Rocky Mount council reviews property tax options, consultant cuts and capital priorities to rebuild fund balance

City Manager Daniels told the Rocky Mount Committee of the Whole at a June budget workshop that staff prepared a set of property-tax and spending options to replenish the city’s general fund and restore its fund-balance policy.

Daniels said staff estimated a one-penny property tax increase would generate about $600,000 in additional general‑fund revenue. He described sliding options — from 1¢ to 5¢ — and what each increment could fund, including park renovations, a city housing grant program, a cost‑of‑living adjustment (COLA) and rebuilding unassigned fund balance. “With 1p on the current rate, we would be able to do 1 of the following projects,” Daniels said, noting the proposals are illustrative and “we are not married to any particular option.”

Why it matters: council members told staff they want specific estimates and trade‑offs before deciding whether to raise taxes, cut spending or do both. Council members repeatedly returned to the city’s recent large capital and financing decisions — including a multi‑million dollar land purchase and a sizable borrowing for a project that has increased debt service — and to the scale of transfers from enterprise funds to the general fund.

Daniels and finance staff described the city’s recent fund‑balance trajectory. The FY24 audit carried an approximate unassigned fund‑balance ratio of about 6.5%; staff’s best estimate for year‑end was roughly 5.5%. Staff told council the city’s policy target is higher: a commonly cited 8% minimum and a 10% (or 4.5 on their metric) longer‑term goal. To return to the policy target, Daniels said the city would need to replenish roughly 2.5 points of fund balance; to meet the higher internal target would take more.

Council members pressed for context on what drove the gap. Multiple members described large transactions and transfers in recent years. One councilmember characterized “a $17,000,000 transaction” and the several financing steps that followed; staff said some acquisition and closing costs remain to be finalized and that the financing structure includes interest‑only periods followed by principal payments. Daniels said the city has already made a first interest payment of about $800,000 and estimated principal payments later will be “in the 2,000,000 range” when they begin. He also said a roughly $37,000,000 transfer from enterprise (utilities) to the general fund is proposed in the current budget.

Council members debated where to find savings. Daniels presented a professional‑services/consultant list and said staff estimated eliminating or reducing certain non‑mission‑critical contracts would save roughly $75,000–$100,000; he warned that amount “still doesn't get us to the 600,000.” He and councilmembers discussed freezing or holding vacant positions (staff noted about 60+ positions were held vacant in the proposed budget and estimated roughly half may need to be restored over time). Daniels said roughly half of the frozen positions could be restored eventually, while some could stay vacant without affecting mission‑critical functions.

Parks and capital projects: council asked about specific projects removed from departmental requests, including Cloverdale Park (approximate cost $500,000–$550,000), Inglewood Park (a larger project staff said may exceed $1 million and at present is viewed as needing to be done as a single phase), and the Battle of Bull community building (about $900,000 previously cited). Daniels said projects were removed from the proposed budget to balance to the available revenue and that council could direct staff to reinsert projects if revenue options were chosen.

Downtown and land purchases: several councilmembers repeatedly framed recent land acquisitions and downtown investments as strategic, saying they were intended to spur higher‑paying jobs and long‑term tax base growth. Others said those same choices contributed to the current shortfall and urged clearer communication of priorities. Councilman Walker summarized that “we have to be able to articulate why we’re making the moves we’re making,” while Councilman Blackwell urged the group to view recent moves as investments rather than evidence of fiscal mismanagement.

Municipal Service District: council briefly discussed the municipal service district (MSD) assessment that funds downtown projects. One member said existing assessments did not uniformly benefit all areas and suggested pausing or redesigning the district until staff provide an accounting; Daniels said the MSD funds must be spent in the district and staff will provide additional detail.

Next steps: Daniels told council staff needs guidance this week to prepare a final proposed budget and utility‑rate proposals for the public hearings. He said reductions to certain consultants and non‑mission expenditures are feasible short‑term, but larger structural fixes will require either revenue increases, difficult expenditure choices, or both.

Ending: Councilmembers requested more back‑of‑envelope and line‑item detail before the next workshop. Daniels said staff would provide the requested information — including consultant savings estimates, a clearer inventory of capital project costs and contingencies, and additional explanation of the municipal service district — in time for the next scheduled meeting.