Sunday, May 19, 2024

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Graham, NC 27253
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MEBANE PROPOSED BUDGET: Water, sewer rates up 10 percent; property taxes the same


Mebane’s city council got its first glimpse Monday night of the city’s proposed budget for the upcoming fiscal year, which if adopted, would increase water/sewer rates by 10 percent but leave the property tax rate unchanged at 37 cents per $100 of valuation.

The minimum monthly bill for 5,000 gallons of water would increase by $3.80, from the current rate of $37.80 to $41.60, starting July 1.  The minimum monthly sewer bill (5,000 gallons) would increase by $4.05, from the current rate of $40.60 to $44.65.  Customers who receive both water and sewer service from the city would see their total minimum monthly bill (5,000 gallons) increase by $7.85, from $78.40 to $86.25, under the proposed municipal budget for Mebane.

In a departure from previous years, assistant city manager Preston Mitchell presented the proposed city budget, stepping in for outgoing city manager Chris Rollins, who has announced his intention to retire this summer.

The proposed budget calls for $32.6 million in general fund spending; $14 million in utility fund spending; $5.5 million in transfers from the utility capital reserve funding; and an estimated $158,550 in revenue from a new hotel occupancy tax.

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General fund spending would increase by 17.8 percent; utility fund spending would increase by 12.3 percent, based on the proposed budget.

The $32.6 million in spending within the general fund is based on a property tax rate of 37 cents per $100 valuation.

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At 37 cents per $100 valuation, Mebane’s municipal tax rate is above the revenue-neutral rate city officials had said they would adopt last year but is still lower than the previous tax rate, 47 cents per $100, in place prior to the county-wide revaluation that Alamance County adopted, which took effect July 1, 2023.  (Property owners on the Orange County side of Mebane are likely to see some fluctuation in their overall property tax rates once that county conducts its next revaluation in January 2025.)


Positions and pay raises

The proposed budget adds no new positions, though four existing full-time employees would be moved from the public facilities department to public works.

Included in the general fund budget is a 4 percent raise (i.e., “cost of living adjustment”) across the board for all 173 city employees, at an estimated cost of $669,415.

Also included are so-called mandatory increases in employer contributions for employee health insurance (3.58 percent for medical and 7.03 percent for dental coverage) and retirement contributions (24.10 percent for most city employees and 25.54 percent for law enforcement).  Those rates are set by the state treasurer.


Capital expenses

The proposed budget includes $7.8 million in capital spending within the general fund for repairs and equipment purchases for the following departments:

  • Recreation & Parks: $6.9 million to improve trails and parks, replace a work truck, purchase a zero-turn mower, and complete other renovations;
  • Police: $240,084 to replace existing patrol vehicles;
  • Public Works: $277,000 for equipment replacements and sidewalk construction;
  • IT: $124,387;
  • Public facilities: $52,000;
  • Sanitation: $80,000; and
  • Fire department: $38,000.

The proposed budget also calls for several big-ticket expenses within the city’s $59.1 million utility fund, such as $966,598 that would be used to replace a backhoe, a pickup truck, and a “vac” truck (the most expensive equipment purchase at $603,750).

The city’s share of the cost to expand the Water Resource Recovery Facility (WRRF) is estimated at $57.9 million, based on the proposed budget that the council previewed this week.

The budget also includes $4.3 million in debt service payments for non-vehicle obligations and $1.5 million in debt service payments for city vehicles during the upcoming fiscal year.

As of June 30, 2023, the city had approximately $12 million on hand in unrestricted fund balance (i.e., “rainy-day savings”), according to the budget proposal.

The city council is scheduled to hold a public hearing on the proposed budget for Mebane on Monday, June 3.

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