5/29/18: PROPOSED FY 2018-19 BUDGET: SHORTFALL ERASED BY TRANSFER OF CAPITAL PROJECT SAVINGS; BIG-TICKET ITEMS INCLUDE INFRASTRUCTURE, FIRE STATION, EMPLOYEE COSTS: Public Hearing To Be Held June 5

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The revenues-expenses shortfall seen in preliminary figures for the Town of Southern Shores’ fiscal year 2018-19 budget has been eliminated with a transfer of nearly $300,000 from the Town’s capital projects savings account. The proposed budget, which Town Manager Peter Rascoe submitted on May 1 and which will be subject to public hearing on June 5, is now balanced at $6,355,402. You may access the budget at:

https://www.southernshores-nc.gov/town-government/administration/public-documents/final-fy2018-2019-proposed-operating-budget/

The public hearing will be held during the Town Council’s regular monthly meeting, which starts at 5:30 p.m. in the Pitts Center behind Town Hall. (See The Beacon, May 24, 2018, for other public hearings scheduled next Tuesday.)

The Council has until June 30 to adopt the recommended budget, with any changes it wishes to make, but it has been customary during Mayor Tom Bennett’s time in office for the Council to approve the budget, as submitted, immediately upon conclusion of the mandatory public hearing.

Transfer of Funds

The preliminary budget that Mr. Rascoe and Town Finance and Personnel Officer Bonnie M. Swain presented to the Town Council at an April 17 work session showed expenses exceeding income by $296,261.

Obligated by law to submit a balanced budget, Mr. Rascoe dealt with the shortfall chiefly through the transfer of $282,828 from the Capital Reserve Fund (CRF) to the General [Operating] Fund. According to Ms. Swain, with whom I met at Town Hall, the Capital Reserve Fund is a “savings account for capital projects.” The shortfall, she said, “was because of capital projects.”

As Ms. Swain explained, the $282,828 transferred from the CRF is made up of $20,000 “reserved for canal and channel maintenance” and $262,828 in “unassigned funds that can be spent at the Council’s discretion.”

At least $195,000 of the CRF’s unassigned funds came from monies allocated in FY 2017-18 for the Yaupon Trail capital project, which had to be postponed, and another $60,000 was money set aside for an update of the Town’s land-use plan, which did not occur, she said.

According to Ms. Swain, the Town has three different funds: The General Fund (GF), which covers nearly all of the budget expenses, including monies budgeted for capital improvements; the Capital Reserve Fund; and the Cemetery Fund. Both the GF and the CRF have unassigned fund balances, she said.

Although the exact amount in the GF unassigned fund will not be determined until FY 2017-18 ends, Ms. Swain estimated that its balance is about $3.4 million, just as it was a year ago. By Town resolution, a minimum of $1.75 million must be maintained in the GF unassigned fund balance, for emergencies related to natural disasters. In FY 2016-17, the GF unassigned fund had a balance of $5.5 million, said Ms. Swain, who expressed an interest in not disturbing this balance.

No Funds for Traffic Reduction

During his presentation of the proposed budget to the Town Council at its May 1 meeting, Mr. Rascoe made a point of saying that it “does not include any costs for traffic reduction.”

Later in the same meeting, Mr. Rascoe described a no-left-turn trial at the intersection of U.S. Hwy. 158 and South Dogwood Trail over the June 23-24 weekend, which the Town Council voted to reaffirm. Police Chief David Kole characterized this trial as a “one-shot deal.”  (See The Beacon, May 3, 2018.)

But is a budgetary inclusion of expenses for traffic reduction really necessary? Can’t unassigned fund monies be transferred to the General Fund to cover such costs as they were used to cover the expenses-revenues gap for the upcoming fiscal year?

According to an email from Ms. Swain, “Once the $282,828 is transferred from the CRF to the GF, the balance in the CRF will be $137,794 plus any interest it makes between now and June 30. Of that amount, $79,794 is unassigned.”

OPINION: That $79,794 would go a long way toward supporting a restriction of cut-through traffic in Southern Shores’ residential districts and enforcing that restriction for 10 weekends this summer. If more money were needed, the GF’s unassigned fund balance would be healthy enough to bear a tap. An added bonus: Less traffic on town roads means less wear-and-tear which, over time, means fewer repairs and improvements to be made.

Big-Ticket Items

The Beacon does not recall a preliminary Town budget ever showing a gap between revenues and expenses. It was clear from the data submitted by Mr. Rascoe in April that the Town’s projects and staff costs are expanding rapidly.

OPINION: The way the Town is spending money, it is easy to envision a property tax-rate increase in the near future. Property taxes account for $2,903,049 in FY 2018-19 revenues. The remaining revenue comes primarily from Southern Shores’ share of county occupancy, sales, and land-transfer taxes.

OPINION: The Beacon would like to see the Mayor and Town Council actually deliberate over how the Town can economize and cut expenses or direct the Town Manager to cut 5 to 10 percent of expenses. I have never seen the Town Council try to tighten the municipal belt. Even Ms. Swain spoke about the Town Council taking a “long, hard look” at the budget.

Southern Shores is only about four square miles in area. We are a town of about 2900 residents with a number of very active homeowner associations, next-to-no crime, and a small commercial district. Granted, our population surges during the vacation months, but does that surge justify such a hefty budget?

Here is a list of the major proposed expenses in the FY 2018-19 budget:

$1,007,163 for the Administration Dept., which includes only four full-time employees (Mr. Rascoe, Ms. Swain, the town clerk, and an administrative assistant), whose combined salaries and benefits, including those paid directly to them and paid in their behalf, equal $499,204. That’s nearly a half-million dollars spent on four employees, and it doesn’t include the costs incurred for their additional training, their wellness, and other initiatives.

The last page of the proposed line-item budget contains the Town’s “pay scale” for its employees as of July 1, 2018. Conspicuously missing from the listed positions is that of Town Manager. (See “Salaries” section below.)

The Town contributes to Medicare; health, life, and dental insurance; state retirement, and a 401k plan for each full-time employee in all of its departments. It also gives each $7800 “in lieu of benefits,” which the employee may use to buy health insurance for dependents, which the Town does not routinely provide, Ms. Swain explained, or simply pocket, if he or she chooses. The combined-department total for in-lieu-of benefits in FY 2018-19 is $187,200.

(You may be interested to know that the budget contains allocations of $61,500 for legal services, an amount that represents a $30,000 annual retainer plus $185/hour for the Town Attorney; and compensation for the mayor of $4,200/yr. and $3,600/yr. for the four Town Council members. Many Southern Shores residents still believe that Town officials serve as volunteers, without remuneration. They don’t receive much, but they do receive something.)

$1,692,147 for the Police Dept., which has a payroll of $1,248,019, including all salaries, benefits, employer expenses for employees, and other budgeted compensation. According to Ms. Swain, the Police Department has 12 full-time officers.

$1,123,597 for Streets, Bridges, and Canals, which includes $654,870 for infrastructure projects, whose priority is recommended by the Capital Infrastructure Improvement Plan Committee; and $250,000 to get started on a five-foot-wide multi-use walkway on East Dogwood Trail, extending from its intersection with North-South Dogwood trails to N.C. Hwy. 12.

Although the CIIP Committee made its recommendations at an April 4 meeting, the Town Council is not planning to consider them until its July 10 meeting, after it has approved the FY 2018-19 budget. See the last page of the following report for the CIIP’s priorities:

https://www.southernshores-nc.gov/wp-content/uploads/2018/04/CIIP-Apr-4-2018-Meeting-Minutes.pdf.

Mayor Bennett and Town Councilman Jim Conners co-chair the CIIP Committee.

$813,614 for Fire Contracted Service, which includes, according to Ms. Swain, $220,000 of an anticipated annual $440,000+ debt for a 15-year loan to pay for construction of a new fire station, which has been estimated will cost up to $6 million and has yet to be approved by the Town; and $545,914 for contracted fire protection, up from $481,925 in FY 2017-18, the difference being the costs for a new deputy fire chief.

Mr. Rascoe announced at the April budget work session that the town’s 10-year contract with the SSVFD will expire in 2019 and, therefore, need to be negotiated anew. You can anticipate the cost for the Fire Department’s services will increase.

$688,465 for Sanitation Services, which includes $176,690 for residential collection; $172,725 for a “landfill tipping fee”; $156,200 for recycling collection; and $130,000 for limb and branch removal.

$546,444 for the Public Works Dept., which includes $379,262 for salaries, benefits, and employer expenses, as described above, for five full-time employees and one part-timer.

Salaries

In an earlier blog about the Town budget, I published some data about employee salaries that I obtained from an informed Town source who did not wish to be identified. My information was accurate. The following is an excerpt of what I wrote:

“Town Manager Rascoe is slated to earn nearly $159,656 in salary in FY 2018-19. In FY 2011-12, Mr. Rascoe earned a salary of $112,238. His salary, therefore, has increased 42 percent in seven years.

“When town expenses for Medicare, health, life, and dental insurance, state retirement, and his 401k plan are added to Mr. Rascoe’s salary, the total cost to Southern Shores for his position in FY 2018-19 is nearly $207,000.”

To my knowledge, Mr. Rascoe is the highest paid town manager on the beach. Having a law degree and N.C. law license, as Mr. Rascoe does, is not prerequisite to doing a town manager’s job.

A member of the Town Council thought my reporting of this information, which is a matter of public record and should be readily available to all members of the public, was inappropriate and took me harshly to task—identifying me, without naming me—at the May 1 Council meeting for being “irresponsible.” He further accused me of “doxing” Town employees.

After the meeting, I approached Councilman Jim Conners and asked him what “doxing” means. I’d never heard the term. Mr. Conners refused to define it, telling me “to look it up.” He further declined to discuss what I perceived as his bullying of a journalist in his official capacity during a public meeting.

I looked up doxing. According to Wikipedia.com, doxing or doxxing is “the Internet-based practice of researching and broadcasting private or identifiable information about an individual or organization.”

There is nothing private about a public employee’s salary and benefits and what they cost the municipality and its taxpayers. Inflated salaries—as well as excessive perks, junkets, luxuries, etc.—are an issue for our local, state, and national governments, and taxpayers want and deserve accountability. (The Beacon had hoped to have by now a comparison of Southern Shores’ payroll with other towns on the beach, but this report has been delayed.)

I’ve lost track of the number of Cabinet-level and other senior U.S. officials who have flown pricey private jets, instead of traveling commercial, during President Trump’s and President Obama’s administrations.

Just last month, Dr. Robert Redfield Jr., the newly appointed chief of the U.S. Centers for Disease Control and Prevention, asked for and received a sizable pay cut after his annual salary, set to be $375,000, became a distraction. He reportedly was going to make $150,000 more per year than his predecessor had and quite a bit more than other high-level U.S. government officials, who work in public health and elsewhere.

On Dictionary,com, I read that “to dox” is to “search for and publish private or identifying information about a particular individual on the Internet, typically with malicious intent.”

Once again, I distinguish private from public information. As for malicious intent, I had none, but I’m left wondering if Mr. Conners did.

Ann G. Sjoerdsma, May 29, 2018; updated, June 3, 2018

 

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