Roberson challenged by increased expenses as he crafts city budget
Published 7:02 pm Wednesday, March 21, 2018
It happens every year in early spring.
No, not the beginning of the Major League Baseball season, but it’s a city manager presenting a proposed city budget for the upcoming fiscal year. The city manager knows that as soon as that proposed budget is completed it will soon become obsolete because the City Council will change it. It’s the nature of the beast.
Washington City Manager Bobby Roberson is scheduled to present his proposed budget for the 2018-2019 fiscal year to the City Council at its April 9 meeting. It will be a balanced budget, as required by state law. It will be a proposed budget that Roberson put together with plenty of input from city department heads, chief financial officer Matt Rauschenbach and, of course, the City Council.
Finding revenue sources to pay for the increasing costs of the city’s day-to-day operations is a major challenge, Roberson said.
“One of the hardest measures that we use — and it’s the same thing on the private side — is we have ongoing operations and maintenance costs. Those goods have a tendency to increase in price. If we’re down at the garage changing oil (in vehicles), it’s at higher prices. The cost of gasoline goes up,” Roberson said about recurring expenses that often increase on a regular basis.
The city’s electric system also provides somewhat of a unique challenge in that other municipalities across the state do not sell electricity nor have to buy power at wholesale rates, distribute that power to customers and make enough money from retail sales of power to operate the utility, Roberson noted.
“The most difficult thing is for us to get a figure on our electrical projection because we’re forecasting a kind of a one-shot operation that lasts us 12 months. If we’re off on that, it can have a negative effect all the way through the budget. That’s very difficult for us to do. That always presents problems for us — making accurate projections, specifically on the electrical side about what the future holds on the distribution costs,” Roberson said.
Councilman Doug Mercer wants the city to adopt a revenue-neutral approach as it deals with revalution of property values during the council’s budget preparations in the coming months. Although raising taxes is something to avoid if possible, Roberson said, adopting a hardline revenue-neutral approach might not been in the best interest of the city.
“When you say revenue neutral, I hear that consistently in local government. … Over the past eight years, costs have increased. It may be minimum, but you did have a cost increase. Whatever that increase may be, we need to add that in as a percentage,” Roberson said. “If we get a wholesale rate increase on the electrical side of 3 percent and we pass that 3 percent on to our customers, in actuality we would be losing money because you have the operations and maintenance costs that need to go into that number.”
A revenue-neutral policy is a taxing method that allows a government — local, state or federal — to receive the amount of tax revenue despite changes in tax rates. The government may lower taxes for a specific group of taxpayers and/or increase taxes for another specific group of taxpayers. This allows the overall revenue the government takes in to remain unchanged, or neutral.
The revaluation of property in Beaufort County takes effect this year. A county must conduct a revaluation at least every eight years.
Roberson said his proposed budget would reflect increased costs to operate the city. “I don’t know of anywhere where the costs have gone down,” he said.