Council approves budget prepared under pandemic uncertainty

Details: Lance Martin; News; 17 June 2020; 2458

Roanoke Rapids City Council Tuesday night approved its financial plan for the upcoming fiscal year, a budget which was crafted in anticipation of projected revenue decreases in light of the novel coronavirus pandemic.

The $15,580,502 budget contains no tax increase and pulls $60,000 from fund balance.

“The budget document represents balanced revenues and expenditures,” City Manager Joseph Scherer told council in a meeting which was held using the Zoom application to comply with social distancing and other guidelines during the pandemic. “Achieving a balanced budget remains a challenge to provide effective services to our citizens.”

In his budget message to council Scherer said, “Much of our future activities may be hindered in the coming months due to the current global health pandemic — COVID-19. Our nation’s economy is on hold; industries and businesses are suffering; residents are losing their jobs and lasting effects of this crisis are yet unknown.”

The city manager said, “We must face a new reality in regard to our economy and local budget. Through this pandemic, Roanoke Rapids is still challenged to fund increased expenses as economically sensitive revenues are down, including sales, income, ad valorem and hotel occupancy taxes.”

The priorities in the budget were to maintain minimum service levels in the public safety departments, Scherer said. “All departments have had to reduce some operating expenses to help us achieve a balanced budget.”

There is no funding for capital purchases to replace aging equipment or facilities. “This budget does not add positions or fill vacancies. While no appropriation is being recommended for merit increases or cost of living adjustments, an employee holiday bonus is being recommended while retaining the other personnel benefits currently offered.”

The budget, Scherer said, “does attempt to provide minimum necessary services while reducing the impact on our taxpayers by recommending no tax increase.”

The pandemic, Scherer said, “has had a shocking impact on both the global and American economies. Economic experts vary (widely) on how our economy will look this coming fiscal year.”

The global economy is already experiencing a sudden significant downturn and a global decline in commodity prices — particularly oil — will likely reduce investment spending in the United States, he said. “ … Even under relatively benign assumptions about the future course of the illness United States GDP — gross domestic product — growth will likely plunge in the first quarter and very likely fall further in the second quarter.”

There are a large number of economists who believe the immediate economic impact is likely to fade within a year as a vaccine or the natural progression of an epidemic reduces the number of infections and consumers venture out of their homes to resume eating at restaurants and shopping for more than hand sanitizer, the city manager said. “The economy will likely recover quickly once that happens. However, any prediction must consider whether or not the disease outbreak begins to recede by the beginning of summer and people are able to return to normal activities during the summer and into the fall or if the outbreaks of the disease continue to affect economic activity for over a year.”

In summarizing the financial plan, Scherer told council, “As always, we will continue to explore ways we can minimize our costs and improve efficiencies … Despite the immediate funding challenges the city of Roanoke Rapids faces, we are confident that our long-term prospects for improvement remain good. As we move forward we remain committed to providing quality services to all our citizens.”

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Councilman Wayne Smith made the motion to move forward with the budget on a second by Suetta Scrabrough.

Smith wanted the new fee schedule for the Aquatic Center included in the budget motion.

The fee schedule voted on is $25 per month for an individual resident and $40 a month for families residing within the city limits. The non-residential fees are $40 a month for an individual and $50 a month for a family.

Councilman Carl Ferebee wanted it read into the motion that once revenues become available that part-time employees who lost jobs under the financial plan be rehired. Scherer said that would be reflected in the minutes.

Mayor Emery Doughtie said before the vote was taken to consider the motion, “I can’t help but feel like we had to take $60,000 to balance the budget this year. We didn’t take any last year. A couple of years before that we had to take significant amounts out.”

The mayor said, “Sometimes I feel we’re living a little bit above our means. I feel like the council is being pressured somewhat by groups for what they want to have happen. As a council we’ve got to make sure we stay in a good financial position.”

Doughtie said generally he is an optimist, “But I can’t also help but believe from the information we are seeing that we have a number of small businesses in our town and when you look at it they are really, really struggling.”

Some that have reopened, Doughtie said, are having to operate on 25 to 50 percent while their costs remain the same. “I think our revenue trends for the next six months to a year, maybe, will continue to trend down.”

Although the city worked to reduce theater debt, the mayor said the city still has more than $1 million it still pays out. “That’s about 25 percent of the budget. It takes a big chunk out of what we have to offer services to our people; to maintain streets; to offer programs.”

He said, however, the city works hard to provide services. “I think we do an excellent job. I’m really praying that our revenue will increase. We can’t continue to cut ourselves and be successful.

“We’ve got to have the revenue. We’re so limited by not being able to have water and sewer and other ancillary services that so many municipalities have. Our tax rate, I think it’s high enough so we’re going to have to continue to maintain our community so that people want to come here. You’ve got to have businesses so people will want to come here.”

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