What do governments do when they get too much revenue? Well, spend it, almost inevitably.
But in one case in Mebane last month, the city council voted to do so in order to comply with a state law.
The city budget each year includes estimates for expenses and revenues for all sort of departmental expenses – police, fire, sanitation, planning, inspections, for instance.
In the case of the city’s inspections department, however, the revenues this year are far exceeding the expectations when the current year’s budget was adopted last June.
State law now requires a review to ensure that inspections revenues do not exceed inspections-related expenses (both direct and indirect).
A “regular rolling review” is required, according to the city, which resulted in a proposal at last month’s city council meeting to allocate $738,551 from the revenue overage for expenses not originally included in the budget.
Where did the money come from?
The source of the overage varies somewhat. According to the written summary prepared for the council, Cliff Ayscue the inspections director and Daphna Schwartz, the city’s finance director, all of the excess was attributed to the huge expansion of the Walmart distribution center now under construction beside the existing facility on Senator Ralph Scott Parkway.
According to their memo, “The Mebane Walmart Distribution Center project was projected within the FY 25-26 Inspections revenue line items, but the actual submittal far exceeded the projections based upon initial meetings with the Walmart team associated with this private sector project. As a result, it is now projected that revenues will at least exceed what was originally budgeted by approximately $738,551.”
However, when Ayscue summarized the issue before the council on March 9, he listed some other big commercial and industrial projects as also having contributed to the excess revenues.
Those included the new Koury shopping center along Hawfields-Trollingwood Road, and the Target being built in the same center; a new hotel; a large warehouse (244,000 square feet) along Oakwood Street extension; the Duke Health office building on Gregory Poole Drive; and the Evolve mixed-use development on Mebane Oaks Road.
[Story continues below photos of large commercial and industrial projects in Mebane.]
In some cases, he told the council, the projects had come in during the current fiscal year, although they had been anticipated to come earlier.
In fact, he noted, last year, inspection revenues were below the budgeted amount. Ayscue told the council that this was the first time in his 13 years with the city in which there had been such an excess.
The projects came in (or “dropped” in his terminology) during the current fiscal year, resulting in a large excess of revenues above budgeted expenses.
Where to spend the excess revenues
As with most cities, Mebane developed a ready list of ways to spend the money. Most, $394,244, was spent in connection with the city’s intention to purchase a real estate office along South Fifth Street, directly behind city hall, for future office use.
The city’s down payment, $368,069, will come from the surplus revenues. Another $26,175 is allocated toward the appraisal, closing costs, upgrades to the building, and covering the administrative costs of getting approval of the financing from the Local Government Commission (LGC) for having the building’s owner, Mickey Tripp, finance the purchase over 10 years at 3 percent interest.
Another chunk, approximately $216,000, is going toward putting utility lines underground around the inspections building, which is located beside Mebane’s city hall.
Another $65,125 is designated for some new software for the inspections department.
An additional $63,700 is listed as potential expenses for the demolition of what Asycue said would be five houses. [See separate story this edition: https://alamancenews.com/mebane-sets-aside-money-to-deal-with-dilapidated-houses/]
The city’s attorney, Lawson Brown, confirmed to the council his view that the listed expenditures complied with the state law’s requirement to ensure that the listed expenses were associated with the city’s inspections department.
The council approved the changes unanimously, 5-0.
MORE MEBANE NEWS THAN YOU’LL FIND ANYWHERE ELSE. SUBSCRIBE TODAY:
ONE YEAR/$50; TWO YEARS/$89.
