Belt-tightening budget expected for Elkin

Anthony GonzalezStaff Writer

April 6, 2013

The Town of Elkin is facing tough budget decisions and is operating with an available fund balance level that is the same dollar amount as in 1994, records indicate.

“That’s not a good thing,” said town Manager Lloyd Payne.

“The undesignated fund balance, which is probably the most stringent calculation, showed an undesignated fund balance of $2,327,820 in 1994. For 2012 the amount was $1,586,868,” said John W. Holcomb, assistant town manager and finance director.

Much of the depletion has been related to water fund expenses. Some town officials believe the town should no longer transfer money from the general fund to help pay for water fund expenses. Looking at other ways to reduce or eliminate costs are also important, commissioners say.

In the next 60 days officials and commissioners must hammer out next year’s budget.

“We in Elkin have a tough budget year in front of us. We have a plethora of wants but only a finite amount of money to fund said projects. What makes the cut? What do you cut? Who knows? said Payne.

“We cannot fund everything and will be forced to make tough decisions that affect the everyday lives of our residents,” said Payne.

According to Payne, there is a great deal of uncertainty regarding traditionally state-collected municipal revenues that are “up for discussion and elimination discussion” that could impact the revenue stream for Elkin and all towns or cities in North Carolina.

“The State is looking to “be more business friendly” and eliminate several of the “little” business taxes which are currently imposed and replace them with an expansion of the sales tax base,” said Payne. “The claim is cities and towns would be ‘held harmless’ in this change, but evidence of this claim has not been put forth. The details are in the making, and I eagerly anticipate the detailed information.”

Though tight times may be ahead, commissioners are optimistic that things will work out.

“Most towns our size in North Carolina have this problem or some version of it,” said Elkin Mayor Lestine Hutchens. “The towns on the coast must maintain huge fund balances in case of storms. We are lucky that we don’t usually have that to contend with that. We can increase our fund balance, if only our revenues could stay about the same. We have no idea what the legislature will do with our funding. The whole tax question leaves us with a lot of blanks were there was funding. Almost every dollar we get through the state is now under scrutiny and could be withheld. We will be very conservative in revenue estimates and very conservative in spending plans. I believe we will continue our effort to make providing fresh clean water a break even proposition with the plan to include some cushion for capital projects. We will also continue to market water to our neighbors in an effort to provide clean water and to make the system pay for itself.”

“The process may be formidable, but we have a very good staff and strong board and mayor so I am optimistic that we will arrive at reasonable solutions,” said Commissioner J.L. Lowe, Jr. “It is times such as this that we must continue to pursue our plans which have been developed with assistance from SBTDC [Small Business Technology Development Center]. We also have a large number of volunteers who are very enthusiastic about helping to improve Elkin. We are probably better off than most towns of our size, but we must work hard plus smarter during these trying times.”

The first budget workshop is on April 30 at 5:30 p.m. at Town Hall.

Reach Anthony Gonzalez at 336-835-1513 or by email at agonzalez@civitasmedia.com