Recommended Fiscal Year 2024 Budget Ready for Review
Attend the budget public hearing and work session on May 22
The Hillsborough Board of Commissioners has received a proposed budget for Fiscal Year 2024. The proposed budget makes no changes to property tax rates or stormwater fees. It increases water and sewer rates to address capital infrastructure and meet payments for previous revenue bonds. The increase mirrors the rate of inflation.
“The FY24 Budget and Financial Plan includes moving many priorities and overdue projects forward,” said Town Manager Eric Peterson. “The significant growth Hillsborough is experiencing is straining our small organization’s ability to effectively manage and pay for so many needs in such a short period while simultaneously providing quality services to the community on a day-to-day basis. Trying to balance these competing needs means there is still a lot of work to do in planning and evaluating when to move projects forward and how to pay for them. An advantage of using a multi-year financial plan to make these decisions is that it encourages adjustments and re-evaluation as conditions change and new information comes in. This is especially critical in the Water and Sewer Fund as there are tens of millions of dollars in major projects needed in the next few years. A key part of the budget process is receiving input from the community and town board to provide guidance, varying perspectives, and alternatives to build a budget that addresses Hillsborough’s most important needs.”
Budget materials are available below and on the town’s Budget webpage. A work session and public hearing on the budget will be at 7 p.m. May 22 at the Town Hall Annex, E. Corbin St. The meeting will also be available for view on the town’s YouTube channel. Any person wishing to speak on the budget will be allowed three minutes to address the board. The board is expected to vote on the budget at its June 12 meeting.
Proposed FY24 budget
The town has three budgetary funds. The General Fund is primarily funded with property and sales tax revenues, while the other two funds are enterprise funds that rely on user fees. No profits are made in enterprise funds, and the revenue is used for no other purpose.
Under the draft plan for Fiscal Year 2023-24 — which starts July 1 and runs through June 30, 2024 — the town’s operating expenses would total about $31.8 million, with:
- $16.5 million in expenses in the General Fund.
- $14.3 million in expenses in the Water and Sewer Fund.
- $992,000 in expenses in the Stormwater Fund.
Rates and fees
- Maintaining the property tax rate of 58.7 cents per $100 of assessed value.
- Increasing water and sewer rates 6%. Even with proposed rate increases, there is still a significant deficit due to increased operational costs; millions of dollars in large expenses for capital projects such as replacing old lines and pump stations in the system, some of which are over 50 years old; as well as other needs.
General Fund projects and initiatives proposed for funding in Fiscal Year 2024 include:
- Increasing annual payments for fire service from Orange Rural Fire Department by 8% and implementing market-rate compensation adjustments. The FY24 cost, including a contract with Orange County for fire inspections, is $1.98 million.
- Providing funds for moving staff and equipment to the N.C. 86 North Facility and for constructing storage buildings. FY24 cost: $4.52 million.
- Repaving Waterstone Drive, with about half the cost paid with savings from the State Street Aid Program (Powell Bill). FY24 cost: $950,000.
Proposed for funding in Fiscal Year 2024 from the Water and Sewer Fund include debt service on past, major utilities projects and paying design and construction fees on new projects, including replacement of the River Pump Station, which is expected to cost $8 million in total.
See the Budget at a Glance below for additional highlighted projects.
Hillsborough uses a multi‐year budget format to provide a more accurate picture of the fiscal and operational challenges the town faces. The first year of the budget is legally binding, while years 2 and 3 provide critical information of upcoming needs to plan for before potential problems become unmanageable. The draft budget package provides forecasting through Fiscal Year 2026.
The budget is made up of two types of funds:
General funds ― These are the chief operating fund for a government. Revenue for the fund comes primarily from property and other taxes. The Hillsborough General Fund pays for services such as police protection, residential garbage collection, and the building and maintenance of recreation facilities like the Riverwalk greenway.
Enterprise funds ― These are government-owned funds that provide goods and services to the public. The revenue for these funds comes from fees and charges. Each of Hillsborough’s two enterprise funds pay for the costs of its individual operations.
- The Water and Sewer Fund pays for providing water and sewer service, which includes the operation, maintenance and improvements of the utility system. Revenue primarily comes from water and sewer charges.
- The Stormwater Fund pays for stormwater services, including maintaining stormwater drainage infrastructure and preventing pollutants and debris from reaching waterways. Revenue primarily comes from stormwater charges.
Community members are invited to ask questions and share their thoughts on the proposed budget. Attend the public hearing on May 22, or contact Hillsborough Budget Director Emily Bradford by email or by phone at 919-296-9427. To sign up for public comment, contact Town Clerk Sarah Kimrey by email or at 919-296-9443.