Martin County releases $33.4 million draft budget; water districts and use of savings flagged as risks

County Manager David Bone on Wednesday presented a $33,385,140 draft budget for fiscal 2020-21 that keeps the property tax rate at $0.81 per $100 valuation but assumes a 5% drop in sales tax revenue and a 1% decline in the property tax collection rate because of COVID-19. The board reviewed the draft during a web-enabled regular session and scheduled further work before the June 10 public hearing.

Bone said the budget balances with a $2,364,307 appropriation from the General Fund balance and a $1,566,667 transfer from the Hospital Fund and contains no cost-of-living or merit raises and no new permanent positions. "This draft budget has been developed in an unprecedented time," Bone told commissioners, adding staff made cuts across departments and will continue to monitor revenue volatility tied to the pandemic.

The draft holds funding levels for Martin Community College and the regional jail, reduces youth detention funding, maintains the county contribution to district health and mental-health partners, and includes capital outlay items such as a landfill compactor and multiple vehicle replacements. The budget also includes the county's approximate $20,000 match for the Lead for NC fellowship program.

Water-district finances were a focal point. Bone told the board that Martin County Water Districts 1 and 2 "continue to struggle" to cover debt service and operating expenses; at June 30, 2019, District 1 owed the General Fund $379,145 and District 2 owed $1,256,529. The county will not raise customer water rates in the draft, even though the wholesale rate from the Martin County Regional Water and Sewer Authority will rise from $5.63 to $5.80 per 1,000 gallons for 2020-21. Bone said the Local Government Commission has placed Martin County on a watch list because of the rate structure and revenue shortfalls.

Commissioners asked staff to seek additional cuts and to hold another budget work session in late May so the board could consider a revised proposal ahead of the June 10 public hearing. Vice Chairman Dempsey Bond said he wanted to wait until after the initial reopening phase ended before adopting final figures; Commissioner Ronnie Smith urged caution and said ongoing daily changes justified delaying adoption until late June if necessary.

The board approved several budget amendments on Wednesday tied to one-time items, including Amendment #23 to appropriate $25,000 from Fund Balance for the county's purchase of the former Jamesville school property and other amendments to reflect insurance proceeds, grants, and firearm-sale proceeds used for capital purchases. Each amendment passed unanimously.

The county manager concluded the presentation by warning that continued reliance on savings to balance operations is not sustainable: "This situation needs to be continuously monitored over the next few years and appropriately managed so Martin County does not grow overly reliant on its savings." The board scheduled a special called meeting toward the end of May to consider a revised draft prior to the June public hearing.