Government

Fayetteville adopts FY 2024 budget

By Staff Report, posted 10 months ago

The Fayetteville City Council approved the FY 2024 budget during the June 21 Budget Work Session held in City Hall.

“One of my most important responsibilities is to ensure the financial well-being of our city and its residents, and approving a fiscally responsible budget is an essential commitment to the future prosperity of our community. Together, [the] City Council worked tirelessly together to allocate the resources to keep our city moving forward,” said Mayor Mitch Colvin in a press release. “The approved budget includes most importantly, only the voter approved tax increase, in addition to cost-of-living adjustments for our Police, Firefighters and all city employees and contours investment in city services.”

The recommended budget was presented to the City Council on June 1. During a series of budget meetings, questions were presented to City staff by Council. These questions can be found on the City’s website under the “Budget Chronicles” tab.

“I’m impressed with the amount of care and consideration that our elected officials put forth when analyzing the budget as it is presented,” said City Manager Douglas J. Hewett in a press release. “They listen to the residents and take every necessary action to ensure we provide the services everyone in this wonderful city need. Today, Council adopted a responsible budget that advances goals and priorities.”

Revenue changes from the recommended budget include:

  1. Property tax rate increase of 4.00 cents, instead of 7 cents
  2. Vehicle license fee increase of $20 (new)
  3. Increased projected investment income for FY 24 - $1million
  4. Reprogramming $850,000 ARPA projects from intersection projects to day resource center and Phoenix Center.  Intersection improvements would now be funded by the increased vehicle license fee funds.

Adjustments:

  1. The original recommended tax rate was .5695 per $100 assessed value or a 7 cents increase. Following deliberation and extensive dialogue, the tax rate included in the budget ordinance is .5395 per $100 of assessed value or an increase of 4.00 cents.
    1. As part of the 2022 referendum-approved bond debt program, the authorization of $12 million of housing bonds will be held until the City Council appropriates those funds. The City has until the fall of 2029 to issue the debt.
  2. Increase the Motor Vehicle License Tax (MVLT) rate from $10 to $30. The revenue is dedicated to maintaining, repairing, constructing, reconstructing, widening, and improving public streets. The revenue generated from the MVLT will support the $25 million referendum-approved infrastructure bond debt service.
  3. Increase the estimated general fund interest earnings by $1 million based on the projected investment market and the City’s portfolio performance.
  4. Redirection of $850,000 of American Rescue Plan Act funding from infrastructure improvements to the following:
    1. $600,000 to provide operating funds to the City’s Day Resource Center for two years,
    2. $300,000 in FY 2024 and $300,000 in FY 2025.
    3. $150,000 to provide funds to the Phoenix Center for two years, $75,000 in FY 2024 and
    4. $75,000 in FY 2025. The funding will add to existing service agreements with the Phoenix Center and Rape Crisis of Cumberland County. The requested funding was for a victim services position and additional room vouchers.
    5. $100,000 for the development of an environmental sustainability plan.
  5. Increase recommended $250,000 for capital contribution to the Cape Fear Regional Theater to $500,000. The original request from CFRT is for $2.5 million to fund capital improvements and renovations at their existing facility. The City Council will be asked to approve a resolution with a $2.5 million commitment, $500,000 annually for five years.
  6. Include $350,000 for the Glennville Lake Walking Trail design. The City will request funding for this project from the Fayetteville Area Metropolitan Planning Organization.
  7. Reduction of $237,000 to the transfer from the general fund to the transit fund, representing a reduction from $8.46 million to $8.22 million. The reduced transfer remains an increase of $3.66 million from the FY 2023 budgeted funding.
  8. Increase of $63,000 to the recommended funding for the Fayetteville Cumberland Economic Development Corporation. The adjustments to the contract cost were requested after the recommended funding was finalized.
  9. Change the Mental Health Navigator title to Director of the Office of Community Safety; this change has no fiscal impact but indicates the City Council’s desire to establish an Office of Community Safety. The funding included in the recommended budget for this purpose is $250,000.
  10. No Storm Water Rate Increase
  11. Increase of $3.33 monthly for solid waste fees, going from $225 to $265 annually.

Considerations for this budget included the change from a per capita to ad valorem method of tax distribution beginning in FY 2026 and the interlocal tax agreement covering the next two fiscal years. The impact for Fayetteville is that no additional revenue beyond FY 2022 actuals will be recognized and that any growth from that benchmark would go to the county as outlined in the approved agreement. Given the related financial projections over the coming years, the adopted FY 2024 City budget provides a responsible, transparent roadmap to sustain City services and meet expectations of residents making Fayetteville a desirable place to live, work and play.

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