Spencer’s recommended FY 2024 budget aims to continue momentum

May 10, 2023

Public Hearing scheduled for June 8 Board of Aldermen pre-agenda meeting

Watch the recommended budget presentation here

Update: The FY24 budget was adopted on June 13, 2023, with adjustments discussed at the May 23 Budget Workshop.

SPENCER – Town Manager Peter Franzese recommended the fiscal year 2023-24 budget to the Spencer Mayor and Board of Aldermen at the May 9 regular meeting. The proposed Spencer budget for FY24 totals $5,845,484, with $5,461,186 in the General Fund, $174,000 in the Powell Bill Fund, and $210,298 in the new Capital Reserve and Replacement Fund. In light of the countywide revaluation that took effect January 1, 2023, the recommended property tax rate is 55 cents per $100 of valuation, down from the rate of 65.5 cents used for the last four years.

While the revenue-neutral rate calculated according to NCGS 159-11(e) would be 48.06 cents, the recommended property tax rate of 55 cents is key to funding Town priorities. Compared to a 39.5 percent increase in assessed property values, the recommended budget is approximately 12 percent higher than the current year.

Considering the impact on Spencer taxpayers, Franzese described how the increase in real property values is offset by the stable or even depreciating value of vehicles. For example, the median single-family residential property owner’s property and vehicle taxes would increase $117 per year or roughly $9.75 per month. In this example (with a home value increased from $116,482 to $163,650) the Town property tax bill increases from $763 to $900, but the vehicle tax (based on 2 vehicles with values that do not increase) decreases from $127 to $107.

The Town of Spencer has continued to make progress toward the goals and priorities in its recently updated Strategic Plan. Town elected officials and staff remain focused on community priorities, and the FY24 Budget recommendation continues to prioritize several key areas outlined in the strategic plan.

Using a conservative revenue forecasting approach combined with favorable growth trends has benefitted the Town for the last several years. The proposed FY24 budget accommodates several new public safety positions while continuing the developmental increase program (with accelerated staff movement to target pay rates). The budget includes the second of 30 annual debt service payments for the $2.8 million USDA loan. Also included is the anticipated additional debt service on the new ten-year USDA loan for the Garbage truck that has been ordered.

Spencer is one of approximately 19,000 units of local government to benefit from the American Rescue Plan’s State and Local Fiscal Recovery Funds (SLFRF), provided to state and local governments for the purpose of responding to negative economic impacts of stemming from COVID-19. The Town of Spencer’s allocation is just over $1 million. The Town developed a spending plan based on feedback from the community, staff, and elected officials. The resulting project ideas are funded not with the SLFRF allocation itself, but rather through the “supplanted funds” created by the revenue replacement model. The FY24 budget includes $226,997 to cover staff salaries for the coming fiscal year, thereby freeing local tax dollars to achieve several projects. Other key recommendations include:

  • Six additional full-time Fire positions, pending a successful FEMA SAFER Grant application.
  • Two additional full-time Police positions, to form an Active Criminal Enforcement (ACE) Team who would perform proactive safety projects, targeted enforcement, and enhanced community outreach.
  • Second year of seed funding for the business incubator concept (Rowan IDEA Center).
  • Continuing support of local tourism and events, including marketing support for the North Carolina Transportation Museum and sponsorship of Spencer’s Winterfest.
  • Continuing and expanding the development of public art.
  • A third year of hosting a Lead for NC Fellow.
  • Legal review and recodification of Town Code of Ordinances, and online hosting/supplements.
  • Enhancements to the Town Newsletter and Social Media marketing.
  • Comprehensive signage enhancements including an electronic message sign for Park Plaza.
  • Launching a safer and more efficient garbage collection process starting July 31, 2023.
  • 17th Street Stormwater improvements and Stormwater Planning funded by a state grant.
  • Funding for the proposed Spencer Town Park to match received and pending grants.

The proposed budget includes an appropriation of $355,291 from the General Fund Balance. This includes $82,003 of unspent ARPA supplanted funds reallocated from FY23. This number is derived from the expected Fund Balance increase of $250,000 at the end of FY23 and adding to it an additional amount out of the existing undesignated balance. Over the past couple of years, the Town has continued to add to Fund Balance.

The Town has now established a Capital Replacement and Reserve Fund. For the first time, the Town is budgeting for the replacement and purchase of new capital assets in this new Fund. The recommendation includes designating $210,298 of Fund Balance for capital and using it to provide the funding needed.

Franzese noted the need to continue planning for new staff and operational costs on the horizon. This includes long-term funding for Fire staff the town hopes to hire with initial grant funding, and future recreation staff needed to support the variety of amenities now in the construction and planning stages.

The Board of Aldermen had budget workshop opportunities in March and April, and an additional budget workshop is planned for a special meeting at 6:00 p.m. on Tuesday, May 23. A public hearing is scheduled for 5:30 p.m. on Thursday, June 8 (pre-Agenda meeting. Interested individuals can view the Town Manager’s recommended budget at spencernc.gov and in print in the Town Hall lobby.

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