The City of New Bern is facing significant changes in its fiscal landscape with the proposed budget for FY 2024-25. This budget, presented by City Manager Foster Hughes, outlines critical increases in the ad valorem tax rate, solid waste rates, and other fees. Among these changes is a proposed electric rate increase that has sparked considerable discussion among city officials and residents.
Overview of the Proposed Budget
Increased Operating Budget
On May 14, 2024, City Manager Foster Hughes unveiled a $155,421,881 operating budget for the upcoming fiscal year. This represents a 4.1% increase compared to the previous year’s budget. Hughes highlighted that the revenue generated from ad valorem taxes, sales tax, and other sources is insufficient to meet the city’s growing financial demands.
Impact of Rising Costs
The proposed budget is significantly influenced by increased costs of materials, supplies, NC retirement rates, insurance premiums, salaries, benefits, and debt service. These rising costs necessitate adjustments in the city’s financial strategy, leading to the proposed tax and fee increases.
Ad Valorem Tax Rate Increase
Details of the Tax Hike
The ad valorem tax rate is set to rise from 38 cents to 41 cents per $100 of property value. This increase is expected to generate essential revenue to cover the city’s expenses. The estimated ad valorem tax revenue stands at $4.9 billion, encompassing real property, personal property, certified valuation, and registered motor vehicles.
Board of Aldermen’s Response
During the budget workshop meetings on May 21 and 22 at the Pleasant Hill Community Center, the Board of Aldermen discussed the proposed budget in detail. After extensive deliberation, the board directed the city manager to implement further cuts. Following these discussions, Foster Hughes and Finance Director Kim Ostrom presented a revised budget, incorporating cuts in dues, subscriptions, capital expenses, and travel and training, reducing the deficit to $785,475.
Electric Rate Increase Proposal
Utility Financial Concerns
Charles Bauschard, Director of Public Utilities, expressed significant concerns regarding the health of the city’s electric utility. He highlighted the limited capacity of substations and the increasing demand for power, leading to potential brownouts and system-wide issues. To address these challenges, the city hired Utility Financial Solutions, LLC, to conduct a financial study and develop a three-to-five-year rate plan.
Recommendations and Board Support
Dawn and Chris Lund from UFS presented their findings, recommending a 5% electric rate increase over the next three years and a power cost adjustment (PCA). The majority of the Board of Aldermen supported this recommendation, with an informal vote reflecting a consensus on the need for the rate increase. However, Alderman Bob Brinson abstained, and Mayor Jeffrey Odham requested more time to consider the proposal.
Solid Waste Rate Adjustments
Proposed Increase in Trash Rates
George Chiles, Director of Public Works, recommended a 35 cent increase in the residential trash rate per container, raising it from $19 to $19.35. Additionally, an extra one dollar tipping fee at the landfill was proposed. These adjustments aim to offset the rising costs of waste management and ensure the city’s services remain sustainable.
Impact on Residents
For a property valued at $100,000, the 1 cent increase in the ad valorem tax translates to an additional cost of $10. This, combined with the proposed increases in electric and solid waste rates, represents a notable financial impact on New Bern residents. However, these changes are deemed necessary to maintain the city’s financial health and continue providing essential services.
Next Steps and Public Involvement
Upcoming Public Hearing
A public hearing on the proposed budget is scheduled for May 28 at 6 p.m. at City Hall, located at 300 Pollock Street. This hearing will provide an opportunity for residents to voice their opinions and concerns regarding the budget and the proposed increases.
Further Review and Approval Process
Following the public hearing, the Board of Aldermen will continue to review and refine the budget. The proposed electric rate increase will be formally presented to the board after a public hearing, expected to take place in late June or early July. The board’s decision will be critical in determining the final budget and the implementation of the proposed rate increases.
Conclusion
The City of New Bern is navigating a complex financial landscape with the proposed FY 2024-25 budget. The increases in the ad valorem tax rate, solid waste rates, and electric rates are necessary to address rising costs and ensure the city’s continued financial stability. Residents are encouraged to participate in the upcoming public hearing to express their views and contribute to the budget decision-making process.
For more information on how to boost traffic on your website, just visit The Insider’s Views.
