The City of Clinton is preparing for a mammoth budget year, with many infrastructure projects — a water plant expansion, a new industry and a N.C. 24 widening — that will change the city’s landscape for years to come, and all require big local bucks.
Earlier this week, city manager Shawn Purvis gave an overview of the Capital Improvement Plan (CIP), a multi-year forecast of big-price expenses from fiscal year 2014-15 to 2018-19 and into the future, during a special CIP workshop meeting with the City Council.
The CIP is a tool to gauge budget impact and is in no way a static planning document. The city’s large capital projects — those with at least $10,000 cost and a projected useful life greater than five years — were outlined. Purvis also updated the Council on the status of its two main funds, the General Fund and Water and Sewer Fund.
“Currently, the General Fund is in a stable condition. Sustainability is the issue facing the fund,” Purvis stated in his presentation. “Low growth and a slow economy contribute to revenue growth that lags expenditure growth based on inflation. Some recent industry expansion and potential new industry could help close part of that gap.”
Short-term General Fund projects (in the next 1-2 years) include a fire apparatus, at $265,000; fire station renovations totaling $1.2 million in year 2; a police station, at $2 million in years 2; a police radar trailer, at $21,000; sidewalk improvements totaling $50,000 and $65,000, in year 2; and Royal Lane Rehabilitation Phase I, at a $864,000 cost.
“These are the projects we are trying to fund now and complete,” Purvis said of those short-term expenses.
Long-term General Fund projects (3-5 years out) include more fire station renovations, at $2.25 million; a Pedestrian Plan, at $2 million; Royal Lane Rehabilitation Phase 2, at a $1.2 million cost; a Bellamy Center addition, totaling $3.5 million; and a parallel or N.C. 24 connector road, which would be between $1-2 million.
The long-term projects may happen, or they may not, the city manager noted. Several will not make it into the city’s long-range planning for various reasons. Regardless, those capital projects identified by the Council as in need of funding will be those that best prepare Clinton for the future.
“Capital projects play a significant role in the city’s ability to provide quality services. Many of the city’s facilities are at the end of their useful life. Without new construction or renovations, city services run the risk of becoming less efficient and effective,” Purvis said in his PowerPoint presentation to Council. “Establishing capital replacement programs can be difficult on short-term cash flow but prove beneficial for the long-term fiscal health of the city.”
He then took the Council through the Water and Sewer Fund, which he noted is in sound fiscal condition, with debt service for several projects coming off the books over the next three years.
“This additional capacity coupled with significant retained earnings provides opportunity to pursue some of the city’s infrastructure needs and goals,” said Purvis. “Several large projects are due to break ground in the next two years.
Among the large short-term Water and Sewer Fund projects are the N.C. 24 expansion utilities, which total $2.6 million. Infrastructure for Chemtex (Carolina Cellulosic Biofuels) comes in at another $3.5 million, while the water plant expansion will have a price tag of about $4.8 million. The Southwood water tank, to serve Smithfield Packing and offer additional storage with the plant expansion, will cost $1.7 million.
For the long term, automated meter reading equipment ($1 million); a UV disinfection system ($600,000); and utilities for the parallel/connector road ($1 million) are being eyed.
“Although the Water and Sewer Fund is currently strong, the size of the upcoming projects and future capital needs must be balanced to ensure the financial sustainability of the fund,” Purvis stated. “This balance includes proper planning for spending as well as potential rate adjustments to account for operational cost increases and depreciation of capital assets.”
Chris Berendt can be reached at 910-592-8137 ext. 121 or via email at firstname.lastname@example.org.