Summerville Town Council Budget Discussions: FY26 Projections
I. FY26 Budget Overview
Initial projections for FY26 were presented, including a comparison of actual figures from 2022, 2023, and 2024, alongside the current budget for 2025.
The FY26 budget appears to show an increase of around $3 million.
A blend of increases from 2022-2023 and 2023-2024 was used to calculate average increases or decreases after the 2024 actual. These averages are guidelines rather than absolutes.
The use of fund balance to balance the budget was noted, with approximately $2 million used in the previous year.
II. Revenue Projections and Discussion
Property Taxes: An increase of 2-3% is projected, with reassessment impacting the tax revenue.
The council was cautioned that new construction might not translate into general fund revenue, as much of the growth is allocated to specific projects.
Tax revenue from areas like the Midtown TIF and O area are earmarked for specific purposes and do not contribute to the general fund.
Licenses: Business licenses, especially from insurance companies, make up a sizable portion of this revenue.
The timing of the business license cycle overlaps with the fiscal year, which causes fluctuations.
Local business license taxes are more susceptible to economic changes, while insurance tax collections have seen steady increases.
Franchise Fees: Overall, these are relatively flat, with electric fees increasing slightly but cable TV declining.
The town receives these revenues from Berkeley and Charleston Counties, but a portion is returned to residents and businesses via their tax bills.
Other State Revenue: Subdivision legislation generally increases at about 5%.
Permit Fees: Revenue is generated for the town through permit and inspection fees, particularly from development in Midtown.
School Resource Officer (SRO) Reimbursement: An agreement with the school district helps offset costs, with the proposed amount for FY26 matching what was billed in the current year.
About 85% is billed to the school district, with the 1.3 million representing a better capture of costs.
Asset Sales: Fluctuations occur based on property sales.
Recreation Facilities: Revenue is steadily increasing with enhanced programming.
Fines and Forfeitures: An increase is projected for FY26, with previous uncertainties now clearer.
Interest Income: A conservative approach was taken, and interest income was not projected to increase significantly due to market uncertainties.
Hospitality Transfers: The transfer remains at $3.7 million.
State Accommodations Tax: This is formula-driven and based on state accommodations revenue.
III. Expenses and Personnel
Personnel costs constitute a significant portion of the budget.
Total salary costs, including proposed items, are just over $28 million, with total costs including benefits reaching $42 million.
Grant-funded or SRO reimbursements offset some salary costs.
The town has 445 employees.
Overtime:
The fire department has minimum staffing requirements and a 53-hour work week, which leads to automatic overtime.
Police overtime primarily comes from critical incidents.
Health Insurance:
Health insurance costs are a substantial expense, and the town pays 80% of employee-only coverage.
The town is engaging a new broker to analyze and recommend programs to improve outcomes and minimize premium increases.
A 13% year-over-year increase in insurance premiums was seen, influenced by loss experience and industry trends.
Wellness incentives and potential self-funding plans are being explored to manage costs.
Retirement: Retirement contributions are also a major expense, with rates currently maxed out.
Worker's Compensation:
The importance of safety and timely reporting of injuries was emphasized to manage worker's compensation claims.
Police and fire departments have the highest worker's compensation claims.
IV. Grant Funding and Opportunities
Pat Hill, the Grant Coordinator, discussed grant opportunities and compliance.
Bipartisan Infrastructure Law:
The town was awarded $240,000 with a $60,000 local match for a Comprehensive Safety Action Plan.
The goal is to reduce fatalities and serious injuries, focusing on pedestrian and cyclist safety.
Coordination with regional entities is essential to avoid overlap.
Tourism Advertising Grant (TAG):
The town will apply for a similar grant to the FY24 awards.
The estimated award is $58,800, requiring a 50% match.
Central Avenue Pedestrian Safety Project:
A $400,000 match is needed to combine with a $400,000 award from the Department of Transportation.
V. Council Priorities and Future Planning
Councilmembers identified key priorities from departmental requests.
A conservative approach to budget projections was acknowledged as important for financial stability.
The council engaged in exercises to identify and prioritize departmental requests and future direction for the town.
Councilmembers were each given $5 in play money to apply to the different departmental requests to show where their priorities lay.
A second exercise focused on qualities and projects not currently included in department requests to guide future planning. Councilmembers were given 3 votes each to prioritize from this new set of options.
The potential for a capital fund was discussed.
Underground utilities, a new parking garage, and a new community center to supplement Amy's programming were all ideas for future projects.
*meeting auto transcribed, please excuse any typos & misspellings
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