February 2009

By FRANK M. JOHNSON, Mayor, Town of Mt. Airy
As published Feb. 4, 2009

1. Initial Budget Proposal

Town officials have for many months been discussing the impact of the economic recession on revenues for the current Fiscal Year 2009 as well as next year’s budget. While an initial Fiscal Year 2010 budget has been provided for several months, at the February council meeting the first formal five-year budget, from 2010 to 2014, will be presented.

Although few jurisdictions consider long-term five-year budgets, those that do have found that doing so allows for better long term planning, and also has the tendency to lead to greater caution before taking on new expenses.

The reason is in many ways quite simple. When the effects of expenditures can be seen for five years out, the focus is not just on the expense for a single year but on the costs over a five year period. This in many cases automatically leads to greater caution, and may have helped the town continue its long term conservative fiscal traditions.

The five-year budget proposal will also continue the tradition of separating capital revenues and expenditures from the operating budget. The intent of doing so has simply been to ensure that each budget has separate revenue sources, and further to ensure that development fees, which come in from already approved commercial and residential projects, are not used to support the ongoing operating budget.

Instead, such fees support the capital budget. While they do not provide all of the resources for the capital budget, those development fees were raised substantially a few years ago in order to provide that support. Another impact of raising those fees was to allow the town to project a much slower pace of growth than in the past, and to help prevent unnecessary tax increases to support capital projects as well.

An added benefit of the five-year timeframe is to allow forward predictions, such as the time in the future when prior approved development will begin running out, as may happen in the next 10 to 12 years.

The initial budget proposal does not call for any changes in our revenues. It does not call for any tax increases, and it does not call for any water or sewer rate increases. Naturally, to achieve a balanced budget, expenditures have largely been kept to a minimum. The town council will now have to consider this budget proposal. A final budget should be adopted by the council meeting in May.

2. Possible Annexation of Commercial Property

At the January council meeting, a developer discussed the possibility of annexing land upon which the 84 Lumber site now operates. While no petition has been filed, the developer wished to present the idea before taking any other steps. The discussion was about replacing the existing lumber yard with a form of retail shopping, such as a shopping center (the concept of a “mall” is likely not possible given water and other limitations).

Indeed, the reality of water limitations was raised, and there would be many factors to be considered. In terms of process, if a petition is filed, the council will need to refer the issue to the Planning Commission and staff for review of all of the facts, including the water situation. After the Planning Commission makes a recommendation, the council would review all of the material and hold a formal public hearing before making any final decisions.

Any annexation request, even for small portions of property or for commercial property, needs to follow the same process. That includes a referral to the Planning Commission, their review and consideration, and an eventual recommendation to the Town Council. The Town Council then holds a public hearing and makes the final decision. Often, the process can take many months or even longer, depending on the issues, specific facts and overall considerations.

Please be sure to watch for more details about the budget and these planning concepts!