2020-2021 Budget Message - RUTHERFORD COUNTY, NC STEVE GARRISON, COUNTY MANAGER 2021
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2021 2020-2021 Budget Message RUTHERFORD COUNTY, NC STEVE GARRISON, COUNTY MANAGER WWW.RUTHERFORDCOUNTYNC.GOV | 289 N. Main Street, Rutherfordton, NC 28139
May 4, 2020 Dear Commissioners: Please find attached the proposed budget for the fiscal year beginning July 1, 2020 and ending June 30, 2021 (FY2020-21). Attached are Budget Issues and Budget Worksheets. All funds in the FY2020-21 budget are balanced. Due to expected impacts to sales tax due to COVID-19, the General Fund was balanced using fund balance and reductions to sales tax allocations to the debt service fund. A property tax rate of 59.70 cents per $100 valuation is recommended. As stewards of the public’s money, we are facing the challenges (and opportunities) of making sound investments that improve our economic wellbeing, providing core services that improve the quality of life for the citizens we serve and maintaining our facilities and properties. The FY2020-21 budget was created centered around the vision, strategic objectives and core values defined in our mission statement, which is “To foster and sustain thriving communities and improve the quality of the lives of our citizens, we will maintain public trust, cultivate strategic partnerships and create opportunities to inspire excellence through strategic decision making and sound management.” County departments and offices remain focused on bringing cost-effective services and excellent customer service to the citizens, property owners and guests of Rutherford County. I wish to particularly thank Finance Director Paula Roach, as well as, Planning Director Danny Searcy and Jai Doherty for their invaluable insights and contributions. Debra Conner, Hazel Haynes, Angela Ezell, and Kim Aldridge are also due commendations for their contributions to the creation of this proposed budget. Development of the FY2020-2021 was made more difficult due to unknown impacts of COVID-19 to our local, state and national economy. In the end, the recommendations contained herein are those of the County Manager. I appreciate the opportunity to serve the Board of Commissioners and the citizens of Rutherford County. I look forward to working with the Board to review these recommendations and adopt a budget ordinance for FY2020-21. Sincerely, Steven W. Garrison County Manager Copies of the recommended budget will be available in the Clerk to the Board's office and the County Libraries for public review. Individuals desiring a personal copy may download a copy from the County Website, www.rutherfordcountync.gov.
The Members of the Rutherford County
Board of County Commissioners
The proposed budget for Fiscal Year 2020-2021 is presented for your consideration. This budget is based
on a property tax rate of 59.7 cents per $100 valuation that yields a budget that is within 0.61% of last
year’s adopted budget. This budget message is divided into several sections:
Budget Issues page 3
Budget Trends page 6
General Fund Balance page 6
County Debt Service page 7
General Property Tax Rate page 7
Tax Collection page 7
Other Property Taxes page 9
Sales Tax Revenue page 10
Other Revenues page 11
K-12 Education and Isothermal Community College page 12
Special Appropriations and Other Expenditures page 12
Health Department page 13
Elections Equipment page 13
Emergency Medical Service page 13
Salary Adjustment page 13
Position Changes page 14
Retirements page 14
Benefit Changes page 14
9-1-1 Funds page 14
Grant Funds page 15
Transit Fund page 15
Solid Waste page 16
Summary of Recommended Budget for All Funds page 18
Appendix A County 10 Year Trend page 19
Appendix B Fund Balance 10 Year Trend page 20
Appendix C School Capital Account page 21
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Budget Message FY2020-21 Page 2
Budget Issues
The FY2020-2021 budget was created to ensure that the County can continue to provide core and
mandated services, support education and still make investments in economic development and
quality of life projects. Rutherford County remains in good financial condition but continues to feel the
effects of the economic recession. Prior to the COVID-19 pandemic event, the unemployment rate in
Rutherford County continued to slowly decrease. However, the unemployment rate in March of 2020
(5.5%) is higher as compared to March of 2019 (5.3%).
UNEMPLOYMENT RATE PERCENTAGE
20.00%
18.00%
16.00%
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
Jul-10
Jul-15
Jun-08
Jun-13
Jun-18
Apr-09
May-11
Apr-14
Sep-14
May-16
Apr-19
Nov-08
Sep-09
Feb-10
Dec-10
Mar-12
Jan-13
Nov-13
Feb-15
Dec-15
Mar-17
Jan-08
Aug-12
Aug-17
Nov-18
Sep-19
Feb-20
Jan-18
Oct-11
Oct-16
Unemployment Rate Percentage
Based on information available in the North Carolina Association of County Commissioners 2019
County Map Book, Rutherford County ranks 34th in NC on average property value ($100,876), 7th
lowest in average income per capita ($31,572), 85% of our students are eligible for free or reduced
lunch (ranked 80th in NC), 24% of our children live in poverty (ranked 51st in NC), our food insecurity
rate is 20% (55th in NC), and our rate of uninsured residents is 17% (ranked 69 th in NC), which
continues to demonstrate that while many of the metropolitan service areas centered around North
Carolina’s larger urban areas are experiencing significant growth in their revenues, the rural counties
such as Rutherford County still lag behind and are not experiencing the same level of economic
recovery. Also, the segment of our population that is 65 and older is growing (21%, 72nd in NC).
It is an understatement to say that the economic and revenue impact of the COVID-19 pandemic is both
severe and uncertain. Mitigation efforts at the international, national, state and local level to combat
this pandemic are having a sharp and widespread effect on the economy, which economists confirm is
entering a recession. It is almost impossible to make solid predictions because there are so many
unknown factors, including how long mitigation efforts will be necessary, what types of fiscal support the
state and federal government and the Federal Reserve will provide, how long and what shape an
economic recovery will take and a near complete lack of data and comparable events to craft the
FY2020-2021 budget. The impact of COVID-19 is not only going to impact our projections for FY2020-
2021 but economist forecast a sharp economic contraction in the second quarter of 2020. Over a half
Budget Message FY2020-21 Page 3
million people have filed for unemployment benefits in North Carolina, which represents 10% of the
state’s workforce, and the Congressional Budget Office expects the country’s unemployment rate to
exceed 10% in the second quarter. While most economist believe that we may see the economy
rebound in the second-half of the year, there is growing uncertainty around what the recovery will look
like and how a phased lifting of mitigation efforts and restrictions may influence consumer behavior. For
Rutherford County, we will take a quarter-by-quarter; or even month-by-month, approach to determine
how to apply plausible recovery estimates and timelines. Two challenges, among many others, going
forward will be cash flow and balancing the budget as required amid much uncertainty. The crafting of
the FY2020-2021 budget takes into consideration the following COVID-19 impacts:
• A reduction in Sales Tax collections. For the FY2020-2021 budget, we are projecting a loss of 10% of
our Sales Tax revenue spread out over the 12 months of the budget year. This is a reduction in Sales
Tax revenue of approximately $1.7mil.
• A reduction in property and vehicle tax collections of 1%.
• A higher unemployment rate, higher poverty rate and a higher demand on health and human
services.
The FY2020-2021 proposed budget (General Fund, including DSS) is $69,101,767, a decrease of 0.61%.
The primary decreases consist of the following: reduction of economic development incentives as a
result of depreciation to personal property values at Facebook and improvements at American Zinc
Recycling, reduction to critical capital facility and equipment needs for the County, and the completion
of the SAN Server update in July 2019. The FY2020-2021 funding request from RCS exceeds the current
fiscal year local county funds allocation by $5.67 million (34.66%). Due to numerous factors impacting
their operations and budget, RCS faces a significant budget deficit for the upcoming school year. These
factors include decreased Average Daily Membership funding from the State, special education
funding shortfall from the State, skyrocketing personnel costs, increase in critical capital outlay needs
and more. $4.35 million is needed just to cover the reduction of State Allotted Average Daily
Membership funding and to close the gap of the state mandated special education programming,
which remains capped at 12.75% of total student population (RCS is currently serving 18.1% of their
student population through this programming). The FY2020-2021 funding request from ICC operations
exceeds the current fiscal year allocation of local county funds by 4.76% ($2,623,527). ICC also
requests $11.475M in capital which includes a new Allied Health Sciences Building. ICC anticipates that
they will experience an increase in facility/grounds maintenance, utilities and staffing costs during
FY2020-2021. ICC representatives cite the renovation and redesign of the campus library, an
estimated $1.3 million project, as a top priority.
The Property Tax Rate is proposed to be 59.70 cents per $100 valuation.
Net property valuation is down 0.274% from FY2019-20 to $7.853 billion, however, most of that
change is attributable to the change in value to Andale LLC. For Ad Valorem taxes, we are required
to use a rate not to exceed the previous year’s tax collection rate of 98.04% instead of the current
projected collection rate, which for FY2020-2021 will be 97.53%. This rate is similar to the current
year projected rate of 97.5%. Due to the immediate impacts of COVID-19 to our local economy, it
is not recommended to use the prior year’s collection rate.
Most County department budgets have been kept nearly flat to reflect the revenue issues noted above. The
County Planning and Public Works Department has identified in excess of $2,588,254 in critical/urgent repair
and renovation needs for county facilities and properties. This budget proposes expending $247,523. The
Budget Message FY2020-21 Page 4
Information Technology Department has identified $402,646 in critical/urgent needs for FY2020-21 across all
departments. This budget proposes expending $265,077.
Other budget impacts for FY2020-21 include an increase of the budget contribution from Rutherford and
McDowell counties contributing to the regional Foothills Health District (an increase of $70,686 per year for
Rutherford County) and an increase in the County’s Isothermal Planning Development Commission (IPDC)
dues and RPO fees of $6,681. This budget proposal continues implementation of Pictometry, Spatialist and
Corelogic technology for the Revenue Department, which would help to make our next property revaluation
process easier and less costly as well as enhance the service for the public, realtors, attorneys, etc. by
offering them enhanced tools as they perform property/parcel searches. The total cost for Pictometry over
six years is $147,044 ($40,988 every two years).
County funds are distributed categorically as demonstrated on the following pie chart.
The top three are Education at 27.12%, Public Safety at 23.63% and Human Services at 22.3%. The
Human Services number is a bit misleading, however, as approximately 65.6% of the tax dollars used to
support Human Services is reimbursed through State, Federal and grant sources leaving approximately
34.4% to be covered by county dollars.
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Budget Message FY2020-21 Page 5
The county continues to cover the gap in funds available for capital facility debt service for education.
This is primarily due to the legislative reduction in lottery funds, the recession-based reduction in sales
tax contributions, which directly impacts Articles 40 & 42, and the legislative elimination of the ADM
Corporate Sales Tax. As a result of the 2019 NC Needs Based School Capital Fund (NC NBSCF) Lottery
Grant received for the construction of RS Middle School, the County will not receive the annual lottery
distributions for five years. The County also utilizes $1.2M of the new quarter cent sales tax to help
fund critical school capital and debt service. If we add in the portion of county funds used to
supplement the school construction debt service, approximately $1,359,720, education (RCS and ICC)
makes up approximately 19.14% of the appropriated county funds. Due to the immediate impact of
COVID-19 to our state and local economy, sales tax set aside to the debt service fund was reduced by
10% from the annual planned amounts. As the economy improves later in the fiscal year, restoration of
this set aside is a priority. The funds in the debt service fund are critical for the County to be able to
move forward with much of the County and Schools critical facility needs.
Budget Trends
Attached please find Appendix A which shows the changes in revenue expenditures and fund balances
over the last ten years.
General Fund Balance
The County began FY2019-20 with $20,897,032 in unassigned General Fund balance. During the
current fiscal year, the County budgeted $1.829 million of fund balance. Below are major uses of fund
balance:
• No fund balance appropriated with the original FY2019-20 budget
• $1,779,276 of approved projects or restricted funds such as donations from the prior year
were carried forward; and
• $49,875 appropriated for an economic development grant matching funds and additional
costs incurred for juvenile detention.
Budget Message FY2020-21 Page 6
Through diligent review of expenditures and conservative spending by our departments, it is
anticipated that the County’s fund balance will be reduced by $1.98 million as a result of lower sales tax
collections. Unassigned fund balance is expected to be reduced as of June 30, 2020 by $874,000
primarily due to the capital facility needs completed this fiscal year and the purchase of new elections
equipment.
The proposed FY2020-2021 fund balance available for appropriation is estimated to be 26.41%, which
is lower than the range for North Carolina counties having the population of Rutherford County
(31.74%) and slightly above the informal management goal of 20%. Also, it exceeds the minimal 8%
recommended by the Local Government Commission. Last year’s original budget did not include an
appropriation of fund balance, however, the proposed FY2020-2021 budget does include an
appropriation of $400,000 of Fund Balance from the General Fund (with the exception of carry-over
projects reflected in this budget proposal). This appropriation is recommended due to the anticipated
reduction of sales tax due to the economic impact of COVID 19. Appendix B shows the Fund Balances
of the General Fund and other Governmental Funds over the last ten years.
It is imperative that the County retain optimal levels on the Fund Balance of the General Fund. The
County assumes the capital outlay debt service financing for the County, RCS and ICC. RCS and ICC
cannot secure debt service financing for capital building and facility projects. Reducing our Fund
Balance creates high risk during the lean economic years when these funds are needed to maintain our
joint operational expenses, capital expenses and debt service. The County maintains a good credit
rating due to the management of our budget and Fund Balance, which is needed to maximize our
financing opportunities and to secure competitive bids on capital projects. Currently, the total county
facilities debt outstanding is $40 million (County - $3,972,186, RCS - $30,332,383, ICC - $4,658,132,
water/sewer infrastructure - $1,223,945) and the total debt service set aside for FY2020-2021 is
recommended at $7,105,436. This reinforces the County’s position that it is critical that we retain
optimal levels on the Fund Balance of the General Fund to withstand economic downturns such as
those currently faced.
Each year, the County “carries forward” certain grants and other projects incomplete as of fiscal year
end. The multi-year projects/carry-forward items will be amended in the FY2020-21 budget after July 1
with their June 30th balances. Examples include NC Department of Commerce Industrial Development
and Building Reuse Grants, capital projects (including water and sewer projects), other multi-year
projects such as Queens Gap Infrastructure and remaining proceeds of the Vehicle Replacement fund
for items not yet delivered.
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Budget Message FY2020-21 Page 7
County Debt Service
Rutherford County debt obligations are shown below.
Source: Rutherford County CAFR, June 30, 2019
General Property Tax Rate
The Property Tax Rate is recommended to remain 59.70 cents per $100 valuation.
Tax Collection
As of June 30, 2019, the County audit reflected a collection rate of 98.04%, up from 97.68% as of 2018,
of real estate property tax levy. The State average is 99.23%, which is the short-term target for the
Revenue Department. Each percentage of unpaid delinquency is equal to $468,800 in FY2020-21.
By State law [GS 149-113(b)(6)] the County may only budget property tax revenues based upon the
prior fiscal tax collection. Even though the FY2019-20 levy is $46.880 million, the FY2018-19 tax
collection rate of 98.04% is the maximum rate allowed to be used for budget purposes. Due to the
COVID-19 impact to our community, a tax collection rate of 97.53% is used for the recommended
budget. Therefore, the property tax revenues are only budgeted at $45,721,295.
We are currently projecting a June 30, 2020 collection rate of approximately 97.5%. As of April 27,
2020, the real estate property tax collection rate was 96.68%.
Budget Message FY2020-21 Page 8
Source: Rutherford County CAFR, June 30, 2019
Other Property Taxes
Based upon budget submissions by the County Service Districts, the rates for Fire Protection, Sanitary
and Water are shown for each district. In 2015-16, a tax levy was created, and a tax was set up to
cover Broad River Water Authority’s annual maintenance cost projections needed for the Queens Gap
development water system due to the minimal usage volumes anticipated until the project is further
developed. As the system has taken longer to construct than originally projected, it is recommended
that the Commissioners continue to zero out the Queens Gap Water District tax rate going forward.
We will revisit this in the future once the roads have been constructed, the foreclosed properties
begin to sell, and the new Water District is operational.
Tax
Rate
Needed
FY19-20 to Fund
County Service District - FY 20-21 Assessed Budget FY19-20 FY 20-21 FY20-21
Fire Service Value Amount Tax Rate Budget Request Budget
Bill's Creek $ 330,475,556 $ 291,395 0.070 $ 284,615 0.070
Bostic $ 168,829,980 $ 126,672 0.060 $ 130,818 0.060
Budget Message FY2020-21 Page 9Broad River $ 3,659,487 $ 6,682 0.140 $ 6,997 0.160
Cherry Mountain $ 211,971,803 $ 291,515 0.110 $ 289,119 0.110
Chimney Rock $ 59,982,237 $ 38,124 0.050 $ 36,336 0.050
Cliffside $ 424,125,145 $ 332,630 0.080 $ 442,290 0.080
Edneyville $ 3,419,400 $ 7,491 0.115 $ 4,875 0.115
Ellenboro $ 407,457,015 $ 391,508 0.080 $ 400,540 0.080
Fairfield $ 14,520,684 $ 21,822 0.100 $ 21,097 0.100
Forest City $ 11,147,807 $ 11,020 0.080 $ 10,865 0.080
Green Hill $ 248,080,609 $ 223,908 0.070 $ 219,563 0.070
Hudlow $ 343,495,183 $ 359,760 0.080 $ 414,897 0.100
Lake Lure $ 8,420,342 $ 9,287 0.090 $ 8,593 0.090
Outside Response Area $ 182,732,375 $ 174,325 0.045 $ 172,637 0.045
Polkville $ 42,680,967 $ 42,364 0.080 $ 41,971 0.080
Rutherfordton $ 280,686,428 $ 370,596 0.110 $ 382,458 0.110
Sandy Mush $ 407,325,138 $ 406,882 0.080 $ 392,973 0.080
Shiloh Danieltown Oakland $ 543,884,293 $ 394,280 0.060 $ 407,087 0.060
Shingle Hollow $ 132,757,235 $ 197,464 0.120 $ 200,694 0.120
Spindale $ 12,958,930 $ 12,325 0.080 $ 13,093 0.080
Union Mills $ 173,418,691 $ 110,781 0.050 $ 109,786 0.050
Cliffside Sanitary Service $ 7,868,359 $ 14,472 0.100 * *
*Will be provided by LGC
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Budget Message FY2020-21 Page 10Sales Tax Revenues
The current economic conditions have made forecasting sales tax for next fiscal year as well as the
current quarter extremely unpredictable. Projections reflect almost a 20% loss over the next six
months.
Sales Tax Projection as of April 15, 2020
BUDGET Actual/Projected 2019- 2020 RECOMMENDED
2019-2020 2019-2020 VARIANCE (Budget/Actual) 2020-2021
Article 39 $ 6,062,924 $ 5,528,864 $ (534,060) -8.8% $ 5,441,490
Article 40 3,892,053 3,680,576 (211,477) -5.4% 3,535,885
Article 42 2,962,251 2,697,017 (265,234) -9.0% 2,656,106
Mun H.H. 42 (100,495) (124,682) 24,187 24.1% (102,002)
Mun H.H. 39 (800,099) (849,899) 49,800 6.2% (763,314)
Total $12,016,634 $10,931,876 $ 1,084,758 -9.0% $10,768,165
The anticipated impact of COVID-19 to sales tax is reflected in both the current year and the upcoming
year. The recommended budget anticipates the economy showing improvement by summer 2020. If
sales tax collections exceed the FY2020-2021 recommended budget, it is strongly recommended that
the reductions to the sales tax set asides for debt service be restored. This set aside significantly
effects the county’s ability to move forward on several critical projects.
Effective October 1, 2018, Rutherford County began collecting the Article 46 sales tax following the
successful referendum in May 2018. These proceeds will be used for education-related capital facility
needs. For the upcoming year, it is expected these proceeds will be $1.5 million. The recommendation
is to transfer $300,000 to the College Capital Fund to address their identified critical capital facility
needs including their library/media center renovation project and the remaining $1.2 million to be set
aside for school debt service including the current RS Middle School project.
Based upon prior Board policy, the School Capital Account portion of the Debt Service Fund is expected
to have a balance of $1,251,885 at the end of FY2019-20 as presented in Appendix D.
The County must pay the current debt service for school capital facilities regardless of the availability
of lottery funds or the appropriation of Article 40 and Article 42 Sales Tax funds. Revenues from these
funds are not sufficient to cover this expenditure, which requires the County to supplement with
additional non-education related Sales Tax revenues. Debt service is shown as contra accounts within
multiple sales tax revenue accounts within the General Fund Budget. The Sales Tax allocated to the
Schools is recorded as revenues in the Debt Service Fund. Currently, the amount of county funds
appropriated to school system debt service is $1,359,720 above the available funds from the school
systems lottery allocation and their appropriation of Article 40 and Article 42 funds.
Education Lottery proceeds have not been budgeted for FY2020-2021. As a result of the NC NBSCF
Lottery Grant received in November 2019 for RS Middle School Construction, the County will not
receive lottery funds for five years. The County received the maximum award of $15M for the project.
Completion of the new school is anticipated in summer/fall of 2021. In 2013, the State Legislature
deleted the statutory formula of Education Lottery revenues for school capital construction. The
amount remained the same in FY2013-14 as the prior year, but state school construction funds are
Budget Message FY2020-21 Page 11now subject to the appropriations process without statutory protection. All Education Lottery
proceeds received by Rutherford County shown in the Debt Service Fund are pledged to pay school
debt. If Education Lottery proceeds decrease, as has been proposed in prior Legislative sessions, then
General Fund transfers to the Debt Service Fund will need to increase. The Board of County
Commissioners has approved resolutions in 2016 and 2017 advocating that the North Carolina
Legislators reinstate the county allocations of lottery funds for school capital facility needs as originally
designed.
NOTE: Any reduction by the General Assembly in Education Lottery Funds allocation will require an increase in County
General Fund expense to pay school debt. The General Assembly now allocates $100 million of the expected $268+ million in
Education Lottery Funds that would otherwise be going to statewide school capital construction. If the statutory Education
Lottery had been in place this year, Rutherford County would have received approximately $1,500,800 annually for school
facilities rather than $550,000.
Other Revenues
We continue to see a rise in our Building Inspections revenue as new home construction and home
improvements continue to pick up (7% anticipated increase over FY2019-2020 budget). Also, we have
seen increases in Register of Deeds revenues. All other revenues are remaining flat. However,
revenues generated by these departments are not sufficient to cover their expenditures to operate
them as enterprise funds and County General Funds are used to supplement their budgets.
K-12 Education and Isothermal Community College
In FY2016-2017, increased allocations for the schools and the college were primarily funded by the new
sales tax distribution as a result of the NC 2015-17 budget bill (Session Law 2015-241). This article 44
sales tax distribution (GS 105-524) is projected to be $1,137,824 for Rutherford County for FY2020-
2021. These additional proceeds distributed to the County are restricted to be used for only education
or economic development purposes. ICC capital set aside funds were increased to an annual allocation
of $200,000 in FY2016-2017 utilizing a portion of these funds and this will continue for FY2020-2021. In
2019, the Commissioners approved an additional $300,000 appropriation from the new quarter cent
sales tax, for a total of $500,000 for ICC capital set aside. The remaining article 44 sales tax was
allocated to the school’s current expense and capital needs.
Per their request, RCS was excluded from the County’s Vehicle Replacement Plan in the current FY
budget. The final payment for existing vehicles in the program will be paid in March 2021.
The current expense allocation to the schools also includes $278,139 for the School Resource Officers
(SROs) (portion previously direct funded by the County). Beginning July 2016, the county began
allocating funds to the schools for the SROs and RCS, Thomas Jefferson Classical Academy and Lake Lure
Classical Academy were to be billed for 100% of the cost of the SROs stationed at their respective
schools. The Rutherford County School System and Isothermal Community College made presentations
to the County Commissioners on April 9th.
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Budget Message FY2020-21 Page 12EDUCATION FUNDING
FY17-18 FY18-19 FY19-20 FY20-21 FY20-21
Approved Approved Approved Requested Recommended
County Depts. $39,726,321 $38,240,802 $40,209,789 $45,649,597 41,247,869
excluding
Schools/College
Public Schools 13,852,431 14,268,004 15,263,251 17,199,723 15,415,884
Current Expense
Schools 1,595,908 1,096,163 1,098,654 4,832,647 794,719
Capital Outlay
Isothermal 2,273,407 2,341,601 2,504,225 2,623,527 2,529,267
Community
College (ICC)
ICC 200,000 200,000 500,000 11,475,000 500,000
Capital Outlay
Economic 5,513,641 6,351,935 8,400,201 7,714,076 7,714,076
Development
Incentives
Internal Service 590,000
Fund - SAN
Other 1,201,075 1,289,762 1,313,604 1,881,580 1,399,952
Total $64,362,783 $63,788,267 $70,022,828 $91,876,150 $69,601,767
Special Appropriations and Other Expenditures
The County received requests from several new non-profit agencies requesting consideration for
funding for FY2020-21. Although we recognize these agencies as good community partners who
provide critical services to our citizens, the projected revenues for FY2020-21 will not support the
addition of these new expenditures to the County budget.
Foothills Health District
The Foothills Health District received the final contribution of $56,014 in FY2015-16 of a three-year
planned increase approved by the three counties making up Rutherford-Polk-McDowell Health
District. The operational expenditures for the Foothills Health District continues to outpace the
revenues for this agency and the three counties (Rutherford, McDowell and Polk) agreed to seek
Commissioner approval to include an apportioned (per capita) increase in the county allocations. For
Rutherford County, this increase is $70,687. Although the organization became a two-county agency
effective July 1st, 2019, the County’s recommended budget continues funding at Rutherford’s multi-
year planned increase.
Elections Equipment
Due to changes enacted by the State Legislature, the requisition of new voting equipment, hardware
and software was required. This winter the County purchased and used the new machines during the
February 2020 primary. Due to the unknown cost, the County had accumulated a reserve of $336,232.
The County was able to complete the update within the project budget as reserved.
Budget Message FY2020-21 Page 13Emergency Medical Service
Contributions to the rescue squads are budgeted but will not be released prior to the execution of a
contract between a rescue squad and the County. Such contract must be executed by July 31, 2020 or
the funding to that rescue squad will be reallocated to the capital outlay line item within the EMS
budget. The two non-county managed rescue squads (Rutherford County Rescue and Hickory Nut
Gorge EMS & Rescue) requested increases of the county contributions to their operations this year,
which the county does not have sufficient funds available to accommodate their requests. As the
districts were adjusted in FY2017-18 to evenly apportion the geographic response areas for the two
rescue squads, this budget proposes that the total current appropriation of funds assigned to the
rescue squads be allocated evenly at $92,202 each, which is a reduction to the rescue squads of
$10,000 each.
Salary Adjustment
The County participated in a pay & class study three years ago due to a continued salary
“compression” issue from when the County could not financially support salary adjustments during the
recession years. Compression causes a severe morale problem when experienced, long-term
employees cannot increase through their grade with the new employees being paid at or equitable to
the same as seasoned employees. Also, the investments made by the County to train and certify staff
were not being actualized due to turnover resulting from our inability to compete with neighboring
counties and municipalities.
Based on the results of the pay & class study that the County received from The Maps Group, the
county wages were considered compressed by approximately $2 million as compared to the regional
study area (excluding larger and more urban counties and cities such as Buncombe, Gaston,
Mecklenburg, Charlotte, etc.). To address the compression, the first of a multi-year phase-in was
effective April 2018. The current budget included a Cost of Living Adjustment (COLA) of 1% and the
final of the three-phased rollout of the pay class study recommendation in the amount of $180,000
effective with the June 2020 payroll. This two-phased approach (COLA and pay class study adjustment)
within the same budget year permitted the county to implement the pay class study
recommendations over several budget cycles while ensuring that we keep pace with the continually
fluid and evolving regional wage market. The recommended FY2020-2021 budget includes a 1% COLA
effective June 2021 to help maintain competitive salaries now that the pay study implementation is
complete.
Position Changes
Several position reclassifications or new positions were requested by the departments for FY2020-21.
As the current revenues projected for FY2020-21 will not support most of the new positions or
reclassifications that are not part of an employee’s required staff certification, this budget is limited to
the following. The recommended budget includes a full-time animal control officer, DSS Quality
Assurance position (partially supported by state and federal reimbursement) and Peer Support
position (partially funded with grants).
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Budget Message FY2020-21 Page 14Retirements
Several retirements are expected in FY2020-21 and the corresponding payouts for accrued vacations
are budgeted ($10,000). This amount is included as a line item under the Human Resources
Department.
Benefit Changes
No benefit changes are recommended for the FY2020-21 budget and the budget continues the split-
level health coverage offered through the State Health Plan. The County pays for employee-only
coverage at the 70% rate; employees may elect and pay for coverage at the 80% rate. The budget
includes funding for a potential State Health Plan rate increase of 2.5% increase (5% actual effective
January 2021) and no increase for dental insurance. The local government retirement allocation is
expected to increase by 9.84% and the law enforcement officer retirement allocation is expected to
increase by 9.42%.
The County property liability budget allocation and worker’s compensation is expected to increase by
4.55%.
9-1-1 Fund
Total revenues and expenditures are $492,408, all of which is funded through the 9-1-1 surcharge and
within the guidelines established by the State. The County continues to work towards improved
countywide radio transmission and reception with eventual integration into the statewide VIPER
system.
NOTE: 9-1-1 work is severely hindered by existing law that restricts use of 9-1-1 funds only to handling phone calls and not
allowing expenditures for receiving equipment such as radios and towers. In effect, 9-1-1 fees pay for a call into the 9-1-1
center but not for the call to send help. It is estimated that the County will have $31,056 in 9-1-1 fund reserves as of June
30, 2020 that it would like to use towards telecommunication improvements but cannot due to this restrictive law.
Grant Fund
The recommended FY2020-2021 grant fund is comprised of the following continuing grants:
Urgent Repair Program
NC Department of Commerce Building Reuse Grant
One NC Fund Grant
Bulletproof Vests Grant
Single Family Rehabilitation Grant
NC Department of Commerce Industrial Development Fund Grant
NC Commerce CDBG Housing Grant
If the Board approves, carry over balances from FY2019-2020 grants will be re-budgeted with June
30, 2020 unexpended balances.
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Budget Message FY2020-21 Page 15Transit Fund
The Transit Advisory Board has submitted the following budget:
REVENUE
Elderly & Handicap Funds $ 94,733
State Grant RGP $ 114,861
State Administration Grant $ 236,920
NCDOT ROAP Work First Grant $ 20,410
State Grant Vehicle Purchase $ 58,500
State Grant Equipment $ 99,460
RHI Legacy Grant $ 25,000
Contribution from Outside Agencies $ 695,000
Total Revenues $1,344,884
EXPENSES
EXPENSES
Salaries/Fringe $ 751,970
Operations (other than below) $ 154,642
Capital Outlay $ 212,461
Fuel $ 126,665
Insurance $ 79,146
General Fund Indirect Costs $ 20,000
Total Expenses $ 1,344,884
There are no County funds budgeted for Transit. The fund generates revenues from its users and from
grants made by the state and federal governments. Transit will closely monitor proposed legislation
and state funding, including ROAP funding. The recommended budget does not include a rate
increase.
Solid Waste
The budget continues to fund the School Recycling Coordinator part-time position ($13,000) to
promote recycling efforts in the schools. Recycling is not only the right thing environmentally for our
future, it also saves the County over $42 per ton in disposal costs.
The Solid Waste and Revenue Departments continue to work closely with private haulers to ensure
citizens are charged appropriately for Convenience Site Fees. In December 2019, bids were received
for waste and recycling disposal. The contract with Republic for hauling residential/business waste to
an out-of-county waste collection facility will be for a 7-year period with two 2-year renewal options
and increases annually by 3% or indexed to CPI. The Solid Waste Department entered into a recycling
contract with Curbside Management for a 7-year period with two 2-year renewal options.
The international, national, state and local recycling markets continue to show signs of deterioration,
which has impacted the recycling contract costs. The FY2020-2021 budget includes a new recycling
availability fee of $8 annually to be assessed on all improved properties within the County. This new
Budget Message FY2020-21 Page 16fee will be used to operate the recycling program and to absorb the increased costs. Out of County
recyclables received at the transfer station will be charged $130/ton.
The Solid Waste Department has faced multiple challenges during recent years continuing into
FY2020-2021, which will have an impact on our future revenue projections and will impact
expenditures. Due to State and national economic impacts and legislative impacts on the electronics,
textiles, metal, white goods, tires, oil and textile recycling programs, revenues have been negatively
impacted. The Department is currently moving forward in FY2019-2020 with a project to close one
landfill cell and open a new one. An escrow account is in place for the enterprise budget to build this
account up over time to cover this expenditure, which we anticipate to be approximately $1.5 million.
Upon receipt of the bids, a recommendation and budget amendment will be presented for the
reserved funds. Capital Outlay for FY2020-2021 includes $200,000 for repairs to the transfer station
floor, which should be completed this fall.
The Solid Waste Vehicle Replacement Fund does not include any vehicles or equipment this year.
A recap of Revenues and Expenses for the Solid Waste Fund are as follows:
REVENUES
Household/Recycling Availability Fe $2,587,431
Tipping Fees $2,257,088
Recycling Revenues $ 72,000
NC DENR ($2 ton) Fees $ 70,000
Tire Disposal $ 84,000
White Goods $ 22,000
NCDENR Waste Reduction Grant $ 12,000
License Fees $ 1,000
Electronics Management $ 4,000
Contracted Services $ 35,000
Solid Waste Disposal Tax $ 36,000
Fund Balance Appropriated $ 165,978
Total Revenues $5,346,497
EXPENSES
Collections
Salaries/Fringe $ 718,732
Fuel $ 70,000
Operations $ 279,725
General Fund Indirect Costs $ 71,300
Transfer to Vehicle/Equipment $ 67,690
Capital Outlay $ 98,900
Total Collections $1,306,347
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Budget Message FY2020-21 Page 17Disposal
Salaries/Fringe $ 525,156
School Recycling Position $ 13,000
Waste/Recycling Disposal Contract $ 2,120,396
NC DENR Fees ($2 ton) $ 83,000
General Fund Indirect Costs $ 95,029
Operations $ 644,716
Capital Outlay $ 257,100
Transfer to Vehicle/Equipment $ 301,753
Total Disposal $ 4,040,150
Total Expenses $5,346,497
Summary of Recommended Budgets for all Funds
Revenues Expenditures
General Fund $55,613,564 $55,613,564
DSS Fund $13,488,203 $13,488,203
Airport Fund $ 715,792 $ 715,792
Vehicle/Equipment Replacement* $ 1,622,039 $ 1,622,039
Telephone Internal Service Fund $ 134,834 $ 134,834
SAN Server Upgrade Internal Service Fund $ 151,667 $ 151,667
E911 PSAP Fund $ 492,408 $ 492,408
ROD Automation Enhancement $ 75,297 $ 75,297
Grant Fund*
ICC Capital Reserve Fund $ 500,000 $ 500,000
Debt Service Fund $ 7,253,459 $ 7,253,459
Service District Funds $ 3,991,304 $ 3,991,304
Queens Gap Fund*
Schools Capital Project Fund*
Capital Project Fund – Other*
Transit Fund $ 1,344,884 $ 1,344,884
Solid Waste Fund $ 5,346,497 $ 5,346,497
GRAND TOTAL ALL FUNDS $90,729,948 $90,729,948
*Carryforward any unspent funds as of June 30, 2020.
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Budget Message FY2020-21 Page 18Appendix A: "Change in Fund Balances of Governmental Funds Last Ten Fiscal Years"
Source: Rutherford County CAFR, June 30, 2019 Statistical Section Table 4
Budget Message FY2020-21 Page 19Appendix B: "Fund Balances of Governmental Funds, Last Ten Fiscal Years”
Source: Rutherford County CAFR, June 30, 2019 Statistical Section Table 3
Budget Message FY2020-21 Page 20Appendix C: School Capital Account Budget Message FY2020-21 Page 21
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