Hickory reports $79.6 million budget, first-quarter revenue shortfall and $10M+ capital needs
Loading...
Summary
Deputy City Manager and CFO Rodney Miller told Hickory City Council the city's $79.6 million general fund budget showed roughly $19.2 million in revenues through September, down from the prior year; council questioned reserves, water capacity planning and a $10 million-plus meter-replacement project.
Deputy City Manager and Chief Financial Officer Rodney Miller presented the City of Hickory's first-quarter financial report (July'Sept.) at the Nov. 18 council meeting, reporting a $79,600,000 annual general fund budget and about $19,200,000 in revenues to date.
"Our total budget, annual budget, you see there, revenues and expenditures total $79,600,000," Miller said. He told the council the city had received about $19,200,000 through September, slightly below comparable prior-year collections and reflecting a first-quarter shortfall compared with last year.
Miller outlined revenue drivers and pressures: sales tax receipts (the city budgeted $17,450,000 for the year), variability in mortgage-company remittances for property taxes, and inflationary increases in wages and equipment costs. "Staffing shortage ... is the largest driver" of budget growth, Miller said, adding wage and equipment inflation as other primary pressures.
On capital and utility finances, Miller said the water and sewer fund has a budget just over $42,000,000 with roughly $13,400,000 received so far this quarter and a $1,100,000 surplus through the first quarter in that fund. He told council the city is planning for long-term water needs, noting the treatment plant produces up to 32,000,000 gallons per day and the city is considering a second intake to protect supply.
Miller also reported citywide investments of about $114,000,000 across funds and interest receipts exceeding $1,100,000 year to date. He said reserves exceed state Local Government Commission guidance, estimating the general fund reserve ratio between 25% and 30%.
Council members pressed for details on fund restrictions and upcoming capital projects. Miller identified an automated meter replacement program that will exceed $10,000,000 and said the city will use a mix of reserves and financing to fund it. "We will be using some of our reserves in the water and sewer fund to help fund that project, as well as looking at financing opportunities," he said.
Council discussion stressed recruitment and retention as ongoing cost pressures and highlighted the city's practice of multi-year budgeting and departmental reviews ahead of next year's budget cycle. The city manager and Miller said they will return with further details during budget planning and the upcoming annual audit presentation.
The council took no formal budget vote at this meeting; the presentation and the responses will inform upcoming budget hearings and the annual audit presentation scheduled for December.
