FY 2024-25 Budget FAQs

FY 2024-25 PROPOSED BUDGET

FREQUENTLY ASKED QUESTIONS (FAQ)

June 3, 2024

House Example

Below is the property tax impact of the 3-cent increase on a $250,000 home:

*Guilford County revaluation

Impact – Council Salary

The below table shows the breakdown of the Mayor and City Council salary increases approved as part of the FY 2023-24 budget.

The increase of $87,703 equates to 0.06% of the FY 2023-24 adopted general fund budget of $142,113,256.

County rate/revaluation

FY 23, which included the most revaluation of property in Guilford County, saw High Point and Greensboro reduce their tax rates by 3-cents. Guilford County’s property tax rate remained the same at 73.05 cents per $100 of valuation.

Not for new City Hall

The proposed 3-cent property tax increase is for operations, primarily due to inflationary increases on the cost of providing services and additional compensation investments for Police and Fire.

It is not for debt service on a new City Hall. At this point, a final decision on the use of the Church property has not been made. A consultant is studying potential uses and findings will be presented when that study is complete.

Capital Projects in General Fund

The proposed budget includes $2,557,000 in general fund dollars for capital projects. The projects funded by the general fund are below:

Salary Implications

Below are the charts comparing the starting pay for police officers and firefighters for other local jurisdictions and the proposed increase for the City of High Point.

The Greensboro amount reflects the 4% increase in their proposed budget.

Police Officer current grade 29, minimum $49,325 to proposed grade 31, minimum $54,380

Current Entry Proposed Increase

Current Entry Proposed Increase

Fund Balance

The suggestion of 8% (one-month) minimum fund balance available has always been attributed to the LGC, however, they have distanced themselves from the “rule” in recent years. High Point’s 10% minimum is at the low end of our peer cities

Beginning with the 2021 audit, the LGC began applying a set of “tests” or Financial Performance Indicators of Concern (FPICs) to our financial statements. One of the FPICs is a measure of Fund Balance Available as a % of expenditures. If a unit falls below the threshold a response is required from the Board with a plan to become compliant. The threshold can be found in the chart below:

For this measure, the LGC combines the fund balances of the General Fund and Debt Service Fund, and certain expenditures are excluded (Powell Bill, new debt, etc.).

The LGC provided the following statistics on fund balance as of June 30, 2020.

Vehicle and Rolling Stock Replacement

Fleet Services has a very detailed replacement program that takes many factors into account including miles/hours, usage, years of operation, type of operation, and repair cost. The department works closely with vendors to secure pricing on vehicles to decrease the time for production and to avoid costly price increases. Other local cities including Raleigh and Charlotte follow the same process.

A couple of examples that Fleet Services has been able to do recently is secure pricing on three (3) vac trucks that will not be road ready until mid-2025. This is a tremendous savings and reduces the waiting time for the new units. These trucks do not qualify for replacement now, but they will when produced.

Fleet Services has also been able to secure pricing on fifteen (15) Ford Interceptors, three (3) Ford Explorers, one (1) single axle dump truck, and three (3) backhoes.

Library Social Worker and Peer Navigator Contract

There were 83 calls from the library to law enforcement in the past year. Some could probably have been avoided if there was a social worker on site, especially one with significant experience dealing with mental illness. The library often must call law enforcement for situations involving someone exhibiting disturbing behavior, or individuals who have been discharged from the hospital and have nowhere else to go. Some homeless customers spend a lot of time at the library, and mental illness is not uncommon among this population.

Two to three Masters level social interns from NC A&T and UNC-G Joint School of Social Work are at the library each academic year. Students are here September through late November and January through late April, two or three days a week. There are different students each academic year, so there is no continuity of service to individuals after students leave.

In the past 3 years, interns reported an average of 80-85 interactions per academic year.

Primary categories of assistance requested include:

• Housing

• Employment/Education

• Mental health/substance abuse/other health-related issues

• ID/Document assistance – help filling out forms, applying for benefits/assistance, job applications

• Obtaining a free cell phone

Of the 85 cases reported in the 2022-2023 academic year, 25 of these individuals required more than one visit with the intern to receive the help they needed. Ten of them visited with the intern 10 or more times.

When interns are present, staff call upon them to deescalate situations and resolve issues so that law enforcement is not called. While staff take training in de-escalation and dealing with difficult customers, they are not trained to respond to extreme cases, especially those related to mental illness. Also, they do not have the significant amount of time it sometimes takes to resolve situations. These occurrences are disturbing to staff and customers, especially when police are involved. In many instances there is no other option.

In addition to the assistance provided by interns, every Tuesday morning a group of volunteers from local agencies (Partners Ending Homelessness, Mental Health Associates of the Triad, the health department, nurses from the hospital, and others) are here from 9:00 am – 10:30 am providing services, primarily housing assistance. Approximately 50 people come, some just for coffee and snacks, but

many come specifically to receive assistance. Most are homeless or those in danger of becoming homeless. Mental health issues among this population are common. On Thursday mornings, a few volunteers are here to provide limited assistance. Having a licensed social worker and peer navigator would greatly expand and build upon the work of the volunteers who have grown this service over the past six years.

Having a social worker in a public library is not new – this has been the trend for the last decade or longer. Randolph County Public Library has two social workers, Forsyth County Public Library does as well, and Greensboro Public Library is in the process of hiring a full-time social worker.

2023 Revaluation Budget Drivers

The FY 2022-23 adopted budget saw an increase of property tax revenues by $12,336,325. This included the General and Debt Service Funds. The revenue-neutral tax rate was 52.97 cents. The proposed and approved tax rate was 61.75 cents. The below table shows the general fund drivers and tax rate equivalent for this budget.

Proposed 5% Water/Sewer Rate Increase

The below table shows the impact of the proposed 5% water/sewer rate increase on the average monthly bill:

To maintain, replace, and expand our water and sewer infrastructure, the city must raise appropriate revenues to ensure the system’s operating and capital needs are met. The impact on our customers is always considered when requesting a rate increase. Recent long-term studies have suggested a 4-6% annual rate increase is necessary to maintain the Water/Sewer capital improvement plan. In recent years operating costs have increased substantially due to a rise in the cost of labor, supplies, chemicals, and equipment.

Since 2002, the City has issued nearly $300 million in revenue bonds and invested an additional $125 million in cash to maintain and expand our water and sewer infrastructure. The proposed 5-year capital plan includes projects totaling $234 million, including a replacement of the City Lake Dam. From a regulatory perspective, revisions to the Lead and Copper rule and new standards with regards to PFAS will require further capital investment.

This issue is not unique to High Point. Greensboro recently went to the LGC for authorization to issue $450 million in revenue bonds and expects 8.5% rate increases per year through FY28. WinstonSalem/Forsyth County Utilities raised rates by 7% last year and they have not released their FY25 recommended budget.

Electric – Sale of Capacity

Last fall, North Carolina Municipal Power Agency 1 (NCMPA1), which includes High Point, unanimously approved a “purchase power agreement” with Central Electric Power Cooperative.

The sale terms call for Central to purchase 150 megawatts, or 18%, of NCMPA1’s generation capacity at the Catawba Nuclear Station. According to ElectriCities, the buyer will pay NCMPA1 $56 million a year for eight years to purchase excess baseload and will cover 18% of the nuclear plant’s operating costs and other expenses.

The 19 members of NCMPA1 chose the below option for the future of wholesale power rates, following the completion of this sale:

• 10% Wholesale Reduction – Applied to the 1st Demand Block on the Wholesale Bill.

o This adjustment will be effective July 1st

• $100 Million Dollar Working Capital Credits to Participants.

o $23,851,000 Credit is High Point’s share.

o Will be applied to the wholesale bill for July 2024. High Point should see that bill around August 10th.

• Subsequent wholesale increases delayed until 2027 and wholesale is predicted to increase as follows:

o 2027 – 2%

o 2028 – 2%

o 2029 thru 3033 – estimated 1% - 3%

A rate study is currently underway and once complete, the findings will be presented to the Mayor and City Council.

Capital Prioritization

The below table lists the general capital projects by priority.

Use of Fund Balance and Reduce Capital Scenarios

The below tables show scenarios reducing the proposed tax increase in half cent increments , utilizing a combination of reduced general capital projects and increased use of fund balance.