Budget OK’d with $10M assist

It took a matter of 10 minutes Thursday morning for the Sampson County Board of Commissioners to unanimously approve the 2024-25 budget, doing so with a couple modifications to proposed cost of living adjustments and wellness leave for staff — cutting the COLA in half and nixing the latter. The plan, expected to be formally adopted later this month once a budget ordinance is prepared, calls for the expenditure of approximately $10 million in rainy day funds to balance a budget that is $7 million greater than the fiscal plan adopted a year ago.

As he did during the board’s initial deliberations Monday, board chairman Jerol Kivett opened up Thursday’s meeting, some 72 hours later, setting the table for his fellow commissioners.

“We agree that the vast majority of the citizens are not in favor of any kind of tax increase,” said Kivett. “We understand that everyone that falls under our budget, with financial considerations, has significant additional costs; it’s across the board — the private sector and everywhere. The thing about inflation is it is a cumulative (thing). It’s significant.”

The proposed budget was already cut by 7.5%, said Kivett, noting the roughly $86 million in proposed general fund expenditures in the 2024-25 recommended budget, compared with the $93 million in initial departmental requests leading up to county’s administration’s recommendation.

The 2024-25 recommended Sampson County budget includes no proposed tax rate hike, while the tax rate itself is proposed to drop by 20 cents from 82.5 cents to 62.5 cents per $100 valuation, deemed the revenue-neutral rate amid a countywide revaluation this year that saw property values spike since the last appraisal in 2019.

The 2024-25 proposed general fund totals $86,085,496, which is roughly $6.8 million over the adopted 2023-24 general fund of $79,313,859 — an 8.5% increase. The 2023-24 adopted budget was nearly 12% higher than the 2022-23 adopted budget.

The impending 2024-25 plan calls for $12 million in fund balance to balance the budget. Lapsed salaries and benefits are expected to cover approximately $1.9 million of this deficit, leaving the roughly $10 million that will have to be expended from the rainy day funds.

“We’re fortunate we have a rainy day fund to assist us in transitioning to a new normal and maintain financial integrity as we take the next year to balance what is expected from governmental services,” Kivett stated. “There’s a lot of adjustments that will need to be made, and a lot of careful consideration, to give us a chance to get our feet under us and see what we can do. We do agree that the board will need to be very deliberate over the next year and take significant time to evaluate the needs and the expectations — and available revenues — to create a budget that considers all needs and continues our tradition of conscientious budgeting.”

With that, Kivett made a motion to approve the budget as presented, with a couple changes — decreasing the proposed employee COLA from 3% to 1.5% and removing two wellness leave days for all staffers that were introduced as part of the 2024-25 budget.

That COLA is to take effect Jan. 1, 2025. Additionally, an allocation of $747,700 was recommended to assist employees in reaching the midpoint of their salary scale. A 1.5% COLA would mean an increase of $265,574, as opposed to the $531,147 initially proposed.

Effective July 1, 2024, employee salaries will be evaluated to determine the difference between employee salary and midpoint of the assigned pay grade as well as their time in the pay grade. The amount of difference will be divided by the number of years remaining to reach 10 years in the pay grade. Each employee will receive that amount as an annual contingent upon a satisfactory performance evaluation, allowing staffers to realize incremental pay raises and a greater reward for longevity.

The addition of wellness days for each employee — two eight-hour paid leave days proposed for the 2025 calendar year — was to allow employees “an additional opportunity to spend time on activities that add meaning to their lives.”

“I just don’t see, when you’re this much money in the hole, that you can keep adding things on,” Kivett stated. “In the future, when the money gets straightened out, and things get working a lot more fluidly, these things can be added then.”

Commissioner Sue Lee seconded the motion with Kivett’s stipulations. Kivett then opened up the floor for discussion.

“As we look at the budget … we cannot continue to go in our savings funds,” said Commissioner Thaddeus Godwin. “Where we’re at right now, we do have to look to next year as to how we’re going to handle that. That’s very important.”

Commissioner Allen McLamb said he was good with everything but the removal of the wellness days, saying it would not cost the county “a lot of money” to offer that. Commissioner Lethia Lee said perhaps providing the wellness leave as an incentive, based on production and merit, might serve the county well.

“Another factor to consider is we’re so short on employees in some of our departments, we’re going to exacerbate the situation there,” Sue Lee said. “Now that we’re in a hole, trying to get our finances in line, this is something that we can look at in a subsequent budget.”

“There’s a lot of adjusting that is probably going to be made in the next year or two years,” Kivett added.

The wellness days was put to a vote individually, with the board voting 4-1 in favor of removing them, McLamb casting the only dissenting vote. Kivett’s initial motion to approve the 2024-25 budget was then put to a vote, and all commissioners were on the same page, approving the proposed plan with a 5-0 unanimous vote.

The board will reconvene at 10 a.m. Tuesday, June 25, to approve the official 2024-25 budget ordinance, which is expected to be a formality.

The vote Thursday came on the heels of County Manager Ed Causey’s message at the close of Monday’s meeting, in which he alluded to an option for the board to spend fund balance this year and go to the drawing board next year.

“Going into this year, we knew there was not a lot of heart for a tax increase from anybody, and we didn’t have it,” Causey stated Monday, noting $37 million in fund balance, $24 million of which was unassigned. “We basically looked at it and said ‘if the commissioners want to have a year where we’re on an even basis, we can expend $10 million and still be in good shape.’ Now I don’t think you’ll have the luxury to go in there for ($10 million) next year, but it does give us the opportunity to then, once you have this budget, to start the budget process right away for the next year. We were trying to set the stage and give you something that was workable.”

Under the 2024-25 budget, the net tax support needed to balance the budget will grow by roughly $7.6 million.

Some of the largest increases come from the Sheriff’s Office ($2.6 million); Detention Center ($1.3 million); Social Services ($1.3 million); Emergency Medical Services ($1.1 million); Current expense for local schools ($620,000); Communications ($332,626); Emergency Management ($313,357); Health ($296,683); Finance ($274,538); Administration ($248,429); and Human Resources ($210,680).

“Salaries will make up a big chunk of it,” said Finance Officer David Clack.

There was $3 million in special contingency funds used in 2023-24 that is not included in 2024-25.

Among other highlights, the 2024-25 budget also calls for per pupil funding of $1,353 per student for Clinton City Schools and Sampson County Schools, up from the $1,324 per pupil funding in the current year.

Additionally, the total cost of health insurance for employees will increase for 2024-25 by roughly $150 per employee per month, bringing the county expense to $1,100 per month per employee. Employees’ cost of health insurance is expected to increase approximately 6% starting in July 2024.

There are a number of vehicles set for replacement in the coming budget, including 15 patrol vehicles with SUVs, one Animal Control vehicle, two vehicles for Social Services, one new truck for the Cooperative Extension, one new truck for Emergency Management, the replacement of three ambulances, one QR vehicle and one truck for Public Works.

There is $500,000 budgeted for contingency, highlighted by a continued concern of the cost of utilities, gas and oil specifically. The county budget also calls for $800,000 for capital reserve.

There was no discussion Thursday on the fire tax rates, which have been the topic of much talk in recent weeks.

Based on revenue-neutral calculations, fire tax rates for districts in Sampson County as well as the Supplemental Current Expense Tax for the Clinton City Schools were adjusted according to the revenue-neutral tax rate. While the county property tax rate was rounded down — from 62.9 to 62.5 cents — those rates for fire departments and schools were adjusted upward to the nearest half cent.

The revenue-neutral rate is the rate that is estimated to produce revenue for the next fiscal year equal to the revenue for the fiscal year prior to revaluation if no reappraisal had occurred.

Earlier in the week, Causey explained the overarching goal when coming to the recommended budget, which was to be fair across the board, especially as it pertained to the revenue-neutral rate. He mentioned the much-discussed fire tax rate, with fire officials urging county leaders in recent weeks to keep those rates as they have been, and not lower them, despite the lower rates being closer to revenue-neutral.

“With the capital needs that (Clinton City Schools) has, you can make a similar argument for not changing their (Supplemental Current Expense Tax) to the revenue-neutral rate,” Causey stated. “We agree that everybody has a wide range of concerns. We’re not discounting anybody —not any fire department, city schools, county schools, anybody. What we have tried to do with this whole process is try to be consistent with what you’re doing across the board.”

Under the 2024-25 budget, the fire tax rates will be modified to the revenue-neutral rate, some dropping 2-3 cents, however those new rates are projected to generate revenues higher than what was requested for the coming budget year, county officials said. The revenue-neutral rates for fire tax districts are expected to produce revenue of $4,280,723 across the board in 2024-25, a $467,323 increase over the $3,813,400 in revenues projected from the district tax requested.

The proposal to move fire district tax rates in Sampson toward revenue neutral was met with opposition from local fire chiefs, who expressed their desire in multiple meetings in the past two months to see the rates remain where they are. The chiefs said the additional revenue that would come as a result is necessary to stay operational, citing needed equipment replacement and training requirements and, in some cases, the need to add paid staff to ensure coverage.