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Third-quarter forecast: Rocky Mount shows slight surplus at March close but utilities and stormwater face pressure
Summary
Finance staff reported third-quarter figures (through March) showing general fund revenues projected slightly higher than expenditures but identified deficit pressures in electric, gas and stormwater funds and signaled a need to address fund-balance policy during the upcoming budget.
City finance staff told the Rocky Mount City Council at a May work session that, through the third quarter (March), general fund revenues were projected to finish the fiscal year slightly above expenditures but that utilities and the stormwater fund remain under pressure and the city’s unassigned fund balance is below its adopted target.
Ken, the city’s finance presenter, said the city’s year‑to‑date picture had improved relative to the prior year and that the general fund was “still in the black” as of March, though staff cautioned some risks remain going into year end.
Key takeaways from the third-quarter forecast
- General fund: Staff reported general fund revenues of about $75.37 million versus expenditures of just over $75.0 million through March; revenue growth has outpaced expenditure growth in the nine‑month period. Property-tax collections were reported as roughly $29.5 million received to date against an anticipated $30.4 million final total; vehicle-tax receipts were projected to finish the year around $3.6 million.
- Sales tax and other revenues: Local option sales tax for combined Nash and Edgecombe county receipts was forecast at about $19.35 million (Edgecombe expected to exceed projection; Nash expected to underperform). Event-center revenues have exceeded expectations and were forecast to reach roughly $2.014 million for the year.
- Utilities: Electric and gas showed expenditures exceeding revenues (electric roughly $2.5 million over, gas about $1.8 million over) largely driven by capital outlays and wholesale energy costs; water revenues trailed expenditures by about $725,000 but sewer was about $1.5 million favorable, driven by higher receipts and targeted rate adjustments. Stormwater showed sizable capital spending (about $7.0 million in expenditures vs. $4.2 million in revenues) and staff said they will examine cost-of-service and fee adjustments in the upcoming budget.
- Financing and fund balance: The city recorded financing proceeds in March (for capital equipment) after the financing closed. Ken and other staff emphasized the decline in unassigned fund balance and said the manager intends to present a proposed budget that does not change the property tax rate, while pursuing cost-of-service adjustments for utilities and stormwater where appropriate.
Council and staff discussion
Council members asked for more detail on the composition of revenues and on where budgeted items and transfers were recorded. Several council members pressed for greater clarity in agenda items about the budget impact source accounts when votes are requested. Staff said routine budget amendments and contingency accounts are used when projects exceed original estimates; larger overages are brought back to the council for formal amendment.
Staff said they will include fee-adjustment recommendations (water/sewer/stormwater/environmental services) with the manager’s budget to address utility fund positions and aim for a balanced proposed budget when it is presented.
Ending
Finance staff presented the manager’s proposed budget timeline and said detailed budget material would be distributed to council in advance of the public budget presentation. Council members asked staff to supply historical trends for bad-debt expense and receivable allowances in utility funds as part of the budget package.
