10/6/21: TOWN’S FY 2020-21 REVENUES EXCEED EXPENSES BY MORE THAN $1 MILLION, AS OCCUPANCY, SALES, AND LAND-TRANSFER TAXES SOAR; TOWN COUNCIL APPROVES INCREASE IN POLICE SALARIES, ANALYSIS OF THIRD OPTION FOR ROAD MAINTENANCE PLAN.

The Town of Southern Shores’ revenues for fiscal year 2020-21 exceeded its expenses by $1,115,810, and the Town started the new fiscal year with a General Fund balance of $7,149,603, according to accountant Teresa Osborne, who presented the Town’s annual audit to the Town Council last night.

The FY 2020-21 revenues reflect “one of the greatest tourist seasons” ever on the Outer Banks, said Ms. Osborne, who attributed the over-budget revenues to a “higher than expected” increase in Dare County’s sales, occupancy, and land-transfer tax collections.

Southern Shores received $439,611 of Dare County’s occupancy tax revenue, an increase of 46 percent over the previous fiscal year; and the Town’s portion of the county sales tax increased $234,837, which was a 25 percent boost.

Southern Shores’ share of land-transfer tax collection was $314,135, or 128 percent more than its share in FY 2019-20.

Ms. Osborne also cited an 18 percent increase in property values overall, thanks to the County’s recent reassessment, and a “sales bonanza” in which residential properties are being purchased for record-high prices. Ad valorem tax revenue for FY 2020-21 was $3,241,973.

“The Town ended the [fiscal] year in a very strong financial condition,” she concluded.

The Town does not carry any “traditional debt,” such as loans, said Ms. Osborne, who is with the Nags Head accounting firm of Dowdy & Osborne. But she cautioned the Town Council that it needs to start thinking about setting aside funds for long-term liabilities, including $1,640,367 in pension liability and an additional $713,229 for police pensions.

As of June 30, Ms. Osborne reported, the Town’s unassigned fund balance, which must contain at least $3 million, was $5,189,116. These undesignated monies act as a reserve for emergency expenses and as a working fund for expenses that arise during the fiscal year.

This balance reflects a decline of $806,430 from the unassigned fund balance of June 30, 2020, but Ms. Osborne attributed the decline to accounting methods, rather than to an actual diminution of available funds. (At least, as we understood what she said.)

The Beacon has a copy of Ms. Osborne’s Independent Auditor’s Report, which will be posted to the Town website, and will have to study it more before reporting further on its financial content. 

POLICE SALARIES, ROAD UPKEEP

Also last night, the Town Council unanimously approved creating a separate standalone pay scale/plan, to be administered by the Town, not the Police Department, for all police positions, except those of Chief and Deputy Chief, and increasing police salaries, as recommended by Town Manager Cliff Ogburn; and unanimously authorized paying SEPI Engineering and Construction $4,000 to conduct an analysis for a third road maintenance plan that would cost $800,000 per year over 10 years.

SEPI, which conducted a pavement study of the town’s roads in the spring and reported on its results in September, has proposed two 10-year capital-improvement plans for street maintenance, one that would cost $675,000 annually and another that would cost $1 million.

(See The Beacon, 10/3/21, for background on both police salaries and SEPI’s work.)

Both the police salary increases, which would raise minimum salaries for police officers and sergeants and take effect Nov. 1, and SEPI’s two maintenance plans are outlined in the Council’s meeting packet, which is accessible at https://mccmeetings.blob.core.usgovcloudapi.net/soshoresnc-pubu/MEET-Packet-a99196edf5654b038fd19f5a3eb08f4b.pdf.)

The expectation, according to Mr. Ogburn, is that SEPI would submit its analysis by Oct. 15, and the Town Council would choose one of the three capital-improvement plan options for implementation at its Oct. 19 workshop.

All Town staff members who spoke in support of increasing police salaries referenced how difficult it has become nationwide to recruit, hire, and retain well-qualified police officers, and how important it is for Southern Shores to be remain competitive in those efforts.

“We don’t have to be the highest paid,” said Police Chief David Kole, “we just have to be competitive.”

Chief Kole spoke about how much time and money are invested in training Southern Shores police officers and how great the need is to keep those who are trained here and not lose them to more attractive salary and benefit packages offered by other towns.

According to Town Finance Officer Bonnie Swain, the Town would spend an additional $36,943 in FY 2021-22 for the salary increases, and a full year of implementation would cost $55,514.

Ms. Swain said last night that each salary increase comes with a corresponding proportionate increase in FICA (Social Security), which is 7.65 percent, and retirement benefits, including a 401k account, of 17.05 percent.

In other news:

  • The Town Council unanimously approved an amendment to the Town Code’s prohibition on bonfires that would allow bonfires to be held at the Kitty Hawk Elementary School, provided a member of the Southern Shores Volunteer Fire Department or another fire protection official is present to supervise the blaze. The KHES plans to have a bonfire at its Nov. 5 fall festival.
  • The Town Manager announced that the Town has realized a savings of $100,019 in its beach nourishment costs because all of the construction bids “came in way below budget.” The winning bidder was Weeks Marine Inc.
  • Planning Director/Deputy Town Manager Wes Haskett announced that the Town Planning Board’s next meeting will be Monday, Oct. 18, at 5 p.m. (not 5:30 p.m.). The Board will continue its discussion about the proposed new sign ordinance.

LIBRARY UPDATE: Members Michael Fletcher and Lilias Morrison of the Town’s Exploratory Committee for a Potential Branch Library in Northern Dare County gave an impassioned appeal last night for support—the exercise of clout, if you will—from the Town Council and left frustrated with what they received.

“I’m not hearing that you all support a library,” Ms. Morrison said in remarks that were both passionate and pointed and virtually challenged the Council either to back up the Town Council-sanctioned committee or disband it.

Ms. Morrison characterized Chairperson Fletcher’s presentation of the committee’s progress, and how it has stalled because the Dare County Board of Commissioners, the Dare County Library Board, and other key people at the Dare County level have ignored its overtures, as “very noble and tactful,” and then said she would “tell it like it is.”

The Beacon believes this hard-working group of residents, who first met and made great strides before the COVID-19 pandemic up-ended life, deserve better coverage from us than a few paragraphs at the end of a blog report on the Town Council meeting. We will write a separate story about the committee and its prospects as soon as we can.

Ann G. Sjoerdsma, 10/6/21

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