainable for the city.

“For the city to consider staying in the business, rates would have to rise to a level that will turn our existing customer base elsewhere for service,” he said. “To avoid this scenario, the city feels this is the best path forward.”

A proposal to bid the city’s commercial sanitation service out to include the sale of the city’s commercial route, trucks and containers was discussed with city staff and council at the meeting. Once the sale and transfer were completed, the city’s former commercial sanitation customers would begin to receive the service and billing from the new provider and discontinue receiving a monthly invoice from the city for that service.

DeWitt said city staff would mail letters to all commercial sanitation customers, notifying them of the transfer and that they should not receive any disruption in services during the process. However, these customers would still have the option to choose a new provider, should they choose.

Any questions regarding the process can be directed to Public Works Director Kip Gunter at 803-321-1020.

As a business owner himself, Councilperson David Force said he felt most businesses would be agreeable to such a scenario.

Under the line item of Planning and Development Services, the budget is proposed to decrease by $259,013 in the upcoming fiscal year. Most of this decrease is attributable to the CDBG grant for code enforcement decreasing $225,000 as the city completes the work that this grant provided funds for.

The line item of Police is anticipated to increase by $143,360 attributable to adding back three positions that had been removed from the budget in fiscal year 21 so that the budget could be balanced. In addition, the police department added a Watch Commander position in the 2023 fiscal year.

The fire department budget, totaling $1,417,355 is proposed to decrease $100,375 over the current year’s budget attributable to a decrease in capital expenditures. However, DeWitt said the city would probably need to budget for a new fire truck in the fiscal year 2025 budget as it was delayed in the upcoming budget year.

The line item of Public Works Administration is projected to decrease by $141,453 when compared to the current year due to lower capital costs. In the current year’s budget, this line item contained updated computer programs and access controls for facility security. These projects are now completed, DeWitt said, and therefore, they are not in this current budget proposal.

The Public Works Street Department budget will increase $847,316 attributable to the SCDOT grant and CTC funds to put sidewalks on Johnstone Street.

Under the Public Works Garage line item, the budget is anticipated to increase by $20,349. In this budget, is an allocation to purchase a Diesel Tech Diagnostic System for $14,000. The garage department has needed this for years, DeWitt said, and are very excited about being able to connect a vehicle to this system and it telling them what is wrong with the vehicle without paying outside shop fees.

“This will help us to avoid costly shop visits just to run a code to tell us what is wrong with a vehicle,” he said.

Expenditures in the Parks, Recreation and Tourism department are projected to increase by $42,911, with the main contributor being the $100,000 budgeted for Willowbrook Park renovations. The city plans to fund these renovations with the help of a PARD grant, which will fund 20% ($20,000) of the project. The remaining $80,000 will come from a transfer of funds from the Community Housing Fund, DeWitt said. This renovation will include updates to the playground equipment and scout cabin.

The line item of Employee Fringe Benefits is anticipated to increase $137,753 stemming from the city’s share of retirement costs increasing 1%.

The Newberry Arts Center line item is anticipated to increase by approximately $200,000, due to capital expenditures in renovations of the new arts center building, located in the former Newberry Observer location. Phase two of the arts center renovations include a roof replacement and electric service upgrades.

“After a few more rounds of renovations, the facility will be complete and will help residents a long time moving forward,” DeWitt said.

The Special Funds line item of the State Accommodations Tax Fund is projected to experience an increase in revenue of $51,827 as compared to the current year for a total of $191,827. Of that amount, $33,341 will be transferred to the General Fund Revenue in accordance with state statutes, $50,048 will be transferred to the Tourism Fund and the remaining $108,438 will be awarded to local groups to promote tourism through the local accommodations tax application in fiscal year 2024. These distribution formulas are set for municipalities by the state of South Carolina.

In the line item of the Local Hospitality and Accommodations Fund, the source of funding is the two percent tax levied on the sale of food and beverage and the three percent tax levied on lodging and accommodations in the city.

DeWitt said for the upcoming fiscal year, staff anticipated receiving approximately $1,208,488, or an increase of $137,090 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 ($401,344), Parks Recreation and Tourism Special Events ($100,000), the Newberry Recreation Complex ($150,000) and the Firehouse Conference Center ($110,000) will receive these funds.

Under the line item of Streetscape Fund, which historically funds Main Street improvements, expenditures are proposed to increase by $15,000 attributed to purchasing new downtown pole banners. DeWitt said due to weather and normal wear and tear, these banners needed to be replaced. City of Newberry Parks, Recreation and Tourism staff is helping to design new banners, he said that would be approved by the city’s Architectural Review Board prior to installation.

Under the line item of the Community Housing Development Fund, which allocates funding for special projects, the budget is projected to increase $104,949 from prior year.

This line item this year contains funding for Willowbrook Park renovations, the downtown façade grant program, downtown banners and continued support of the city’s relationship with Retail Strategies.

The recreation complex budget is proposed to total $243,092 or a reduction of $72,965 from the previous year. This reduction is a direct reflection of decreased capital needs. DeWitt said that city staff realizes the Capital Project Sales Tax referendum that was passed in the last election will fund projects at the recreation complex, however, staff has not been made aware of when those funds will become available.

“For that reason, city staff plans to come back to council for a budget adjustment once more information can be obtained on funding,” he said. “This will likely occur well into the next fiscal year.”

The city has scheduled a use of fund balance in the proposed budget of $200,000. This will be used to begin the work at the Newberry Arts Center in the upcoming fiscal year and will cover phase two of the project. The sale of land surrounding the Newberry Recreation Complex will help fund this phase and future phases of the renovations.

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