Pittsboro proposes $14 million budget, keeps tax rate near revenue-neutral level while funding staff and capital projects

Town of Pittsboro staff on March 31 presented a working fiscal-year budget that proposes about $14 million in spending and relies on ad valorem property tax revenue for roughly half of that total.

The draft budget shows roughly $7 million in property-tax revenue, with ad valorem receipts representing about 53.6% of the proposed general fund. Other revenue sources cited by staff include a 14% local option sales tax, a motor vehicle tax recently implemented, franchise and utility taxes, and fees for planning, parks and solid waste. Staff also proposed using approximately $1.1 million from fund balance; about $700,000 of that appropriation is earmarked for a land purchase described during the meeting as “not specified.”

Town Manager Heather (staff member) told commissioners the town’s revenue-neutral tax rate after the recent county revaluation is about 0.3449. Staff said sales-tax receipts that surged after COVID are expected to level off and warned the board should not assume continued strong growth. The budget assumes personnel cost increases for retention and market adjustments, and carries several new or reclassified positions: two police positions, one additional public-works employee (half-year in the plan), an IT manager, and conversion of a downtown part-time position to full time.

Why it matters: The budget packages personnel increases with investment in capital projects and planning work the town says is needed to keep pace with development. Commissioners raised questions about long-term debt capacity and the effect of the county revaluation on taxpayers.

Most important details - Overall proposed budget: about $14,000,000; ad valorem (property) revenue about $7,000,000. - Revenue mix: ad valorem ~53.6%, local option sales tax ~14%, solid waste revenue ~4%, fund-balance appropriation ~7.3%, local proceeds ~5.5%, and a 1% contract from the City of Sanford for engineering services. - Fund-balance withdrawal: staff said they plan to draw about $1,100,000 from fund balance; $700,000 of that is for an anticipated land purchase (described in the meeting but not specified further). - New or converted positions programmed in the draft: 2 police officers, 1 public-works position (half-year), 1 IT manager, and downtown manager conversion to full time. Staff said some positions will be phased to full time in July. - Capital projects and priorities discussed: town hall design work (proposal expected on April agenda), continued planning for public-works building, design funding for sidewalks (Channel Lake, Salisbury Street), Thompson Street and other downtown projects, and a shuttle/circulator route supported by state grant applications. - Debt capacity: staff estimated additional debt capacity in the low millions depending on decisions; they cautioned large facility cost overruns could reduce capacity.

Discussion and next steps Commissioners and staff discussed the county revaluation’s effect on tax bills, whether to hold the town’s adopted rate near the revenue-neutral rate, and how stable sales-tax receipts might be in the near term. Staff said final retirement and medical-insurance rates were not yet published and would be updated before the public hearing. The manager asked whether the board wanted to proceed with design proposals already scoped (town hall, public-works) and noted that final decisions on borrowing would return to the board for approval.

Ending Staff will return an updated budget for public hearing with finalized insurance and retirement numbers, and the board asked staff to provide more detail on proposed capital projects and estimated debt service before final adoption.