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June 14, 2021

County manager outlines projections for the upcoming fiscal year budget, suggests uses for stimulus money

By Natalie Anderson
natalie.anderson@salisburypost.com

SALISBURY — While last year’s county budget preparation required much more conservative projections, County Manager Aaron Church says this year’s effort remains uncertain in terms of available revenue and the threat of inflation.

“This budget is almost as uncertain as last year, if not just as uncertain,” Church said.

Included in Church’s budget presentation to commissioners Thursday was a bright red disclaimer indicating all figures listed were estimates and may contain substantial errors since the recommended budget has not been completed.

For the 2020-21 fiscal year, Church, like many managers, erred on the side of caution when preparing the budget as the impact of the pandemic was unknown this time last year. A total of $153.52 million was adopted. The request for 2021-22 is $307.37 million.

After surveying other counties, Church found that the average projection of sales tax revenue was 3.4% over the actual budget amounts adopted in 2020-21, with the highest being 15% in one county. He projects Rowan County’s revenue would fall somewhere between 18%-26% over actual budget amounts once all revenues are received for the 2020-21 fiscal year.

Though the projected sales tax revenue is good news, Church said it’s “scary” to recommend a budget with that high of a projection, especially since the rate of inflation is unknown. Church began the budget presentation with headlines from national media outlets warning that inflation is on the horizon.

Church said the budget will be completed by May 31 and presented to the commissioners on June 5.

Church is anticipating a 100% increase in the cost of gasoline for county vehicles. In the current budget, those costs were estimated at $595,644. Only $680,798 was requested for the upcoming budget, but Church is recommending $1.36 million for gasoline costs.

Church also outlined allocations from the American Rescue Plan, the $1.9 trillion stimulus package passed by the federal government in March. The county is to receive $135 million, with more than 60%, or $87.67 million, going to local schools and the community college. A little more than 10% of those funds are split among local municipalities.

Rowan-Salisbury Schools will receive $76.24 million, which is almost double the annual allocation from the county. Kannapolis City Schools will receive $4.34 million and Rowan-Cabarrus Community College will receive $7.1 million. Church determined the KCS and RCCC amounts by estimating the percent of students who live in Rowan County since educational funds from the county follow the student.

Of all the federal funds going to education, about 20% is designated for “lost learning” during the pandemic, while other eligible expenses include anything impacted by COVID-19, capital projects or mitigating environmental health hazards. Commissioner Judy Klusman said she hopes to see local schools invest in more mental health services for children.

For the current budget, RSS received $38.71 million, KCS received $2.67 million and RCCC received $3.11 million. For the 2021-22 fiscal year, RCCC has requested $54.19 million, which includes the cost of the $45 million bond approved by voters in the 2020 primary election. But Church said after speaking with school officials, the county won’t move forward with the project at this time as it would require raised taxes. He suggested allocating $1 million for architect costs to begin the project.

RSS requested $115.91 million for the 2021-22 budget, while KCS requested $14.71 million.

The county is expected to have approximately $27 million in American Rescue Plan dollars to put toward expenses. Half would be received for 2021-22, and the remaining half would be in the following fiscal year, with a few years available to exhaust the funds.

Church recommends allocating $2.96 million in 2021-22 and $2.29 million in 2022-23 to replace lost revenue across all departments, and $410,000 in the upcoming budget for lost tourism revenue. He also proposes $2.09 million be used for a one-time bonus of up to $2,000 to county employees who worked during the pandemic.

But he included some suggestions for additional expenses that can be covered by the federal funds, including $1 million for a booster pump station, nearly $1 million for a sewer and water project at RCCC, $3.46 million for RCCC stormwater improvements and $4 million across four years for mental health related to COVID-19.

Prior to the budget presentation, several departments made requests to the board. Among those is a $10.5 million Emergency Medical Services radio system infrastructure project.

Other requests included:

• Department of Social Services requested an additional $232,000 to cover the costs of four additional social workers and one supervisor.

• Valerie Steele of the Mid-Carolina Airport requested the county eliminate its Rowan Express service, noting that an average of 25 trips are made across both buses each day, making the service an unnecessary expense. She said the current transit system, which goes door-to-door to the neediest residents, along with the Rural Operating Assistance Program is sufficient to serve the community. Steele also suggested eliminating three full-time positions that remain to be filled, and increase the number of part-time workers.

• Emergency Medical Services requested $880,000 for the replacement of at least a dozen heart monitors that are outdated.

Church outlined the county’s ongoing debt costs for 2021-22, which includes $5.77 million for public school projects, $1.34 million for community college projects and $2.08 million for Rowan County government projects. However, the quarter cent sales tax revenue would pay off in 2021-22 the remaining debt from the communications facility constructed in 2011. Using that quarter cent sales tax revenue could cover the $10.5 million request for an Emergency Medical Services radio system infrastructure project near Young’s Mountain in Lake Lure, as well as the $15 million construction of an Ag Center and conference room at the West End Plaza.

Additionally, Church said the $3.9 million in sales tax revenue could cover more than a dozen one-time payments for purchases such as three ambulances, heart monitors, sheriff patrol cars, court facility roof and carpet repairs, Tasers and an analog intercom system at the Rowan County Detention Center.

Commissioner Craig Pierce said Sheriff Kevin Auten talked about upfitting the cinema at the West End Plaza into a training center. Commissioners agreed and asked Auten to present this idea to the board in the future.

Church projects the fire tax rate to increase across the county, with the minimum rate moving up to 9% and the maximum at 9.8%. The lowest rate is currently at West Rowan at 7%, while the highest is South Rowan at 8.6%. Pierce said perhaps now is the time to begin discussing and studying the consolidation of local fire departments to keep rates low and ensure departments are staffed. Commissioners agreed to gather more information, look at other counties and talk with the NC Association of Fire Chiefs. Chairman Greg Edds emphasized that the board wanted to make clear local firefighters and first responders are greatly appreciated, and that there is no intention to do something that would hurt their operations.

Contact reporter Natalie Anderson at 704-797-4246.

Editor’s Note: This article has been updated to reflect an average of 25 trips are made across both buses each day.

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