Enclosed is the proposed $165 million FY 2007-2008 general fund budget for your consideration with a tax rate of seventy-eight (78) cents per $100 valuation.  The proposed $165 million budget is 5.7% higher than the current FY 2006-2007 adjusted budget, which includes the current year’s adopted budget plus adjustments throughout the year.  The proposed budget is 10% higher than the original and adopted FY 2006-2007 budget. 

Included in the revenue portion of the proposed budget is $2 million in lottery proceeds.  The county will receive the first $2 million of lottery proceeds each year for debt service as shown in our latest capital funding plan. In addition, approximately $3 million of general fund reserves has been used to balance the budget.

The proposed budget includes formula-based current expense funding for Johnston County Schools and a similar current expense adjustment for Johnston Community College. Capital outlay appropriations are also budgeted for Johnston County Schools and Johnston Community College. Please see "Education" tab in document.

The county’s debt service will increase $3.5 million to a total appropriation of $27.8 million for FY 2007-08. The first sale of the new 2007 bond referendum will be held this summer, plus the remaining $20 million from the 2005 bond referendum. We will continue to look for opportunities to refinance existing debt.

The proposed budget includes a $7.8 million entry for the County’s match for Medicaid. We certainly hope the North Carolina General Assembly will provide North Carolina counties assistance with the local Medicaid match. Medicaid relief is the number one priority for the North Carolina Association of County Commissioners, the main lobbying association for county governments.

This proposed budget includes recommendations for new positions, conversions of existing positions, fee adjustments, and employee pay adjustments.

General Fund

• 2 new positions in Social Services
• 1 new position in Tax Office
• 6 new positions in the Sheriff’s Office
• 1 new position in Technology Services
• 1 position in Health department converted from permanent-part time to full-time status

* Please note that there were more positions requested than recommended.

Enterprise Fund

• 2 new positions in Public Utilities
• 3 positions in Public Utilities converted from permanent-part time to full-time status

Fee Adjustments to the General Fund

The only requested fee increase is in Animal Services to raise the adoption fee from $5 to $15 to pay for a rabies shot to be administered at the shelter before the animal leaves with its new owner.

Further, I am recommending that the Board of Adjustment have the option of waiving fees for prevailing parties.

Fee Adjustments to the Enterprise Fund

The recommended fee increases in Public Utilities are:

1. Increase in the water supply capacity fee from $2.50 to $2.75 per gallons per day (effective January 1, 2008.)

2. Increase in the landfill tipping fee for construction and demolition debris in the amount of $1.00 per ton for capital cost recovery of the new lined disposal cell.

3. Increases are proposed in project plan review fees for water, sewer and stormwater programs.

4. Increases in bulk and retail water and wastewater service fees and commodity charges.

5. Implementation of an "irrigation water commodity charge" on January 1, 2008. This would be applicable to all water metered through irrigation meters for commercial and industrial customers, as well as residential water usage over 9,000 gallons per month. The commodity charge would be $4.00 per thousand gallons. (This is actually a conservation initiative for non-essential water use.) I'm recommending this for January 1, 2008, so if approved, we would have ample time to notify all customers.

Employee Pay Adjustments

The proposed budget includes a 2.15% market adjustment. Performance pay funds are also budgeted for eligible employees .

Accomplishments

Our population has soared to 155,000 residents, and we have thousands more traveling through our county on interstate highways. It is my belief that we live in the most exciting county in North Carolina. The following "bullets" represent many of the accomplishments of the Board of Commissioners during the current fiscal year.

• Presented StormReady approval from National Weather Service.

• Partnered with the Town of Smithfield on incentive grant agreement to keep Andrew Corporation in Johnston County.

• Upgraded and improved county website.

• Held joint meeting at Agricultural Center with Johnston County Schools and Johnston Community College to discuss capital needs.

• Approved O'Neal's Water District.

• Approved and scheduled special malt beverage referendums for Cleveland and Wilders Townships, which were eventually approved by the voters in those townships.

• Approved bulk water agreement with Harnett County.

• Eliminated fire inspection fees for businesses.

• Adopted Land Use Policy Guide.

• Hosted towns at Agricultural Center to discuss common items of interest.

• Refinanced 1999 installment note that saved taxpayers close to $500,000 in interest costs.

• Approved and scheduled bond referendums for Johnston County Schools,Johnston Community College and Capital Recreation Needs.

• Approved land purchases for three future school sites.

• Approved purchase of future wastewater treatment facilities off of Galilee Road.

• Accepted Growth Management Committee Report and established Blue Ribbon Committee to analyze the report and make recommendations to the County Commissioners.

• Accepted "clean" audit report.

• Held annual board retreat and established work goals for next 12 months.

• Approved Mountains to the Sea Trail concept for Johnston County.

• Agreed to 20 year lease with Greater Cleveland Athletic Association to enable the GCAA to make major repairs and renovations while ensuring their ability to use facilities.

• Held first Anti-Litter forum at Agricultural Center.

I owe a big thanks to John Massey and the Finance staff, as well as the Technology Services staff, for their assistance in completing this proposed budget.

Sincerely,

Rick J. Hester

County Manager