Thursday, April 18, 2024

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Elon’s town manager springs early-bird budget on council

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As many local government administrators continue to wrangle and writhe over their organizational budgets, Elon’s town manager has shot out ahead of the pack with a fully-fledged set of fiscal recommendations for the town’s elected officials.

Elon’s town manager Richard Roedner formally unveiled this early-bird budget on Monday – more than a month ahead of his previous spending plan, which he debuted before Elon’s town council last May.

Elon town manager Richard Roedner

Roedner’s latest financial road map calls for a grand total of $10,936,866 from the town’s general fund – a repository for revenue from various taxes and fees that bankrolls most of the municipality’s programs and services. Although an increase of about 6.2 percent over the budget that the council approved in 2023, Roedner’s proposal is less than $245,000 higher than this year’s amended budget, which includes various mid-year allocations such as a 5-percent pay raise for Elon’s entire municipal staff.

Yet, Roedner still managed to salt his proposed budget with a fair number of extras, including a 3-percent “cost-of-living adjustment” for staff members, a new employee in the town’s public works department, and nearly $900,000 in potential “capital investments.” He has, moreover, managed to do so with out any change to the town’s property tax rate of 35 cents for every $100 of value.

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In presenting these recommendations, Roedner acknowledged that he had to pencil in a number of rather tentative figures to have a draft of his spending plan ready for the council’s perusal.

Among other things, he conceded that his proposed spending plan doesn’t account for the results of an ongoing salary study, which a consultant in the municipality’s employ expects to have wrapped up by May. Roedner also pointed to some speculative assumptions in his arithmetic, such as a 10 percent increase in employee health insurance and a 3 percent hike in the water and sewer services that Elon receives from Burlington and Gibsonville.

Another unresolved issue that hung over Roedner’s proposed budget was the potential allocation of funds to nonprofits, which Elon hasn’t historically deigned to support.  The town manager confirmed that he has recently received requests for such outlays from the local chapter of the United Way, Alamance Arts, the Alamance County Transportation Authority, or ACTA, which operates van shuttles that serve the county’s outlying areas.

“The policy here has been not to fund nonprofits in the past,” Roedner went on to concede, “so before putting that in the budget, we wanted to bring that to you for your consideration.”

Roedner said that, in spite of all these uncertainties, he is quite confident about the future of Elon’s primary sources of revenue. He noted that the town’s property tax proceeds are on a fairly firm footing with the current 35 cent levy, which was some 4.34 cents higher than the “revenue neutral,” or break even, rate that the county’s tax office had calculated for Elon following last year’s countywide mass revaluation of tax values.

Roedner added that the town has also benefited from a steady uptick in interest rates, which have catapulted the town’s investment income from just $10,000 about five years ago to a current level of about $350,000 per annum. He also foresaw continued good news for the town’s sales tax receipts, which he said are on target to reach $3.9 million in the current financial cycle. Roedner nevertheless acknowledged that he included a more conservative sum of $3.6 million in his proposed budget although he personally anticipates another payout of $3.9 million in the upcoming year.

In the end, though, Roedner credited much of his financial optimism to the robust state of the town’s fund balance, or accumulated financial reserves.

“Our fund balance last year was more than 100 percent of our operating budget,” he went on to explain. “But our goal is to maintain a fund balance of 40 percent.”

Roedner said that the town’s consistently high sales tax receipts have done much to replenish the fund balance year in and year out. In the meantime, he noted that the reserves for the town’s general fund will soon be swelled by $3.9 million in federal pandemic relief that the council has previously earmarked to supplement operational funds that were theoretically lost in the coronavirus pandemic.

[Story continues below photo.]

Elon town council during Monday, March 25 meeting.

All in all, Roedner said that the town’s savings are in such a resilient condition that he has no qualms about deliberately drawing them down to cover his fiscal priorities. To this end, he said that his proposed budget allocates $500,000 from the fund balance for the town’s general operations, $899,994 for various capital investments, and $200,000 to continue funding the 5 percent pay hike that a divided town council had implemented in January.

The council, for its part, had little to say about Roedner’s proposed budget on Monday. In fact, the town manager explicitly bade its members to hold off on any questions or comments until they’ve had an opportunity to digest his recommendations. He went on to urge the council to schedule a “work session” to plumb into the budget’s particulars, which its members agreed to convene at 4:30 p.m. on Monday, April 15.

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