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Board Approves Budget for Fiscal Year 2020-21

Wednesday, July 1, 2020
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The Hillsborough Board of Commissioners approved a budget totaling about $22.3 million in operating expenses for Fiscal Year 2020-21 during a virtual work session Monday night.

The budget — which is effective July 1, 2020 — makes no changes in the property tax rate, stormwater fee, or water and sewer rates and employs several short-term strategies to offset expected revenue decreases due to COVID-19.

“Due to the many unknowns and the financial strain brought on by the pandemic, there were three primary goals in preparing this year’s budget: maintain daily operations, avoid tax and rate increases, and maximize options and flexibility if the situation gets progressively worse over the next two years,” Town Manager Eric Peterson said. “While there is not much new in the FY21 budget, due to the many deferments and cuts, this approach allowed the town to address the three key goals in developing this year's financial plan.”

This will be the eighth consecutive year without a tax rate increase. Expenditures in utility operations were cut significantly to maintain the current water and sewer rates. The town is obligated to maintain rates sufficient to pay 120% of (or 1.2 times) the debt service annually for revenue bonds undertaken for the reservoir expansion.

“This has been an extremely challenging and unusual budget season, to say the least,” Mayor Jenn Weaver said. “As difficult as the current economic environment is, we are confident we have passed a budget ordinance for the next fiscal year that continues the excellent essential services our community is used to and also funds critical needs for the future of Hillsborough.”

The approved budget includes:

  • $10.5 million in expenses in the General Fund.
  • $11.1 million in expenses in the Water and Sewer Fund.
  • $658,298 in expenses in the Stormwater Utility Fund.

Additions

Before approving the budget Monday night, the town board discussed additions made to the document following an initial virtual work session and public hearing on June 8. These included funding for COVID-19 expenses that are expected to continue as well as new ones which may emerge as town offices reopen to the public. It also included $219,000 in the Water and Sewer Fund for sewer pump station generators. The COVID-19 expenses are:

  • $47,875 in the General Fund, which includes $15,000 for daily disinfection of park restrooms.
  • $31,909 in the Water and Sewer Fund.
  • $1,755 in the Stormwater Fund.

The board also chose to add several items identified as priorities at the June 8 work session on the budget:

  • Inclusive play equipment at Gold Park — Estimated $25,000
  • Budget software to automate a largely manual budget process — Estimated $29,600
  • Upgrade of a part-time police training position to a full-time supervisor position — Estimated $24,474
  • Diversity, equity and inclusion initiative, which was noted in the board’s resolution denouncing the killing of George Floyd — Estimated $15,000.
  • Property room storage system for property and evidence held by police — Estimated $15,000
  • Fees for GPS monitoring devices, which serve as accountability tools in police patrol vehicles — Estimated $10,000
  • Seven-week municipal and county administration course for the human resources director/town clerk — Estimated $3,800
  • Special appropriations to the Hillsborough Arts Council and Exchange Club — Estimated additional $700 to the $20,000 already earmarked in the budget ($13,200 for arts council and $7,500 for club)

In addition to using the fund balance — or reserves — for one-time expenditures, the town is using these short-term strategies to balance the budget:

  • Vacant positions deemed non‐essential are frozen indefinitely.
  • Employees will receive no merit pay adjustments.
  • Training will be permitted to maintain certifications and licenses and limited to courses that do not require overnight travel unless deemed a high priority and approved by the town manager.
  • Capital projects and purchase of vehicles and equipment are delayed where possible.

Highlights

Below are some additional highlights for the budget, which represents largely mission-critical expenditures.

General Fund projects include:

  • Valley Forge Road project ― To repair damage to stormwater culverts and washed‐out roadway. Estimated: $475,000, with additional $100,000 from the Stormwater Fund.
  • Garbage truck ― To replace 2012 side-arm truck. An older rear loader requires three employees vs. one when the current truck is in repairs. Estimated: $310,000.
  • Comprehensive Plan ― To cover consulting and other project expenses to develop a sustainability plan that updates and consolidates several planning documents. Consultants would help provide direction on community engagement. Estimated: $75,000.
  • Feasibility study of road connection ― Town’s match to complete Phase 2 of an engineering study for connecting Eno Mountain Road with N.C. 86. Estimated: $45,000.
  • Full-time fire chief ― Town’s share in transitioning Orange Rural Fire Department’s fire chief to a full-time position. The town contracts with the department for fire service. Estimated: $35,000.
  • Rail Station ― Town’s contribution to construction of a rail station building and parking lot. Estimated: $34,000.

Water and Sewer Fund projects include:

  • Reservoir expansion debt payment increase ― Annual debt payments will increase to $840,550, largely due to the sale of revenue bonds earlier this year to pay for the expansion’s last portion, which includes raising a nearby bridge and road to allow the reservoir to fill completely. Estimated: $390,081, with $365,581 associated with the 2020 bonds.
  • Water main interconnects ― To reroute 16‐inch water main through pipe under Interstate 40, interconnect the main with other mains, and build a booster pump station to provide backup service from Orange Water and Sewer Authority when needed. Estimated: $465,000.
  • Water line extension ― To install 8‐inch water line south of I-40 in an economic development district project with Orange County. Estimated: $259,404.
  • River Pump Station design ― To cover the design for upgrading or replacing the town’s largest pump station, which is over 40 years old and approaching capacity limitations. Estimated: $200,000.
  • Infrastructure rehabilitation ― To improve sewer infrastructure identified in modeling of the wastewater collection system and to repair various pump stations. Estimated: $150,000.

More information

The budget also includes a revamped strategic plan for the town to help establish priorities for policy initiatives, capital investments, and budgeting and staffing decisions that align with community priorities. The plan was drafted after several months of collaboration among the town board and key staff.

A video with highlights of the FY2021 budget will be available later in July on the town’s YouTube channel. For more information, see the related documents below.

Related documents


Document Annual budget financial plan and workbook  

Document Budget executive summary  

Document Budget message