Title
Public Hearing on Proposed Fiscal Year 2021 Operating Budget and Fiscal Years 2021-2025 Capital Investment Plan
Action
Action:
Receive public comment on the City Manager’s Proposed Budget.
Body
Committee Chair:
Ed Driggs, Budget and Effectiveness Committee
Staff Resource(s):
Marcus Jones, City Manager’s Office
Ryan Bergman, Strategy and Budget
Explanation
§ On May 4, 2020, the City Manager presented the Proposed Fiscal Year (FY) 2021 Operating Budget and FY 2021-2025 Capital Investment Plan. The proposed budget represents the city’s proposed operating and capital budgets for the fiscal year which begins July 1, 2020.
§ State law requires the city to hold a public hearing following the presentation of the Manager’s Proposed Budget and prior to the City Council adoption of the budget, currently scheduled for June 8, 2020.
§ In light of the COVID-19 pandemic, Charlotte’s Proposed FY 2021 Budget plan focuses on demonstrating our resilience as the city actively moves toward recovery and advancing Council’s Strategic Priorities.
FY 2021 Operating and Capital Proposed Budgets Summary
§ The City Manager’s Proposed FY 2021 Operating Budget and FY 2021-2025 Capital Investment Plan were developed consistent with the City Council’s Strategic Priorities. These priorities served as the foundational elements against which all FY 2021 budget decisions were measured.
§ The proposed budget includes a property tax rate of 34.81¢ per $100 of assessed valuation, which is the same as in FY 2020.
§ The proposed budget for the city consists of three major components supported by general tax revenues:
- A General Fund budget of $718.8 million for FY 2021, representing a decrease of 1.22 percent or $8.8 million from FY 2020, to support initiatives that will continue to deliver exceptional government services to the community;
- A $147.9 million Municipal Debt Service Fund, decreasing 18.2 percent due to updates to the debt model and revenue losses due to COVID-19; and
- A $357.4 million five-year General Capital Investment Plan that invests in affordable housing, neighborhoods, streets, transportation, facilities, and technology.
FY 2021 Budget Highlights
§ Closes a $21.8 million General Fund budget gap created by COVID-19 by reducing discretionary expenses, eliminating vacant positions, and shifting revenue sources to the General Fund.
§ No proposed tax increase, and no city staff are being furloughed or laid off.
§ Supports the city’s Strategic Energy Action Plan by spending $2 million on city building sustainability and by purchasing 20 electric vehicles (EV) and investing $1 million in EV charging infrastructure at city-owned facilities.
Proposed Employee Compensation and Benefits
§ Annualizes costs for FY 2020 employee salary actions.
§ Keeps employee healthcare premiums flat.
§ 1.5 percent market increase and step increase (2.5 to five percent) for eligible public safety plan employees.
§ 1.5 percent merit budget and 1.5 percent market adjustment for non-exempt/hourly employees.
§ Three percent merit budget for all exempt/salaried general employees.
§ Enhances public safety employee compensation beyond a typical salary increase:
- Increases the top pay for all Police Officers and Police Sergeants by 5 percent, and
- Increases the top pay for Firefighter II by 2.5 percent, Fire Engineer by five percent, and Fire Captain by 3.75 percent.
§ 1.2 percentage point increase in the employer contribution rate to the North Carolina Local Governmental Employees’ Retirement System.
§ 1.4 percentage point increase in the employer contribution rate to the Charlotte Firefighter’s Retirement System.
§ Continues to offer the CATS All-Access Transit Pass to employees.
Nongeneral Departments’ Revenue Proposals
§ Charlotte Water: The FY 2021 Water and Sewer Fee is proposed to increase by 1.9 percent. The typical homeowner would experience a $1.24 per month increase. This is the lowest rate increase in more than 10 years.
§ Storm Water Services: For a second consecutive year, Storm Water fees remain unchanged. It will remain at the current monthly average of $5.85.
§ Aviation: Select non-regulatory fees were adjusted to increase or decrease based on Aviation’s cost-recovery model.
§ Charlotte Area Transit System (CATS): In FY 2021, CATS’ fares will remain the same as in FY 2020. FY 2021 User Fees include the creation of three new regulatory fees related to land development reviews, rezoning petitions, and right-of-way/property agreement reviews.
Proposed Financial Partners and Outside Agency Funding
§ Due to financial considerations, no new financial partners were accepted in FY 2021.
§ Other than minor inflationary increases, all existing financial partners are proposed to receive same level of funding as FY 2020.
§ Agencies that receive partial or full funding from federal grants are budgeted to receive the full eligible federal allocation.
§ Agencies that receive only Pay-As-You-Go (PAYGO) funding are proposed to maintain their FY 2020 funding levels.
§ The total proposed annual Out of School Time Partner funding is $852,000.
Proposed FY 2021-2025 Capital Investment Plan (CIP)
§ The five-year total Proposed FY 2021-2025 CIP is $4.9 billion (this includes the total General CIP, as well as the five-year capital plan totals for nongeneral departments: Aviation, CATS, Charlotte Water, and Storm Water).
§ The General CIP totals $357.4 million (this includes general obligation debt, other debt, and PAYGO funds).
§ The nongeneral departments’ five-year capital plans total $4.6 billion and are summarized below:
- Aviation totals $2.0 billion, a 1.6 percent decrease,
- CATS totals $149.1 million, a 7.1 percent increase,
- Charlotte Water totals $1.9 billion, an 18.8 percent increase, and
- Storm Water totals $518.5 million, a 14.8 percent increase.
§ The Proposed FY 2021-2025 General CIP includes:
- Completing “The Big Ideas” with the final street, neighborhood, and housing bond referendum in November 2020 for a total of $197.2 million,
- Proposing the second consecutive $50.0 million housing bond to create and preserve affordable housing throughout Charlotte,
- Implementing a new Corridors of Opportunity program that dedicates $24.5 million to revitalizing six corridors, and
- Investing $47.3 million in transportation and mobility to build and repair sidewalks, advance the bicycle network, and improve traffic flow and mitigate congestion.
Budget Process
§ The following is the proposed remaining budget meeting schedule:
- May 11 - Budget public hearing,
- May 20 - Budget adjustments,
- May 27 - Straw votes, and
- June 8 - Budget adoption.
§ State law requires local governments to adopt a budget by July 1 of each year.
§ A complete copy of the proposed budget is available at the City Clerk’s Office or online at: <https://charlottenc.gov/budget/FY2021/FY2021Managers_Proposed_Budget-FinalA.pdf>
Attachments
Attachment(s)
City Manager’s Transmittal Letter
Executive Summary for the Proposed FY 2021 Budget