Toughest work ahead for county board as 2024-25 begins

Sampson County’s budget has been adopted, but the hard work is still ahead, with close to $12 million in rainy day funds utilized to balance a ballooning budget. Commissioners have essentially decided to punt this year, and leave the most arduous deliberations to the next fiscal year — that 2024-25 fiscal year starts Monday — with reserves dwindling and departmental needs and requests increasing.

County Manager Ed Causey noted that the budget, with a few slight changes made by the Board of Commissioners, was a “workable” option despite the utilization of what is ultimately anticipated to be in the neighborhood of $10 million in fund balance, minus lapsed salaries, as the county has a good deal of money in the bank.

Causey offered the caveat that the budget would need to be examined in earnest over the next year, because a similar dip in the rainy day funds may prove untenable.

The budget season in Sampson was book-ended by talk of fire tax rates, beginning with fire chiefs last month urging rates not to be lowered toward revenue neutral and ending with commissioners — after an amendment to boost the rates failed — saying that many aspects of county operations would have to be examined in a general fund that has grown by 20 percent in two years.

The decision to approve the budget, with the utilization of the sizable amount of fund balance, was made unanimously by the board on June 13, with sparing dialogue outside of general comments by the board’s chairman. The adoption was pending only the preparation of a formal budget ordinance. That ordinance was presented a dozen days later, on June 25, but it was not a formality.

The budget was ultimately adopted in a 4-1 vote by the board, a sticking point being a last-ditch amendment to adjust the proposed fire tax rates by boosting them by one cent across the board.

Commissioner Allen McLamb made that motion, requesting an increase of 1 cent to the proposed fire tax rates, which were modified toward revenue neutral as part of the 2024-25 fiscal plan along with other rates, including the property tax rate. The proposed amendment ultimately fell flat, with commissioners saying implementing such a boost would burden taxpayers and put the board in a precarious position if it provided a boost for one department or funding partner over another.

The 2024-25 general fund totals $85,015,496, which is roughly $5.7 million over the adopted 2023-24 general fund of $79,313,859 — an 7.2 percent increase. The 2023-24 adopted budget was nearly 12 percent higher than the 2022-23 adopted budget. The plan includes close to $11.6 million in fund balance to balance the budget. Lapsed salaries and benefits are expected to cover approximately $1.9 million of this deficit, leaving roughly $10 million that will have to be expended from the rainy day funds.

The adopted 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.

Under the 2024-25 budget, the fire tax rates were modified to the revenue-neutral rate, some dropping 1 to 2.5 cents (many of the larger departments have been at 10 cents), however those new rates are projected to generate revenues higher than what was requested for the coming budget year, county officials said.

Those fire tax rates now stand between 5.5 and 8.5 cents, but the property values had spiked to a degree that rounding up on revenue neutral meant a near-half a million dollar increase countywide for fire departments over their 2024-25 requests.

Based on revenue-neutral calculations, fire tax rates for districts in Sampson as well as the Supplemental Current Expense Tax for the Clinton City Schools were among those adjusted according to the revenue-neutral tax rate. That 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. 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.

Those new 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. An additional cent would have yielded an additional $563,057 on top of the boost the fire departments are already receiving, which would mean more than $1 million over operational budgets in 2023-24.

According to Finance Officer David Clack, had the fire tax rates stayed the same, the total tax collected would have been $5,335,102. This amount includes the three departments — Coharie (Roseboro), Herring and Turkey fire districts — that requested a tax increase.

Commissioners, in what amounted to fairly brief talks over the course of three separate sessions for budgetary deliberations, conceded the toughest work was ahead of them.

“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,” board chairman Jerol 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.”

Other commissioners concurred, sharing the sentiment that the board would have to dig in over the next 12 months.

“We, as commissioners, have work to do,” said Commissioner Thaddeus Godwin said this week. “When we pass this budget, we have to get busy. How do we adjust? And now we have a year to do it.”

Causey noted earlier this month that the county had $37 million in fund balance, roughly $24 million of which was unassigned.

“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. “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.”

The adopted budget was ultimately untouched from Causey’s initial May 20 presentation outside of modifications by the board during the June 13 special session to proposed cost of living adjustments (COLA) and wellness leave for staff — cutting a proposed COLA in half from 3 to 1.5 percent and removing two newly-introduced wellness leave days for all staffers.

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

Under the 2024-25 budget, according to numbers from Clack, the net tax support needed to balance the budget is set to grow by more than $7 million.