Macon starts preliminary budget talks
Macon County continues to find itself in a secure financial position heading into the 2020-21 fiscal budget process, but commissioners still face a number of challenges when it comes to prioritizing the county’s growing needs.
In their initial budget planning meeting Feb. 6, commissioners each discussed their priorities and heard from several department heads regarding their challenges and funding requests.
County Manager Derek Roland reminded the board of accomplishments that came out of the current fiscal budget as well as an early outlook for the next year.
During the 2019-20 budget process, the board ultimately decided to increase its revenue-neutral property tax rate from 36.9 cents per $100 of assessed value to 37.4 cents in order to cover additional needs within the Macon County Schools system. Commissioners agreed to fund $500,000 more for school operations, $250,000 for school capital outlay, $310,000 in technology needs and two additional STEM program positions.
Macon County completed a $6 million expansion project at South Macon Elementary to add six classrooms and renovate the cafeteria.
Roland said the county also worked on increasing efficiencies to cut costs, including replacing all county facility lighting with LED light bulbs. The county budgeted $185,000 for the project but ended up only paying $75,000 by using county staff to complete the project and by receiving rebates from Duke Energy.
As far as public safety enhancements, Roland said the county’s 26 road deputies are now equipped with body cameras as well as dash cameras. The county also invested in telecommunication improvements and hired two additional 911 dispatchers to meet the increased call volumes.
Other staff needs were met by adding two new employees at the Department of Social Services and a full-time receptionist at the senior services center.
In 2019, Macon County completed a revaluation process and 2020 will be the first year those updated property values take effect. Last year’s property tax collection rate was over 98 percent.
“Like every other year we always have challenges and the past few years one challenge has been with health insurance,” Roland said. “We saw a 24 percent increase last year from our provider — that’s a $740,000 increase and the county picked up $500,000 of that.”
Commissioners decided to switch over to the North Carolina insurance funding pool, which means the county will only see a 4 percent increase in health insurance costs in the coming fiscal year. The county will need to absorb another 1.2 percent increase in retirement costs.
While the county has been working to update its employee pay plan in recent years, Roland reminded the board that several county departments still aren’t where they need to be on the pay scale.
“There are still some departments where our grades need to be adjusted for retaining and recruiting employees,” he said.
Macon County’s fund balance continues to grow as the county continues to be conservative with revenues. With more than $24 million sitting in the fund balance, that represents about half of the county’s $51 million annual budget.
“How did we gain in fund balance? We underspent the budget in the general fund by $1.7 million,” Roland said. “We take a conservative approach to sales tax — we were $306,000 above the original budgeted amount and excess sales tax plays a key role in building our capital reserve fund.”
Superintendent Chris Baldwin said there’s still many unknowns in the state budget for public education. With the state budget standoff in Raleigh, he said it took a series of “mini budgets” to get them through the fall. The state is looking at salary increases for certain teachers, but just like last year’s round of raises Baldwin said some school employees are left out of that, including custodians, clerical, cafeteria and bus drivers.
“Last year, if you recall, the board appropriated funds to cover the cost of increases for those left out by the state — a 2 percent one time cost of living increase,” Baldwin said.
Baldwin also told commissioners that the school system needs more support to handle the mental health needs of its student body.
“We’ve met with the school principals and guidance counselors and the main thing they’re concerned about is serving the mental health needs of our students,” he said. “Our teachers and counselors are not equipped to deal with some of the mental health issues we’re dealing with today.”
Commissioner Gary Shields, the public education liaison to the county board, said the school system is trying everything it can to implement programs to help children but more research needs to be done.
Commissioner Ronnie Beale, the other school liaison, mentioned the possibility of hiring a child psychologist to work within the school system. He said Swain and a few other far west counties received state funding to hire child psychologists. With more mental health funding cuts expected from the state, he said the school system was going to suffer.
Other funding cuts from the state will also impact the school system, Baldwin said. Beginning in 2011, Macon County Schools had to start cutting funds from arts and music programs.
“Many parents and school employees want to see it back at the middle school level and improved throughout our system, and I can’t argue with that,” Baldwin said.
Even if the school system gets more funding to restore music and art classes, space to hold those classes is also an issue since the state started implementing smaller classroom size requirements. Baldwin said Cartoogechaye and East Franklin Elementary won’t have an art or music classroom because those classes will be needed for basic instructional space. Art and music will be taught from a mobile cart going to each class.
By the 2021-22 school year, first-grade classes can’t exceed 16 students and second- and third-grades classes can’t exceed 17 students.
“So if we have 18 second-graders, we’ll have to have two teachers and two classrooms,” Baldwin said. He added that those restrictions could be changed through legislation and that if the state would increase funding for teacher assistants, instruction could be improved without having to have more classrooms and teachers.
Commission Chairman Jim Tate had a couple of suggestions as the board moves into the budget process. To continue being conservative and making sure funds are being used responsibly, he said the board might want to consider establishing a maximum debt policy and a maximum debt service based on expenditures.
“It looks like our fund balance is over 50 percent now. I’d like the board to consider a policy maybe to set a maximum for what the fund balance should be,” he said, adding that anything over 50 percent could be designated for paying off debts.
In his comments, Beale asked to look into the possibility and costs associated with enclosing the pool at the rec center so students competing in swimming have a place to practice year around.
He also wants the board to continue pushing broadband expansion and helping those projects underway move along. The board approved some funding for a project in Highlands and Otto but is still trying to work through the legalities associated with government bodies helping private providers.
Meeting with other groups, Beale said the board should expect to get a $37,000 request from the Community Care Clinic to pay for a new provider and a $20,000 request from the Macon County Fair Association for roof repairs.
Commissioner Karl Gillespie said he’d like the board to continue to look into improving its technology in order to improve efficiencies. He also echoed what Beale said about continuing to invest in broadband.
Commissioner Paul Higdon said he wants the board to make the needed infrastructure projects in Nantahala a higher priority. The recently completed Capital Improvement Plan placed the Nantahala library/community center as a tier 3 priority, but he wants to see that moved up. Before a new building can be considered, the county needs to decide on the best location for it and adequate space in the community is lacking.
“We’ve talked about it for four years and we’re still in the same place. What does it take to get it off the ground?” Higdon asked.
Gillespie agreed the project should be a higher priority. In his opinion, the new building should be a multi-purpose facility that will not only house a library and community center, but also have space for the sheriff’s office, the health department and other county services that aren’t easily accessible to the Nantahala community.
Higdon asked for the second year in a row for the county to address the low pay for convenience center employees, who are still all considered part-time employees making $8 an hour with no insurance or retirement benefits.
“We can do better than that for the vital service they provide,” he said.
Lastly, Higdon suggested cutting the $75,000 budget line item for the community funding pool, an allocation divvied up each year to local nonprofits that apply for program funding.
“I acknowledge the value of all these nonprofits in the county, but I’ve never been in favor of taking taxpayer dollars and selectively funding nonprofits,” he said.